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EXHIBIT 2
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WARRANT PURCHASE AGREEMENT
BETWEEN
BRUNSWICK BIOMEDICAL CORPORATION
AND
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
Dated as of April 15, 1996
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TABLE OF CONTENTS
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RECITALS: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Purchase and Sale of Warrants; Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3. Investment Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5. Warranties, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(a) Credit Agreement Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Power, Authority, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(c) Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(d) Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(e) Capitalization and Ownership of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(f) Authorization and Issuance of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(g) Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(h) No Integration of Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Financial and Business Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Public Company Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Maintenance of Corporate Existences, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Maintenance of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Organic Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(g) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(h) Issuance of Additional Rights, Options and Warrants . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 7. Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8. Execution of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9. Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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SECTION 10. Registration of Transfers and Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 11. Exercise of Warrants; Conversion of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 12. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 13. Mutilated or Missing Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 14. Reservation of Warrant Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 15. Adjustment of Exercise Price and Number of Warrant Shares Issuable . . . . . . . . . . . . . . . . . . . 22
(a) Adjustment for Change in Capital Stock of the Company . . . . . . . . . . . . . . . . . . . . . . 22
(b) Adjustment for Stock Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(c) Adjustment for Convertible Securities Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(d) Adjustment for Right, Option and Warrant Issues . . . . . . . . . . . . . . . . . . . . . . . . . 25
(e) Consideration Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(f) Special Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(g) When No Adjustment Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(h) Determination of Fair Market Value per Share; Notice of Adjustment . . . . . . . . . . . . . . . . 28
(i) Reorganization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(j) The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(k) When Issuance or Payment May Be Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(l) Adjustment in Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 16. Fractional Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 17. Notice to Warrant Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 18. Cash Distributions and Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 19. Put Rights; Tag-Along Rights and Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(a) Put by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(b) Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(c) Restrictions on Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(d) Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(e) Limitation on Put Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(f) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 20. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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SECTION 21. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 22. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 23. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 24. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 25. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 26. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 27. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 28. Amendments; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 29. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 30. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 31. Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 32. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 33. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Exhibit A Form of Series A Warrant Certificate
Exhibit B Form of Series B Warrant Certificate
Exhibit C Schedule of Exceptions
Exhibit D Holders of the Company's Stock
Exhibit E-1 Existing Warrants
Exhibit E-2 Shares Reserved under Stock Option Plan
Exhibit F Existing Registration Rights
Exhibit G Opinion of Counsel to STI
(to be delivered on the Merger Consummation Date)
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WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of April 15, 1996 by and between BRUNSWICK BIOMEDICAL
CORPORATION, a Massachusetts corporation ("Brunswick"), and INTERNATIONALE
NEDERLANDEN (U.S.) CAPITAL CORPORATION, a Delaware corporation (the
"Purchaser").
W I T N E S S E T H:
RECITALS:
A. Simultaneously herewith, the Purchaser is entering
into a Credit Agreement, dated of even date herewith, by and among Brunswick,
the Purchaser and various other lenders that may become parties thereto (the
"Lenders") and the Purchaser in its capacity as Agent for the Lenders (the
"Agent");
B. It is a condition precedent to the extensions of
credit by the Purchaser to Brunswick contemplated by the Credit Agreement that
Brunswick agree to issue to the Purchaser (1) Series A Warrants initially
exercisable for 33,370 shares of Class A Common Stock, par value $0.01 per
share, of the Company ("Class A Common Stock") for an exercise price of $0.01
per share and (2) Series B Warrants initially exercisable for 36,298 shares of
Class A Common Stock for an exercise price of $27.55 per share;
C. Shares of Class A Common Stock are convertible, at
the option of each of the holders thereof, into shares of voting common stock,
par value $0.01 per share, of Brunswick (the "Voting Common Stock"); and
D. The Purchaser and Brunswick desire to set forth in
this Agreement the terms and provisions of the Series A Warrants and the Series
B Warrants (collectively, the "Warrants") and the conditions to the issuance
and sale of the Warrants to the Purchaser;
NOW, THEREFORE, in consideration of the premises and the
agreements herein set forth and to induce the Purchaser to proceed with the
transactions contemplated by the Credit Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. Definitions.
(a) Defined Terms. Capitalized terms appearing herein
and not otherwise defined herein shall have the meanings ascribed thereto in
the Credit Agreement (irrespective of whether the Credit Agreement is in effect
or has been terminated). The following terms (whether or not underscored) when
used in this Agreement, including its preamble and recitals, shall, except
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where the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):
"Affiliate" of any Person means any other Person which,
directly or indirectly, controls or is controlled by or under common control
with such Person (excluding any trustee under, or any committee with
responsibility for administering, any Plan). A Person shall be deemed to be
"controlled by" any other Person if such other Person possesses, directly or
indirectly, power (a) to vote 5% or more of the securities having ordinary
voting power for the election of directors of such Person, or (b) to direct or
cause the direction of the management or policies of such Person whether by
contract or otherwise; provided that no Lender shall be deemed to constitute an
Affiliate of the Company solely by virtue of holding Warrants or Warrant
Shares.
"Agent" is defined in Recital A.
"Agreement" means this Warrant Purchase Agreement as in effect
on the date hereof and as hereafter amended, supplemented, restated or
otherwise modified.
"Authorized Officer" means, relative to the Company, those
officers of the Company whose signature, incumbency and authority shall have
been certified to the Agent and the Lenders pursuant to Section 4.1.1 or
Section 4.2.1 of the Credit Agreement.
"Brunswick" is defined in the preamble to this Agreement .
"Business Day" means any day which is neither a Saturday or
Sunday nor a legal holiday on which banks are authorized or required to be
closed in New York, New York.
"Capitalized Lease Liabilities" shall have the meaning set
forth in the Credit Agreement.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation issued or guaranteed by the
United States of America or any agency or instrumentality thereof and backed by
the full faith and credit of the United States of America, or issued by any
state or political subdivision or public instrumentality thereof, (i) which
has a remaining maturity at the time of purchase of not more than one (1) year
or which is subject to a repurchase agreement with any Lender or any Eligible
Lending Institution exercisable within one (1) year from the time of purchase
so long as such direct obligation remains in the possession of the Borrower or
in the possession of any Lender and (ii) which, in the case of obligations of
any state or political subdivision or public instrumentality thereof, is rated
AA or better by Xxxxx'x Investors Service, Inc.;
(b) certificates of deposit, time deposits, demand
deposits and bankers' acceptances, having a remaining maturity at the time of
purchase of not more than one (1) year, issued by any Lender or by any Eligible
Lending Institution;
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(c) corporate obligations rated Prime-1 by Xxxxx'x
Investors Service, Inc. or A-1 by Standard & Poor's Corporation, having a
remaining maturity at the time of purchase of not more than one (1) year;
(d) shares of funds registered under the Investment
Company Act of 1940, as amended, having assets of at least $100,000,000 which
invest only in obligations described above and which shares are rated by
Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation in one of the
two highest rating categories assigned by such agencies for obligations of such
nature.
"Change of Control" means (a) at any time prior to the Merger
Consummation Date, (i) the sale, transfer or other disposition by EM
Industries, Inc. or Mylan Laboratories, Inc. of any shares of Stock held by
such Persons as of the Closing Date other than to an affiliate of such Person,
or (ii) the failure of Xxxxx X. Xxxxxx (or a Person of comparable
qualifications and experience) to serve as chief executive officer of the
Company, and (b) from and after the Merger Consummation Date, (i) the
acquisition by any Person or group of Persons (other than an employee benefit
plan solely for employees of STI and its subsidiaries) of beneficial ownership
of more than 20% of the outstanding Stock of the Company (within the meaning of
Section 13(d) or 14(d) of the Securities and Exchange Act of 1934, as amended,
and the applicable rules and regulations thereunder) other than as a result of
the Merger; (ii) during any period of 12 consecutive months (whether commencing
before or after the Closing Date), the failure of individuals who on the first
day of such period were directors of the Company (together with any replacement
or additional directors who are nominated or elected by a majority of directors
then in office) to constitute a majority of the Board of Directors of the
Company; or (iii) the failure of Xxxxx X. Xxxxxx (or a Person of comparable
qualifications and experience) to serve as chief executive officer of the
Company.
"Class A Common Stock" means (a) at any time prior to the
Merger Consummation Date, Class A Common Stock, par value $0.01 per share, of
Brunswick, convertible into Voting Common Stock of Brunswick at the option of
the Holder, and (b) at any time on and after the Merger Consummation Date,
non-voting Common Stock of STI, convertible into voting Common Stock of STI at
the option of the Holder.
"Closing" means the closing of the sale and purchase of the
Warrants as contemplated hereby.
"Closing Date" means April 15, 1996, the date of the Closing.
"Common Stock" means shares now or hereafter authorized of any
class of common stock of the Company and any other capital stock of the
Company, however designated, that has the right (subject to any prior rights of
any class or series of preferred stock) to participate in any distribution of
the assets upon voluntary or involuntary liquidation, dissolution or winding up
of the Company or in the earnings of the Company without limit as to per share
amount, and shall include, without limitation, the presently authorized
1,903,000 shares of Voting Common Stock and 72,000 shares of Class A Common
Stock . "Common Stock" shall not include preferred or special stock.
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"Company" means (a) at all times prior to the Merger
Consummation Date, Brunswick, and (b) at all times on and after the Merger
Consummation Date, STI.
"Contract Value per Share" means the value determined in
accordance with paragraphs (i), (ii) and, if the Company is not a Public
Company, (iii) below, and shall equal the highest number yielded by such
determination:
(i) If the Common Stock is traded on a national
securities exchange or quoted in a national inter- dealer quotation
system, the Contract Value per Share determined pursuant to this
paragraph (i) shall be an amount equal to the average of the Quoted
Prices for Common Stock for the thirty (30) consecutive trading days
commencing forty-five (45) trading days before the date of
determination.
(ii) The Contract Value per Share determined pursuant to
this paragraph (ii) shall equal the quotient of (A) seven (7.0) times
EBITDA for the twelve-month period ending on the last day of the
fiscal month ending immediately prior to the date of determination (for
any twelve-month period ending prior to the first anniversary of the
Merger Consumation Date, determined on a pro forma basis as if the
Merger had occurred on the first day of such period), minus (1) the
outstanding principal amount of Funded Indebtedness as of the last day
of the fiscal month ending immediately prior to the date of
determination, plus (2) cash and Cash Equivalent Investments on the
balance sheet of the Company and its Subsidiaries as of the last day of
the fiscal month ending immediately prior to the date of determination,
all determined in accordance with GAAP, divided by (B) the number of
Fully Diluted Shares as of the date of determination.
(iii) If the Company is not a Public Company, the Contract
Value per Share determined pursuant to this paragraph (iii) shall be
equal to the Fair Market Value per Share.
"Conversion Factor" means the greater of (a) the actual number
of whole and fractional shares of Common Stock of STI issued to shareholders of
Brunswick in respect of one share of Common Stock of Brunswick as a result of
the Merger and (b) 2.5046.
"Conversion Right" is defined in Section 11(b).
"Convertible Securities" is defined in Section 15.
"Credit Agreement" means the Credit Agreement, dated of even
date herewith, by and among the Company, the Purchaser and various other
Lenders that may become parties thereto and the Purchaser as Agent for the
Lenders, as in effect on the date hereof and as hereafter amended,
supplemented, restated or otherwise modified.
"EBITDA" shall have the meaning specified for such term in the
Credit Agreement as in effect on the Closing Date.
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"Eligible Lending Institution" means a financial institution
having a branch or office in the United States and having capital and surplus
and undivided profits aggregating at least $100,000,000 and whose long-term
debt securities are rated Prime-1 or better by Xxxxx'x Investor Service, Inc.
or A-1 or better by Standard & Poor's Corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Excluded Shares" means (i) shares of Common Stock to be
issued upon exercise or conversion of the Warrants, (ii) shares of Common Stock
issued upon exercise or conversion of any Option Securities granted prior to
the Closing Date and (iii) shares of Common Stock issued upon exercise or
conversion of any Option Securities granted pursuant to a stock incentive plan
approved in good faith by the Board of Directors of the Company after the
Merger Consummation Date.
"Exercise Price" means, with respect to the Series A Warrants,
the Series A Exercise Price and, with respect to the Series B Warrants, the
Series B Exercise Price.
"Fair Market Value per Share" means the fair market value of
a share of Common Stock of the Company, and shall be equal to the quotient of
(A) the fair market value of the Company and its Subsidiaries taken as a whole
on the date of determination, taking into account all the factors relevant
thereto, including, without limitation, the highest of the prices that could be
obtained from an arms'-length sale without time constraints of (1) all or
substantially all of the assets of the Company and the Subsidiaries subject to
or after satisfaction of all liabilities of the Company and the Subsidiaries or
(2) all of the Fully Diluted Shares, whether by stock sale, merger,
consolidation or otherwise, divided by (B) the number of Fully Diluted Shares
on the date of determination. In no event shall the Fair Market Value per
Share be reduced or discounted on the basis that any securities to be valued on
the basis of such Fair Market Value per Share may represent the right to
acquire a minority interest in the Company or may not be freely transferable
under federal or state securities laws, or for any other reason. The Fair
Market Value per Share shall be determined as provided in clause (a) or (b)
below, as applicable.
(a) In any circumstances in which the Fair Market Value
per Share is required to be determined, not later than ten (10) days following
the date as of which such determination is required to be made, the Board of
Directors of the Company shall determine in good faith the Fair Market Value
per Share, and the Company shall give to the Holders (or, if such determination
affects less than all of the Holders, to the Holders so affected) prompt
written notice of such determination. If within thirty (30) days after the
date such notice is given, the Company and the Required Holders agree upon the
Fair Value per Share, then the Fair Market Value per Share shall be as so
agreed. If within such 30-day period, the Company and the Required Holders do
not agree upon such Fair Market Value per Share, then the Fair Market Value per
Share shall be determined as provided in clause (b) of this definition.
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(b) If the Required Holders and the Company do not agree
upon such Fair Market Value per Share within the 30-day period specified in
clause (a) of this definition, then the Required Holders and the Company shall
appoint a recognized investment banking firm of national reputation, reasonably
acceptable to the Required Holders and the Company. If the Company and the
Required Holders cannot agree on the appointment of a mutually acceptable
investment banking firm, or if the firm so appointed declines or fails to
serve, then the Required Holders and the Company shall each choose one such
investment banking firm and the respective firms so chosen shall appoint
another recognized investment banking firm of national reputation. The
investment banking firm so selected shall appraise the value of the Company
(which shall be in the form of a written report signed by such investment
banking firm), and such appraised value of the Company determined as herein
provided shall be final and conclusive and binding on the Company and the
Holders. If the appraised value of the Company as determined by such
investment banking firm is equal to or less than that determined by the Board
of Directors of the Company in accordance with clause (a) of this definition,
then all fees and expenses of such investment banking firm shall be paid by the
Required Holders requesting such appraisal. If the appraised value of the
Company as determined by such investment banking firm is greater than that
determined by the Board of Directors in accordance with clause (a) of this
definition, then all fees and expenses of such investment banking firm shall be
paid by the Company.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means, (a) at any time prior to the Merger
Consummation Date, the accounting period of Brunswick commencing on the Closing
Date and ending June 30, 1996 or, if Brunswick shall have changed its Fiscal
Year end to July 31 in contemplation of the Merger, July 31, 1996 and each
twelve-month accounting period ending June 30 or July 31, as the case may be,
thereafter, and (b) from and after the Merger Consummation Date, the accounting
period of STI commencing on the Merger Consummation Date and ending on the
first July 31 to occur thereafter, and each twelve- month accounting period
ending on July 31 thereafter. References to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "1996 Fiscal Year") refer to the
Fiscal Year ending on a date in such calendar year.
"Fully Diluted Shares" means, as of any date of determination,
the number of shares of Common Stock of the Company equal to the sum of (i) the
number of shares of Common Stock outstanding on such date of determination,
plus (ii) the number of Warrant Shares receivable upon conversion of all
outstanding Warrants as of such date of determination pursuant to Section
11(b), plus (iii) the number of shares of Common Stock that would be issued in
respect of all Option Securities of the Company outstanding and immediately
exercisable as of such date of determination if such Option Securities were to
be converted into shares of Common Stock in accordance with the following
formula:
X = Y (A - B)
---------
A
where: X = the number of shares to be
issued to the holders of
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such Option Securities;
Y = the number of shares for
which such Option Securities
are exercisable;
A = the Fair Market Value per
Share as of the date of
determination; and
B = the exercise price for such
Option Securities;
provided, however, that the term "Fully Diluted Shares" as used in the
definition of Fair Market Value per Share shall mean the number of issued and
outstanding shares of Common Stock plus the number of Warrant Shares
purchasable and receivable upon exercise of the rights represented by the
Warrant Certificates pursuant to Section 11(a).
"Funded Indebtedness" means (i) the indebtedness under the
Credit Agreement, (ii) Capitalized Lease Liabilities, and (iii) all other
indebtedness of the Company and its Subsidiaries which matures more than one
year from the date of its creation or matures within one year from such date
but is renewable or extendable, at the option of the Company or any of its
Subsidiaries, to a date more than one year from such date or arises under an
agreement which obligates the lender or lenders to extend credit during a
period of more than one year from such date.
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Holders" means, collectively, Purchaser and any subsequent
registered holders, from time to time, of Warrant Securities.
"Indemnified Liabilities" is defined in Section 22.
"Indemnified Parties" is defined in Section 22.
"Legally Available Funds" means, with respect to any purchase
of Warrant Securities pursuant to Section 19(a), the amount of funds of the
Company legally available therefor under the corporate laws under which the
Company is organized and existing.
"Lenders" is defined in Recital A.
"Lien" means any mortgage, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, lien (statutory or other), adverse
claim or preference, priority or other
- 7 -
12
security agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any
financing lease involving substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction).
"Loans" shall have the meaning set forth in the Credit
Agreement.
"Merger" means the merger of Brunswick with and into STI, with
STI being the surviving corporation.
"Merger Consummation Date" means the date on which the Merger
has been consummated and all conditions set forth in Section 4.2 of the Credit
Agreement have been satisfied or waived in writing by the Lenders and the
Agent.
"Minimum Price" is defined in Section 15.
"Obligations" means all obligations of the Company with
respect to the repayment or performance of any obligations (monetary or
otherwise) of the Company arising under or in connection with the Credit
Agreement, the "Notes" or the other "Loan Documents" (as such terms are defined
in the Credit Agreement) and the Warrant Documents.
"Option Securities" is defined in Section 15.
"Organic Document" means, relative to any Person, its articles
or certificate of incorporation or organization or certificate of limited
partnership, its by-laws, partnership or operating agreement or other
organizational documents, and all stockholders agreements, voting trusts and
similar arrangements applicable to any of its Stock or partnership interests or
other ownership interests, in each case, as amended.
"Person" means any natural person, corporation, partnership,
limited liability company, firm, association, government, governmental agency
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Preferred Stock" means shares now or hereafter authorized of
any class of capital stock of the Company other than Common Stock, and shall
include, without limitation, the presently authorized 1,400,000 shares of
Preferred Stock, $0.01 par value, of which (i) 65,000 shares have been
designated Series A Preferred Stock, 64,665 shares of which are outstanding,
(ii) 30,000 shares have been designated Series B Preferred Stock, 28,144 shares
of which are outstanding, (iii) 380,000 shares have been designated Series C
Preferred Stock, 374,462 shares of which are outstanding, (iv) 50,000 shares
have been designated Series D Preferred Stock, 45,695 shares of which are
outstanding, (v) 30,000 shares have been designated Series E Preferred Stock,
25,816 shares of which are outstanding, (vi) 210,000 shares have been
designated Series F Preferred Stock, 208,710 shares of which are outstanding,
and (vii) 635,000 shares are undesignated and unissued.
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13
"Prospective Purchaser" shall have the meaning set forth in
Section 19(d).
"Public Company" means a company (i) which is subject to the
reporting requirements of Section 15(d) of the Exchange Act, or (ii) any of
whose securities are registered pursuant to Section 12(b) or 12(g) of the
Exchange Act.
"Put Closing Date" is defined in Section 19(b).
"Put Event" means any of the following: (a) any
representation or warranty of the Company under any Warrant Document is or
shall be incorrect when made in any material respect; (b) the Company shall
default in the due performance and observance of any of its obligations under
any Warrant Document and, in the case of any such default other than a default
of the Company's obligations under Section 6(l), such default shall have
continued for a period of thirty (30) days after written notice thereof has
been given to the Company by the Required Holders; (c) an Event of Default
shall have occurred under the Credit Agreement; (d) a merger or consolidation
of the Company with or into any other Person (other than the Merger if
consummated in accordance with the provisions of Section 15(j)) or any
acquisition of the Company by means of a share exchange; and (e) a Change of
Control.
"Put Exercise Notice"_is defined in Section 19(a).
"Put Purchase Price" is the amount payable to each Holder for
such Holder's Warrant Securities, as calculated in accordance with Section
19(a).
"Put Notice" is the written notice to the Company specifying
the number and type of Warrant Securities with respect to which the Put Right
is being exercised.
"Put Right" is the right of each Holder to require that the
Company purchase all or any portion of the Warrant Securities then owned by
such Holder.
"Quoted Price" of Common Stock for each day means the last
reported sales price of Common Stock on such day as reported by NASDAQ or, if
Common Stock is listed on a national securities exchange, the last reported
sales price of Common Stock on such exchange (which shall be consolidated
trading if applicable to such exchange) on such day, or if not so reported or
listed, the average of the last reported bid and ask prices of Common Stock on
such day, in each case as appropriately adjusted for any stock splits or
reverse stock splits occurring after the Closing Date.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated of even date herewith, between the Company and the Purchaser,
as in effect on the date hereof and as hereafter amended, supplemented,
restated or otherwise modified.
"Regulatory Approval" means each and every approval, consent,
filing and registration by or with any federal, state or other regulatory
authority (domestic or foreign)
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14
necessary to authorize or permit the execution, delivery or performance of this
Agreement or any other Warrant Document, for the validity or enforceability
hereof or thereof or for the consummation of the transactions contemplated
hereby or thereby.
"Required Holders" means Holders holding at least 66-2/3% of
the Warrant Securities outstanding (treating all Warrants as fully exercised
for the Warrant Shares to which Holders would be entitled upon exercise of such
Warrants) or, if any matter affects the interest of less than all of the
Holders, then Holders holding at least 66-2/3% of the Warrant Securities so
affected, as the context may require.
"Restriction on Purchase" exists if, at the time of a Put
Closing, (i) the purchase of such Warrant Securities would result in a default
under or a breach of any Restrictive Provision (assuming that the covenants
applicable to the Company at the end of the Fiscal Quarter in which such
purchase is to occur were applicable on the date of such purchase), or (ii) the
Company would not have sufficient Legally Available Funds to pay the Purchase
Price for the Warrant Securities.
"Restrictive Provision" means any of the financial covenants
contained in Section 6.2.4 or the negative covenants contained in Section 6.2.8
of the Credit Agreement, in each case as the same may be amended from time to
time; provided, however, that to the extent noncompliance with any such
covenant as a result of the purchase by the Company of Warrant Securities is
waived in accordance with Section 9.1 of the Credit Agreement, such covenant
shall not constitute a Restrictive Provision.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Securities Legend" is defined in Section 10.
"Selling Holder" is defined in Section 19(c).
"Selling Holder Notice" is defined in Section 19(d).
"Selling Holder Offer" is defined in Section 19(d).
"Series A Exercise Price" means (a) at any time prior to the
Merger Consummation Date, $.0.01 per Warrant Share and (b) at any time on or
after the Merger Consummation Date, an amount per share equal to $0.01 divided
by the Conversion Factor, in each case as adjusted as herein provided.
"Series A Warrant Certificates" means the certificates
evidencing the Series A Warrants in the form of Exhibit A.
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15
"Series A Warrants" means the warrants referred to in clause
(1) of Recital B as evidenced by the Series A Warrant Certificates.
"Series B Exercise Price" means (a) at any time prior to the
Merger Consummation Date, $27.55 per Warrant Share and (b) at any time on or
after the Merger Consummation Date, an amount per Warrant Share equal to $27.55
divided by the Conversion Factor, in each case as adjusted as herein provided.
"Series B Warrant Certificates" means the certificates
evidencing the Series B Warrants in the form of Exhibit B.
"Series B Warrants" means the warrants referred to in clause
(2) of Recital B as evidenced by the Series B Warrant Certificates.
"Stock" means any capital stock of the Company.
"Subsidiary" of any corporation means any other corporation
greater than 50% of the outstanding shares of Stock of which having ordinary
voting power for the election of directors is owned directly or indirectly by
such corporation, and, except as otherwise indicated herein, references to
Subsidiaries shall refer to Subsidiaries of the Company.
"Substitute Securities" is defined in Section 15.
"Transfer Agent" is defined in Section 14.
"Voting Common Stock" means (a) at any time prior to the
Merger Consummation Date, voting Common Stock, par value $0.01 per share, of
Brunswick, and (b) at any time on and after the Merger Consummation Date,
voting Common Stock of STI.
"Warrant Certificates" means, collectively, the Series A
Warrant Certificates and the Series B Warrant Certificates.
"Warrant Documents" means, collectively, this Agreement, the
Warrants, the Registration Rights Agreement and any other document, instrument
or agreement executed or delivered in connection with any of the foregoing to
which the Company is a party, but excluding the Credit Agreement and the other
Loan Documents (as defined in the Credit Agreement).
"Warrant Securities" means, collectively, the Warrants and
Warrant Shares.
"Warrant Shares" means the securities which a Holder may
acquire upon exercise or conversion of a Warrant, together with any other
securities which such Holder may acquire on account of any such securities,
including, without limitation, as the result of the shares of Class A Common
Stock being converted into shares of Voting Common Stock and/or any dividend or
other distribution on Common Stock, any split-up of such Common Stock, or in
accordance with a
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16
recapitalization, merger, consolidation, share exchange, reorganization or
other transaction or series of related transactions in which shares of Common
Stock are changed into or exchanged for securities of another corporation
(including the Merger), or the exercise of any preemptive right (or the
exercise or conversion of any security which such Holder may acquire in
connection with the exercise of any preemptive right) with respect to any such
Common Stock.
"Warrants" means the Series A Warrants and Series B Warrants,
together with any warrants issued in substitution or replacement therefor.
(b) Cross-References. Unless otherwise specified,
references in this Agreement to any Article or Section are references to such
Article or Section of this Agreement, and unless otherwise specified,
references in any Article, Section, or definition to any clause are references
to such clause of such Section, Article or definition.
SECTION 2. Purchase and Sale of Warrants; Closing.
(a) Subject to the funding of the Bridge Loan under the
Credit Agreement, Brunswick hereby agrees to sell to the Purchaser and, subject
to the provisions of Section 4, the Purchaser hereby agrees to purchase from
Brunswick, for a purchase price of $1.00 and other good and valuable
consideration, all of which shall be deemed to have been received by the
Company upon the funding of the Bridge Loan under the Credit Agreement, (1)
Series A Warrants to purchase 33,370 shares of Class A Common Stock of
Brunswick for an initial exercise price of $0.01 per share and (2) Series B
Warrants to purchase 36,298 shares of Class A Common Stock of Brunswick for an
initial exercise price of $27.55 per share.
(b) The sale and purchase of the Warrants shall take
place at the Closing at the offices of King & Spalding, 000 Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000, at 10:00 a.m. on April 15, 1996, or such other place
and time as may be agreed upon by the Purchaser and the Company. At the
Closing, the Company will deliver to the Purchaser, upon payment therefor, (1)
Series A Warrant Certificates in the form of Exhibit A evidencing the Series A
Warrants to be purchased by the Purchaser and (2) Series B Warrant Certificates
in the form of Exhibit B evidencing the Series B Warrants to be purchased by
the Purchaser, in each case in such denomination or denominations as the
Purchaser may request and registered in its name or the name of its nominee and
dated the Closing Date.
SECTION 3. Investment Representations. Purchaser represents
and warrants that it is purchasing the Warrants and any Warrant Shares issuable
upon exercise or conversion of the Warrants for its own account, for investment
purposes and not with a view to the distribution thereof; provided, however,
that the foregoing representation shall not be construed as imposing any
limitation on the Purchaser's right to transfer any of the Warrants or Warrant
Shares that is not otherwise expressly set forth in the Warrant Documents or
required under applicable law. Each Holder agrees that it will not, directly
or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise
dispose of any of the Warrant Securities (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of the Warrant Securities),
except in compliance with the
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17
Securities Act. Each Holder agrees that it will not transfer, sell, assign,
pledge, hypothecate or otherwise dispose of any of the Warrant Securities if
any such disposition would cause the Company to be required to register any
Warrant Securities pursuant to Section 12(g) of the Exchange Act.
SECTION 4. Conditions Precedent. The obligation of the
Purchaser to purchase the Series A Warrants and the Series B Warrants on the
Closing Date pursuant to Section 2 hereof shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this
Section 4, except as the Purchaser shall otherwise consent:
(a) the accuracy of the representations set forth in this
Agreement and in the other Warrant Documents in all material respects;
(b) the compliance by the Company in all material
respects with all covenants and agreements required to be performed by it on or
prior to the Closing;
(c) the satisfaction of all of the conditions precedent
set forth in Sections 4.1 and 4.3 of the Credit Agreement;
(d) Purchaser's receipt of Warrant Certificates
registered in Purchaser's name (or in the name of a nominee of Purchaser)
evidencing the Warrants;
(e) Purchaser's receipt of the Registration Rights
Agreement with respect to the Warrants, in form and substance reasonably
satisfactory to Purchaser, duly executed and delivered by the Company and dated
the Closing Date;
(f) Purchaser's receipt of a copy of the Company's
articles of organization including provisions reasonably satisfactory to the
Purchaser relating to the Company's capital structure, certified as of a recent
date by the Secretary of the Commonwealth of Massachusetts;
(g) Purchaser's receipt of a certificate of the clerk or
an assistant clerk of the Company, together with true and correct copies of the
resolutions of the Board of Directors and, to the extent necessary, the
stockholders of the Company authorizing or ratifying the execution, delivery
and performance of this Agreement and the other Warrant Documents, authorizing
the amendment to the Company's articles of organization so that it contains the
provisions referred to in Section 4(g) and authorizing the creation and
issuance of the Warrants and the Warrant Shares; and setting forth the names of
the Authorized Officers of the Company executing this Agreement and the other
Warrant Documents, together with a sample of the true signature of each such
Authorized Officer;
(h) Purchaser's receipt of certified copies of all
documents evidencing any other necessary corporate action, consents and
governmental approvals or filings (if any) with respect to this Agreement and
the other Warrant Documents;
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18
(i) Purchaser's receipt of an opinion, dated the Closing
Date, from Xxxxxx & Dodge, counsel to the Brunswick, in form and substance
reasonably satisfactory to Purchaser and its counsel, and covering such matters
as the Purchaser may reasonably request;
(j) All proceedings taken in connection with the
transactions contemplated by this Agreement and the other Warrant Documents
shall be reasonably satisfactory in form and substance to Purchaser and its
counsel, and Purchaser and its counsel shall have received copies (executed or
certified as may be appropriate) of all documents, instruments and agreements
which Purchaser or its counsel may reasonably request in connection with the
consummation of such transactions.
SECTION 5. Warranties, etc. In order to induce Purchaser to
enter into this Agreement, to engage in the transactions contemplated herein
and in the other Warrant Documents and to purchase the Warrants hereunder, the
Company represents and warrants unto Purchaser as set forth in this Section 5,
except as provided in the Schedule of Exceptions attached as Exhibit C, each
and all of which representations and warranties are made as of the Closing Date
and shall survive the execution and delivery of this Agreement and the Closing
hereunder:
(a) Credit Agreement Warranties. Each of the
representations and warranties of the Company set forth in the Credit Agreement
is true and correct.
(b) Power, Authority, etc. The Company has full power
and authority to enter into and perform its obligations under this Agreement
and each of the other Warrant Documents.
(c) Due Authorization. The execution and delivery by the
Company of this Agreement and each of the other Warrant Documents, the
performance by the Company of its obligations hereunder and thereunder and the
issuance of the Warrants hereunder by the Company have been duly authorized by
all necessary corporate action, do not require any Regulatory Approval (except
those Regulatory Approvals already obtained), do not and will not conflict
with, result in any violation of, or constitute any default under, any
provision of any Organic Document of the Company or any Subsidiary, any
agreement or instrument to which the Company or any of it's Subsidiaries is a
party or by which it or any of its property is bound, or any law or
governmental regulation or court decree or order and will not result in or
require the creation or imposition of any Lien on any of the Company's or any
Subsidiary's properties pursuant to the provisions of any such agreement or
instrument. No vote (including any vote under the rules of any securities
exchange or trading system or market on which any of the Company's securities
are listed or traded) on the part of the stockholders of the Company, other
than those which have been obtained, is required to approve or authorize the
amendment to the articles of organization provided for in Section 4(g), any of
the transactions contemplated by this Agreement, any of the other Warrant
Documents or any of the Loan Documents or the authorization of the issuance of
Class A Common Stock or the Warrant Securities or any shares of capital stock
to be issued pursuant to the Loan Documents. None of the transactions
contemplated by this Agreement, any of the other Warrant Documents or any of
the Loan Documents (including the issuance of Class A Common Stock, the Warrant
Securities or any shares of capital stock to be issued pursuant to the Loan
Documents) will give rise
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19
to any payment or the acceleration of any obligation (whether with or without
the passage of time or upon the occurrence of any event) to any director,
officer or employee of the Company or any Subsidiary.
(d) Validity, etc. This Agreement and each of the other
Warrant Documents constitutes the legal, valid and binding obligations of the
Company enforceable in accordance with their respective terms, subject to (i)
the effect of any applicable bankruptcy, insolvency, moratorium or similar laws
affecting creditors' rights generally; and (ii) the effect of general
principles of equity (regardless of whether considered in a proceeding in
equity or at law).
(e) Capitalization and Ownership of the Company. The
authorized capital stock of the Company consists of (1) 1,903,000 shares of
Voting Common Stock, 66,780 of which will be outstanding on the Closing Date;
(2) 72,000 shares of Class A Common Stock, no shares of which will be
outstanding on the Closing Date; and (3) 1,400,000 shares of Preferred Stock,
$.01 par value, of which (i) 65,000 shares have been designated Series A
Preferred Stock, 64,665 shares of which are outstanding, (ii) 30,000 shares
have been designated Series B Preferred Stock, 28,144 shares of which are
outstanding, (iii) 380,000 shares have been designated Series C Preferred
Stock, 374,462 shares of which are outstanding, (iv) 50,000 shares have been
designated Series D Preferred Stock, 45,695 shares of which are outstanding,
(v) 30,000 shares have been designated Series E Preferred Stock, 25,816 shares
of which are outstanding, (vi) 210,000 shares have been designated Series F
Preferred Stock, 208,710 shares of which are outstanding, and (vii) 635,000
shares are undesignated and unissued. The record and, to the best knowledge of
the Company, beneficial ownership of the outstanding capital stock of the
Company as of the Closing Date is set forth in Exhibit D. All such outstanding
shares are duly authorized, validly issued, fully paid and nonassessable, and
are not, and will not have been, issued in violation of any preemptive rights.
Except as set forth in Exhibit C, Exhibits E-1 and E-2, and the Organic
Documents, no issued, no authorized but unissued and no treasury shares of
capital stock of the Company are subject to any preemptive right, option,
warrant, right of conversion or purchase or any similar right issued or granted
by the Company or, to the best knowledge of the Company, by any of its
shareholders. Except as set forth in the Organic Documents of the Company or
in Section 19, there are no agreements or understandings with respect to the
voting, sale or transfer of any shares of capital stock of the Company to which
the Company or, to the best knowledge of the Company, any of its Affiliates is
a party.
(f) Authorization and Issuance of Warrants. The issuance
of the Warrants has been duly authorized and, upon delivery to Purchaser of the
Warrant Certificates therefor in accordance with the terms hereof, the Warrants
will have been validly issued and fully paid and nonassessable, free and clear
of all Liens and the issuance thereof will not give rise to any preemptive
rights. The issuance of the shares of Class A Common Stock subject to the
Warrants has been duly authorized and, when issued upon exercise of the
Warrants in accordance with the terms thereof, such shares will have been
validly issued and will be fully paid and nonassessable. The issuance of the
shares of Voting Common Stock issuable upon conversion of the Class A Common
Stock has been duly authorized and, when issued upon conversion of the Class A
Common Stock in accordance with the terms thereof, such shares will have been
validly issued and
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20
will be fully paid and nonassessable and the issuance thereof will not give
rise to any preemptive rights. 69,668 shares of Class A Common Stock have been
duly reserved for issuance upon the exercise of the Warrants. Except as set
forth in the Registration Rights Agreement and on Exhibit D, no Person has the
right to demand or any other right to cause the Company to file any
registration statement under the Securities Act relating to any securities of
the Company or any right to participate in the any such registration.
(g) Securities Laws. In reliance on the investment
representations contained in Section 3, the offer, issuance, sale and delivery
of the Warrants to the Purchaser as provided in this Agreement, the issuance
and delivery of Class A Common Stock upon the exercise of the Warrants by the
Purchaser, and the conversion of the Class A Common Stock into Voting Common
Stock, are and will be exempt from the registration requirements of the
Securities Act and all applicable state securities laws, as such laws are
currently in effect.
(h) No Integration of Issue. Neither the Company nor any
Person authorized or employed by the Company as agent, broker or otherwise in
connection with the offering of the Warrants has offered the Warrants for sale
to, or solicited any offers to buy the Warrants from, or otherwise approached
or negotiated or communicated in respect thereof with, anyone other than
Purchaser. Neither the Company nor any Person acting on behalf of the Company
will sell or offer any class of securities to, or solicit any offers to buy any
class of securities from, or otherwise approach, negotiate or communicate in
respect thereof with, any Person so as to require the registration of the
Warrants under the Securities Act or any applicable state securities laws.
SECTION 5. Covenants. The Company agrees with each Holder
that, until the termination of this Agreement pursuant to Section 24 hereof,
the Company will perform the obligations set forth in this Section 6:
(a) Financial and Business Information. For so long as
the Company is not a Public Company, the Company will furnish, or will cause to
be furnished, to each Holder copies of the following financial statements,
reports and information:
(i) promptly when available and in any event
within ninety (90) days after the close of each Fiscal Year, a
consolidated and consolidating balance sheet at the close of
such Fiscal Year, and related consolidated and consolidating
statements of operations, retained earnings, and cash flows
for such Fiscal Year, of the Company and its Subsidiaries
(with comparable information at the close of and for the prior
Fiscal Year), certified (in the case of consolidated
statements) without qualification by Price Waterhouse LLP or
other independent public accountants reasonably satisfactory
to the Required Holders, together with a report containing
management's discussion and analysis of financial condition
and results of operation of the Company and its Subsidiaries
generally similar in scope to that which would be required in
an annual report on Form 10-K filed under the Exchange Act for
such Fiscal Year (delivery to the Holders of such annual
report in respect of any Fiscal
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21
Year shall satisfy the requirements of this clause (a)(i) with
respect to such Fiscal Year);
(ii) promptly when available and in any event
within forty-five (45) days after the close of each Fiscal
Quarter, consolidated and consolidating balance sheets at the
close of such Fiscal Quarter, and consolidated and
consolidating statements of operations, retained earnings, and
cash flows for such Fiscal Quarter and for the period
commencing at the close of the previous Fiscal Year and ending
with the close of such Fiscal Quarter, of the Company and its
Subsidiaries (with comparable information at the close of and
for the corresponding Fiscal Quarter of the prior Fiscal Year
and for the corresponding portion of such prior Fiscal Year),
certified by the chief financial or executive officer of the
Company, together with a brief report containing management's
discussion and analysis of the financial condition and results
of operations of the Company and its Subsidiaries (including a
discussion and analysis of any changes compared to prior
results) generally similar in scope to that which would be
required in a quarterly report on Form 10-Q filed under the
Exchange Act (delivery to the Holders of such a quarterly
report on Form 10-Q with respect to any Fiscal Quarter will
satisfy the requirements of this clause (a)(ii) with respect
to such Fiscal Quarter;
(iii) promptly when available and in any event
within thirty (30) days after the close of each calendar month
of each Fiscal Year (other than a calendar month that is the
last month of a Fiscal Quarter), consolidated and
consolidating balance sheets at the close of such month, and
consolidated and consolidating statements of operations,
retained earnings and cash flows for such month and for the
period commencing at the close of the previous Fiscal Year and
ending with the close of such month, of the Company and its
Subsidiaries (with comparable information at the close of and
for the corresponding month of the prior Fiscal Year and for
the corresponding portion of such prior Fiscal Year),
certified by the chief executive or financial officer of the
Company, together with a brief report containing management's
discussion and analysis of the financial condition and results
of operations of the Company and its Subsidiaries (including a
discussion and analysis of any changes compared to prior
results); and
(iv) promptly upon the sending or filing thereof,
copies of all reports that the Company sends to its security
holders generally, and copies of all reports and registration
statements that the Company or any of its Subsidiaries files
with the SEC or any national securities exchange.
(b) Public Company Information. From and after such time
as the Company shall become a Public Company:
(i) Filings. The Company will file with the SEC
on or before the required date all regular or periodic reports
required pursuant to the Exchange Act
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22
and deliver to each Holder, promptly upon its becoming
available, one copy of each report, notice or proxy statement
sent by the Company to its stockholders generally, and of each
regular or periodic report filed pursuant to the Exchange Act
and any registration statement, prospectus or written
communication (other than transmittal letters) pursuant to the
Securities Act filed by the Company with (i) the SEC or (ii)
any national securities exchange; and
(ii) Rule 144. The Company will use its best
efforts to make publicly available information concerning the
Company sufficient to allow any Holder to dispose of all or a
portion of the Warrant Securities pursuant to Rule 144 (or any
successor provision) promulgated by the SEC under the
Securities Act.
(c) Maintenance of Corporate Existences, etc. Except as
permitted pursuant to Section 6.2.10 of the Credit Agreement, the Company will
cause to be done at all times all things necessary to maintain and preserve the
corporate existences of the Company and its Subsidiaries.
(d) Maintenance of Books and Records. The Company will,
and will cause each Subsidiary to, keep books and records reflecting all of its
business affairs and transactions in accordance with GAAP.
(e) Inconsistent Agreements. The Company will not, and
will not permit any Subsidiary to, enter into any agreement containing any
provision which would be violated or breached by the issuance of the Warrants
or the Warrant Shares or by the performance by the Company or any Subsidiary of
its obligations under this Agreement or under any other Warrant Documents.
(f) Organic Documents. So long as any Warrant Securities
are outstanding, the Company's charter shall contain the provisions regarding
the Class A Common Stock set forth in its Organic Documents as constituted on
the date hereof, except that in connection with the Merger, non-substantive
modifications may be made to such provisions to reflect the Merger. The
Company shall not permit to occur any amendment, alteration or modification to
its Organic Documents, as constituted on the date hereof, the effect of which,
in Purchaser's or the Required Holders' judgment, would be to alter, impair or
adversely affect either the rights and benefits of Purchaser or the Holders or
the duties and obligations of the Company under this Agreement and the other
Warrant Documents.
(g) Transactions with Affiliates. The Company will not,
and will not permit any Subsidiary to, enter into, or cause, suffer or permit
to exist:
(i) any arrangement or contract with any of its
Affiliates of a nature customarily entered into by Persons which are
Affiliates of each other (including management or similar contracts or
arrangements relating to the allocation of revenues, expenses or
otherwise) requiring any payments to be made by the Company or any of
its Subsidiaries to any
- 18 -
23
Affiliate, other than (i) any arrangement solely among the Company and
its wholly-owned Subsidiaries, and (ii) the Merger; and
(ii) any other transaction, arrangement or contract with
any of its Affiliates which is on terms which are less favorable than
are obtainable in a transaction from any Person which is not one of
its Affiliates.
(h) Issuance of Additional Rights, Options and Warrants.
At any time prior to the Merger Consummation Date, the Company will not issue
any rights, options or warrants to subscribe for or purchase or otherwise
acquire Common Stock or Convertible Securities, whether or not the right to
exercise such rights, options or warrants or to convert or exchange such
Convertible Securities is immediately exercisable or is conditioned upon the
passage of time, an occurrence or non-occurrence of some other event, or both.
(i) Antitakeover Statutes. The Company shall take all
action necessary to avoid the application of any "fair price," "moratorium,"
"control share acquisition," "business combination," "shareholder protection"
or similar antitakeover statute to the transactions contemplated by this
Agreement or any other Warrant Document (including the issuance of the Warrant
Securities).
(j) Governmental Approvals. The Company will, and will
cooperate with the Holders to, secure all necessary consents, approvals,
authorizations and exemptions from all governmental authorities in connection
with the exercise of the Warrants, the issuance of shares of Class A Common
Stock upon exercise of the Warrants and the issuance of shares of Voting Common
Stock upon the conversion of such shares of Class A Common Stock.
(k) Issuances of Shares. The Company will not issue any
shares of Class A Common Stock other than pursuant to the exercise of the
Warrants.
(l) Registration Rights Priorities. On or prior to the
Merger Consummation Date, Brunswick shall cause the holders of its Preferred
Stock and all other holders of securities of the Company that are officers and
directors of the Company and have registration rights to agree, or otherwise
become subject to contractual provisions to the effect, that
(i) in the event of any registration of securities of the
Company where the intended method of distribution of such securities
is by means of an underwriting, (A) all Warrant Shares requested by
the Holders to be included in such registration and underwriting
pursuant to the rights of the Holders under the Registration Rights
Agreement shall first be included before any shares of Preferred Stock
(or other securities of the Company issued in connection with the
issuance of such Preferred Stock) or other securities of the Company
held by such officers and directors shall be included in such
registration and underwriting, (B) such priority of registration
rights shall be effective notwithstanding that any other holder of
securities of the Company has not agreed that Warrant Shares may first
be included in such registration and underwriting, and (C) in order to
effect such
- 19 -
24
registration and underwriting of Warrant Shares, such other holders of
securities of the Company that have not so agreed that Warrant Shares
shall first be included in such registration and underwriting may have
a larger percentage of their shares included therein than otherwise
would be included absent such registration and underwriting of Warrant
Shares; and
(ii) if requested by the Company and an underwriter of
Common Stock (or other securities) of the Company, not to sell or
otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by it during a period of not less than
90 days following the effective date of a registration statement of
the Company filed under the Securities Act, provided that such
agreement may apply only to the first such registration statement of
the Company after the Merger Consummation Date that includes
securities to be sold on its behalf to the public in an underwritten
offering.
The form of such agreements and provisions shall be reasonably satisfactory to
the Required Holders and, in the case of clause (i) above, shall be solely for
the benefit of the Holders of Warrant Securities and not for any other Person.
SECTION 7. Warrant Certificates. The Warrant Certificates to
be delivered pursuant to this Agreement shall be in registered form only as
provided in Section 9 and, (a) in the case of the Series A Warrants, in the
form set forth as Exhibit A and, (b) in the case of the Series B Warrants, in
the form of Exhibit B.
SECTION 8. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by the duly authorized
officers of the Company under its corporate seal. Each such signature upon the
Warrant Certificates may be in the form of a facsimile signature of the duly
authorized officers of the Company and may be printed or otherwise reproduced
on the Warrant Certificates and for that purpose the Company may adopt and use
the facsimile signature of any person who shall have been a duly authorized
officer of the Company, notwithstanding the fact that at the time the Warrant
Certificates shall be delivered or disposed of such person shall have ceased to
hold such office. The seal of the Company may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Warrant Certificates. In case any officer of the Company who shall have signed
any of the Warrant Certificates shall cease to be such officer before the
Warrant Certificates so signed shall have been disposed of by the Company, such
Warrant Certificates nevertheless may be delivered or disposed of as though
such person had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate although at the date of
the execution of this Agreement such person was not such officer.
SECTION 9. Registration. The Company shall number and
register the Warrant Certificates in a register as they are issued. The
Company may deem and treat the registered holder(s) of the Warrant Certificates
as the absolute owner(s) thereof (notwithstanding any notation
- 20 -
25
of ownership or other writing thereon made by anyone) for all purposes and
shall not be affected by any notice to the contrary.
SECTION 10. Registration of Transfers and Exchanges. (a) The
Company shall from time to time register the transfer of any outstanding
Warrant Certificates in a Warrant register to be maintained by the Company upon
surrender of such Warrant Certificates accompanied by a written instrument or
instruments of transfer in form reasonably satisfactory to the Company, duly
executed by the registered Holder or Holders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney; provided,
however, that prior to effecting such transfer, the transferee shall agree (in
a form reasonably satisfactory to the Company) to be bound by the terms of this
Agreement, including, without limitation, Section 19. Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be canceled and
disposed of by the Company. Until the Warrant Certificate is transferred on
the Warrant register of the Company, the Company may treat the Holder as shown
in the Warrant register as the absolute owner of the Warrant Certificate for
all purposes, and notwithstanding any notice to the contrary. The Company
agrees that it will make the Warrant register available for inspection by the
Holders during normal business hours at its office and that the Holders may
rely on the Warrant register for purposes of complying with the preceding
sentence.
(b) The Warrants shall be transferable in whole or in
part and, in the event that a Warrant Certificate is transferred in respect of
fewer than all the Warrants evidenced by the Warrant Certificate, a new Warrant
Certificate evidencing the remaining Warrant or Warrants will be issued and
delivered pursuant to the provisions of this Section 10 and of Section 8.
(c) If any transfer of Warrants or Warrant Shares is not
made pursuant to an effective registration statement under the Securities Act,
the Holder will, if reasonably requested by the Company, deliver to the Company
an opinion of counsel, which may be counsel to the Holder but which must be
reasonably satisfactory to the Company, reasonably satisfactory in form, scope
and substance to the Company, that such Warrants or Warrant Shares may be sold
without registration under the Securities Act, as well as:
(1) an investment covenant reasonably
satisfactory to the Company signed by the proposed transferee (except
that no such covenant will be required in connection with a transfer
effected in accordance with Rule 144A under the Securities Act);
(2) an agreement by such transferee to the
impression of the restrictive legends set forth below on the Warrant
Certificate or on the certificate evidencing such Warrant Shares.
The Holders agree that each Warrant Certificate and each certificate
representing Warrant Shares will bear the following legend (the "Securities
Legend"):
- 21 -
26
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS. SAID
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION, OR AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL TO THE
HOLDER) AS TO AN EXEMPTION, FROM THE REGISTRATION
PROVISIONS OF SAID ACT OR LAWS."
Notwithstanding the foregoing provisions of this Section 10, the restrictions
upon the transferability of the Warrant Securities and the Securities Legend
requirement set forth above in this Section 10 shall terminate as to any of the
Warrant Securities (i) when and so long as such Warrant Security shall have
been effectively registered under the Securities Act and disposed of pursuant
thereto or (ii) when the Company shall have received an opinion of counsel
reasonably satisfactory to it that such Securities Legend is not required in
order to ensure compliance with the Securities Act. Whenever the restrictions
imposed by this Section 10 shall terminate as to any Warrant Security, as
hereinabove provided, the Holder thereof shall be entitled to receive from the
Company, at the expense of the Company, a new Warrant Certificate or
certificate for Warrant Shares bearing the following legend in place of the
Securities Legend set forth above:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE TERMINATED
ON ______________, 19__, AND ARE OF NO FURTHER FORCE
AND EFFECT."
The Holders further agree that each Warrant Certificate and each certificate
representing Warrant Shares will bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS OF A WARRANT PURCHASE AGREEMENT,
DATED AS OF APRIL 15, 1996, BETWEEN BRUNSWICK
BIOMEDICAL CORPORATION (THE "COMPANY") AND
INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION
(THE "PURCHASER"),
- 22 -
27
AND A REGISTRATION RIGHTS AGREEMENT, DATED AS OF
APRIL 15, 1996, AMONG THE COMPANY AND THE PURCHASER,
COPIES OF EACH OF WHICH ARE ON FILE AT THE MAIN
OFFICE OF THE COMPANY. ANY SALE OR TRANSFER OF THE
SECURITIES EVIDENCED BY THIS CERTIFICATE IS SUBJECT
TO THE TERMS OF THOSE AGREEMENTS AND ANY SALE OR
TRANSFER OF SUCH SECURITIES IN VIOLATION OF SAID
AGREEMENTS SHALL BE INVALID."
Warrant Certificates may be exchanged at the option of the Holder(s) thereof
when surrendered to the Company at its office for another Warrant Certificate
or other Warrant Certificates of like tenor and representing in the aggregate a
like number of Warrants, including, without limitation, upon an adjustment in
the Exercise Price or in the number of Warrant Shares purchasable upon exercise
of the Warrants. Warrant Certificates surrendered for exchange shall be
canceled and disposed of by the Company.
SECTION 11. Exercise of Warrants; Conversion of Warrants.
(a) Subject to the terms of this Agreement, each Holder shall have the right,
which may be exercised at any time or from time to time prior to April 15,
2006, to receive from the Company the number of fully paid and nonassessable
Warrant Shares which such Holder may at the time be entitled to receive on
exercise of all or any part of the Warrants and payment of the appropriate
Exercise Price then in effect for such Warrant Shares. A Warrant may be
exercised upon surrender to the Company at its office designated for such
purpose (the address of which is set forth in Section 20) of the certificate or
certificates evidencing the Warrants to be exercised with the form of election
to purchase attached thereto properly completed and signed, upon payment to the
Company of the appropriate Exercise Price for the number of Warrant Shares in
respect of which such Warrants are then exercised. Payment of the aggregate
Exercise Price shall be made in cash or by check payable to the order of the
Company. Upon such surrender of Warrant Certificates and payment of the
appropriate Exercise Price, the Company shall issue and cause to be delivered
with all reasonable dispatch (and in any event within ten (10) Business Days of
such surrender and payment) to or upon the written order of the Holder, and in
the name of the Holder or the Holder's nominee, a certificate or certificates
for the number of full Warrant Shares issuable upon the exercise of such
Warrants together with such other property (including cash) and securities as
may then be deliverable upon such exercise, including cash for fractional
Warrant Shares as provided in Section 16. Such certificate or certificates
shall be deemed to have been issued and the Person so named therein shall be
deemed to have become a holder of record of such Warrant Shares as of the date
of the surrender of such Warrant Certificates and payment of the Exercise
Price.
- 23 -
28
(b) Subject to the terms of this Agreement, each Holder
shall have the right (the "Conversion Right"), which may be exercised at any
time or from time to time prior to April 15, 2006, to convert the Warrants, in
whole or in part, into the number of fully paid and nonassessable Warrant
Shares calculated pursuant to the following formula:
X = Y (A-B)
-------
A
where: X = the number of Warrant Shares to be
issued to the Holders;
Y = the number of Warrant Shares for
which the Conversion Right is being
exercised;
A = the Fair Market Value per Share as
of the date of exercise of such
Conversion Right; and
B = the Exercise Price with respect to
such Warrants.
A Warrant may be converted upon surrender to the Company at its office
designated for such purpose (the address of which is set forth in Section 20)
of the certificate or certificates evidencing the Warrants to be converted with
the form of election to convert attached thereto properly completed and signed.
Upon such surrender of Warrant Certificates, the Company shall issue and cause
to be delivered with all reasonable dispatch (and in any event within ten (10)
Business Days of such surrender) to or upon the written order of the Holder,
and in the name of the Holder or the Holder's nominee, a certificate or
certificates for the number of full Warrant Shares issuable upon the conversion
of such Warrants together with such other property (including cash) and
securities as may then be deliverable upon such conversion, including cash for
fractional Warrant Shares as provided in Section 16. Such certificate or
certificates shall be deemed to have been issued and the Person so named
therein shall be deemed to have become a holder of record of such Warrant
Shares as of the date of the surrender of such Warrant Certificates.
(c) The Warrants shall be exercisable and convertible, at the
election of the Holders thereof, either in full or from time to time in part,
and in the event that a Warrant Certificate is exercised or converted in
respect of fewer than all of the Warrant Shares issuable pursuant to such
Warrant Certificate at any time prior to the date of expiration of the
Warrants, a new Warrant Certificate evidencing the remaining Warrant or
Warrants will be issued and delivered pursuant to the provisions of this
Section 11 and of Section 8. All Warrant Certificates surrendered upon
exercise or conversion of Warrants shall be canceled and disposed of by the
Company. The Company shall keep copies of this Agreement and any notices
received hereunder available for inspection during normal business hours at its
office. The Company will furnish, at its expense, copies of this Agreement and
all such notices, upon request, to any Holder of any Warrant Certificates.
- 24 -
29
SECTION 12. Payment of Taxes. The Company will pay all stamp
and transfer taxes in connection with the issuance, sale and delivery of the
Warrants hereunder, as well as all such taxes attributable to the initial
issuance of Warrant Shares upon the exercise of Warrants and payment of the
appropriate Exercise Price or upon conversion of the Warrants. The Company
will not, however, be required to pay any tax or other similar charges imposed
in connection with any transfer of any Warrant Securities. Nothing herein
shall be construed as requiring the Company to pay any taxes imposed in respect
of income realized by any Holder upon the purchase, transfer or exercise of
Warrants.
SECTION 13. Mutilated or Missing Warrant Certificates. Upon
receipt by the Company of evidence reasonably satisfactory to the Company
(which shall include an affidavit of the Holder) that any Warrant Certificate
shall have been mutilated, lost, stolen or destroyed and, in the case of loss,
theft or destruction, a customary indemnity agreement from the Holder of such
Warrant Certificate, the Company shall issue, in exchange and substitution for
and upon cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants.
SECTION 14. Reservation of Warrant Shares. The Company will
at all times that any Warrant is exercisable reserve and keep available, free
from preemptive or similar rights, out of the aggregate of its authorized but
unissued capital stock or its authorized and issued capital stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, (i) the maximum number of shares of
each class of capital stock constituting a part of the Warrant Shares which may
then be deliverable upon the exercise of all outstanding Warrants and (ii) the
maximum number of shares of each class of capital stock of the Company which
may then be delivered upon the conversion of all issued Warrant Shares into
Voting Common Stock of the Company. The Company shall cause all shares of
Voting Common Stock into which shares of Class A Common Stock issuable upon
exercise of the Warrants are convertible to be (x) listed (or to be listed
subject to notice of issuance) on each securities exchange on which shares of
Voting Common Stock are listed, or (y) admitted for trading in any inter-dealer
quotation system on which shares of Voting Common Stock are traded. The
Company or, if appointed, the transfer agent for shares of each class of
capital stock of the Company (the "Transfer Agent") and every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the Warrants will be irrevocably authorized and directed at all
times to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants or of the rights of conversion of the Warrant
Shares. The Company will furnish such Transfer Agent a copy of all notices of
adjustments, and certificates related thereto, transmitted to each Holder
pursuant to Section 17. Before taking any action which would cause an
adjustment pursuant to Section 15 to the maximum number of Warrant Shares
deliverable upon the exercise of all outstanding Warrants above the then
authorized number of shares of Class A Common Stock, the Company shall cause to
be authorized additional shares of Class A Common Stock such that such maximum
number of shares of Class A Common Stock deliverable upon
- 25 -
30
exercise of all outstanding Warrants does not exceed the number of shares of
Class A Common Stock authorized pursuant to the Organic Documents of the
Company. Before taking any action which would cause an adjustment pursuant to
Section 15 to reduce the Exercise Price below the then par value (if any) of
the Warrant Shares, the Company will take any corporate action which may, in
the opinion of its counsel (which may be counsel employed by the Company), be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares at the Exercise Price as so adjusted.
SECTION 15. Adjustment of Exercise Price and Number of
Warrant Shares Issuable. The Exercise Price and the number of Warrant Shares
issuable upon the exercise of each Warrant are subject to adjustment from time
to time upon the occurrence of any of the events enumerated in this Section 15.
(a) Adjustment for Change in Capital Stock of the
Company. If the Company (i) pays a dividend or makes a distribution on any
class of its Common Stock in shares of any class of its Stock, (ii) subdivides
its outstanding shares of any class of Common Stock into a greater number of
shares, (iii) combines its outstanding shares of any class of Common stock
into a smaller number of shares, (iv) makes a distribution on any class of its
Common Stock in shares of its Stock other than Common Stock, or (v) issues by
reclassification of any class of its Common Stock any shares of its Stock, then
the Exercise Price in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which it would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action and the shares of
Class A Common Stock issuable upon exercise of such Warrants had been converted
into shares of Voting Common Stock. Such adjustment shall be made successively
whenever any event listed above shall occur, and shall become effective
immediately after the record date in the case of a dividend or distribution and
immediately after the effective date in the case of a subdivision, combination
or reclassification. If after an adjustment a Holder of a Warrant upon exercise
of such Warrant may receive shares of two or more classes of capital stock of
the Company, the Board of Directors of the Company shall determine in the good
faith exercise of its reasonable business judgment the allocation of the
adjusted Exercise Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each class of
capital stock shall thereafter be subject to adjustment on terms comparable to
those in this Section 15.
(b) Adjustment for Common Stock Issues. If the Company
issues shares of Common Stock for a consideration per share less than the Fair
Market Value per Share on the date the Company fixes the offering price of such
additional shares, the Exercise Price shall be adjusted in accordance with the
following formula:
P
-
E' = E x (O + M)
-----
A
- 26 -
31
where: E' = the adjusted Exercise Price;
E = the then current Exercise Price;
O = the number of shares of Common Stock
outstanding immediately prior to the issuance
of such additional shares;
P = the aggregate consideration received for the
issuance of such additional shares;
M = the Fair Market Value per Share on the date
the Company fixes the offering price of such
additional shares; and
A = the number of shares of Common Stock
outstanding immediately after the issuance of
such additional shares.
The adjustment shall be made successively whenever any such issuance is made,
and shall become effective immediately after such issuance. The provisions of
this subsection (b) do not apply (i) to of the transactions described in
subsection (a) of this Section 15 or (ii) any transaction for which an
adjustment has been made pursuant to the provisions of subsections (c) or (d)
of this Section 15, or (iii) the issuance of any Excluded Shares.
(c) Adjustment for Convertible Securities Issues. If the
Company issues any evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable, with or without payment
of additional consideration in cash or property, for shares of Stock, either
immediately or upon the occurrence of a specified date or a specified event
("Convertible Securities"), other than shares of Class A Common Stock issued
pursuant to the Warrants and Convertible Securities for which an adjustment has
been made pursuant to the provisions of subsection (d) of this Section 15,
whether or not the right to convert or exchange thereunder is immediately
exercisable or is conditioned upon the passage of time, the occurrence or
non-occurrence of some other event, or both, for a consideration per share of
Stock initially deliverable upon conversion or exchange of such Convertible
Securities less than the Fair Market Value per Share on the date of issuance of
such Convertible Securities, the Exercise Price shall be adjusted in accordance
with this formula:
P
-
E' = E x O + M
-----
O + D
where: E' = the adjusted Exercise Price;
E = the then current Exercise Price;
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32
O = the number of shares of Common Stock
outstanding immediately prior to the issuance
of such Convertible Securities;
P = the aggregate consideration received for the
issuance of such Convertible Securities; and
M = the Fair Market Value per Share on the date
of issuance of such Convertible Securities;
and
D = the maximum number of shares of Common Stock
deliverable upon exercise, conversion or in
exchange of such Convertible Securities at
the Minimum Price.
In this subsection (c), the term "Minimum Price" means the lowest price at
which the Convertible Securities can be converted into or exchanged for Common
Stock, regardless of whether that is the initial rate or is conditioned upon
the passage of time, the occurrence or non-occurrence of some other event, or
both. The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance. If all of
the Stock deliverable upon conversion or exchange of such Convertible
Securities has not been issued when such Convertible Securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such Convertible Securities been made on the basis of the actual
number of shares of Stock issued upon conversion or exchange of such
Convertible Securities.
(d) Adjustment for Right, Option and Warrant Issues. If the
Company issues any rights, options or warrants to subscribe for or purchase or
otherwise acquire Stock, whether or not the right to exercise such rights,
options or warrants is immediately exercisable or is conditioned upon the
passage of time, the occurrence or non-occurrence of some other event, or both
(the "Option Securities"), for a consideration per share of Stock initially
deliverable upon exercise of such Option Securities less than the Fair Market
Value per Share on the date of issuance of such Option Securities, the Exercise
Price shall be adjusted in accordance with this formula:
P
-
E' = E x O + M
-----
O + D
where: E' = the adjusted Exercise Price;
E = the then current Exercise Price;
O = the number of shares of Common Stock outstanding
immediately prior to the issuance of such Option
Securities;
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33
P = the aggregate consideration received for the issuance
of such Option Securities;
M = the Fair Market Value per Share on the date of
issuance of such Option Securities; and
D = the maximum number of shares of Common Stock
deliverable upon exercise, conversion or in exchange
of such Option Securities at the Minimum Price.
As used in this subsection (d), the term "Minimum Price" means the lowest price
at which the Option Securities may be exercised to purchase or otherwise
acquire Common Stock, regardless of whether that is the initial price or is
conditioned upon the passage of time, the occurrence or non-occurrence of some
other event, or both. The adjustment shall be made successively whenever any
such issuance is made, and shall become effective immediately after such
issuance. If all of the Common Stock deliverable upon exercise of such Option
Securities has not been issued when such Option Securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such Option Securities been made on the basis of the actual number
of shares of Common Stock issued upon such exercise of such Option Securities.
(e) Consideration Received. For purposes of any
computation respecting consideration received pursuant to any subsection of
this Section 15, the following shall apply:
(i) in the case of the issuance of shares of Common Stock
for cash, the consideration received shall be the amount of cash
received by the Company therefor, without deduction therefrom of any
reasonable expenses incurred by the Company in connection therewith or
any reasonable underwriters' discounts, fees and commissions paid or
allowed by the Company in connection therewith.
(ii) in the case of the issuance of shares of Common Stock
for a consideration consisting in whole or in part of other than cash,
the consideration other than cash shall be deemed to be the fair
market value thereof as determined by the Board of Directors of the
Company in the good faith exercise of its business judgment, without
deduction therefrom of any reasonable expenses incurred by the
Company in connection therewith. In any circumstances in which the
fair market value of any such consideration is to be determined
pursuant to this paragraph (ii), the Company shall give to the Holders
(or, if such determination affects less than all of the Holders, to
the Holders so affected) written notice of the proposed fair market
value, as determined in good faith by the Board of Directors of the
Company. If, within thirty (30) days after the date such notice is
given, the Company and such Holders agree upon the fair market value
then the fair market value for purposes of this paragraph (ii) shall
be as so agreed. If such Holders and the Company do not agree upon
such fair market value within such 30-day period, then the Required
Holders and the Company shall appoint a recognized investment banking
firm of national reputation,
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34
reasonably acceptable to the Required Holders and the Company. If the
Company and the Required Holders cannot agree on the appointment of a
mutually acceptable investment banking firm, or if the firm so
appointed declines or fails to serve, then the Required Holders and
the Company shall each choose one such investment banking firm and the
respective firms so chosen shall appoint another recognized investment
banking firm of national reputation. The investment banking firm so
selected shall appraise the fair market value for the purposes of this
paragraph (ii), and such investment banking firm shall make such
appraisal (which shall be in the form of a written report signed by
such investment banking firm) and, for the purposes of determining the
fair market value pursuant to this paragraph (ii), such appraised fair
market value determined as herein provided shall be final and
conclusive on the Company and the Holders. If the appraised value of
the Company as determined by such investment banking firm is equal to
or less than that determined by the Board of Directors of the Company
in accordance with this paragraph (ii), then all fees and expenses of
such investment banking firm shall be paid by the Required Holders
requesting such appraisal. If the appraised value of the Company as
determined by such investment banking firm is greater than that
determined by the Board of Directors in accordance with this paragraph
(ii), then all fees and expenses of such investment banking firm shall
be paid by the Company.
(iii) in the case of the issuance of Convertible Securities
or securities issuable upon the exercise of Option Securities, the
aggregate consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such
Convertible Securities, plus the consideration, if any, received by
the Company for the issuance of such Option Securities, plus the
additional minimum consideration, if any, to be received by the
Company upon the conversion, exchange or exercise thereof (the
consideration in each case to be determined in the same manner as
provided in clauses (i) and (ii) of this subsection (e)).
(f) Special Adjustments. If the purchase price provided
for in any Option Securities, the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities or the rate at
which any Convertible Securities are convertible into or exchangeable for Stock
shall change, the Exercise Price or number of Warrant Shares purchasable upon
the exercise of the Warrants in effect at the time of such event shall
forthwith be readjusted. The Exercise Price or number of Warrant Shares
purchasable upon the exercise of the Warrants shall be adjusted to those
amounts which would have been in effect at such time had such Option Securities
or Convertible Securities outstanding at such time initially been granted,
issued or sold and the Exercise Price or number of Warrant Shares purchasable
upon the exercise of the Warrants initially adjusted as provided in the
applicable subsection of this Section 15, whichever was applicable, except that
the minimum amount of additional consideration payable and the total maximum
number of shares issuable shall be determined after giving effect to such event
(and any prior event or events).
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35
(g) When No Adjustment Required. No adjustment need be
made for a change in the par value or absence of par value of any Common Stock.
No adjustment in the Exercise Price need be made unless adjustment would
require an increase or decrease of at least 1% of the Exercise Price. Any
adjustments that are not made but deferred pursuant to this subsection shall be
carried forward and taken into account in any subsequent adjustment.
(h) Determination of Fair Market Value per Share; Notice
of Adjustment. Prior to issuing any shares of Common Stock, any Convertible
Securities or any Option Securities, the Company shall cause the Board of
Directors of the Company to determine in good faith the Fair Market Value per
Share, as of the date on which the Company fixes the offering price of such
shares or as of the date of issuance of such Convertible Securities or Option
Securities, as the case may be. Within five (5) days of such determination by
the Board of Directors of the Company, but in no event later than thirty (30)
days prior to issuance of such Common Stock, Convertible Securities or Option
Securities, the Company shall give the Holders written notice of the proposed
Fair Market Value per Share. If within such thirty (30) day period, the
Company and such Holders agree upon the Fair Market Value per Share, then the
Fair Market Value per Share shall be as so agreed. If, within such 30-day
period, the Company and the Required Holders do not agree upon such Fair Market
Value per Share, then the Fair Market Value per Share shall be determined as
provided in clause (b) of the definition thereof.
(i) Reorganization of the Company. In the event of any
capital reorganization, recapitalization or reclassification of the capital
stock of the Company, or consolidation, merger or amalgamation of the Company
with another entity, any acquisition of capital stock of the Company by means
of a share exchange, or the sale, lease, transfer, conveyance or other
disposition of all or substantially all of its assets to another entity, then,
as a condition of such reorganization, recapitalization, reclassification,
consolidation, merger, amalgamation, share exchange or sale, lease, transfer,
conveyance or other disposition, lawful and adequate provision shall be made
whereby the Holders of the Warrant Certificates shall thereafter have the right
to purchase and receive, on the basis and upon the terms and conditions
specified in this Agreement and in lieu of the Warrant Shares immediately
theretofore purchasable and receivable upon the exercise of the rights
represented by the Warrants, such shares of stock, securities, cash or property
as may be issued or payable with respect to or in exchange for the number of
Warrant Shares immediately theretofore purchasable and receivable upon the
exercise of the rights represented by the Warrant Certificates had such
reorganization, recapitalization, reclassification, consolidation, merger,
amalgamation, share exchange or sale, lease, transfer, conveyance or other
disposition not taken place. If such consolidation, merger, amalgamation,
share exchange, sale, lease, transfer, conveyance or other disposition is with
any Person or group of Persons (within the meaning of Section 13(d) or 14(d) of
the Exchange Act) who shall have made a purchase, tender or exchange offer
which was accepted by the holders of not less than twenty percent (20%) of the
outstanding shares of Common Stock of the Company, the Holders of the Warrants
shall have been given a reasonable opportunity (and, in no event, less than 30
days) to elect to receive, either (x) the stock, securities, cash or property
it would have received pursuant to the immediately preceding sentence or (y)
the stock, securities, cash or property issued or paid (or to be issued or
paid) to holders of the Common Stock in accordance with such offer. In any
such case appropriate provision shall be
- 31 -
36
made with respect to the rights and interests of the Holders of the Warrants to
the end that the provisions of this Agreement (including, without limitation,
provisions for adjustment of the Exercise Price and of the number and type of
securities purchasable upon the exercise of the Warrants) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
securities, cash or property thereafter deliverable upon the exercise of the
Warrants. The Company shall not effect any such consolidation, merger,
amalgamation, share exchange or sale, lease, transfer, conveyance or other
disposition unless prior to or simultaneously with the consummation thereof
the successor entity (if other than the Company) resulting from such
consolidation, merger or amalgamation, share exchange or the entity purchasing
or otherwise acquiring such assets or shares (i) shall assume by a supplemental
Warrant Agreement, satisfactory in form, scope and substance to the Required
Holders (which shall be mailed or delivered to the registered Holders of the
Warrants at the last address of such Holders appearing on the books of the
Company) the obligation to deliver to such Holders such shares of stock,
securities, cash or property as, in accordance with the foregoing provisions,
such Holders may be entitled to purchase (the "Substitute Securities") and (ii)
shall assume all of the obligations of the Company set forth in this Agreement
and the Registration Rights Agreement. Following such assumption such
obligations shall apply to the Substitute Securities rather than to the
Warrant Shares. If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an Affiliate of the
formed, surviving, transferee or lessee entity, such issuer shall join the
supplemental Warrant Agreement. The foregoing provisions of this paragraph
shall similarly apply to successive reorganizations, recapitalizations,
reclassifications, consolidations, mergers, amalgamations, share exchanges,
sales, leases, transfers, conveyances or other dispositions. The provisions of
this subsection (i) of Section 15 shall not apply to the Merger to the extent
the Merger complies with subsection (j) of Section 15.
(j) The Merger. Upon consummation of the Merger, (1) the
Warrant Documents and all obligations of Brunswick under the Warrant Documents
shall automatically become the legal, valid and binding obligations of STI,
enforceable against STI in accordance with their terms, as if STI had been the
signatory thereto, (2) each Series A Warrant shall be exercisable for a number
of shares of Class A Common Stock of STI equal to (i) the number of shares of
Class A Common Stock of Brunswick for which such Series A Warrant is
exercisable as of the Merger Consummation Date, multiplied by (ii) the
Conversion Factor, for an Exercise Price equal to $.10 per share multiplied by
the Conversion Factor, and (3) each Series B Warrant shall be exercisable for a
number of shares Class A Common Stock of STI equal to (i) the number of shares
of Class A Common Stock of Brunswick for which such Series B Warrant is
exercisable as of the Merger Consummation Date, multiplied by (ii) the
Conversion Factor, for an Exercise Price equal to the Exercise Price
immediately prior to consummation of the Merger divided by the Conversion
Factor. Brunswick acknowledges and agrees that it is a condition to the Merger
that STI execute and deliver to the Purchaser, prior to or concurrently with
the consummation of the Merger, (1) an assumption agreement, in form and
substance reasonably satisfactory to the Required Holders, pursuant to which
STI shall expressly assume and reaffirm its obligations under the Warrant
Documents, (2) substitute Series A Warrant Certificates and Series B Warrant
Certificates evidencing warrants for the number of shares of Class A Common
Stock of STI set forth in the preceding sentence and reflecting the Exercise
Prices for the Series A Warrants and Series B
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37
Warrants effective upon and after the Merger Consummation Date, and (3) an
opinion of counsel to STI in the form of Exhibit F.
(k) When Issuance or Payment May Be Deferred. In any
case in which this Section 15 shall require that an adjustment in the Exercise
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event (i) issuing to the Holder
of any Warrant exercised after such record date the Warrant Shares issuable
upon such exercise over and above the Warrant Shares issuable upon such
exercise on the basis of the Exercise Price prior to such adjustment and (ii)
paying to such Holder any amount in cash in lieu of a fractional share pursuant
to Section 16; provided, however, that the Company shall deliver to such Holder
a xxxx or other appropriate instrument evidencing such Holder's right to
receive such additional Warrant Shares and cash upon the occurrence of the
event requiring such adjustment.
(l) Adjustment in Number of Shares. Upon each adjustment
of the Exercise Price pursuant to this Section 15, each Warrant outstanding
prior to the making of the adjustment in the Exercise Price shall thereafter
evidence the right to receive upon payment of the adjusted Exercise Price that
number of Warrant Shares (calculated to the nearest hundredth) obtained from
the following formula:
N'= N x E
-
E'
where: N' = the adjusted number of Warrant Shares
issuable upon exercise of a Warrant by
payment of the adjusted Exercise Price;
N = the number or Warrant Shares previously
issuable upon exercise of a Warrant by
payment of the Exercise Price prior to
adjustment;
E' = the adjusted Exercise Price; and
E = the Exercise Price prior to adjustment.
Anything in this subsection (l) or elsewhere in this Agreement to the contrary
notwithstanding, if because of any limitations set forth in subsection (g) of
this Section 15, no adjustment in the Exercise Price is made, the provisions of
this subsection (l) shall nevertheless be given effect so as to increase or
decrease the adjusted number of Warrant Shares as though E' in the above
formula had actually been adjusted.
SECTION 16. Fractional Interests. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If
more than one Warrant shall be presented for exercise in full at the same time
by the same Holder, the number of full Warrant Shares which shall be issuable
upon exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of the
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38
Warrant Shares would, except for the provisions of this Section 16, be issuable
on the exercise of any Warrants (or specified portion thereof), the Company
shall pay an amount in cash equal to the Fair Market Value per Share on the day
immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
SECTION 17. Notice to Warrant Holders. Upon any adjustment
of the Exercise Price or number or type of securities purchasable upon exercise
of the Warrants pursuant to Section 15, and as otherwise required by Section
15, the Company shall promptly thereafter (i) upon the request of the Required
Holders, cause to be filed with the Company a certificate of the chief
financial officer of the Company setting forth the Exercise Price and the
number and type of securities or other property constituting Warrant Shares
after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are based and, in the
case of an adjustment pursuant to Section 15(i) or (j), setting forth the
number and type of securities or other property constituting Warrant Shares (or
portion thereof) issuable, after such adjustment in the Exercise Price or
number of Warrant Shares purchasable upon exercise of the Warrants, upon
exercise of a Warrant and payment of the adjusted Exercise Price, and (ii)
cause to be given to each of the Holders of the Warrant Certificates written
notice of such adjustments, together with a copy of such certificate. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be given under the other provisions of this Section 17. In
the event:
(a) the Company shall authorize the issuance to holders
(although not necessarily to all such holders) of shares of Stock or rights,
options or warrants to subscribe for or purchase or otherwise acquire shares of
Stock or of any other securities or property (including securities of any other
issuer) or of any other subscription rights, options or warrants; or
(b) the Company shall authorize the payment of any
dividend or distribution to holders of shares of Stock of cash, Stock or other
securities or property (including securities of any other issuer) of the
Company; or
(c) of any capital reorganization, reclassification or
recapitalization of the capital stock of the Company, or any amalgamation,
consolidation or merger to which the Company is a party, or any acquisition of
capital stock of the Company through a share exchange, or of the sale, lease,
conveyance, transfer or other disposition of the properties and assets of the
Company substantially as an entirety, or a purchase, tender or exchange offer
for shares of Common Stock or other securities constituting part of the Warrant
Shares (whether by the Company or some other party); or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company proposes to take any action which would
require an adjustment of the Exercise Price or number of Warrant Shares
purchasable upon exercise of the Warrants pursuant to Section 15;
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39
then the Company shall cause to be given to each of the Holders, at least 20
days prior to the applicable record date hereinafter specified (or promptly in
the case of events for which there is no record date), a written notice stating
(as applicable) (i) the date as of which the holders of record of shares of
Stock entitled to receive any such rights, options, warrants or dividends or
distribution are to be determined, (ii) the date on which any such
reclassification, recapitalization or reorganization, consolidation, merger,
amalgamation, share exchange, sale, lease, conveyance, transfer, disposition,
dissolution, liquidation or winding up is expected to become effective or be
consummated, or (iii) the initial expiration date set forth in any purchase,
tender or exchange offer for shares of Stock, and the date as of which it is
expected that holders of record of shares of Stock or other securities
constituting a part of the Warrant Shares (or securities into which the Warrant
Shares may be converted) shall be entitled to exchange such shares or
securities for securities or other property, if any, deliverable upon such
reclassification, recapitalization, reorganization, consolidation, merger,
amalgamation, share exchange, sale, lease, conveyance, transfer, disposition,
dissolution, liquidation or winding up. The failure to give the notice
required by this Section 17 or any defect therein shall not affect the legality
or validity of any distribution, right, option, warrant, reorganization,
recapitalization, reclassification, consolidation, merger, amalgamation, share
exchange, sale, lease, conveyance, transfer, disposition, dissolution,
liquidation or winding up, or the vote upon any action. Nothing contained in
this Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the Holders the right to vote or to consent as stockholders in
respect of the meetings of stockholders or the election of members of the Board
of Directors of the Company or any other matter, or any rights whatsoever as
stockholders of the Company.
SECTION 18. Cash Distributions and Dividends. If the Company
pays a dividend or makes a distribution to the holders of its Stock of any
securities (other than Stock) or property (including cash and securities of
other companies) of the Company, or any rights, options or warrants to purchase
securities (other than Stock) or property (including securities of other
companies) of the Company, then, simultaneously with the payment of such
dividend or the making of such distribution, and as a condition precedent to
its right to do so, it will pay or distribute to the Holders of Series A
Warrant Certificates an amount of property (including without limitation cash)
and/or securities (including without limitation securities of other companies)
of the Company as would have been received by such Holders had they exercised
all of the Series A Warrants represented by the Series A Warrant Certificates
immediately prior to the record date (or other applicable date) used for
determining stockholders of the Company entitled to receive such dividend or
distribution. Anything in subsection (d) of Section 15 to the contrary
notwithstanding, no adjustment to the Exercise Price shall be made for any
distribution of Convertible Securities of the Company to the Holders pursuant
to the provisions of this Section 18.
SECTION 19. Put Rights; Tag-Along Rights and Registration
Rights.
(a) Put by Holders. Unless the Required Holders have otherwise
agreed in writing, at any time and from time to time on or after the occurrence
of a Put Event, the Put Right shall be exercisable by each of the Holders.
After receipt of a Put Notice from any Holder, the Company will promptly (and
in any event within ten (10) days) give written notice (the "Put Exercise
Notice")
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40
to each of the other Holders of Warrant Securities that a Put Right has been
exercised. Each Holder will have the right to participate in the Put Right and
require the Company to repurchase all or any portion of such Holder's Warrant
Securities by delivering written notice to the Company within ten (10) days
following receipt of the Put Exercise Notice. All such notices delivered by
such other Holders will be deemed to have been delivered as of the date of the
initial Put Notice and taken together will be deemed to be one exercise of the
Put Right. Upon the exercise by a Holder of the Put Right, the purchase price
payable to such Holder (the "Put Purchase Price") by the Company for such
Holder's Warrant Securities shall be as follows:
(i) in the case of Warrants, an amount determined by
subtracting (A) the aggregate Exercise Price for Series B Warrants
then in effect under the Warrant Agreement from (B) the product of (1)
the Contract Value per Share, multiplied by (2) the number of shares
of Voting Common Stock that may be acquired upon the conversion by
such Holder of the shares of Class A Common Stock that would be
received upon exercise of such Holder's Warrants with respect to which
the Put Right is being exercised;
(ii) in the case of Class A Common Stock, an amount equal
to the product of (A) the Contract Value per Share, multiplied by (B)
the number of shares of Voting Common Stock that may be acquired upon
the conversion by such Holder of the shares of Class A Common Stock
with respect to which the Put Right is being exercised; and
(iii) in the case of Voting Common Stock, an amount equal
to the product of (A) the Contract Value per Share, multiplied by (B)
the number of shares of Voting Common Stock with respect to which the
Put Right is being exercised.
Promptly upon the receipt of a Put Notice pursuant to Section 19(a) the Company
shall cause the Contract Value per Share to be determined, and shall give
written notice of the determination thereof to each Holder, promptly upon the
determination thereof and in any event within thirty (30) days following the
Company's receipt of the Put Notice. The provisions of this Section 19(a)
shall apply until the termination of this Agreement pursuant to Section 24 to
any Person who acquires in any manner any Warrant Securities from any Holder.
(b) Closing. Each closing of the purchase and sale of any Warrant
Securities pursuant to Section 19(a) shall take place on a date (a "Put Closing
Date") which is the later of (i) thirty (30) days after the giving of the Put
Notice, and (ii) ten (10) days after determination of the Contract Value per
share, provided that if such day is not a Business Day such closing shall be on
the next succeeding Business Day. Payment of the Put Purchase Price shall be
due and payable in full on the Put Closing Date. The closing of such purchase
and sale of Warrant Securities shall take place at 10:00 a.m. on the Put Closing
Date at such location in Atlanta, Georgia, or New York, New York, as the
Required Holders may reasonably determine and notify the Company or at such
other location as may be agreed to by the Company and the Required Holders. The
Put Purchase Price shall be paid in full at each such closing, by wire transfer
of immediately available federal funds, and the Warrant Securities to be
repurchased at such closing shall be duly endorsed for transfer. Such Warrant
Securities shall be free and clear of all liens and encumbrances of any kind,
nature and
- 36 -
41
description, other than applicable restrictions under federal and state
securities laws, and each Holder shall represent and warrant to the Company to
such effect with respect to such Holder's Warrant Securities. The Company will
pay all stamp and transfer taxes in connection with the repurchase of the
Warrant Securities hereunder.
(c) Restrictions on Purchase. The Company covenants and agrees
that, other than the Restrictive Provisions, it shall not, and shall not permit
any of its Subsidiaries to, without the prior written consent of the Required
Holders, enter into or agree to become subject to any term, condition,
provision or agreement that would conflict with or restrict in any way the
performance of the Company's obligations under this Agreement or that would by
its terms restrict the availability of Legally Available Funds with which to
perform such obligations. Anything in this Agreement to the contrary
notwithstanding, the Company shall not be required to purchase Warrant
Securities under Section 19(a) if at the time of closing of the purchase and
sale of any Warrant Securities pursuant to Section 19(a) there exists any
Restrictions on Purchase. Upon receipt of a Put Notice, if the Company's
obligations under Section 19(a) at the time of performance would be subject to
Restrictions on Purchase, then the Company (i) shall promptly use all
reasonable efforts (excluding the payment of waiver, consent or similar
transactional fees, but including reasonable documentation costs and other
similar expenses) to cause the Required Lenders to waive compliance with any
such Restrictive Provisions and/or to amend the Restrictive Provisions so as to
permit the purchase of the Warrant Securities pursuant to this Agreement, (ii)
shall not repay, redeem, purchase or otherwise retire any indebtedness for
borrowed money of, or any debt securities issued by, the Company in an amount
or for a price or other consideration in excess of the principal amount
thereof, and (iii) shall not declare or pay any dividend or distribution on any
shares of Stock (other than dividends that accrue and cumulate on Preferred
Stock in accordance with the terms of such Preferred Stock as is in effect on
the date such Put Notice is received by the Company). If, notwithstanding the
Company's reasonable efforts required under this Section 19(c), the Company is
unable to fulfill its obligations under Section 19(a) because of the existence
of one or more Restrictions on Purchase, the Company shall give prompt written
notice thereof to each Holder exercising Put Rights, specifying in reasonable
detail the nature thereof and the extent, if any, to which the Company would be
able to fulfill its obligation to pay the Purchase Price within the
Restrictions on Purchase. If any Restrictions on Purchase exist on the
proposed Put Closing Date, then at the sole and independent election of each
such Holder, and pursuant to written notice given by any such Holder to the
Company: (i) such Holder's Put Right shall remain exercised and the closing of
the purchase and sale of Warrant Securities pursuant to such Holder's Put Right
shall be deferred until not more than five Business Days after all such
Restrictions on Purchase cease to exist; provided, however, that, as and to the
extent that such Restrictions on Purchase cease to exist, the Company shall
promptly make partial payments of the Purchase Price to such Holder, in which
case there shall be a series of such closings, each of which shall take place
not more than five Business Days after such Restrictions on Purchase have
ceased to exist to an extent that would permit such partial payments of the
Purchase Price in increments of not less than $100,000 ("Partially Available
Funds"); or (ii) the exercise of such Holder's Put Right shall be rescinded and
such Holder shall reserve its right to exercise the Put Right at any subsequent
time. In the event that any Holders make the election provided in clause (i)
of the immediately preceding sentence, the Company shall purchase from such
selling Holders that number of Warrant Securities as may
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42
be purchased at the Purchase Price using that portion of Partially Available
Funds for such purchase as equals the product of (a) all Partially Available
Funds, and (b) the ratio of (i) the Warrant Securities originally proposed to
be sold by such Holders electing to sell and not electing to rescind pursuant
to clause (ii) of the immediately preceding sentence, to (ii) the Warrant
Securities originally proposed to be sold by all Holders (treating all Warrants
as fully exercised for the Warrant Shares to which the Holders would be
entitled upon exercise of such Warrants). Such purchase shall be made from
each selling Holder pro rata based on the ratio of (i) the number of Warrant
Securities originally proposed to be sold by such Holder to (ii) the Warrant
Securities originally proposed to be sold by all Holders. None of the
provisions of this Section 19(c) shall be construed to limit any other right or
remedy under applicable law which any Holder may have as a result of the
failure by the Company to purchase Warrant Securities as herein provided.
(d) Tag-Along Rights. Without limitation to the right of any
Holder to exercise its Put Right pursuant to Section 19(a), if at any time the
Company shall determine to enter into any transaction or series of transactions
that would result in a Change of Control (a "Change of Control Transaction")
(any third party proposing to enter into such transaction or transactions being
hereinafter referred to in this Section 19(d) as a "Prospective Purchaser"),
the Company and any Prospective Purchaser shall first give written notice (the
"Offer Notice") to all of the Holders, specifying the name and address of the
Prospective Purchaser and the number of shares, if any, of Stock proposed to be
issued, sold, transferred or otherwise disposed of and setting forth in
reasonable detail the price, structure and other terms and conditions of the
Change of Control Transaction. The Offer Notice shall represent the offer (the
"Offer") from the Prospective Purchaser to each of the Holders of the right to
sell to the Prospective Purchaser as a condition to the consummation of the
proposed transaction described in the Offer Notice, all Warrant Securities then
owned by each Holder to the Prospective Purchaser and, at the option of the
Holders, on the same terms and conditions (including price and form of
consideration) as are being offered by the Prospective Purchaser to the Company
or at the Fair Market Value per Share, determined as of the date of the Offer
Notice, minus the Exercise Price (if any). Each Holder shall have thirty (30)
days from the date of receipt of the Offer Notice to give written notice of its
intention to accept or reject the Offer. Failure to respond within such
thirty-day period shall be deemed notice of rejection. In the event that any
Holder gives written notice to the Company and the Prospective Purchaser of its
intention to accept such Offer, then such written notice, taken in conjunction
with the Offer Notice, shall constitute a valid and legally binding agreement,
and each of the Holders so giving such written notice shall be entitled to sell
to the Prospective Purchaser, contemporaneously with the consummation of the
Change of Control Transaction, all of the Warrant Securities at the price
specified therefor by such Holder in accordance with this Section 19(d). In
the event that all of the Holders reject or are deemed to have rejected the
offer represented by the Offer Notice, the Company shall be free to proceed to
consummate such Change of Control Transaction on the terms and conditions set
forth in the Offer Notice, provided that such sale is not otherwise prohibited
by any agreement between the Company and the Purchaser. In the event the
Company fails to complete the proposed sale, transfer or other disposition
within ninety (90) days after the Holder or Holders rejected or were deemed to
have rejected the Offer, such transaction or transactions shall again be
subject to the provisions of this Section 19(d). The provisions of this
Section 19(d)
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43
shall apply until the termination of this Agreement pursuant to Section 24 to
any Person who acquires in any manner any Warrant Securities from any Holder.
(e) Limitation on Put Rights of Others. The Company covenants and
agrees that, neither the Company nor any of its Subsidiaries shall, directly
or indirectly, grant to any Person or agree to or otherwise become obligated in
respect of any rights to require the Company or any of its Subsidiaries to
purchase securities of the Company upon the demand of any Person. The Company
represents and warrants that neither it nor any of its Subsidiaries has
previously entered into any agreement granting any such rights to any Person,
except for such rights as are granted pursuant to the Preferred Stock Purchase
Agreement between Brunswick and the State of Maryland relating to the Series D
Preferred Stock of Brunswick.
(f) Severability. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the conflict
of any provision with any constitution, statute, rule or public policy, or for
any other reason, such circumstances shall not have the effect of rendering the
provision or provisions in question, invalid, inoperative or unenforceable in
any other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute, rule or public policy,
but this Agreement shall be reformed and construed in any such jurisdiction or
case as if such invalid, inoperative or unenforceable provision had never been
contained herein and such provision reformed so that it would be valid,
operative and enforceable to the maximum extent permitted in such jurisdiction
or in such case.
SECTION 20. Notices. All notices, consents, approvals,
agreements and other communications provided hereunder shall be in writing or
by telecopy and shall be sufficiently given to the Purchaser, the Holders and
the Company if addressed or delivered to them at the following addresses:
If to the Purchaser: ING Capital
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Credit Officer
Telecopier No.: (000) 000-0000
with copies to: ING Capital
Atlanta Xxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
and a copy to: King & Spalding
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44
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Xx.,
Esq.
Telecopier No.: (000) 000-0000
If to any other At its last known address appearing
Holder: on the books of the Company
maintained for such purpose
If to the Company Brunswick Biomedical Corporation
prior to the Merger 0 Xxxxxxxx Xxxx
Xxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxxxxx 00000
Date: Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
with a copy to: Xxxxxx & Dodge
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Company Survival Technology, Inc.
on or after the 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Merger Consumma- Xxxxxxxxx, Xxxxxxxx 00000
tion Date: Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
with a copy to: Xxxxxx & Dodge
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
or at such other address as any party may designate to any other party by
written notice. All such notices and communications shall be deemed to have
been duly given: (i) at the time delivered by hand, if personally delivered,
(ii) when received, if deposited in the mail, postage prepaid, (iii) when
transmission is verified, if telecopied, and (iv) on the next Business Day, if
timely delivered to an air courier guaranteeing overnight delivery.
SECTION 20. Costs and Expenses. The Company agrees to pay
all reasonable out-of-pocket expenses of the Purchaser (including reasonable
fees and expenses of counsel retained by the Purchaser from time to time) in
connection with (i) the negotiation, preparation, execution, and delivery of
this Agreement and each other Warrant Document, whether or not the transactions
contemplated hereby are consummated, and (ii) the consideration of legal
questions relevant hereto and thereto. The Company also agrees to reimburse
the Purchaser and each Holder upon demand
- 40 -
45
for all reasonable out-of-pocket expenses (including reasonable attorneys' fees
and expenses) incurred by the Purchaser or such Holder in enforcing the
obligations of the Company under this Agreement or any other Warrant Document
or in connection with any amendment, waiver, consent, supplement or other
modification to this Agreement or any Warrant Document.
SECTION 22. Indemnification. (a) In consideration of the
transactions contemplated by this Agreement and the other Warrant Documents,
the Company hereby agrees to indemnify, exonerate and hold the Purchaser and
each Holder, each of their respective successors and assigns, each of the
respective officers, directors, employees, attorneys and agents of the
Purchaser and each Holder and each of their respective successors and assigns
(collectively, the "Indemnified Parties") free and harmless from and against
any and all actions, causes of action, suits, losses, costs, liabilities,
damages and expenses (irrespective of whether such Indemnified Party is a party
to the action for which indemnification hereunder is sought), including
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
the Indemnified Parties or any of them or asserted or awarded against the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to:
(i) any transaction contemplated by this Agreement or any other
Warrant Document;
(ii) the making of any claim by any investment banking firm, broker
or third party that it is entitled to compensation from any
Indemnified Party in connection with this Agreement;
(iii) any claim, investigation, litigation, or proceeding made or
commenced by a third party related to this Agreement or any
other Warrant Documents, whether or not the Indemnified Party
or any other Indemnified Party is party thereto;
(iv) the breach by the Company of any representation or warranty
set forth in this Agreement or in any other Warrant Document;
or
(v) the failure of the Company to comply with all terms,
conditions, and covenants set forth in this Agreement or in
any other Warrant Document;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct as determined by a final and
nonappealable decision of a court of competent jurisdiction. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Company hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. The foregoing indemnity shall become effective immediately
upon the execution and delivery hereof and shall remain operative and in full
force and effect notwithstanding the consummation of the transactions
contemplated hereunder, the issuance or exercise of the Warrants hereunder, the
termination of this Agreement pursuant to Section 24, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Warrant Document, or any investigation made by or on behalf of any Holder or
the Purchaser.
- 41 -
46
(b) Promptly after receipt by an Indemnified Party of
notice of the commencement of any action (including any governmental
investigation or inquiry), such Indemnified Party will, if such Indemnified
Party intends to make a claim in respect thereof against the Company, give
written notice to the Company of the commencement thereof, but the omission so
to notify the Company shall not relieve the Company from any of its obligations
hereunder. In case any such action is brought against any Indemnified Party
and it notifies the Company of the commencement thereof, the Company shall be
entitled to participate in and to the extent that it may wish, to assume the
defense thereof, with counsel reasonably satisfactory to such Indemnified
Party, and after notice from the Company to such Indemnified Party, the Company
shall not be responsible for any legal or other expenses subsequently incurred
by such Indemnified Party in connection with the defense thereof. The Company
will not consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation.
SECTION 23. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Holders shall bind
and inure to the benefit of their respective successors and assigns, including
those by operation of law, merger, consolidation or as otherwise provided in
subsection (i) or (j) of Section 15.
SECTION 24. Termination. Except as otherwise provided
herein, this Agreement shall terminate when (a) all Warrants have expired
unexercised in accordance with their terms or all Warrant Securities have been
purchased pursuant to Section 19 hereof, and (b) all obligations of the Company
and the Borrower (or any successor to either of them) shall have been satisfied
in full and all contingencies in respect thereof shall no longer exist,
including, without limitation, the obligations set forth in subsection (i) or
(j) of Section 15.
SECTION 25. Governing Law. THIS AGREEMENT AND THE WARRANTS
SHALL BE GOVERNED BY THOSE PROVISIONS OF THE CORPORATE CODE OF THE JURISDICTION
IN WHICH THE COMPANY IS INCORPORATED AND ARTICLE 8 OF THE UNIFORM COMMERCIAL
CODE OF THE JURISDICTION IN WHICH THE COMPANY IS INCORPORATED WHICH ARE
NECESSARILY APPLICABLE TO SECURITIES ISSUED BY A CORPORATION INCORPORATED IN
SUCH JURISDICTION AND OTHERWISE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE.
SECTION 26. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company and
the Holders any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the Company
and the Holders.
SECTION 27. Counterparts. This Agreement may be executed in
any number of counterparts and each such counterpart shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.
- 42 -
47
SECTION 28. Amendments; Waiver. No provision of this
Agreement may be amended or waived except by an instrument in writing signed by
the party sought to be bound; provided, however, that any amendment requested
or waiver sought from the Holders of any provision of this Agreement which
affects Holders generally may be given by the Required Holders and any waiver
so given shall be binding on all Holders; provided further, that the provisions
of Section 11 with respect to the type of securities for which the Warrants are
exercisable may not be changed without the consent of each Holder affected
thereby. No failure or delay by any party in exercising any right or remedy
hereunder shall operate as a waiver thereof, nor shall a waiver of a particular
right or remedy on one occasion be deemed a waiver of any other right or remedy
or a waiver of the same right or remedy on any subsequent occasion.
SECTION 29. Waiver of Jury Trial. THE PURCHASER, EACH HOLDER
AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, ON THE WARRANTS OR ON ANY OF THE OTHER WARRANT DOCUMENTS, OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT, THE WARRANTS OR ANY OF THE
OTHER WARRANT DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PURCHASER, ANY HOLDER OR
THE COMPANY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PURCHASER'S
ENTERING INTO THIS AGREEMENT.
SECTION 30. Jurisdiction. The Company hereby agrees that any
legal action or proceeding against it with respect to this Agreement, the
Warrants or any of the other Warrant Documents may be brought in the courts of
the State of New York or of the United States of America for the Southern
District of New York as any Holder may elect, and, by execution and delivery
hereof, it accepts and consents for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts and
agrees that such jurisdiction shall be exclusive, unless waived by the Required
Holders in writing, with respect to any action or proceeding brought by it
against such Holders. The Company hereby irrevocably designates, appoints and
empowers CT Corporation System whose present address is 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as its authorized agent to receive, for and on its behalf
and its property, service of process in the State of New York when and as legal
actions or proceedings may be brought in the courts of the State of New York or
of the United States of America sitting in New York, and such service of
process shall be deemed complete upon the date of delivery thereof to such
agent, or upon the earliest of any other date permitted by applicable law. It
is understood that a copy of said process served on such agent will be
forwarded to the Company as soon as practicable, at its address set forth
herein, but its failure to receive such copy shall not affect in any way the
service of said process on said agent as the agent of the Company. The Company
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of the copies thereof by
certified mail, return receipt requested, postage prepaid, to it at its address
set forth herein, such service to become effective upon the earlier of (I) the
date 10 calendar days after such mailing and (ii) any earlier date permitted by
applicable law. The Company agrees that it will at all times continuously
maintain an agent to
- 43 -
48
receive service of process in the State of New York on behalf of itself and its
properties and in the event that, for any reason, the agent named above or its
successor shall no longer serve as its agent to receive service of process in
the State of New York on its behalf, it shall promptly appoint a successor so
to serve and shall advise the Holders thereof. The Company agrees that
Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New
York shall apply to this Agreement and each of the other Warrant Documents and
waives any right to stay or to dismiss any action or proceeding brought before
said courts on the basis of forum non conveniens. Nothing herein shall affect
the right of any Holder to bring proceedings against the Company in the courts
of any other jurisdiction or to serve process in any other manner permitted by
applicable law.
SECTION 31. Specific Performance. The Company recognizes
that the rights of the Holders under this Agreement and the other Warrant
Documents are unique and, accordingly, the Holders shall, in addition to such
other remedies as may be available to any of them at law or in equity, have the
right to enforce their rights hereunder and thereunder by actions for
injunctive relief and specific performance to the extent permitted by law. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
or any of the other Warrant Documents and hereby agrees to waive in any action
for specific performance the defense that a remedy at law would be adequate.
This Agreement is not intended to limit or abridge any rights of the Holders
which may exist apart from this Agreement.
SECTION 32. Confidentiality. The Holders shall hold all
non-public, proprietary or confidential information (which has been identified
as such by the Company) obtained pursuant to the requirements of this Agreement
in accordance with their customary procedures for handling confidential
information of this nature; provided, however, that each Holder may make
disclosure of any such information to its examiners, Affiliates, outside
auditors, counsel, consultants, appraisers and other professional advisors in
connection with this Agreement or as reasonably required by any proposed
transferee in connection with the contemplated transfer of any Warrant
Securities (but only if the proposed transferee agrees to be bound by the terms
of this Section 32) or as required or requested by an Governmental Authority or
representative thereof or in connection with the enforcement hereof or of any
other Warrant Document or pursuant to legal process. In no event shall any
Holder be obligated or required to return any materials furnished to it by the
Company.
SECTION 33. Entire Agreement. The parties hereto agree that
this Agreement, the Registration Rights Agreement and the Loan Documents
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings between
them as to such subject matter; and there are no restrictions, agreements,
arrangements, oral or written, between any or all of the parties relating to
the subject matter hereof which are not fully expressed or referred to herein
or therein.
- 45 -
49
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
BRUNSWICK BIOMEDICAL
CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
- 45 -
50
EXHIBIT A
FORM OF SERIES A WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. SAID
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION, OR AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL TO THE HOLDER)
AS TO AN EXEMPTION, FROM THE REGISTRATION PROVISIONS OF SAID ACT OR LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A
WARRANT PURCHASE AGREEMENT, DATED AS OF APRIL 15, 1996, BETWEEN BRUNSWICK
BIOMEDICAL CORPORATION (THE "COMPANY") AND INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION ("ING") AND A REGISTRATION RIGHTS AGREEMENT, DATED AS OF
APRIL 15, 1996, AMONG THE COMPANY AND THE PURCHASERS IDENTIFIED IN EXHIBIT A
ATTACHED THERETO, COPIES OF EACH OF WHICH ARE ON FILE AT THE MAIN OFFICE OF THE
COMPANY. ANY SALE OR TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE
IS SUBJECT TO THE TERMS OF THOSE AGREEMENTS AND ANY SALE OR TRANSFER OF SUCH
SECURITIES IN VIOLATION OF SAID AGREEMENTS SHALL BE INVALID.
Certificate No.__ _______ Warrants
Warrant Certificate
BRUNSWICK BIOMEDICAL CORPORATION
This Warrant Certificate certifies that INTERNATIONALE
NEDERLANDEN (U.S.) CAPITAL CORPORATION ("ING"), or registered assigns, is the
registered holder of the number of Warrants (the "Warrants") set forth above to
purchase shares of non-voting common stock, par value $0.01 per share (the
"Class A Common Stock"), of BRUNSWICK BIOMEDICAL CORPORATION, a Massachusetts
corporation (the "Company"). Each Warrant entitles the holder upon exercise to
receive from the Company one fully paid and nonassessable share of Class A
Common Stock (a "Warrant Share") at the initial exercise price (the "Exercise
Price") of $0.01, payable in lawful money of the United States of America, upon
surrender of this Warrant Certificate and payment of the Exercise Price, if
applicable, at the office of the Company designated for such purpose, subject
to the conditions set forth herein and in the Warrant Agreement referenced
below. The Exercise Price and number and type of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events, as set forth in the Warrant Agreement. Each Warrant also
entitles the holder to convert such Warrant into the number of Warrant Shares
determined in accordance with Section 11(b) of the Warrant Agreement.
51
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Series A Warrants, and are issued or to be issued
pursuant to a Warrant Purchase Agreement dated as of April 15, 1996 (the
"Warrant Agreement"), duly executed and delivered by the Company and ING, which
Warrant Agreement is hereby incorporated by reference in and made a part of
this instrument and is hereby referred to for a description of the rights,
obligations and duties hereunder of the Company and the holders of the Warrants
(the words "holders" or "holder" meaning the registered holders or registered
holder). A copy of the Warrant Agreement may be obtained by the holder hereof
upon written request to the Company.
The holder of Warrants evidenced by this Warrant Certificate
may exercise such Warrants under and pursuant to the terms and conditions of
the Warrant Agreement by surrendering this Warrant Certificate, with the form
of election to purchase attached hereto (and by this reference made a part
hereof) properly completed and executed, together with payment of the Exercise
Price in cash at the office of the Company designated for such purpose. In the
event that any exercise of Warrants evidenced hereby shall be for less than the
total number of Warrants evidenced hereby, there shall be issued by the Company
to the holder hereof or his or its registered assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the
Warrant Agreement provides that the number of shares of Warrant Shares issuable
upon the exercise of each Warrant shall be adjusted. No fractional shares of
Warrant Shares will be issued upon the exercise of any Warrant, but the Company
will pay the cash value thereof determined as provided in the Warrant
Agreement.
The Holders of the Warrants are entitled to certain
registration rights as set forth in a Registration Rights Agreement dated as of
April 15, 1996, among the Company and the purchasers identified in Exhibit A
attached thereto (the "Registration Rights Agreement"). By acceptance of this
Warrant Certificate, the Holder hereof agrees that upon exercise of any or all
of the Warrants evidenced hereby, such Holder will be bound by the Registration
Rights Agreement. A copy of the Registration Rights Agreement may be obtained
by the holder hereof upon written request to the Company.
Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, for another
Warrant Certificate or Warrant Certificates of like tenor evidencing in the
aggregate a like number of Warrants.
The Company may deem and treat the registered holder(s)
thereof as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing made hereon) for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder
A-2
52
of the Company (other than the right to receive dividends and distributions as
set forth in Section 18 of the Warrant Agreement).
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed by its duly authorized officer and has caused its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: April __, 1996
BRUNSWICK BIOMEDICAL CORPORATION
By: ____________________________________
Name:
Title:
A-3
53
FORM OF ELECTION TO PURCHASE
[To Be Executed Upon Exercise of Warrant]
The undersigned holder hereby represents that he or it is the registered holder
of this Warrant Certificate, and hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive ____________ shares
of Class A Common Stock, par value $.01 per share (the "Class A Common Stock"),
of BRUNSWICK BIOMEDICAL CORPORATION (the "Company") and herewith tenders
payment for such shares to the order of the Company in the amount of
$___________ in accordance with the terms hereof. The undersigned requests
that a certificate for such shares be registered in the name of the undersigned
or his/its nominee hereinafter set forth, and further that such certificate be
delivered to the undersigned at the address hereinafter set forth or to such
other person or entity as is hereinafter set forth. If said number of shares
is less than all of the shares of Class A Common Stock purchasable hereunder,
the undersigned requests that a new Warrant Certificate representing the
remaining balance of such shares be registered in the name of the undersigned
or his/its nominee hereinafter set forth, and further that such Warrant
Certificate be delivered to the undersigned at the address hereinafter set
forth or to such other person or entity as is hereinafter set forth.
Certificate to be registered as follows:
Name: Internationale Nederlanden (U.S.) Capital Corporation
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Credit Officer
Certificate to be delivered as follows:
Name: Internationale Nederlanden (U.S.) Capital Corporation
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Credit Officer
Date:____________________
_______________________________________
(Signature must conform in all respects
to the name of the holder as specified
on the fact of the Warrant Certificate,
unless Form of Assignment has been
executed)
A-4
54
FORM OF ELECTION TO CONVERT
[To be Executed Upon Conversion of Warrant]
The undersigned holder hereby represents that he or it is the registered holder
of this Warrant Certificate, and hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to convert the Warrants
evidenced by this Warrant Certificate into ____________ shares of Class A
Common Stock, par value $.01 per share (the "Class A Common Stock"), of
BRUNSWICK BIOMEDICAL CORPORATION (the "Company"). The undersigned requests
that a certificate for such shares be registered in the name of the undersigned
or his/its nominee hereinafter set forth, and further that such certificate be
delivered to the undersigned at the address hereinafter set forth or to such
other person or entity as is hereinafter set forth. If said number of shares
is less than all of the shares of Class A Common Stock convertible hereunder,
the undersigned requests that a new Warrant Certificate representing the
remaining balance of such shares be registered in the name of the undersigned
or his/its nominee hereinafter set forth, and further that such Warrant
Certificate be delivered to the undersigned at the address hereinafter set
forth or to such other person or entity as is hereinafter set forth.
Certificate to be registered as follows:
Name: Internationale Nederlanden (U.S.) Capital Corporation
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Credit Officer
Certificate to be delivered as follows:
Name: Internationale Nederlanden (U.S.) Capital Corporation
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Credit Officer
Date:____________________
_______________________________________
(Signature must conform in all respects
to the name of the holder as specified
on the fact of the Warrant Certificate,
unless Form of Assignment has been
executed)
A-5
55
FORM OF ASSIGNMENT
[To be executed upon Transfer of Warrant]
FOR VALUE RECEIVED, the undersigned registered holder of the enclosed
Warrant Certificate hereby sells, assigns and transfers unto
________________________________________ the right represented by such Warrant
Certificate to purchase _____________ shares of Class A Common Stock of
BRUNSWICK BIOMEDICAL CORPORATION to which such Warrant Certificate relates, and
appoints __________________ _______________________________ Attorney to make
such transfer on the books of BRUNSWICK BIOMEDICAL CORPORATION maintained for
such purpose, with full power of substitution in the premises.
Date:___________________
_______________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
_____________________________________
(Street Address)
_____________________________________
(City) (State) (Zip Code)
A-6
56
EXHIBIT B
FORM OF SERIES B WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. SAID
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION, OR AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL TO THE HOLDER)
AS TO AN EXEMPTION, FROM THE REGISTRATION PROVISIONS OF SAID ACT OR LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A
WARRANT PURCHASE AGREEMENT, DATED AS OF APRIL 15, 1996, BETWEEN BRUNSWICK
BIOMEDICAL CORPORATION (THE "COMPANY") AND INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION ("ING") AND A REGISTRATION RIGHTS AGREEMENT, DATED AS OF
APRIL 15, 1996, AMONG THE COMPANY AND THE PURCHASERS IDENTIFIED IN EXHIBIT A
ATTACHED THERETO, COPIES OF EACH OF WHICH ARE ON FILE AT THE MAIN OFFICE OF THE
COMPANY. ANY SALE OR TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE
IS SUBJECT TO THE TERMS OF THOSE AGREEMENTS AND ANY SALE OR TRANSFER OF SUCH
SECURITIES IN VIOLATION OF SAID AGREEMENTS SHALL BE INVALID.
Certificate No. ___ _______ Warrants
Warrant Certificate
BRUNSWICK BIOMEDICAL CORPORATION
This Warrant Certificate certifies that INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION ("ING"), or registered assigns, is the registered
holder of the number of Warrants (the "Warrants") set forth above to purchase
shares of Class A Common Stock, par value $0.01 per share (the "Class A Common
Stock"), of BRUNSWICK BIOMEDICAL CORPORATION, a Massachusetts corporation (the
"Company"). Each Warrant entitles the holder upon exercise to receive from the
Company one fully paid and nonassessable share of Common Stock (a "Warrant
Share") at the initial exercise price (the "Exercise Price") of $27.55, payable
in lawful money of the United States, upon surrender of this Warrant
Certificate and payment of the Exercise Price, if applicable, at the office of
the Company designated for such purpose, subject to the conditions set forth
herein and in the Warrant Agreement referenced below. The Exercise Price and
number and type of Warrant Shares issuable upon exercise of the Warrants are
subject to adjustment upon the occurrence of certain events, as set forth in
the Warrant Agreement. Each Warrant also entitles the holder to convert such
Warrant into the number of Warrant Shares determined in accordance with Section
11(b) of the Warrant Agreement.
57
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Series B Warrants, and are issued or to be issued
pursuant to a Warrant Purchase Agreement dated as of April 15, 1996 (the
"Warrant Agreement"), duly executed and delivered by the Company and ING, which
Warrant Agreement is hereby incorporated by reference in and made a part of
this instrument and is hereby referred to for a description of the rights,
obligations and duties hereunder of the Company and the holders of the Warrants
(the words "holders" or "holder" meaning the registered holders or registered
holder). A copy of the Warrant Agreement may be obtained by the holder hereof
upon written request to the Company.
The holder of Warrants evidenced by this Warrant Certificate
may exercise such Warrants under and pursuant to the terms and conditions of
the Warrant Agreement by surrendering this Warrant Certificate, with the form
of election to purchase attached hereto (and by this reference made a part
hereof) properly completed and executed, together with payment of the Exercise
Price in cash at the office of the Company designated for such purpose. In the
event that any exercise of Warrants evidenced hereby shall be for less than the
total number of Warrants evidenced hereby, there shall be issued by the Company
to the holder hereof or his or its registered assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the
Warrant Agreement provides that the number of shares of Warrant Shares issuable
upon the exercise of each Warrant shall be adjusted. No fractional shares of
Warrant Shares will be issued upon the exercise of any Warrant, but the Company
will pay the cash value thereof determined as provided in the Warrant Agreement.
The Holders of the Warrants are entitled to certain
registration rights as set forth in a Registration Rights Agreement dated as of
April 15, 1996, among the Company and the purchasers identified in Exhibit A
attached thereto (the "Registration Rights Agreement"). By acceptance of this
Warrant Certificate, the Holder hereof agrees that upon exercise of any or all
of the Warrants evidenced hereby, such Holder will be bound by the Registration
Rights Agreement. A copy of the Registration Rights Agreement may be obtained
by the holder hereof upon written request to the Company.
Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, for another
Warrant Certificate or Warrant Certificates of like tenor evidencing in the
aggregate a like number of Warrants.
The Company may deem and treat the registered holder(s)
thereof as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing made hereon) for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder
B-2
58
of the Company (other than the right to receive dividends and distributions as
set forth in Section 18 of the Warrant Agreement).
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed by its duly authorized officer and has caused its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: April __, 1996
BRUNSWICK BIOMEDICAL CORPORATION
By:
-------------------------------------
Name:
Title:
B-3
59
FORM OF ELECTION TO PURCHASE
[To Be Executed Upon Exercise of Warrant]
The undersigned holder hereby represents that he or it is the registered holder
of this Warrant Certificate, and hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive ____________ shares
of Class A Common Stock, par value $.01 per share (the "Class A Common Stock"),
of BRUNSWICK BIOMEDICAL CORPORATION (the "Company") and herewith tenders
payment for such shares to the order of the Company in the amount of
$___________ in accordance with the terms hereof. The undersigned requests
that a certificate for such shares be registered in the name of the undersigned
or his/its nominee hereinafter set forth, and further that such certificate be
delivered to the undersigned at the address hereinafter set forth or to such
other person or entity as is hereinafter set forth. If said number of shares
is less than all of the shares of Class A Common Stock purchasable hereunder,
the undersigned requests that a new Warrant Certificate representing the
remaining balance of such shares be registered in the name of the undersigned
or his/its nominee hereinafter set forth, and further that such Warrant
Certificate be delivered to the undersigned at the address hereinafter set
forth or to such other person or entity as is hereinafter set forth.
Certificate to be registered as follows:
Name: Internationale Nederlanden (U.S.) Capital Corporation
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Credit Officer
Certificate to be delivered as follows:
Name: Internationale Nederlanden (U.S.) Capital Corporation
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Credit Officer
Date:
---------------------------
----------------------------------------
(Signature must conform in all respects
to the name of the holder as specified
on the fact of the Warrant Certificate,
unless Form of Assignment has been
executed)
B-4
60
FORM OF ELECTION TO CONVERT
[To Be Executed Upon Conversion of Warrant]
The undersigned holder hereby represents that he or it is the registered holder
of this Warrant Certificate, and hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to convert the Warrants
evidenced by this Warrant Certificate into____________ shares of Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), of BRUNSWICK
BIOMEDICAL CORPORATION (the "Company") and herewith tenders payment for such
shares to the order of the Company in the amount of $___________ in accordance
with the terms hereof. The undersigned requests that a certificate for such
shares be registered in the name of the undersigned or his/its nominee
hereinafter set forth, and further that such certificate be delivered to the
undersigned at the address hereinafter set forth or to such other person or
entity as is hereinafter set forth. If said number of shares is less than all
of the shares of Class A Common Stock convertible hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
such shares be registered in the name of the undersigned or his/its nominee
hereinafter set forth, and further that such Warrant Certificate be delivered
to the undersigned at the address hereinafter set forth or to such other person
or entity as is hereinafter set forth.
Certificate to be registered as follows:
Name: Internationale Nederlanden (U.S.) Capital Corporation
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Credit Officer
Certificate to be delivered as follows:
Name: Internationale Nederlanden (U.S.) Capital Corporation
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Credit Officer
Date:
---------------------------
----------------------------------------
(Signature must conform in all respects
to the name of the holder as specified
on the fact of the Warrant Certificate,
unless Form of Assignment has been
executed)
B-5
61
FORM OF ASSIGNMENT
[To be executed upon Transfer of Warrant]
FOR VALUE RECEIVED, the undersigned registered holder of the
enclosed Warrant Certificate hereby sells, assigns and transfers unto
________________________________________ the right represented by such Warrant
Certificate to purchase _____________ shares of Class A Common Stock of
BRUNSWICK BIOMEDICAL CORPORATION to which such Warrant Certificate relates, and
appoints _________________________________________________ Attorney to make
such transfer on the books of BRUNSWICK BIOMEDICAL CORPORATION maintained for
such purpose, with full power of substitution in the premises.
Date:
---------------------------
----------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (Zip Code)
62
EXHIBIT C
Schedule of Exceptions
Section 5(e)
The State of Maryland has the right to require the Company to
repurchase the shares of Preferred Stock of the Company it holds if the Company
leaves the State of Maryland within a certain period of time.
63
EXHIBIT D
Stockholder List
64
BRUNSWICK BIOMEDICAL CORPORATION
Common Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE ---------------------- WERE TRANSFERRED ---------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 7/1/90 1 16,167 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 7/1/90 2 16,167 Original Issue 2 16,167 Brunswick Biomedical
Corporation - Treasury
1,857 shares; Xxxxxx X.
Xxxxxxx - Certificate
No. 9 14,310 shares
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx 7/1/90 3 2,000 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx 7/1/90 4 1,000 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx 10/4/91 5 6,743 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X'Xxxx 10/4/91 6 6,743 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx 3/1/93 7 3,371 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X'Xxxx 3/1/93 8 3,371 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 10/28/93 9 14,310 Xxxxxx X. Xxxxxxx -
Certificate No. 2
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx 2/24/94 10 3,971 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X'Xxxx 2/24/94 11 3,971 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 2/24/94 12 2,807 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 2/24/94 13 2,105 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Health Advances, Inc. 2/28/95 14 221 Treasury
===================================================================================================================================
65
BRUNSWICK BIOMEDICAL CORPORATION
Series A Preferred Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE --------------------- WERE TRANSFERRED ---------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 7/2/90 P-1 21,555 Original Issue P-1 21,555 Commonwealth BioVentures 9/8/93
I Limited Partnership V Limited Partnership -
Certificate No. P-4
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 7/2/90 P-2 21,555 Original Issue P-2 21,555 Commonwealth BioVentures 9/8/93
II Limited Partnership V Limited Partnership -
Certificate No. P-5
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 7/2/90 P-3 21,555 Original Issue
III Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 9/8/93 P-4 21,555 Commonwealth Bio
V Limited Partnership Ventures I Limited
Partnership -
Certificate No. P-1
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 9/8/93 P-5 21,555 Commonwealth Bio
V Limited Partnership Ventures II Limited
Partnership -
Certificate No. P-2
===================================================================================================================================
66
BRUNSWICK BIOMEDICAL CORPORATION
Series B Preferred Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE ---------------------- WERE TRANSFERRED ---------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 12/30/91 PB-1 7,428 Original Issue PB-1 7,428 Commonwealth BioVentures 9/8/93
II Limited Partnership V Limited Partnership -
Certificate No. PB-4
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 12/30/91 PB-2 9,145 Original Issue
III Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 12/30/91 PB-3 12,571 Original Issue
IV Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 9/8/93 PB-4 7,428 Commonwealth Bio
V Limited Partnership Ventures II
Limited Partnership -
Certificate No. PB-1
===================================================================================================================================
67
BRUNSWICK BIOMEDICAL CORPORATION
Series C Preferred Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE --------------------- WERE TRANSFERRED ---------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
BancBoston Ventures, Inc. 11/12/93 PC-1 30,103 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 11/12/93 PC-2 6,020 Original Issue
III Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 11/12/93 PC-3 35,010 Original Issue
IV Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 11/12/93 PC-4 9,048 Original Issue
V Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx, Trustee, 11/12/93 PC-5 7,549 Original Issue
U/D/T dated 8/17/35 by
Xxxxxxxx X. Xxxxx f/b/o
Xxxx X. Xxxxx and others
(Xxxxxx)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx, Trustee, 11/12/93 PC-6 7,549 Original Issue
U/D/T dated 8/17/35 by
Xxxxxxxx X. Xxxxx f/b/o
Xxxx X. Xxxxx and others
(Xxxxxx)
-----------------------------------------------------------------------------------------------------------------------------------
BancBoston Ventures, Inc. 11/12/93 PC-7 28,571 Original Issue
----------------------------------------------------------------------------------------------------------------------------------
Concord Partners II, L.P. 11/12/93 PC-8 57,142 Original Issue
c/x Xxxxxx, Read Inc.
-----------------------------------------------------------------------------------------------------------------------------------
Kummell Investments Limited 11/12/93 PC-9 57,142 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Alpetta Finance Corporation 11/12/93 PC-10 5,700 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Clariden Bank c/o Swiss 11/12/93 PC-11 62,942 Original Issue PC-11 62,942 Clariden Bank-Certificate 1/16/95
American Securities No. PC-30 4,200 shares,
PC-31 5,800 shares,
PC-32 52,942 shares
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx & Co. (Nominee: 11/12/93 PC-12 14,000 Original Issue PC-12 14,000 Bear Xxxxxxx & Co. - 3/30/95
Clariden Asset Mgmt.) Certificate No. PC-33
c/o Chase Manhattan Bank
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx and Xxxxx 11/12/93 PC-13 1,428 Original Issue
X. Xxxxxx, JTWROS
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx 11/12/93 PC-14 2,857 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx, Trustee, 11/12/93 PC-15 1,428 Original Issue
U/D/T dated 8/17/35 by
Xxxxxxxx X. Xxxxx f/b/o
Xxxx X. Xxxxx and others
(Xxxxxx Share)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx, Trustee, 11/12/93 PC-16 1,428 Original Issue
U/D/T dated 8/17/35 by
Xxxxxxxx X. Xxxxx f/b/o
Xxxx X. Xxxxx and others
(Xxxxxx Share)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxx and Xxxxx 11/12/93 PC-17 2,857 Original Issue
X. Xxxxx, JTWROS
===================================================================================================================================
68
BRUNSWICK BIOMEDICAL CORPORATION
Series C Preferred Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE ------------------- WERE TRANSFERRED ------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx 11/12/93 PC-18 857 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxx and 11/12/93 PC-19 571 Original Issue
Xxxxx X. Xxxx, JTWROS
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxxxxx and 11/12/93 PC-20 590 Original Issue
Xxxxx X. Xxxxxxxxx, JTWROS
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx and 11/12/93 PC-21 457 Original Issue
Xxxx X. Xxxxxxx, JTWROS
-----------------------------------------------------------------------------------------------------------------------------------
MODL Ventures 11/12/93 PC-22 2,857 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx and 11/12/93 PC-23 1,000 Original Issue
Xxxxxxxx X. Xxxxxx, JTWROS
-----------------------------------------------------------------------------------------------------------------------------------
Bears Xxxxxxx & Co. 11/12/93 PC-24 28,942 Original Issue
(Nominee: Clariden Asset
Mgmt Inc.)
-----------------------------------------------------------------------------------------------------------------------------------
Delaware Charter 11/12/93 PC-25 1,000 Original Issue
Guarantee & Trust Co.
TTEE FBO Xxx X.
Xxxxx R-XXX
-----------------------------------------------------------------------------------------------------------------------------------
Delaware Charter 11/12/93 PC-26 1,700 Original Issue
Guarantee & Trust Co.
TTEE FBO Xxxxxx Xxxxx
R-XXX
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 11/12/93 PC-27 2,000 Original Issue
Profit Sharing Plan U/A/D
7/8/92 F/B/O
Xxxxxx X. Xxxxxx
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx 11/12/93 PC-28 2,000 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx 12/7/93 PC-29 1,714 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Clariden Bank 1/16/95 PC-30 4,200 Clariden Bank c/o PC-30 4,200 Xxxx & Co. (Nominee for: 8/7/95
Swiss American Clariden Bank)-
Securities - Certificate Certificate No. PC-34
No. PC-11 1,000 shares, PC-35 1,000
shares, PC-36 1,000
shares, PC-37 1,000
shares, PC-38 100
shares & PC-39 100 shares
-----------------------------------------------------------------------------------------------------------------------------------
Clariden Bank 1/16/95 PC-31 5,800 Clariden Bank c/o PC-31 5,800 Clariden Bank-Certificate 11/10/95
Swiss American No. PC-40 2,900 shares,
Securities - Certificate PC-41 2,300 shares & PC
No. PC-11 42 600 shares
-----------------------------------------------------------------------------------------------------------------------------------
Clariden Bank 1/16/95 PC-32 52,942 Clariden Bank c/o
Swiss American
Securities - Certificate
No. PC-11
===================================================================================================================================
69
BRUNSWICK BIOMEDICAL CORPORATION
Series C Preferred Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE -------------------- WERE TRANSFERRED ------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
Bear Xxxxxxx & Co. 3/30/95 PC-33 14,000 Clariden Bank- PC-33 14,000 Bear Xxxxxxx & Co. 3/30/95
(Nominee for: Clariden Certificate No.PC-30 (Nominee for: Clariden
Asset Mgmt. Co., Inc. Asset Mgmt. Co., Inc.) -
Certificate No. PC-43
12,000 shares, PC-44 179
shares, PC-45 150 shares,
PC-46 384 shares, PC-47 740
shares, PC-48 547 shares
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx & Co. (Nominee for 8/7/95 PC-34 1,000 Clariden Bank -
Clariden Bank) Certificate No. PC-30
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx & Co. (Nominee for 8/7/95 PC-35 1,000 Clariden Bank -
Clariden Bank) Certificate No. PC-30
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx & Co. (Nominee for 8/7/95 PC-36 1,000 Clariden Bank -
Clariden Bank) Certificate No. PC-30
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx & Co. (Nominee for 8/7/95 PC-37 1,000 Clariden Bank -
Clariden Bank) Certificate No. PC-30
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx & Co. (Nominee for 8/7/95 PC-38 100 Clariden Bank -
Clariden Bank) Certificate No. PC-30
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx & Co. (Nominee for 8/7/95 PC-39 100 Clariden Bank -
Clariden Bank) Certificate No. PC-30
-----------------------------------------------------------------------------------------------------------------------------------
Clariden Bank 11/10/95 PC-40 2,900 Clariden Bank -
Certificate No. PC-31
-----------------------------------------------------------------------------------------------------------------------------------
Clariden Bank 11/10/95 PC-41 2,300 Clariden Bank -
Certificate No. PC-31
-----------------------------------------------------------------------------------------------------------------------------------
Clariden Bank 11/10/95 PC-42 600 Clariden Bank -
Certificate No. PC-31
-----------------------------------------------------------------------------------------------------------------------------------
Bear Xxxxxxx & Co. 3/30/96 PC-43 12,000 Bear Xxxxxxx & Co.
(Nominee for: Clariden (Nominee for: Clariden
Asset Mgmt. Co., Inc.) Asset Mgmt. Co., Inc.) -
Certificate No. PC-33
-----------------------------------------------------------------------------------------------------------------------------------
Bear Xxxxxxx & Co. 3/30/96 PC-44 179 Bear Xxxxxxx & Co.
(Nominee for: Clariden (Nominee for: Clariden
Asset Mgmt. Co., Inc.) Asset Mgmt. Co., Inc.) -
Certificate No. PC-33
-----------------------------------------------------------------------------------------------------------------------------------
Bear Xxxxxxx & Co. 3/30/96 PC-45 150 Bear Xxxxxxx & Co.
(Nominee for: Clariden (Nominee for: Clariden
Asset Mgmt. Co., Inc.) Asset Mgmt. Co., Inc.) -
Certificate No. PC-33
-----------------------------------------------------------------------------------------------------------------------------------
Bear Xxxxxxx & Co. 3/30/96 PC-46 384 Bear Xxxxxxx & Co.
(Nominee for: Clariden (Nominee for: Clariden
Asset Mgmt. Co., Inc.) Asset Mgmt. Co., Inc.) -
Certificate No. PC-33
-----------------------------------------------------------------------------------------------------------------------------------
Bear Xxxxxxx & Co. 3/30/96 PC-47 740 Bear Xxxxxxx & Co.
(Nominee for: Clariden (Nominee for: Clariden
Asset Mgmt. Co., Inc.) Asset Mgmt. Co., Inc.) -
Certificate No. PC-33
-----------------------------------------------------------------------------------------------------------------------------------
Bear Xxxxxxx & Co. 3/30/96 PC-48 547 Bear Xxxxxxx & Co.
(Nominee for: Clariden (Nominee for: Clariden
Asset Mgmt. Co., Inc.) Asset Mgmt. Co., Inc.) -
Certificate No. PC-33
===================================================================================================================================
70
BRUNSWICK BIOMEDICAL CORPORATION
Series D Preferred Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE --------------------- WERE TRANSFERRED ---------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 3/14/96 PD-1 36,620 Original Issue
V Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Maryland Department of 3/14/96 PD-2 9,075 Original Issue
Business and Economic
Development
===================================================================================================================================
71
BRUNSWICK BIOMEDICAL CORPORATION
Series E Preferred Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE --------------------- WERE TRANSFERRED ---------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
Xx. Xxxxxx Xxxxx 3/14/96 PE-1 1,089 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xx. Xxxxxx Xxxxx 3/14/96 PE-2 907 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx and 3/14/96 PE-3 3,629 Original Issue
Xxxxx X. Xxxxxx, joint
tenants with right of
survivorship
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx 3/14/96 PE-5 2,000 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx 3/14/96 PE-6 1,815 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxx 3/14/96 PE-7 363 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxx Xxxxxxxxx and Xxxxxxxxx 3/14/96 PE-8 1,815 Original Issue
X. Xxxxxxxxx, joint tenants
with right of survivorship
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx 3/14/96 PE-9 3,629 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 3/14/96 PE-10 3,629 Original Issue
V Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 3/14/96 PE-11 3,629 Original Issue
IV Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Commonwealth BioVentures 3/14/96 PE-12 1,814 Original Issue
III Limited Partnership
===================================================================================================================================
72
BRUNSWICK BIOMEDICAL CORPORATION
Series F Preferred Stock Register
-----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATES
CERTIFICATES ISSUED FROM WHOM SHARES SURRENDERED DATE OF
DATE --------------------- WERE TRANSFERRED ---------------- TRANSFER
BECAME CERT. NO. (If original issue CERT. NO. TO WHOM OF
NAME OF STOCKHOLDER OWNER NOS. SHARES enter as such) NOS. SHARES SHARES ARE TRANSFERRED SHARES
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Mylan Laboratories, Inc. 4/15/96 PF-1 108,892 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
EM Industries, Inc. 4/15/96 PF-2 72,595 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Concord Partners II, L.P. 4/15/96 PF-3 13,103 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Lexington Partners IV, L.P. 4/15/96 PF-4 436 Original Issue
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxxx, Read & Co. Inc., 4/15/96 PF-5 4,610 Original Issue
as agent
-----------------------------------------------------------------------------------------------------------------------------------
GMI/DRI Investment Trust 4/15/96 PF-6 9,074 Original Issue
===================================================================================================================================
73
EXHIBIT E-1
WARRANT REGISTER
Warrant # Holder Face Vested % Vested # Expiration Current Common Reserved
C-1 CBI IV 984 100% 984 6-12-95 0 984
C-2 CBI IV 656 100% 656 8-10-95 0 656
C-3 BancBoston 2,857 60% 1,714 4-22-00 1,714 1,714
C-4 CBI I 286 60% 172 4-22-00 0
X-0 XXX XX 000 00% 000 0-00-00 0
X-0 XXX XXX 571 60% 343 4-22-00 343 343
C-7 CBI IV 286 60% 172 4-22-00 172 172
C-8 Xxxxxxxx
(Casper) 714 60% 428 4-22-00 428 428
C-9 Xxxxxxxx
(Xxxxxx) 714 60% 428 4-22-00 428 428
C-10 Flagship Bk 400 100% 400 8-24-03 000 000
X-00 XXX X 000 60% 172 4-22-00 000 000
X-00 XXX X 000 60% 343 4-22-00 343 343
C-13 Xxxxxx 2,000 100% 2,000 4-22-00 2,000 2,000
C-14 Doubleday 2,000 100% 2,000 4-22-00 2,000 2,000
C-15 CBI V 36,620 100% 36,620 3-14-01 36,620 36,620
C-16 MDBED 9,075 100% 9,075 3-14-01 9,075 9,075
C-17 Xxxxxx Xxxxx 1,714 100% 1,714 3-14-01 1,714 1,714
C-18 Xxxxxx Xxxxx 1,428 100% 1,428 3-14-01 1,428 1,428
C-19 R. and X. Xxxxxx 5,713 100% 5,713 3-14-01 5,713 5,713
C-20 NOT ISSUED
C-21 Xxxxxxx Xxxxxxxx 3,149 100% 3,149 3-14-01 3,149 3,149
C-22 Xxxxx Xxxxxx 2,857 100% 2,857 3-14-01 2,857 2,857
C-23 X. Xxxxxxxxx 572 100% 572 3-14-01 572 572
C-24 Xxxxxxxxx 2,857 100% 2,857 3-14-01 2,857 2,857
C-25 X. Xxxxxx 5,713 100% 5,713 3-14-01 5,713 5,713
C-26 CBI V 5,713 100% 5,713 3-14-01 5,713 5,713
C-27 CBI IV 5,713 100% 5,713 3-14-01 5,713 5,713
C-28 CBI III 2,856 100% 2,856 3-14-01 2,856 2,856
74
WARRANT REGISTER (Continued)
Warrant # Holder Face Vested % Vested # Expiration Current Common Reserved
C-29 Xxxxxxx Estate 50,000 100% 50,000 4-15-01 50,000 50,000
NOTE:
Warrants C-1 and C-2 expired on their terms
Warrants C-4 and C-5 were transferred in exchange for Warrants C-7 and C-6,
respectively, when the CBII and II partnerships would up and transferred their
interest to the CBI III and IV partnerships.
75
EXHIBIT E-2
123,220 shares of Common Stock are reserved for issuance upon the exercise of
stock options which have been granted pursuant to the Company's 1993 Stock
Option Plan.
76
EXHIBIT F
Existing Registration Rights
1. Preferred Stock Purchase Agreement dated as of July 2, 1990
among Brunswick Manufacturing Corporation and the purchasers
named therein with respect to Series A 8% Convertible
Preferred Stock.
2. Series B Convertible Preferred Stock Purchase Agreement dated
December 30, 1991 among Brunswick Manufacturing Corporation and
the purchasers named therein with respect to Series B 8%
Convertible Preferred Stock.
3. Purchase Agreement dated as of April 22, 1993 among Brunswick
BioMedical Corporation and the purchasers named therein with
respect to Series C Convertible Preferred Stock.
4. Preferred Stock and Warrant Purchase Agreement dated March 14,
1996 among Brunswick Biomedical Corporation and the purchasers
named therein with respect to Series D Convertible Preferred
Stock.
5. Preferred Stock and Warrant Purchase Agreement dated as of March
14, 1996 among Brunswick Biomedical Corporation and the
purchasers named therein with respect to Series E Convertible
Preferred Stock.
6. Preferred Stock Purchase Agreement dated April 15, 1996 between
Brunswick Biomedical Corporation and the purchasers named
therein with respect to Series F Convertible Preferred Stock.
7. Each of the warrants to purchase Common Stock of the Company
listed on Exhibit E-1 attached hereto.
77
EXHIBIT G
OPINION OF COUNSEL TO STI
(to be delivered on the Merger Consummation Date)
[MERGER CONSUMMATION DATE]
Internationale Nederlanden
(U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Credit Officer
Ladies and Gentlemen:
We have acted as counsel to Brunswick Biomedical Corporation, a
Massachusetts corporation ("Brunswick") and Survival Technology, Inc., a
Delaware corporation ("STI") in connection with the Warrant Purchase Agreement,
dated as of April 15, 1996 (the "Warrant Agreement"), between Brunswick and
Internationale Nederlanden (U.S.) Capital Corporation ("ING") and in connection
with the other Warrant Documents. All capitalized terms used herein and not
defined herein shall have the meanings ascribed to them in the Warrant
Agreement or the "Credit Agreement" (as such term is defined in the Warrant
Agreement).
In these capacities, we have examined fully executed originals of the
following documents (collectively, the "Opinion Documents"):
1. the Assumption Agreement;
2. the replacement Series A Warrant Certificate; and
3. the replacement Series B Warrant Certificate.
In addition, we have examined the Articles of Organization of Brunswick and all
amendments thereto, the Articles of Incorporation of STI and all amendments
thereto, including, without limitation, the Articles of Merger adopted by
Brunswick and STI on __________, 1996 (the "Articles of Merger"), and the
by-laws of Brunswick and STI as now in effect. We also have examined the
Warrant Agreement, the Registration Rights
78
Agreement and the Merger Agreement, dated as of even date herewith, between STI
and Brunswick (the "Merger Agreement").
We also have reviewed original, photostatic or certified copies of all
corporate records, certificates of public officials of pertinent states,
certificates of corporate officers of Brunswick and STI and such other
instruments, documents and agreements as we have deemed relevant and necessary
as a basis for the opinions hereinafter set forth.
[INSERT ASSUMPTIONS AND QUALIFICATIONS
TO BE REASONABLY ACCEPTABLE TO THE PURCHASER]
Based upon the foregoing, we are of the opinion that:
1. Immediately prior to the Merger, Brunswick was validly existing as a
corporation and in corporate good standing under the laws of the Commonwealth
of Massachusetts and was duly qualified to do business and in good standing as
a foreign corporation in the State of Maryland. STI is validly existing as a
corporation and is in corporate good standing under the laws of the State of
Delaware and is duly qualified to do business and in good standing as a foreign
corporation in the State of Maryland, the State of Missouri [INSERT OTHER
JURISDICTIONS]. STI has full power and authority to own and hold under lease
its property and to conduct its business as currently conducted by it and as
contemplated to be conducted by it.
2. STI has full power and authority to execute, deliver and perform its
obligations under each of the Opinion Documents.
3. The execution and delivery by STI of each Opinion Document, and the
performance by STI of its obligations thereunder, (a) have been duly authorized
by all necessary corporate action, (b) do not require any Regulatory Approval
(except those Regulatory Approvals already obtained), (c) do not and will not
result in a violation of, or constitute a default under, or give rise to a
right of termination or acceleration under, any provision of any Organic
Document of STI or any Subsidiary, any Contractual Obligation of STI or any of
its Subsidiaries listed in the Disclosure Schedule or, to our knowledge, any
court decree or order, (d) do not and will not result in a violation of any law
or governmental regulation, and (e) will not result in or require the creation
or imposition of any Lien.
4. Each Opinion Document has been duly executed and delivered by STI and
constitutes the legal, valid and binding obligation of STI, enforceable in
accordance with its terms, subject to the effect of any applicable bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights generally
and general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
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5. A Massachusetts court or a federal court sitting in the Commonwealth
of Massachusetts as the forum state and applying the conflict of law rules of
the Commonwealth of Massachusetts would give effect to the provisions of the
Opinion Documents providing that such Opinion Documents are to be governed by,
and construed and enforced in accordance with, the internal laws of the State
of New York.
6. A Maryland court or a Federal Court sitting in the State of Maryland
as the forum state and applying the conflict of law rules of the State of
Maryland would give effect to the provisions of the Opinion Documents providing
that such Opinion Documents are to be governed by, and construed and enforced
in accordance with, the internal laws of the State of New York.
7. Upon consummation of the Merger, the authorized Stock of STI consists
of (a) __________ shares of Common Stock, par value $____ per share; (b)
_______ shares of non-voting Common Stock, par value $___ per share; (c) and
_________ shares of Preferred Stock of which [INSERT DESIGNATIONS]. The issued
and outstanding shares of Stock of STI are listed on Exhibit A attached hereto,
and all of such shares are duly authorized, validly issued, fully paid and
nonassessable. None of such issued and outstanding shares of Stock of STI have
been issued in violation of any preemptive rights or other restrictions
contained in the Organic Documents of STI or otherwise known to us. Except as
set forth in the Warrant Agreement, no issued, no authorized but unissued and
no treasury shares of Stock of STI are subject to any preemptive rights
contained in the Organic Documents of STI or, to our knowledge, are subject to
any options, warrants, rights of conversion or purchase or any similar rights.
Except as set forth in the Organic Documents or disclosed in the Warrant
Agreement, there are no agreements or understandings with respect to the
voting, sale or transfer of any shares of Stock of STI to which STI or, to the
best of our knowledge, any of its Affiliates is a party.
8. The issuance of the replacement Warrant Certificates has been duly
authorized by all necessary corporate action, the Warrants have been validly
issued by STI and the issuance thereof will not give rise to any preemptive
rights. The issuance of shares of non-voting Common Stock upon exercise or
conversion of the Warrants has been duly authorized by STI and, when issued by
STI upon exercise or conversion of the Warrants on the terms and conditions
contained in the Warrant Agreement, will be validly issued and fully paid and
nonassessable and the issuance thereof will not give rise to any preemptive
rights. The issuance of shares of Common Stock upon conversion of the
non-voting Common Stock has been duly authorized by STI and, when issued by STI
upon such conversion in accordance with the terms and conditions of the
non-voting Common Stock set forth in the Certificate of Merger, will be validly
issued and fully paid and nonassessable, and the issuance thereof will not give
rise to any preemptive rights. No vote or approval by the shareholders of STI
or Brunswick is required under Massachusetts or Delaware law, the Organic
Documents of
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STI or Brunswick or any Contractual Obligation of STI or Brunswick listed on
the Disclosure Schedule as a condition to the issuance of the replacement
Warrant Certificates, the issuance by STI of shares of non-voting Common Stock
upon exercise or conversion of the Warrants or the issuance by STI of Common
Stock upon conversion of the non-voting Common Stock.
9. Based upon the investment representations contained in Section 3 of
the Warrant Agreement, the offer, issuance, sale and delivery of the replacement
Warrant Certificates to ING, the issuance and delivery by STI to ING of
non-voting Common Stock upon the exercise or conversion of the Warrants, and
the issuance by STI to ING of Common Stock upon conversion of the non-voting
Common Stock are exempt from the registration requirements of the Securities
Act.
10. No order, consent, approval, license, authorization or validation of,
or filing, recording or registration with, or exemption by, any Governmental
Authority is required to authorize, or is required in connection with, the
execution, delivery and performance of any Opinion Document, other than those
which have been obtained or made.
11. No taxes, including, but not limited to, transfer, excise, intangible,
documentary stamp or similar taxes, shall be payable to the Commonwealth of
Massachusetts, or any jurisdiction therein, on account of the execution and
delivery of the Opinion Documents, the issuance by STI of the replacement
Warrant Certificates, the issuance by STI of non-voting Common Stock upon
exercise or conversion of the Warrants or the issuance by STI of Common Stock
upon conversion of the non-voting Common Stock, provided that we express no
opinion with respect to income, excise or franchise taxes.
The opinions rendered herein are limited to the laws of the Commonwealth
of Massachusetts, the State of Maryland, the Delaware General Corporation Law
and the federal laws of the United States. With your permission, we render such
opinions as if the Opinion Documents were governed by the laws of the
Commonwealth of Massachusetts, notwithstanding their recitation that New York
law governs. With your permission, we have relied upon an opinion of
_____________ (Maryland counsel) with respect to issues of Maryland law
contained the opinions rendered in paragraphs 1, 3(b), 3(d), and (6).
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This opinion is furnished by us pursuant to Section 4(i) of the Warrant
Agreement for the sole benefit of ING and its counsel, and may not be used or
relied upon by any other Person or in connection with any other transaction
without our prior written consent.
Very truly yours,
