<PAGE> 1
REGISTRATION NO. 333-13703
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BARRINGER TECHNOLOGIES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 3829 84-0720473
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
</TABLE>
219 SOUTH STREET, NEW PROVIDENCE, NEW JERSEY 07974
(908) 665-8200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STANLEY S. BINDER, PRESIDENT
BARRINGER TECHNOLOGIES INC.
219 SOUTH STREET, NEW PROVIDENCE, NEW JERSEY 07974
(908) 665-8200
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
COPIES TO:
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JOHN D. HOGOBOOM, ESQ. ARTHUR M. BORDEN, ESQ.
LOWENSTEIN, SANDLER, KOHL, FISHER & BOYLAN, P.A. ROSENMAN & COLIN LLP
65 LIVINGSTON AVENUE 575 MADISON AVENUE
ROSELAND, NEW JERSEY 07068 NEW YORK, NEW YORK 10022
(201) 992-8700 (212) 940-8790
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Tenth of the Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), and Section 10 of the Company's by-laws, as
amended ("By-laws"), provide that the Company shall, to the fullest extent
permitted by law, indemnify each person (including the heirs, executors,
administrators and other personal representatives of such person) against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by such person in connection with
any threatened, pending or actual suit, action or proceeding (whether civil,
criminal, administrative or investigative in nature or otherwise) in which such
person may be involved by reason of the fact that he or she is or was a director
or officer of the Company or is serving any other incorporated or unincorporated
enterprise in any of such capacities at the request of the Company.
Section 145 of the General Corporation Law of the State of Delaware (the
"GCL") permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been judged liable to the corporation unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article Tenth of the Certificate of Incorporation also contains a provision
limiting the personal liability of directors to the fullest extent permitted or
authorized by the GCL or other applicable law. Under the GCL, such provision
would not limit liability of a director for (i) breach of the director's duty of
loyalty, (ii) acts or omissions not in good faith or involving intentional
misconduct or knowing violation of law, (iii) payment of dividends or
repurchases or redemptions of stock other than from lawfully available funds, or
(iv) any transactions from which the director derives an improper benefit.
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ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table lists the expenses which will be incurred in connection
with the issuance and distribution of the Securities being registered:
<TABLE>
<CAPTION>
EXPENSE
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SEC Registration Fee.............................................. $ 5,543
National Association of Securities Dealers, Inc. Filing Fee....... 2,300
NASDAQ NMS Listing Fee............................................ 42,485
Accounting Fees and Expenses...................................... 75,000
Legal Fees and Expenses........................................... 175,000
Blue Sky Fees and Expenses........................................ 25,000
Printing and Engraving............................................ 110,000
Miscellaneous..................................................... 39,672
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TOTAL................................................... $475,000
========
</TABLE>
All of the above amounts, other than the registration fee, are estimates
only. All of the above expenses will be paid by the Company.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following information relates to securities of the Company issued or
sold within the past three years which were not registered under the Securities
Act (all share and per share amounts have been adjusted to reflect the
one-for-four reverse stock split of the Company's common stock, $.01 par value
(the "Common Stock") effected on September 25, 1995):
(i) On July 10, 1996 the Company issued an aggregate amount of
$1,000,000 of its 6% subordinated convertible debentures, due 1997 (the
"Debentures") to institutional and private investors and members of
management for an aggregate purchase price of $1,000,000. This transaction
was completed without registration under the Securities Act of the
Debentures or the shares of Common Stock into which such Debentures are
convertible in reliance upon exemptions provided by Section 4(2) of the
Securities Act. There were no underwriters for this issuance.
(ii) On June 30, 1995 the Company issued an aggregate of 28 units,
each unit consisting of 2,500 shares of Common Stock and a five-year
warrant to purchase 2,500 shares of Common Stock at $2.00 per share (a
"Unit"), to private investors and members of management, for an aggregate
purchase price of $168,000. This transaction was completed without
registration under the Securities Act of the shares of Common Stock or the
warrants comprising the Units or the shares of Common Stock underlying the
warrants in reliance upon the exemptions provided by Section 4(2) of the
Securities Act. There were no underwriters for this issuance.
(iii) On May 9, 1995 the Company issued an aggregate of 125 Units and
one three-year warrant to purchase 37,500 shares of Common Stock at $2.00
per share, to two institutional investors, for an aggregate purchase price
of $750,000. This transaction was completed without registration under the
Securities Act of the shares of Common Stock or the warrants comprising the
Units, the shares of Common Stock underlying the warrants included in the
Units, the additional three-year warrant or the shares of Common Stock
underlying the three-year warrant, in reliance upon the exemptions provided
by Section 4(2) of the Securities Act. There were no underwriters for this
issuance.
(iv) At various times between October 1993 and October 1996, the
Company granted stock options to certain employees of the Company covering
an aggregate of 434,375 shares of Common Stock. These grants were exempt
from registration pursuant to Securities Act Release No. 33-6188 (Feb. 1,
1980). No underwriter was involved in these grants.
II-2
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ITEM 27. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
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1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of the Company, as amended.(1)
3.2 Bylaws of the Company.(2)
4.1 Form of Warrant Agreement.
4.2 Form of Warrant to be issued to Janney Montgomery Scott Inc.
5.1 Opinion of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.
10.1 Employment Agreement between Stanley S. Binder and the Company dated as of
July 10, 1989.(3)
10.2 Form of Employment Agreement between Richard S. Rosenfeld and the Company.
10.3 Form of Employment Agreement between Kenneth S. Wood and the Company.
10.4 Consulting Agreement between John J. Harte and the Company dated as of
January 1, 1991.*
10.5 Barringer Resources, Inc. 1990 Stock Option Plan.(4)
10.6 Form of 1995 nonqualified stock option agreement.*
10.7 Form of 1996 nonqualified stock option agreement.*
10.8 Description of 1991 Warrant Plan.*
10.9 Description of Exercise Plan.*
10.10 License Agreement dated February 27, 1989 between Canadian Patents and
Development Limited -- Societe Canadienne Des Brevets Et D'Exploitation
Limite and Barringer Instruments Limited (the "License Agreement"),
Supplement #1 dated March 4, 1991, Assignment of License Agreement, dated
January 2, 1992, to Her Majesty the Queen in Right of Canada, as
Represented By the Minister of National Revenue and Supplemental Letter
Agreement, dated October 7, 1996.*
10.11 Termination Agreement between the Company and Labco dated October 7, 1996.*
10.12 Unit Purchase Agreement and Form of Warrant Agreement by and between the
Company, Special Situations Fund III, L.P. and Special Situations Cayman
Fund, L.P. dated May 9, 1995.(5)
10.13 Form of Subscription Agreement and Form of Warrant Agreement by and between
the Company and certain officers and directors of the Company, dated as of
June 30, 1995.(6)
10.14 Form of Debenture Purchase Agreement dated as of July 10, 1996, by and
between the Company and certain accredited investors.*
10.15 Loan Agreement dated September 20, 1994 by and between Ontario Development
Corporation and Barringer Research Limited.(7)
10.16 Agreement dated September 28, 1995 between the Toronto-Dominion Bank, the
Company and Barringer Research Limited.(8)
10.17 Lease between the Company and Murray Hill Inn Associates dated as of
February 17, 1993.*
10.18 Lease between BRL and Lehndorff Management Limited ("Lehndorff") dated as
of July 27, 1995.*
10.31 Form of Stock Purchase Agreement dated as of November 30, 1992 by and
between the Company and certain accredited investors.(9)
10.33 Stock Purchase Agreement dated as of February 2, 1993 by and between the
Company and Special Situations Cayman Funds, L.P.(9)
10.34 Form of Stock Purchase Agreement dated as of December 13, 1993 by and
between the Company and certain accredited investors.(9)
11 Earnings per share computation for the six months ended June 30, 1996.(10)
21 List of Subsidiaries of the Company.
</TABLE>
II-3
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<TABLE>
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23.1 Consent of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A. (included in
Exhibit 5.1 to this registration statement).
23.2 Consent of BDO Seidman, LLP, independent certified public accountants.*
24.1 Power of Attorney (included on the signature page).*
</TABLE>
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* Previously filed.
(1) Incorporated by reference to Exhibit 3.1A to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, File No. 0-3207.
(2) Incorporated by reference to Exhibit 3.2A to the Company's Annual Report on
Form 10-K/A-2 for the fiscal year ended December 31, 1994, File No. 0-3207.
(3) Incorporated by reference to Exhibit 10.15 to the Company's Registration
Statement on Form S-1, File No. 33-3162.
(4) Incorporated by reference to Exhibit 10.25 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990, File No. 0-3207.
(5) Incorporated by reference to Exhibit 4.17 to the Company's Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-3207.
(6) Incorporated by reference to Exhibit 4.19 to the Company's Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-3207.
(7) Incorporated by reference to Exhibit 10.36 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, File No. 0-3207.
(8) Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed
on October 13, 1995, File No. 0-3207.
(9) Incorporated by reference to the identically numbered Exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1992, File No. 0-3207.
(10) Incorporated by reference to the identically numbered Exhibit to the
Company's Quarterly Report on Form 10-QSB for the quarter ended June 30,
1996, File No. 0-3207.
ITEM 28. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) For the purpose of determining any liability under the Securities
Act, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act, shall be deemed a part of this
Registration Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions on
indemnifications, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and authorizes this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Borough of New Providence, State of New Jersey, on
November 1, 1996.
BARRINGER TECHNOLOGIES INC.
By: /s/ STANLEY S. BINDER
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Stanley S. Binder, President and
Chief Executive Officer
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<CAPTION>
SIGNATURE TITLE
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/s/ STANLEY S. BINDER President, Chief Executive Officer
- --------------------------------------------- (Principal Executive Officer) and
Stanley S. Binder Director
* Director
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John D. Abernathy
* Director
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Richard D. Condon
* Director
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John H. Davies
* Director
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John J. Harte
* Director
- ---------------------------------------------
James C. McGrath
/s/ RICHARD S. ROSENFELD Vice President-Finance, Chief Financial
- --------------------------------------------- Officer
Richard S. Rosenfeld and Treasurer (Principal Accounting
and Financial Officer)
*By: /s/ STANLEY S. BINDER
- ---------------------------------------------
Stanley S. Binder,
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
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1.1 Form of Underwriting Agreement...................................
3.1 Certificate of Incorporation of the Company, as amended(1).......
3.2 Bylaws of the Company(2).........................................
4.1 Form of Warrant Agreement........................................
4.2 Form of Warrant to be issued to Janney Montgomery Scott Inc......
5.1 Opinion of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.......
10.1 Employment Agreement between Stanley S. Binder and the Company
dated as of July 10, 1989(3).....................................
10.2 Form of Employment Agreement between Richard S. Rosenfeld and the
Company..........................................................
10.3 Form of Employment Agreement between Kenneth S. Wood and the
Company..........................................................
10.4 Consulting Agreement between John J. Harte and the Company dated
as of January 1, 1991*...........................................
10.5 Barringer Resources, Inc. 1990 Stock Option Plan(4)..............
10.6 Form of 1995 nonqualified stock option agreement*................
10.7 Form of 1996 nonqualified stock option agreement*................
10.8 Description of 1991 Warrant Plan*................................
10.9 Description of Exercise Plan*....................................
10.10 License Agreement dated February 27, 1989 between Canadian
Patents and Development Limited -- Societe Canadienne Des Brevets
Et D'Exploitation Limite and Barringer Instruments Limited (the
"License Agreement"), Supplement #1 dated March 4, 1991,
Assignment of License Agreement, dated January 2, 1992, to Her
Majesty the Queen in Right of Canada, as Represented By the
Minister of National Revenue and Supplemental Letter Agreement,
dated October 7, 1996*...........................................
10.11 Termination Agreement between the Company and Labco dated October
7, 1996*.........................................................
10.12 Unit Purchase Agreement and Form of Warrant Agreement by and
between the Company, Special Situations Fund III, L.P. and
Special Situations Cayman Fund, L.P. dated May 9, 1995(5)........
10.13 Form of Subscription Agreement and Form of Warrant Agreement by
and between the Company and certain officers and directors of the
Company, dated as of June 30, 1995(6)............................
10.14 Form of Debenture Purchase Agreement dated as of July 10, 1996,
by and between the Company and certain accredited investors*.....
10.15 Loan Agreement dated September 20, 1994 by and between Ontario
Development Corporation and Barringer Research Limited(7)........
10.16 Agreement dated September 28, 1995 between the Toronto-Dominion
Bank, the Company and Barringer Research Limited(8)..............
10.17 Lease between the Company and Murray Hill Inn Associates dated as
of February 17, 1993*............................................
10.18 Lease between BRL and Lehndorff Management Limited ("Lehndorff")
dated as of July 27, 1995*.......................................
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
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10.31 Form of Stock Purchase Agreement dated as of November 30, 1992 by
and between the Company and certain accredited investors(9)......
10.33 Stock Purchase Agreement dated as of February 2, 1993 by and
between the Company and Special Situations Cayman Funds,
L.P.(9)..........................................................
10.34 Form of Stock Purchase Agreement dated as of December 13, 1993 by
and between the Company and certain accredited investors(9)......
11 Earnings per share computation for the six months ended June 30,
1996(10).........................................................
21 List of Subsidiaries of the Company.............................
23.1 Consent of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.
(included in Exhibit 5.1 to this registration statement).........
23.2 Consent of BDO Seidman, LLP, independent certified public
accountants*.....................................................
24.1 Power of Attorney (included on the signature page)*..............
</TABLE>
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* Previously filed.
(1) Incorporated by reference to Exhibit 3.1A to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, File No. 0-3207.
(2) Incorporated by reference to Exhibit 3.2A to the Company's Annual Report on
Form 10-K/A-2 for the fiscal year ended December 31, 1994, File No. 0-3207.
(3) Incorporated by reference to Exhibit 10.15 to the Company's Registration
Statement on Form S-1, File No. 33-3162.
(4) Incorporated by reference to Exhibit 10.25 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990, File No. 0-3207.
(5) Incorporated by reference to Exhibit 4.17 to the Company's Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-3207.
(6) Incorporated by reference to Exhibit 4.19 to the Company's Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-3207.
(7) Incorporated by reference to Exhibit 10.36 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, File No. 0-3207.
(8) Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed
on October 13, 1995, File No. 0-3207.
(9) Incorporated by reference to the identically numbered Exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1992, File No. 0-3207.
(10) Incorporated by reference to the identically numbered Exhibit to the
Company's Quarterly Report on Form 10-QSB for the quarter ended June 30,
1996, File No. 0-3207.
<PAGE> 1
Exhibit 1.1
____________, 1996
1,250,000 SHARES OF COMMON STOCK
1,250,000 COMMON STOCK PURCHASE WARRANTS
BARRINGER TECHNOLOGIES INC.
UNDERWRITING AGREEMENT
, 1996
JANNEY MONTGOMERY SCOTT INC.
1801 Market Street
20th Floor
Philadelphia, Pennsylvania 19103
Attention: Syndicate Department
Dear Ladies and Gentlemen:
Barringer Technologies Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") 1,250,000 shares of its common stock, par value $.01
per share (the "Common Stock") and 1,250,000 Common Stock Purchase Warrants.
Each such Warrant shall represent the right to acquire one quarter of a share of
Common Stock, shall expire three years from the effective date of the initial
offering unless redeemed prior thereto, shall be exercisable at a price equal to
115% of the offering price per share of Common Stock, and shall contain such
other terms and conditions as are set forth in the related exhibit to the
Registration Statement described below. The 1,250,000 shares of Common Stock to
be purchased by the Underwriters are hereinafter referred to as the "Firm
Shares" and the 1,250,000 Common Stock Purchase Warrants to be purchased by the
Underwriters as the "Firm Warrants". The Firm Shares and Firm Warrants are
hereinafter collectively referred to as the "Firm Securities". In addition, the
Company proposes to grant to the several Underwriters, solely for the purpose of
covering over-allotments in the sale of the Firm Shares, the option described in
Section 5 of this agreement (the "Agreement") to purchase up to 187,500
additional shares of Common Stock (the "Additional Shares") and 187,500
additional Common Stock Purchase Warrants (the "Additional Warrants"). The
Additional Shares and the Additional Warrants are hereinafter collectively
referred to as the "Additional Securities". The Additional Securities may only
be purchased on the basis of one Additional Warrant for each Additional Share
purchased.
The Firm Securities and the Additional Securities, and the shares of
Common Stock issuable upon exercise of the Firm Warrants and the Additional
Warrants are hereinafter
<PAGE> 2
collectively referred to as the "Offered Securities"; the Offered Securities and
the Representative's Securities (defined below in Section 6 hereof) collectively
as the "Securities"; all the warrants included in the Securities as the
"Warrants" and all of the shares of Common Stock issuable on exercise of the
Warrants as the "Warrant Shares".
You, as representative of the Underwriters (the "Representative"), have
advised the Company that you and the other Underwriters desire to purchase,
severally and not jointly, the Firm Securities and that you have been authorized
by the Underwriters to execute this Agreement on their behalf. The Company
hereby confirms the agreement made by it with respect to the purchase of the
Firm Securities by the several Underwriters on whose behalf you are signing this
Agreement, as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) REGISTRATION STATEMENT AND PROSPECTUS. The Company has filed
with the Securities and Exchange Commission ("Commission") a registration
statement on Form SB-2 (No. 333-13703) for the registration under the
Securities Act of 1933, as amended ("Securities Act"), of the Securities,
and may have filed one or more amendments thereto, copies of which have
heretofore been delivered to you. The registration statement, including
the prospectus, financial statements and exhibits, when it shall become
effective, and such additional information, if any, with respect to the
offering permitted to be omitted from such registration statement when it
becomes effective if subsequently filed with the Commission pursuant to
Rule 430A of the General Rules and Regulations of the Commission under the
Securities Act (the "Rules under the Securities Act"), is hereinafter
called the "Registration Statement" and the final prospectus included as
part of the Registration Statement is herein called the "Prospectus",
except that, if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Securities which differs from the Prospectus on file at the Commission at
the time the Registration Statement becomes effective (whether or not such
revised prospectus is required to be filed by the Company pursuant to Rule
424(b) of the Rules under the Securities Act), the term "Prospectus" shall
refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such use. The term "Preliminary
Prospectus" as used in this Agreement means a preliminary prospectus as
defined in Rule 430 of the Rules under the Securities Act. The Securities
Act, the Securities Exchange Act of 1934, as amended ("Exchange Act"), and
the rules and regulations promulgated thereunder are sometimes
collectively referred to in this Agreement as the "Acts." All contracts
and documents required by the Acts to be filed or submitted in connection
with the Registration Statement have been so filed or submitted.
2
<PAGE> 3
(b) COMPLIANCE WITH SECURITIES ACT, ETC. When the Registration
Statement shall become effective and at all times subsequent thereto, up
to and including the Closing Date and the Option Closing Date (as such
terms are herein defined), and during such longer period until any
post-effective amendment to the Registration Statement shall become
effective, the Registration Statement (and any post-effective amendment to
the Registration Statement) will contain all statements which are required
to be stated therein in accordance with the Securities Act and the Rules
under the Securities Act, will fully comply as to form in all material
respects with the applicable provisions of the Securities Act and the
Rules under the Securities Act, and the Registration Statement and any
post-effective amendment to the Registration Statement will not contain
any untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and the Prospectus and any
amendment or supplement thereto will at all times up to and including the
Closing Date and the Option Closing Date (as hereinafter defined), and
during such longer period as the Prospectus may be required to be
delivered in connection with sales of Securities by the Underwriters or
any dealer, fully comply in all material respects with the provisions of
the Securities Act and the Rules under the Securities Act and will not
contain any untrue statement of a material fact and will not omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to the information contained in or
omitted from the Registration Statement and any post-effective amendment
to the Registration Statement or the Prospectus or any amendment of, or
supplement to, either of them in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representative specifically for use in connection
with the preparation of the Registration Statement or of the Prospectus.
It is understood that for all purposes of this Agreement the statements
set forth in the Prospectus on page 2 with respect to stabilization, the
second and third sentences of the last paragraph under "Certain
Relationships and Related Transactions" with respect to the transactions
with officers of the Representative under the section entitled
"Underwriting" and the identity of counsel for the Underwriters under the
section entitled "Legal Matters" constitute the only information furnished
in writing by or on behalf of the Underwriters for inclusion in the
Registration Statement and Prospectus.
(c) NO STOP ORDER. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus, and each
Preliminary Prospectus, at the time of filing thereof, fully complied in
all material respects with the provisions of the Securities Act and the
Rules under the Securities Act and did not include any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
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the information contained in or omitted from any Preliminary Prospectus in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter through the Representative
specifically for use in connection with the preparation of such
Preliminary Prospectus.
(d) ACCOUNTANTS. BDO Seidman, LLP has audited the audited financial
statements filed as part of the Registration Statement and those included
in the Prospectus, to the extent set forth in their reports in the
Registration Statement and Prospectus, and are independent certified
public accountants with respect to the Company as required by the
Securities Act and the Rules under the Securities Act.
(e) FINANCIAL STATEMENTS. The consolidated financial statements and
the notes thereto included in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Rules under the Securities Act.
The consolidated financial statements present fairly the financial
condition and results of operations and combined cash flows of the Company
and its consolidated subsidiaries, at the dates and for the periods
indicated therein, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved (except as disclosed in the notes thereto). The
financial information set forth in the Prospectus under the headings
"Summary Consolidated Financial Information", "Recent Developments" and
"Selected Consolidated Financial Data" present fairly, on the basis stated
in the Prospectus, the information set forth therein and has been derived
from or compiled on a basis consistent with that of the audited
consolidated financial statements included in the Prospectus.
The Companies (as defined below) maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any difference.
(f) SUBSIDIARIES; COMMONLY CONTROLLED ENTITIES. The Company owns all
of the outstanding shares of capital stock of Barringer Instruments, Inc.,
a Delaware corporation ("BII"), and of Barringer Research Ltd., an
Ontario, Canada corporation ("BRL"; collectively, the "Subsidiaries") and
26% of the capital stock of Barringer Laboratories, Inc., a
corporation ("Labco"). All the outstanding shares of Capital Stock of
each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and all the shares of capital stock of
BII and BRL and shares of Labco are owned beneficially
by the Company, free and clear of any liens, encumbrances, security
interests or other restrictions, except
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restrictions created pursuant to the Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated December 1, 1995, between the Company and
Labco and the Termination Agreement (the "Termination Agreement"), dated
October 1996, between the Company and Labco, and no rights exist to
acquire any of the capital stock of any of the Subsidiaries, except those
included in the Stock Purchase Agreement and the Termination Agreement.
Neither the Company, nor any of its Subsidiaries owns any securities of
any corporation or has any equity interest in any firm, partnership,
association or other entity. The Company and the Subsidiaries are
hereinafter collectively referred to as the "Companies".
(g) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, other than as stated therein, none of the Companies has
sustained any material loss or interference with their respective
businesses, financial condition or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree; and,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of the Companies has
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, not in the ordinary course of
business, and there has not been any material change in the capital stock
(including any dividend or distribution of any kind declared, paid, or
made on any class of capital stock of any of the Companies) or long-term
debt or obligations under capital leases of any of the Companies, or any
material adverse change; and there is no present intention by any of the
Companies to terminate any material supplier relationship or knowledge by
any of them of any material supplier's present intention to terminate the
supplier relationship with any of the Companies, nor any knowledge of any
development involving a prospective material adverse change in the
supplier's respective businesses, financial conditions or properties,
including any proposed legislation or regulations which, if enacted or
adopted, could have a material adverse change, in the condition (financial
or otherwise), or in the earnings, business affairs or business prospects
of the any of the Companies other than those reflected in the Registration
Statement and the Prospectus.
(h) CAPITALIZATION; DESCRIPTIONS OF SECURITIES. (i) The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under "Capitalization"; the issued and outstanding shares of
Common Stock and Preferred Stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; the Firm Shares
and Additional Shares, upon payment of the applicable price therefor, and
when issued and delivered by the Company pursuant to this Agreement, will
be validly issued, fully paid and non-assessable. The shares of Common
Stock and Preferred Stock of the Company conform to the descriptions of
them contained in the Prospectus, and the descriptions of the Common Stock
and Preferred Stock conform to the rights set forth in the Company's
Certificate of Incorporation, as amended, defining the same. No rights
exist to acquire any of the capital stock of the Company, except as set
forth in the
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Registration Statement. The issuance of the Firm Shares and the Additional
Shares is not subject to, or in violation of, any preemptive or other
subscription rights.
(ii) The Warrants have been duly authorized and, when delivered and
paid for in accordance with this Agreement and the Warrant Agreement
related thereto, will be validly issued and will constitute valid and
binding obligations of the Company in accordance with, and will be
exercisable in accordance with, their terms; the shares of Common Stock
issuable upon exercise of the Warrants have been duly and validly reserved
for issuance pursuant to the terms of the Warrants and, when delivered and
paid for pursuant to the terms of such Warrants upon the due exercise of
the Warrants by the holders thereof, will be duly authorized, validly
issued, fully paid and nonassessable, and the holders will not be subject
to personal liability by reason of being such holders, and such shares
will not be subject to the preemptive rights of any stockholder of the
Company.
(iii) The Warrants conform in all material respects to the
description thereof contained in the Prospectus, and such description
conforms to the rights set forth in the instrument defining the same.
(i) ORGANIZATION, QUALIFICATION, ETC. The Company is a duly
organized and validly existing corporation in good standing under the laws
of the State of Delaware with corporate power and authority to own and
lease its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement, BII is a duly organized and validly existing corporation in
good standing under the laws of the State of New Jersey, BRL is a duly
organized and validly existing corporation in good standing under the laws
of Ontario, Canada, each with corporate power to own and lease its
properties and to conduct its business as described in the Prospectus, and
each is duly qualified to do business and in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse effect
on its condition, financial or otherwise, or on its earnings, business
affairs or business prospects (a "Material Adverse Change").
(j) REGULATORY COMPLIANCE. Each of the Companies holds all material
licenses, certificates, permits and other evidence of regulatory
compliance issued by appropriate federal, state or local or foreign
governmental agencies or bodies necessary for the conduct of its business
as described in the Prospectus except for those which the failure of the
Company to hold would not result in a Material Adverse Change, and none of
the Companies has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, permit or
other evidence of compliance which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change.
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(k) AUTHORITY. The Company has the corporate power and authority,
and has taken all corporate action necessary, to enter into this Agreement
and to authorize, issue and sell the Securities on the terms and
conditions set forth in this Agreement, and this Agreement has been duly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except to the extent enforceability
may be limited by bankruptcy or other laws relating to or affecting
creditors' rights generally or equitable provisions under federal or state
securities laws or public policy.
(l) COMPLIANCE WITH OTHER INSTRUMENTS; CONSENTS. None of the
Companies is in violation of its charter or bylaws or in default in the
performance or observation of any obligation, agreement, covenant or
condition contained in any distribution agreement, indenture, mortgage,
deed of trust, note, bank loan or credit agreement, or any other material
agreement or instrument to which any of the Companies is a party or by
which it is bound, or to which any of its properties or assets are
subject, other than those default or defaults, which singly or in the
aggregate would not result in a Material Adverse Change, and each such
distribution agreement, indenture, mortgage, deed of trust, note, bank
loan or credit agreement, and other material agreement or instrument, is
in full force and effect and, assuming that such agreement or instrument
is the legal, valid and binding obligation of the other party to such
agreement or instrument, is the legal, valid and binding obligation of,
and is enforceable as to, each of the Companies, as the case may be, in
accordance with its terms. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated herein will not (i) conflict with, result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or give rise to the rights of termination under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Companies pursuant to, any distribution
agreement, indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other material agreement or instrument to which any of
the Companies is a party or by which any of their respective properties or
assets are bound other than such conflicts, breaches, violations or
defaults which, singly or in the aggregate, would not result in a Material
Adverse Change, nor will such action result in any violation of the
provisions of the charter or bylaws of any of the Companies, or any law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court having jurisdiction over any of the
Companies, or their respective properties or operations except for such
violations, which, singly or in the aggregate, would not result in a
Material Adverse Change, or (ii) require the consent, approval,
authorization or order of any court or governmental agency or body for the
consummation by the Company of any of the transactions contemplated
hereby, except such as have been obtained and such as may be required
under the Acts, and under state securities or "Blue Sky" laws in
connection with the issuance and distribution of the Securities or except
for those which the failure of the Company to obtain would not result in a
Material Adverse
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Change. There are no contracts or documents of the Companies that are
required to be filed as exhibits to the Registration Statement under the
Securities Act or the Rules that have not been so filed.
(m) LITIGATION. Except as set forth in the Prospectus, there is no
action, suit or proceeding before or by any court or governmental agency
or body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened, against or affecting any of the Companies, that is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or that might result in a Material Adverse Change or
that might materially and adversely affect the properties or assets
thereof or that might materially or adversely affect the consummation of
this Agreement; all pending legal or governmental proceedings to which any
of the Companies is a party or of which any of their respective properties
or assets are the subject, that are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business of the Companies, are not material.
(n) PAYMENT OF TAXES. Each of the Companies has filed all United
States federal, state and local tax returns which are required to be filed
and all such filed returns are complete and accurate except for such
incompletions and inaccuracies as would not result in a Material Adverse
Change. All taxes and all assessments to the extent that they have become
due have been paid in full or the Company has contested such amounts
through appropriate proceedings and has established adequate reserves
therefor in accordance with generally accepted accounting principles, and
each of them has made adequate accruals for all taxes which may be owed
but have not been paid. There is no audit, examination, deficiency, or
refund litigation pending or, to the Company's knowledge, threatened, with
respect to any Taxes of the Companies that would individually or in the
aggregate result in a Material Adverse Change. All Taxes, interest,
additions, and penalties due with respect to completed and settled
examinations or concluded litigation relating to it have been paid in
full. None of the Companies has executed an extension or waiver of any
statute of limitations on the assessment or collection of any Tax that is
currently in effect. No rulings have been issued by or agreements entered
into with any Tax Authority (as defined below) with respect to the Company
or any subsidiary or affiliate. For purposes of this paragraph, "Taxes"
shall mean all taxes, charges, fees, liens, duties or other assessments,
however denominated, including any interest or penalties that may become
payable in respect thereof, imposed by the United States government, any
state, local or foreign government or any agency or political subdivision
of any such government (a "Taxing Authority"), which taxes shall include,
without limiting the generality of the foregoing, all income taxes,
payroll and employee withholding taxes, unemployment insurance taxes,
social security taxes, sales and use taxes, excise taxes, capital taxes,
franchise taxes, gross receipt taxes, occupation taxes, real or personal
property taxes, value added taxes, stamp taxes, transfer taxes, workers'
compensation taxes, and other obligations of the same or of a similar
nature.
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(o) Listing. The Securities are qualified for listing on The NASDAQ
National Market System.
(p) INVESTMENT COMPANY STATUS. None of the Companies are an
"investment company" or an "affiliated person" of, or promoter, or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940.
(q) REAL AND PERSONAL PROPERTY. Except as disclosed in the
Prospectus, each of the Companies owns outright, in fee simple, title to
the real and personal property purported to be owned by it, free and clear
of all liens, mortgages, charges or encumbrances of any nature, except
those which do not materially diminish the value of the property subject
to them or materially interfere with or materially impair the present and
continued use of that property in the usual and normal conduct of its
business (collectively "Permitted Encumbrances"). All of the leases under
which each of the Companies holds properties or assets as lessee are in
all material respects as described in the Prospectus, are valid and in
full force and effect and, to the Companies' knowledge, enforceable as to
the Companies in accordance with their terms, and none of the Companies is
in default in any respect under any of the terms or provisions of any such
leases, except for any default which would not result in a Material
Adverse Change and, to the Company's knowledge, no claim has been asserted
by anyone adverse to the rights of the Companies as lessee under any of
the leases mentioned above, or affecting or questioning the right of any
of the Companies to continued possession of the leased premises or assets
under any such lease that would result in a Material Adverse Change.
(r) INTELLECTUAL PROPERTY. Each of the Companies owns or possesses
adequate licenses or other rights to use all patents, trade secrets,
trademarks, trade names and copyrights necessary to enable it to conduct
its business as now operated (the "Intellectual Property") except for such
licenses or other rights, which the failure of the Company to own of
possess would not result in a Material Adverse Change and such
Intellectual Property (other than Intellectual Property rights acquired as
licensee) is owned free and clear of any liens, security interests,
mortgages, charges, encumbrances and adverse rights of every kind, nature
and description; and none of the Companies has any knowledge of any claim
or received any notice of infringement of or conflict with asserted rights
of others or have knowledge of infringement by others of its rights with
respect to any of the foregoing which, singly or in the aggregate, could
result in a Material Adverse Change . Except for the rights of customers
under license agreements, the Intellectual Property is not subject to any
licenses, sublicenses, royalty arrangements, or disputes, and except for
such rights, each of the Companies has the exclusive right to make, copy,
sell, exploit and provide to others the use of the Intellectual Property
pertinent to it and all derivative works thereof free and clear of any
liens, security interests, mortgages, charges, encumbrances and adverse
rights of every kind, nature and description. There are no defects in the
Intellectual Property, which defects would in any material and
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adverse respect affect the functioning thereof in accordance with the
specifications therefor, or the use or exploitation thereof. No agreement
exists which would preclude any desired change to the Intellectual
Property, excluding Permitted Encumbrances. Each of the Companies has
taken or is taking all actions necessary in its reasonable judgment to
protect the Intellectual Property pertinent to it. Except as disclosed in
the Prospectus, no third party has any interest in, or right to
compensation from any of the Companies by reason of the use, exploitation
or sale of the Intellectual Property, and none of the Companies has
received notice or knowledge of any complaint, assertion, threat or
allegation that would contradict the foregoing.
(s) INSURANCE. Each of the Companies has its property adequately
insured against loss or damage by fire, maintains adequate insurance
against liability for negligence, and maintains such other insurance in
such nature and amounts of coverage as is usually maintained by companies
engaged in the same or similar business.
(t) NO STABILIZATION OR MANIPULATION OF PRICE. Neither the Company
nor any officer or director of the Company has taken or will take,
directly or indirectly, any action designed to stabilize or manipulate the
price of any security of the Company, or which has constituted or which
might in the future reasonably be expected to constitute stabilization or
manipulation of the price of the Offered Securities in connection with the
offering contemplated by the Registration Statement.
(u) RELATED TRANSACTIONS. There are no business relationships or
related-party transactions of the nature described in Item 404 of
Regulation S-B involving any of the Companies and any other persons
referred to in said Item 404 that are required to be described in the
Prospectus and which have not been so described.
(v) NO REGISTRATION RIGHTS. Except as set forth in Schedule __
hereto, no person or entity has the right (which has not been waived) to
require registration of Common Stock or other securities of the Company
because of the filing or effectiveness of the Registration Statement or
otherwise.
(w) LOCK-UP AGREEMENTS. The Company has obtained and delivered to
the Underwriters a written agreement, in form satisfactory to Rosenman &
Colin LLP, counsel for the Underwriters, by each officer and director of
the Company as of the Effective Date not to, directly or indirectly, sell,
offer to sell or agree to sell or otherwise dispose of any Common Stock of
the Company for a period of 180 days from the Effective Date without the
prior written consent of the Representative, other than pursuant to the
Registration Statement or as described in such agreement.
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(x) NO BROKER OR FINDER ENGAGED BY THE COMPANY. Except as disclosed
in the Prospectus, the Company has not incurred any liability for any
finder's fees or similar payments in connection with any of the
transactions herein contemplated.
(y) LABOR RELATIONS. None of the Companies is involved in any labor
dispute which might reasonably be expected to result in a Material Adverse
Change nor, to the knowledge of the Companies, is any such dispute
threatened.
(z) DEALINGS. None of the Companies nor any of their respective
officers, directors, employees, agents or any other person acting on their
behalf has, directly or indirectly, given or agreed to give any money,
gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
an agent of a customer or supplier, or official or employee of any
governmental agency or instrumentality of any government (domestic or
foreign) or any political party or candidate for office (domestic or
foreign) or other person who was, is, or may be in a position to help or
hinder their respective businesses (or assist in connection with any
actual or proposed transaction) which (a) might subject any of them to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, (b) if not given in the past, might result in a Material
Adverse Change as reflected in any of the combined financial statements
contained in the Prospectus, or (c) if not continued in the future, would
reasonably be expected to result in a Material Adverse Change. Each of the
Companies' internal accounting controls and procedures are sufficient to
cause it to comply with the Foreign Corrupt Practices Act of 1977, as
amended.
(aa) PRIOR TRANSACTIONS. Except as set forth in the Registration
Statement, the Company has not issued, sold or offered for sale within the
last three years any of its equity securities.
2. PURCHASE AND SALE OF SHARES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby agrees to issue and sell to the Underwriters,
severally and not jointly,the number of Firm Securities to be sold by the
Company set forth opposite the name of each Underwriter on Schedule I, and each
Underwriter, severally and not jointly, hereby agrees to purchase from the
Company the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule I hereto, at a purchase price of $ per Firm Share
and $ per Firm Warrant.
3. DELIVERY AND PAYMENT. The Company shall deliver the Firm Securities at
the office of Janney Montgomery Scott Inc., 26 Broadway, New York, New York, on
, 1996 at 10:00 A.M., New York City time, the date and time of such delivery
being hereinafter called the "Closing Date." On the Closing Date, delivery of
the Firm Securities shall be made to you, for the respective accounts of the
several Underwriters, against payment by the several Underwriters through you of
the purchase price for the Firm Securities. The purchase price for the Firm
Securities will be paid to or upon the order of the Company, in bank checks in
New York Clearing House funds. Certificates for the Firm Securities shall be
made available to you for inspection, checking and packaging at the office
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of Janney Montgomery Scott Inc., 26 Broadway, New York, New York, not less than
one full business day prior to the Closing Date. Time shall be of the essence
and delivery at the time and place specified in this Agreement is a further
condition to the obligations of each Underwriter.
In the event the Underwriters exercise the option granted in Section 4(a)
hereof to purchase all or any portion of the Additional Securities, the Company
shall deliver the Additional Securities at the office of Janney Montgomery Scott
Inc., 26 Broadway, New York, New York, at 10:00 A.M., New York City time on the
Option Closing Date (as hereinafter defined). On the Option Closing Date,
delivery of the Additional Securities shall be made to you, for the respective
accounts of the several Underwriters, against payment by the several
Underwriters through you of the purchase price for the Additional Securities.
The purchase price for the Additional Securities will be paid to or upon the
order of the Company, in bank checks in New York Clearing House funds.
Certificates for the Additional Securities shall be made available to you for
inspection, checking and packaging at the office of Janney Montgomery Scott
Inc., 26 Broadway, New York, New York, not less than one full business day prior
to the Option Closing Date. Time shall be of the essence and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of each Underwriter.
4. OPTION TO PURCHASE ADDITIONAL SHARES.
(a) For the sole purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants an option to the Underwriters to purchase
150,000 Additional Shares and 150,000 Additional Warrants from the Company, in
each case at a price identical to the price per Firm Share and Firm Warrant set
forth in Section 2 of this Agreement. The option hereby granted may be exercised
by the Underwriters as to all or any part of the Additional Securities at any
time, but only once prior to the end of the close of business on the thirtieth
day following the Closing Date; provided, however, that Additional Securities
may only be purchased on the basis of one Additional Warrant for each Additional
Share purchased. Subject to such adjustments to eliminate fractional Additional
Securities as you, as the Representative of the Underwriters, may determine, the
number of Additional Securities to be purchased by each Underwriter shall be
equal to the number of Additional Shares multiplied by a fraction, the numerator
of which is the number of Firm Shares purchased by such Underwriter and the
denominator of which is the total number of Firm Shares purchased by all
Underwriters including the Representative.
(b) The option granted hereby may be exercised by you, as the
Representative of the Underwriters, by giving written notice to the Company
setting forth the number of Additional Securities to be purchased, the date and
time for delivery of payment for the Additional Securities, and stating that the
Additional Securities being purchased are to be used solely for the purpose of
covering over-allotments in connection with the distribution and sale of the
Firm Securities. If the notice is given prior to the Closing Date, the date for
delivery and payment shall not be earlier than the later of two (2) full
business days after the notice is given or the Closing Date. If the notice is
given on or after the Closing Date, the date for delivery and payment shall not
be earlier than three full business days
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after the day on which the notice is given. In either event, the date shall not
be more than fifteen (15) full business days after the day on which the notice
is given. The date and time for delivery and payment is called the "Option
Closing Date." Upon exercise of the option, the Company shall become obligated
to sell to the Underwriters and, subject to the terms and conditions set forth
in Section 4(c) of this Agreement, the Underwriters shall become obligated,
severally and not jointly, to purchase the number of Additional Shares described
in Section 4(a) above.
(c) The obligation of the Underwriters to purchase and pay for any of the
Additional Securities is subject to the accuracy in all material respects as of
the date of this Agreement, the Closing Date and the Option Closing Date of, and
the compliance by the Company in all material respects with, its representations
and warranties in this Agreement, to the accuracy in all material respects of
the statements of the officers of the Company made pursuant to this Agreement,
to the performance in all material respects by the Company of its obligations
under this Agreement, to the satisfaction by the Company as of the Option
Closing Date of the conditions set forth in Section 11 of this Agreement, and to
the delivery to you of opinions, certificates, and letters addressed to you and
dated the Option Closing Date substantially similar in scope to those specified
in Section 11 of this Agreement, but with each reference to "Firm Securities" to
be to the Additional Securities being sold, and "Closing Date" to be to the
"Option Closing Date."
5. OFFERING BY UNDERWRITERS. After the Registration Statement becomes
effective, the Underwriters propose to offer for sale to the public the Firm
Securities and any Additional Securities which may be sold at the price and upon
the terms set forth in the Prospectus. The Representative represents and
warrants that it has not incurred any liability for finder's fees or similar
payments in connection with the transactions herein contemplated.
6. REPRESENTATIVE'S WARRANTS. At the Closing, the Company shall sell to
the Representative, for $.0012 per warrant, five-year warrants (the
"Representative's Warrants") entitling the holder to purchase up to 125,000
shares of Common Stock and three-year warrants (the "Underlying Warrants")
entitling the holder to purchase up to 125,000 warrants identical in form and
substance to the Firm Warrants. The Representative's Warrants shall be
exercisable for a period of four years commencing one year after the effective
date of the Prospectus and the Underlying Warrants shall be exercisable for a
period of two years commencing one year after the effective date of the
Prospectus, in each case at a price or prices conforming to the requirements of
the National Association of Securities Dealers Inc. and shall contain the
registration rights and other terms and conditions set forth in the related
Exhibit to the Registration Statement. As used herein, "Representative's
Securities" shall mean the Representative's Warrants, the Underlying Warrants
and the shares of Common Stock issuable on exercise of all such Warrants.
7. EXPENSES.
The Company will pay all fees, taxes and expenses incident to the
performance of the obligations of the Company under this Agreement and under any
other agreement in connection with the offer, sale and issuance of the Firm
Securities and Additional Securities,
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and any fees, taxes and expenses, including transfer taxes incident to the
issuance and delivery of the Firm Securities and Additional Securities to the
Underwriters as may be required by this Agreement, including, without
limitation, accounting, legal (other than the fees and disbursements of the
Underwriters' counsel, except as provided below), printing, any state or local
transfer or other taxes, advertising and other costs incurred in connection with
the preparation, printing, filing and delivery to the Representative of the
Registration Statement, the Preliminary Prospectus, the Prospectus, and all
amendments or supplements to them, preliminary and final Blue Sky Memoranda,
this Agreement, the Agreement Among Underwriters and Selected Dealer Agreement,
Underwriters' Questionnaires, powers of attorney, the listing of the Securities
on The Nasdaq National Market System and any other agreements or similar items
of expense, including postage, printing, advertising costs, the expenses of
"road shows" and other marketing expenses reasonably incurred by you or
reasonably required or desirable in connection with the offering and sale of the
Firm Securities and Additional Securities, and in connection with furnishing
copies of the Preliminary Prospectus, the Prospectus and all supplements and
amendments to them to the several Underwriters and all filing fees to the
Commission and the National Association of Securities Dealers, Inc. ("NASD")
payable in connection with this offering. The Company will pay all legal fees
(including the reasonable fees of Rosenman and Colin LLP, Blue Sky counsel to
the Company), disbursements, filing fees and other costs of compliance with or
registration and qualification under applicable state securities or Blue Sky
laws and all reasonable expenses incident thereto. The Company shall also pay
the fees and expenses of the transfer agent and warrant agent. At the Closing,
the Company shall pay to the Representative a non-accountable expense allowance
of 2% of the gross proceeds of the offering of the Firm Securities, of which the
Representative acknowledges having received a non-refundable advance of $20,000,
and at any Option Closing shall pay to the Representative a further
non-accountable expense allowance of 2% of the gross proceeds of the offering of
Additional Securities.
8. FURTHER COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters contained in this Agreement, the Company
covenants and agrees with each of the several Underwriters as follows:
(a) The Company will not at any time submit or make any amendment or
supplement to the Prospectus or Registration Statement which shall not
have been submitted to you within a reasonable time prior to the proposed
submission thereof, or to which you shall reasonably object in writing, or
which is not in compliance with the Acts.
(b) The Company will use its best efforts to cause the Registration
Statement and any post-effective amendments thereto to comply with the
requirements of the Securities Act and the Rules under the Securities Act
and to become effective, and will promptly advise you and confirm in
writing upon your request (i) when the Registration Statement and any
amendment thereto shall become effective, (ii) when any post-effective
amendment to the Registration Statement becomes effective, (iii) of the
receipt of any comments from the Commission, (iv) when the Commission
shall request any amendment to the Registration Statement or Prospectus,
or request any additional information, (v) of the necessity
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of amending or supplementing the Registration Statement or any
post-effective amendment in order to then meet the requirements of the
Securities Act and the Rules under the Securities Act, and (vi) of the
issuance by the Commission, any "Blue Sky" authority or any other
governmental agency with jurisdiction over the Company or its securities,
of any stop order or similar order with regard to the Registration
Statement or the Prospectus, or any order preventing or suspending the use
of any Preliminary Prospectus or the Registration Statement or Prospectus,
or of the suspension of the qualification of the Securities for offer or
sale in any jurisdiction, or of the institution of any proceedings for any
such purpose. The Company will use its best efforts to prevent the
issuance of any stop order or of any order preventing or suspending such
use and if such an order shall be issued, the Company will use its best
efforts to obtain its withdrawal as soon as possible.
(c) The Company will prepare and file with the Commission, upon your
reasonable request, any amendments or supplements to the Registration
Statement or Prospectus, in form and substance reasonably satisfactory to
counsel for the Company, as in the opinion of Rosenman & Colin LLP,
counsel for the Underwriters, may be necessary or advisable in connection
with the distribution of the Offered Securities and the exercise of the
Warrants included therein, and will use its best efforts to cause the same
to become effective as promptly as possible and to remain effective for
the term of the Warrants included in the Offered Securities.
(d) The Company consents to the use of any Preliminary Prospectus by
the several Underwriters and by dealers for the purposes contemplated by
this Agreement and in accordance with the Acts. The Company will deliver
to you, at or before the Closing Date, three copies of the Registration
Statement and all amendments thereto, including all financial statements
and exhibits filed with it, and copies of all written communications
between the Company, its representatives and agents and the Commission,
and will deliver to you such number of copies of the Registration
Statement, including such financial statements, but without exhibits, and
all amendments thereto as you may reasonably request. The Company will
deliver or mail to you and, upon your request, to the Underwriters, from
time to time, during the period when delivery of the Prospectus relating
to the Offered Securities shall be required under the Acts, as many copies
of the Prospectus (as amended or supplemented) as you may reasonably
request.
(e) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the Rules under the Securities Act, then, at the times
specified in Rule 430A and Rule 424(b), the Company will prepare, and file
or transmit for filing with the Commission in accordance with such Rule
430A and Rule 424(b) of the Rules under the Securities Act copies of the
amended Prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including an amended Prospectus)
containing all information so omitted.
(f) The Company will comply with the requirements of the Acts and
any other applicable rules and regulations of any governmental authority
having
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<PAGE> 16
jurisdiction over this offering so as to permit the completion of the
public distribution of the Offered Securities. Subject to the provisions
of Subsection (a) of this Section 8, if, at any time when a Prospectus is
required to be delivered under the Acts, (i) an event relating to or
affecting the Company shall have occurred which, in the judgment of the
Company and its counsel, or in the opinion of counsel for the
Underwriters, would cause the Registration Statement as then in effect to
include an untrue statement of a material fact or to omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading, or in order to make the
Registration Statement comply with the Acts and the Rules under the
Securities Act, or (ii) it is necessary to amend or supplement the
Registration Statement or Prospectus, the Company will promptly notify you
of the occurrence and will promptly prepare, file and deliver to you
without charge such number of copies of the amended or supplemented
Registration Statement or Prospectus as you shall reasonably request, and
will use its best efforts to cause the Commission and appropriate "Blue
Sky" authorities to take all required action with regard to any such
amendment as may be necessary to permit the lawful use of the Registration
Statement and Prospectus in connection with the distribution of the
Offered Securities.
(g) The Company will supply all necessary documents, exhibits and
information and execute all applications, instruments and papers as may be
necessary or desirable in the opinion of Rosenman & Colin LLP, Blue Sky
counsel, and as requested by you, to qualify the Offered Securities for
sale under the Blue Sky or other securities laws in such jurisdictions as
the Underwriters may reasonably request, provided the Company shall not
have to qualify as a foreign corporation and shall not be required to
consent to service of process generally. The Company will take any
reasonable measures requested by you and such action, if any, which is
necessary under such laws in order to qualify the Offered Securities for
sale and to continue such registration or qualification so long as
necessary to permit the completion of the public distribution with respect
to such Securities.
(h) The Company will make generally available to its security
holders as soon as practicable after the expiration of one year after the
date the Registration Statement becomes effective, and in all events not
later than , 1997, an earnings statement of the Company (which will
be in such detail and form as you may reasonably request and which need
not be audited) covering a period of at least 12 months beginning not
later than the first day of the Company's fiscal quarter next following
the date the Registration Statement becomes effective, which earnings
statement shall satisfy the provision of Section 11(a) of the Securities
Act including Rule 158 promulgated thereunder.
(i) So long as the Company shall be subject to the reporting
requirements of the Exchange Act, the Company shall furnish to its
stockholders and warrantholders annual reports containing financial
statements of the Company audited by its independent certified public
accountants and quarterly reports for the first three quarters of its
fiscal year containing financial information which may be unaudited.
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(j) So long as the Company shall be subject to the reporting
requirements of the Exchange Act, the Company will, from time to time,
after the date the Registration Statement becomes effective, file with the
Commission such reports as are required by the Acts and with state
securities commissions in states where the Offered Securities have been
sold by the Representative (as the Representative shall have advised the
Company in writing) such reports as are required to be filed by the
securities acts and the regulations of those states.
(k) The Company will apply the net proceeds from the sale of the
Offered Securities for the purposes set forth under "Use of Proceeds" in
the Prospectus.
(l) The Company shall furnish to you as early as practicable prior
to the Closing Date, but no later than three (3) full business days prior
thereto, a copy of the latest available unaudited interim financial
statements of the Company which have been read by the Company's
independent certified public accountants, as stated in their letters to be
furnished pursuant to Section 11(i) of this Agreement.
(m) During the period of five (5) years from the date the
Registration Statement becomes effective, the Company will furnish to the
Representative copies of all reports and other communications (financial
or other) furnished by the Company to its shareholders and, as soon as
reasonably practicable, copies of any reports or financial statements
furnished or filed by the Company to or with the Commission, NASDAQ, or
any national exchange on which any class of securities of the Company may
be listed.
(n) During a period of 180 days after the date the Registration
Statement becomes effective, the Company will not, directly or indirectly,
without the prior written consent of the Representative, offer, sell,
grant any option to purchase or otherwise dispose of any Common Stock or
any securities convertible into or exchangeable for Common Stock except
pursuant to this Agreement, and except (i) in connection with a merger or
asset acquisition, (ii) upon exercise or conversion of securities
(including stock options) of the Company outstanding prior to the
effective date of the Registration Statement (iii) the creation and
adoption of an employee stock compensation program (a "Program"), or (iv)
the grant of options, SARs, restricted stock and other securities under
such Program, not to exceed 200,000 shares of Common Stock.
(o) The Company will reasonably enforce, for your benefit, the
written agreements (copies of which have been furnished to you) by all of
the executive officers and directors of the Company pursuant to Section
1(w) hereof.
(p) The Company will cause the officers and directors of the Company
(enumerate) to enter into an agreement with the Representative to the
effect that, for a period of 180 days from the date hereof, he or she will
not, without the prior consent of the Representative, directly or
indirectly, offer, sell, offer to sell, grant any option to purchase or
otherwise sell or dispose of any shares of the Common Stock of the Company
or any securities convertible into or exercisable or exchangeable
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therefor or with respect to which such person has the power of
disposition, except for the exercise of stock options.
(q) The Prospectus and any amendment or supplement thereto will at
all times up to and including the Closing Date and the Option Closing Date
(as hereinafter defined), and during such longer period as the Prospectus
may be required to be delivered in connection with the issuance and sale
by the Company of shares of Common Stock or exercise of any of the
Warrants fully comply in all material respects with the provisions of the
Securities Act and the Rules under the Securities Act and will not contain
any untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless, and, subject to
Section 9(c) to indemnify and hold harmless, each Underwriter (including
specifically each person who may be substituted for an Underwriter as provided
in Section 13 of this Agreement) and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act, from and
against any and all losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them may become subject under the Act, state
securities laws or under any other statute or at common law or otherwise, and,
except as hereinafter provided, will reimburse each of the Underwriters and each
such controlling person, if any, for any legal or other out-of-pocket expenses
reasonably incurred by them or any of them in connection with investigating or
defending any claim or action whether or not resulting in any liability, insofar
as such losses, claims, damages, expenses, liabilities or actions arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, in any Preliminary Prospectus or
in the Prospectus (or the Registration Statement or Prospectus as from time to
time amended or supplemented by the Company) or in any application or other
document (hereinafter "Application") executed by the Company or based upon
written information furnished by or on behalf of the Company, filed in any
jurisdiction in order to qualify the Securities under the securities laws of
that jurisdiction, or which arise out of or are based upon the omission or
alleged omission to state in any of the foregoing any material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the indemnity agreement contained in this Subsection shall not
apply to any loss, claim, damage, expense or liability to the extent arising out
of any untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, Preliminary Prospectus or
Prospectus (or the Registration Statement or Prospectus as from time to time
amended or supplemented by the Company) or, Application in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by the Representative or any Underwriter directly or through you
expressly for use therein; provided, further that the indemnity agreement
contained in this Subsection is subject to the condition that, insofar as it
relates to any such untrue statement or alleged untrue statement or omission or
alleged omission in any Preliminary Prospectus but
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eliminated or remedied in the Prospectus, such indemnity agreement shall not
inure to the benefit of any Underwriter or any person controlling such
Underwriter from whom the person asserting any such loss, claim, damage,
expense, liability or action purchased the Securities if (i) prior to the time
such Prospectus was required under the Securities Act to be furnished to such
person the Company had furnished copies of the properly corrected or
supplemental Prospectus to such Underwriter, (ii) a copy of such Prospectus, as
then corrected or supplemented, was not furnished to such person at or prior to
the time required under the Securities Act, and (iii) the delivery of such
Prospectus would have constituted a complete defense to the claim asserted by
such person. Promptly after receipt by any Underwriter or any person controlling
such Underwriter of notice of the commencement of any action in respect of which
indemnity may be sought against the Company under this Subsection (a), such
Underwriter or controlling person shall notify the Company in writing of the
commencement of the action and, subject to the provisions hereinafter stated,
the Company shall assume the defense of that action (including the employment of
counsel who shall be reasonably satisfactory to the Representative (who may be
Company counsel)) and the payment of reasonable out-of-pocket expenses insofar
as such action shall relate to any alleged liability in respect of which
indemnity may be sought against the Company. Any Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action and participate in the defense, but the fees and expenses of such counsel
shall not be at the expense of the Company unless the employment of such counsel
has been specifically authorized by the Company or unless the indemnified party
or parties reasonably conclude there may be defenses available to it or them
which were not available to the Company (in which case the Company will not have
the right to direct the defense of the action on behalf of the indemnified
parties), in which event the reasonable expenses of one additional counsel for
the Underwriters will be borne by the Company. The Company shall not be liable
to indemnify any person for any settlement of any such action effected without
the written consent of the Company. The obligations of the Company under the
indemnity agreement set forth in this Subsection (a) shall be in addition to any
liability the Company may otherwise have under this Agreement.
(b) Each Underwriter (including specifically each person who may be
substituted for an Underwriter as provided in Section 13 of this Agreement)
severally agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, from and against
any and all losses, claims, damages, expenses, or liabilities, joint or several,
to which they or any of them may become subject under the Acts or under any
other statute or at common law or otherwise, and, except as hereinafter
provided, will reimburse the Company and each such director, officer or
controlling person for any legal or other out-of-pocket expenses reasonably
incurred by them or any of them in connection with investigating or defending
any claim or action whether or not resulting in any liability, insofar as such
losses, claims, damages, expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, in any Preliminary Prospectus or in the
Prospectus (or the Registration Statement or Prospectus as from time to time
amended or supplemented) or in any Application, or arise out of or are based
upon the omission or alleged omission to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
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misleading, but only insofar as any such statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by the Representative or such Underwriter
directly or through the Representative expressly for use therein. Promptly after
receipt of notice of the commencement of any action in respect of which
indemnity may be sought against one or more Underwriters under this Subsection
(b), the indemnified party shall notify the Representative Underwriters in
writing of the commencement of the action and the Underwriter or Underwriters
against whom indemnity may be sought shall, subject to the provisions
hereinafter stated, assume the defense of such action (including the employment
of counsel who shall be reasonably satisfactory to the Company, and the payment
of expenses) and the payment of reasonable out-of-pocket expenses insofar as
such action shall relate to an alleged liability in respect of which indemnity
may be sought against such Underwriter or Underwriters. The Company and each
such director, officer or controlling person shall have the right to employ
separate counsel in any such action and participate in the defense, but the fees
and expenses of such counsel shall not be at the expense of any Underwriter
unless the employment of such counsel has been specifically authorized by the
Underwriters obligated to defend such action, unless the indemnified party or
parties reasonably conclude there may be defenses available to it or them which
are not available to the Underwriters against whom indemnification is sought (in
which case those Underwriters will not have the right to direct the defense of
the action on behalf of the indemnified party or parties), in which event the
reasonable out-of-pocket expenses of one additional counsel for all the
indemnified parties will be borne by the indemnifying Underwriters. The
Underwriter against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any action effected without such
Underwriter's written consent. The obligations of each Underwriter under the
indemnity agreement set forth in this Subsection (b) shall be in addition to any
liability each of them may otherwise have under this Agreement.
10. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section 9 is
for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by said indemnity agreement incurred by the Company, and
one or more of the Underwriters, as incurred, in such proportions that the
Underwriters are responsible for that portion represented by the percentage that
the underwriting discount appearing on the cover page of the Prospectus bears to
the public offering price appearing thereon, and the Company shall be
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the provisions of
this Section 10, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Firm Securities and
Additional Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages of the kind described in
Section 9(a) which such Underwriter has otherwise paid in respect of such
losses, claims, damages, liabilities and expenses. For purposes of this Section,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
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signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as the Company.
11. CONDITIONS OF OBLIGATIONS OF UNDERWRITERS. The obligations of the
Underwriters to purchase and pay for the Firm Securities and Additional
Securities are subject (as of the date hereof and the Closing Date) to the
accuracy in all material respects of the representations and warranties of the
Company, the accuracy in all material respects of the statements of officers and
directors of the Company made pursuant to the provisions of this Agreement, the
performance in all material respects by the Company of its obligations under
this Agreement and to the following additional conditions:
(a) The Registration Statement shall become effective with the
Commission no later than 10:00 A.M., New York City time, on the day
following the date of this Agreement, or such later time and date as shall
have been consented to by the Underwriters (including you) who are
obligated to purchase a majority of the Firm Securities to be purchased by
all of the Underwriters pursuant to this Agreement; the Commission shall
have taken all required action, if any, with regard to the Registration
Statement, and, prior to the Closing Date, no stop order or similar order
with regard to the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be
pending or, to the knowledge of the Underwriters or the Company, shall be
contemplated by the Commission or by any securities, Blue Sky or other
regulatory authority of any jurisdiction, and any request on the part of
the Commission or such other securities, Blue Sky or regulatory
authorities for additional information shall have been complied with to
the reasonable satisfaction of Rosenman & Colin LLP, counsel for the
Underwriters.
(b) Prior to the date of this Agreement, the issuance and sale of
the Securities shall have been approved by all requisite corporate action
of the Company.
(c) The NASD shall have indicated that it had no objection to the
underwriting arrangements pertaining to the sale of the Firm Securities
and the Additional Securities and the participation by the Underwriters in
the sale thereof.
(d) No action shall have been taken by the Commission or the NASD
the effect of which would make it improper, at any time prior to the
Closing Date, for members of the NASD to execute transactions (as
principal or agent) in any of the Securities, and no proceedings for the
taking of such action shall have been instituted or shall be pending or,
to the knowledge of the Underwriters or the Company, shall be contemplated
by the Commission or the NASD. The Company represents that at the date
hereof it has no knowledge that any such action is in fact contemplated by
the Commission or the NASD.
(e) Between the date of this Agreement and the Closing Date, none of
the Companies shall have sustained any material loss outside the ordinary
course of its
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business or of such character as would result in a Material Adverse
Change, whether or not that loss is covered by insurance.
(f) Between the date of this Agreement and the Closing Date, each of
the Companies shall have conducted its business in the usual and ordinary
manner, and, except as disclosed in the Prospectus or except in the
ordinary course of its business, shall not have incurred any material
liabilities or obligations, direct or contingent, or altered in any
material respect any material supplier relationship, or disposed of a
material amount of its assets, or entered into any material transactions,
and shall not have suffered or experienced any Material Adverse Change. At
the Closing Date, the capital stock of the Company shall be substantially
as set forth in the Registration Statement, except with respect to the
Firm Securities to be sold by the Company.
(g) At the Closing Date, there shall have been delivered to you a
signed opinion of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.
addressed to the Underwriters, dated as of the Closing Date, in form and
substance reasonably satisfactory to Rosenman & Colin LLP, counsel for the
Underwriters, together with a signed or photostatic copy of that opinion
for each of the other Underwriters, substantially to the effect that:
(i) Each of the Company and BII has been duly incorporated and
is validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority to own and lease its properties and to conduct its
business as described in the Registration Statement and Prospectus
and is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where, to such counsel's
knowledge, it owns or leases properties and where the failure to so
qualify would have a material adverse effect on its earnings,
business affairs or business prospects.
(ii) This Agreement has been duly authorized, executed and
delivered by the Company. All corporate action required to be taken
by the Board of Directors of the Company and all action required to
be taken by the stockholders of the Company, if any, in connection
with the authorization, issuance and sale of the Securities to be
sold by the Company as contemplated in the Registration Statement
and the Prospectus have been duly taken. The Company has the
requisite power and authority to enter into and consummate this
Agreement.
(iii) Neither the issuance by the Company of the Securities to
be sold by it under this Agreement, the execution and delivery of
this Agreement, the undertakings contained in the Registration
Statement or the Prospectus, the consummation of the transactions
contemplated in this Agreement or compliance with the terms of this
Agreement, will conflict with or result in a breach of any of the
terms or provisions of the Certificate of Incorporation, as amended,
or the By-laws of the Company, or any material indenture, mortgage,
deed of trust, note, bank loan or credit agreement or any other
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agreement or instrument filed as an exhibit to the Registration
Statement or to any other filing heretofore made by the Company
under the Acts, any applicable federal or State law (other than Blue
Sky laws), rule or regulation, or (without search of any court
dockets) any judgment, order or decree of any government,
governmental agency or instrumentality or court having jurisdiction
over any of the Companies or their respective properties or assets,
of which such counsel is aware.
(iv) To such counsel's knowledge, there are no contracts,
indentures, mortgages, notes, leases or other instruments or
agreements required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto;
the descriptions thereof or references thereto in the Prospectus are
correct in all material respects and no default exists in the due
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, note,
lease or other instrument or agreement so described, referred to or
filed.
(v) To such counsel's knowledge, the Company has no
subsidiaries other than as set forth in Section 1(f) hereof. All of
the outstanding shares of capital stock of each Subsidiary have been
duly authorized and validly issued, are fully paid and non
assessable and, as of the Closing Date, are owned beneficially by
the Company, free and clear of any liens, encumbrances, security
interests or other restrictions, and no person, firm or corporation
has the right, upon the passage of time or otherwise, to acquire any
of the stock of any such Subsidiary.
(vi) Except as described in the Prospectus, to such counsel's
knowledge, the Company and the Subsidiaries hold all material
licenses, certificates, permits and other evidence of regulatory
compliance issued by appropriate federal, state or local
governmental agencies or bodies necessary for the conduct of its
business as described in the Prospectus.
(vii) The Company's authorized capital stock consists of
7,000,000 shares of Common Stock, par value $.01 per share,
1,000,000 shares of Convertible Preferred Stock, par value $1.25 per
share, and 4,000,000 shares of Preferred Stock, par value $2.00 per
share.
(viii) The outstanding stock options and warrants relating to
the Common Stock have been duly authorized and validly issued.
(ix) The certificates for the Securities are in proper form
and comply with Delaware law.
(x) The Firm Shares and Additional Shares to be sold by the
Company as contemplated by this Agreement have been duly authorized,
and, when issued as provided in this Agreement and any warrant
agreement relating
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thereto upon the due exercise of the Warrants, including the payment
of the exercise price therefor, will be validly issued, fully paid
and non-assessable. The holders of any of the Firm Shares and
Additional Shares when issued as contemplated pursuant to this
Agreement and any warrant agreement relating thereto upon the due
exercise of the Warrants, including the payment of the exercise
price therefor, will not be subject to personal liability solely by
reason of being such holders and, to such counsel's knowledge, there
is no preemptive right of any holder of any securities of the
Company applicable to [any outstanding share of Common Stock] and no
preemptive right will be applicable to any of the Firm Shares and
the Additional Shares to be sold by the Company under this Agreement
when issued and sold as contemplated in this Agreement and in the
Registration Statement and the Prospectus.
(xi) The Warrants have been duly authorized and, when
delivered and paid for in accordance with this Agreement will be
validly issued and will constitute valid and binding obligations of
the Company in accordance with, and will be exercisable in
accordance with, their terms; the shares of Common Stock issuable on
exercise of the Warrants have been duly and validly reserved for
issuance pursuant to the terms of the Warrants and when duly issued
and paid for in accordance with the terms of such Warrants, will be
duly authorized, validly issued, fully paid and nonassessable, and
the holders will not be subject to personal liability by reason of
being such holders and such shares will not be subject to the
preemptive rights of any stockholder of the Company.
(xii) Except for registration or qualification under the
Securities Act or under state securities or Blue Sky laws, no
authorization, approval, consent or license of any federal, New
Jersey or Delaware regulatory body or authority is required for the
valid authorization, issuance, sale and delivery of any of the
Securities, or, if required, all such authorizations, approvals,
consents and licenses have been obtained and are in force and
effect.
(xiii) The Registration Statement has become effective, and,
to such counsel's knowledge, no stop order or similar order has been
issued with regard to the Registration Statement or the Prospectus,
and no proceedings for that purpose have been instituted or are
pending and such counsel has not been notified that any such
proceedings are contemplated under the Acts or under any Blue Sky or
other securities laws of any jurisdiction.
(xiv) The Registration Statement, the Prospectus and each
post-effective amendment or supplement thereto complies as to form
in all material respects with the requirements of the Securities Act
(except that no opinion shall be expressed as to the financial
statements, notes related thereto, and other financial or
statistical data included therein and information supplied by you as
set forth in Section 1(b) hereof).
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(xv) Such counsel has acted as counsel for the Company and has
participated in the preparation of the Registration Statement and
Prospectus and any post-effective amendments or supplements thereto
to the date of such opinion and, during the course of such
representation, no facts have come to the attention of such counsel
which would lead such counsel to believe that either the
Registration Statement or the Prospectus or any post-effective
amendment thereto contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except no
opinions need be expressed as to the financial statements and notes
thereto and other financial or statistical data included therein and
information supplied by you as set forth in Section 1(b) hereof).
(xvi) To such counsel's knowledge, all statutes or regulations
or legal or governmental proceedings required to be described in the
Registration Statement or Prospectus are described therein as
required, and all such descriptions in the Registration Statement or
Prospectus are accurate in all material respects and present fairly
the information purported to be shown.
(xvii) To such counsel's knowledge, none of the Companies has
any outstanding options, warrants or other rights to purchase or
acquire any shares of capital stock of any of them except set forth
in the Registration Statement or the Prospectus.
(xviii) The Common Stock conforms as to legal matters in all
material respects with the statements concerning such shares made in
the Registration Statement and the Prospectus under the section
entitled "Description of Capital Stock", and such statements present
fairly the matters respecting such shares required to be set forth
in the Registration Statement or the Prospectus.
(xix) The Warrants conform as to legal matters in all material
respects with the statements concerning such Warrants made in the
Registration Statement and the Prospectus under the section entitled
"Description of Common Stock Purchase Warrants", and such statements
present fairly the matters respecting such Warrants required to be
set forth in the Registration Statement or the Prospectus.
(xx) Except as set forth in the Registration Statement and
Prospectus, to such counsel's knowledge, there is no pending or
threatened action, suit or proceeding before any court or before or
by any governmental agency or body to which any of the Companies is
a party, or of which any of their respective properties or assets
are the subject, which is required to be disclosed in the
Registration Statement or Prospectus.
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<PAGE> 26
(xxi) The contracts filed as Exhibit Nos. 10.1, 10.2, 10.3,
10.4, 10.10, 10.11, 10.12 and 10.33 to the Registration Statement
have been duly authorized, executed and delivered by the Company,
and such counsel has not been advised of any assertion that such
contracts do not constitute the valid and binding obligation of the
other parties thereto. The Forms of Contracts filed as Exhibit Nos.
10.6, 10.7, 10.13, 10.14, 10.31 and 10.34 to the Registration
Statement have been duly authorized by the Company.
(xxii) Such other legal matters relating to this Agreement,
the Companies and the Securities as you and such counsel shall
reasonably agree upon.
In rendering such opinion, such counsel may rely (a) as to matters
involving the application of laws other than the laws of the United States
and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon
an opinion or opinions (in form and substance reasonably satisfactory to
counsel for Underwriters) of other counsel reasonably acceptable to
counsel for the Underwriters, familiar with the applicable laws; and (b)
as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having
custody of documents respecting the corporate existence or good standing
of the Companies, provided that copies of any such statements or
certificates shall be delivered to counsel for the Underwriters, and on
the representations and warranties of the Company contained in this
Agreement. The opinion of such counsel for the Company shall state, in
their opinion, you and they are justified in relying on the opinion of
such other counsel.
(h) At the Closing Date, there shall have been delivered to you a
signed opinion of _____________, addressed to the Underwriters, dated as
of the Closing Date, in form and substance reasonably satisfactory to
Rosenman & Colin LLP, counsel for the Underwriters, together with a signed
or photostatic copy of that opinion for each of the other Underwriters,
substantially to the effect that:
(1) BRL has been duly incorporated and is validly existing and
in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to own and
lease its properties and to conduct its business as described in the
Registration Statement and Prospectus;
(2) all of the outstanding shares of capital stock of BRL have
been duly authorized and validly issued, are fully paid and
nonassessable and, as of the Closing Date, all such shares of
capital stock of BRL are owned beneficially by the Company, free and
clear of any liens, encumbrances, security interests or other
restrictions;
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<PAGE> 27
(3) neither the issuance and sale by the Company of the
Securities to be sold by it under this Agreement, the execution and
delivery of this Agreement, the undertakings contained in the
Registration Statement or the Prospectus, the consummation of the
transactions contemplated in this Agreement nor compliance with the
terms of this Agreement will conflict with or result in a breach of
any of the terms or provisions of BRL's charter or by-laws, or any
material indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other agreement or instrument known to such
counsel and to which BRL is a party or by which BRL is bound or
affected, any applicable law, rule or regulation or (without search
of any court dockets) any judgment, order or decree of any
government, governmental agency or instrumentality or court having
jurisdiction over BRL or any of its property; and
(4) The contract filed as Exhibit No. 10.10 to the
Registration Statement has been duly authorized, executed and
delivered by BRL and such counsel has not been advised of any
assertion that such contract does not constitute the valid and
binding obligation of the other parties thereto.
(i) At the Closing Date, you shall have received a Certificate
signed by the President and the Vice President-Finance of the Company,
dated as of the Closing Date, to the effect that:
Each officer signing the Certificate has carefully examined
the Registration Statement and the Prospectus, and, in his opinion,
as of the date of the Prospectus, and as of the date of the
Certificate, neither the Registration Statement nor the Prospectus,
nor any amendment or supplement, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading, and, since the date of the Prospectus, no event has
occurred which should have been set forth in an amendment or a
supplement to the Registration Statement or Prospectus which has not
been so set forth, and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change in the
condition of any of the Companies, financial or otherwise, or, as
compared with the comparable period in the prior fiscal year, in the
earnings of any of the Companies from that set forth in the
Registration Statement, whether or not arising in the ordinary
course of business.
(j) At the Closing Date, you shall have received a Certificate
signed by the President of the Company, dated as of the Closing Date, to
the effect that:
No stop order or similar order with regard to the Registration
Statement or Prospectus has been issued and no proceedings for that
purpose have been taken or are, to the knowledge of such officer,
contemplated by the Commission.
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<PAGE> 28
The Company has complied in all material respects with its obligations
under this Agreement, and the representations and warranties set forth in
Section 1 of this Agreement are true and correct in all material respects as of
the date of the Certificate with the same force and effect as though made on
that date (except any such representations and warranties which relate
specifically to an earlier date, which shall be true and correct in all material
respects as of such earlier date).
(k) On the date of this Agreement, you shall have received letters
addressed to the Underwriters, the Board of Directors of the Company and
the officers signing the Registration Statement, with a signed or
photostatic copy for each of the several Underwriters, dated the date it
is delivered, in form and substance satisfactory to you and Rosenman &
Colin LLP (and substantially in the form of the drafts dated ,
1996, previously submitted to Rosenman & Colin LLP), from BDO Seidman, LLP
concerning their examination and review of financial statements and
various other data contained in the Registration Statement. At the Closing
Date, you shall have received a letter addressed to you, the Board of
Directors of the Company and the officers signing the Registration
Statement, dated as of the Closing Date, with a signed or photostatic copy
for each of the several Underwriters from BDO Seidman, LLP confirming, as
of the Closing Date, the statements made in the letters furnished by them
at the date of this Agreement and advising that as of a date no earlier
than three business days prior to the Closing Date they have no reason to
believe that there has been any change in the matters described in the
prior letters.
(l) At the Closing Date there shall have been delivered to you, with
a photostatic copy for each of the several Underwriters, a signed opinion
of Rosenman & Colin LLP, counsel for the Underwriters, dated as of the
Closing Date, with respect to the sufficiency of corporate proceedings and
other legal matters in connection with this Agreement, the Securities,
Registration Statement, Prospectus and related matters as the
Representative may request, and the Company shall have furnished to such
counsel all documents such counsel may have reasonably requested for the
purpose of enabling them to pass upon those matters. In rendering such
opinion, Rosenman & Colin LLP may rely, as to incorporation of the Company
and all matters of law governed by the laws of states other than New York
and Delaware and as to factual matters, upon the opinion referred to in
(g) above.
(m) The Representative shall have received the Representative's
Warrants described in Section 6 hereof and the Company shall have paid to
the Representative a non-accountable expense allowance of 2% of the gross
proceeds of the offering of the Firm Securities pursuant to Section 7
hereof, less the sum of $20,000 heretofore advanced to the Representative
pursuant to such Section 7.
(n) In the event the Underwriters exercise the option granted in
Section 4(a) hereof to purchase all or any portion of the Additional
Securities, the representations and warranties of the Companies contained
in Section 11(a) - (f) herein and the Statements in any certificates
furnished by the Companies shall be
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<PAGE> 29
true and correct as of the Option Closing Date and the Representative
shall have received:
(i) A certificate, dated the Option Closing date, of the
Chairman or President of the Company and of the chief financial or
chief accounting officer of the Company confirming that the
Certificate delivered on the Closing Date pursuant to Section 11(i)
remains true as of the Option Closing Date;
(ii) A certificate of the Chairman or President of the Company
confirming that the Certificate delivered on the Closing Date
pursuant to Section 11(j) remains true as of the Option Closing
Date;
(iii) The favorable opinion of Lowenstein, Sandler, Kohl,
Fisher & Boylan, P.A., counsel for the Company, dated the Option
Closing Date, relating to the Additional Securities and otherwise to
the same effect as the opinion required by Section 11(g), to the
extent applicable;
(iv) The favorable opinion of Rosenman & Colin LLP, counsel to
the Underwriters, dated the Option Closing Date, relating to the
Additional Securities and otherwise to the same effect as the
opinion required by Section 11(k), to the extent applicable;
(v) The favorable opinion of [Canadian counsel], counsel to
the company, dated the Option Closing Date, relating to the
Additional Securities and otherwise to the same effect as the
opinion required by Section 11(h), to the extent applicable;
(vi) A letter from BDO Seidman, LLP, in form and substance
satisfaction to the Underwriters and dated the Option Closing Date,
substantially the same in scope and substance as the letter
furnished to the Representative pursuant to Section 11(k), dated not
more than five days prior to the Option Closing Date; and
(vii) A non-accountable expense allowance of 2% of the gross
proceeds of the Additional Securities pursuant to Section 7 hereof.
(o) All proceedings in connection with the authorization, issuance
and sale of the Securities on the Closing Date and the Option Closing Date
shall be reasonably satisfactory in form and substance to you and to your
counsel, and your counsel shall have been furnished with all documents,
certificates and opinions, including resolutions of the Board of Directors
of the Company and minutes of any stockholders' meetings, as may have been
reasonably requested in order to evidence the accuracy and completeness of
any of the representations, warranties or statements of the Company and
the performance of any of the covenants of the Company or the compliance
with any of the conditions contained in this Agreement.
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<PAGE> 30
12. CONDITIONS OF OBLIGATIONS OF COMPANY. The obligations of the Company
to sell and deliver the Firm Securities to the several Underwriters are subject
to the condition that the Registration Statement shall become effective with the
Commission not later than 10:00 A.M., New York City time, on the day following
the date of this Agreement, or such later date as shall have been consented to
by the Underwriters (including you) who are obligated to purchase a majority of
the Firm Securities to be purchased by all of the Underwriters pursuant to this
Agreement, and that prior to the Closing Date (and, with respect to the
Additional Securities, prior the Option Closing Date), no stop order or similar
order with regard to the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending, or,
to your knowledge or to the knowledge of the Company, shall be contemplated by
the Commission or any other regulatory agency having jurisdiction with respect
to the offer and sales of the Offered Securities.
13. SUBSTITUTION OF UNDERWRITERS.
(a) If one or more Underwriters default in its or their obligations to
purchase and pay for Firm Securities under this Agreement and if the aggregate
amount of the Firm Securities which all Underwriters so defaulting shall have
agreed to purchase does not exceed 10% of the Firm Securities, each
nondefaulting Underwriter shall have the right and is obligated, severally, to
purchase and pay for (in addition to the number of Firm Securities set forth
opposite its name in Schedule I) the number of Remaining Firm Securities
multiplied by a fraction, the numerator of which is the total number of Firm
Securities purchased by such Underwriter and the denominator of which is the
total number of Firm Securities purchased by all non-defaulting Underwriters. In
that event, the Representative, for the accounts of the several nondefaulting
Underwriters, may take up and pay for all or any part of the Remaining Firm
Securities to be purchased by each nondefaulting Underwriter under this
Subsection (a), and may postpone the Closing Date to a time not exceeding three
full business days after the Closing Date determined as provided in Section 3 of
this Agreement; or
(b) If one or more Underwriters default in its or their obligations to
purchase and pay for Firm Securities under this Agreement and if the aggregate
amount of the Remaining Firm Securities exceeds 10% of the Firm Securities, or
if one or more Underwriters for any reason permitted under this Agreement cancel
its or their obligations to purchase and pay for Firm Securities under this
Agreement, the noncancelling and nondefaulting Underwriters (hereinafter called
the "Remaining Underwriters") shall have the right to purchase such Firm
Securities on the Closing Date in the proportion as may be agreed among them. If
the Remaining Underwriters do not purchase and pay for all such Firm Securities
at the Closing Date, the Closing Date shall be postponed by two business days
and the Remaining Underwriters shall have the right to purchase the Firm
Securities, or to substitute another person or persons to purchase them, or
both, at the postponed Closing Date. If purchasers are not found for such Firm
Securities by the postponed Closing Date, the Closing Date shall be postponed
for a further five business days and the Company shall have the right to
substitute another person or persons, satisfactory to the Representative, to
purchase those Firm Securities at the second postponed Closing Date. If the
Company does not find the purchasers for those Firm Securities by the second
postponed Closing Date, then this
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<PAGE> 31
Agreement shall automatically terminate and neither the Company nor the
Remaining Underwriters shall be under any obligation under this Agreement
(except that the Company shall remain liable to the extent provided in Sections
7 and 9(a) and the Underwriters shall remain liable to the extent provided in
Section 9(b)). As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 13. Nothing in this
Section will relieve a defaulting Underwriter from liability for its default or
obligate any Underwriter to purchase or find purchasers for any Firm Securities
in excess of those agreed to be purchased by the Underwriter in Sections 2 and
13(a) of this Agreement. If the Representative is the defaulting Underwriter,
the right of first refusal set forth in Section 16 hereof shall terminate.
14. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective at
whichever of the following times shall first occur: (i) at 10:00 A.M., New York
City time, on the next full business day following the date on which the
Registration Statement becomes effective or (ii) at such time after the
Registration Statement has become effective and the Underwriters shall release
the Firm Securities for sale to the public; provided, however, that the
provisions of Sections 7, 9, 10, 14 and 19 hereof shall at all times be
effective. For purposes of this Section 14, the Firm Securities shall be deemed
to have been so released upon the release by the Underwriters for publication,
at any time after the Registration Statement has become effective, of any
newspaper advertisement relating to the Firm Securities or upon the release by
the Underwriters of telegrams offering the Firm Securities for sale to
securities dealers, whichever may occur first.
15. TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated at any time prior to the Closing Date
by you by giving written notice to the Company upon the occurrence of any of the
following events:
(i) any of the Companies shall have sustained a loss, by reason of
fire, flood, accident or other calamity, which in your reasonable
judgment, materially affects the aggregate value of the property owned or
leased by the Companies taken as a whole or which materially interferes
with the operation of the business of the Companies taken as a whole,
regardless of whether or not that loss shall have been insured;
(ii) any of the Companies has encountered or been threatened with a
strike (including but not limited to strikes of stevedores and other
transporters of goods) or other labor dispute or been subjected to
governmental action or fluctuations in currency or major political
upheaval which materially affects the aggregate value of the property
owned or leased or which materially interferes with the operation of its
business taken as a whole or which in your reasonable judgment makes it
impracticable or inadvisable to offer for sale or to enforce contracts
made by the Underwriters for the resale of the Firm Securities;
(iii) except as set forth in the Prospectus, there shall be pending
or threatened against any of the Companies or notification has been
received by any of the Companies of the threat of any material legal or
governmental proceeding or
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<PAGE> 32
action relating generally to the business or prospects of any of the
Companies which could materially adversely affect any of the Companies
taken as a whole (including action with respect to credit or interest
rates) or which in your reasonable opinion makes it impracticable or
inadvisable to proceed with the offering;
(iv) any of the certificates, opinions or other documents to be
delivered on the date of this Agreement or at the Closing Date are not in
form reasonably satisfactory to counsel to the Underwriters;
(v) any conditions set forth in Section 11 of this Agreement shall
not have been satisfied;
(vi) the Company is merged or consolidated or all or substantially
all of the capital stock or assets of the Company are acquired by another
company or group, or there exists a binding legal commitment for the
foregoing or any other material change of ownership or control occurs;
(vii) if there has occurred any outbreak of hostilities or
escalation of any existing hostilities or other calamity or crisis, the
effect of which on the financial markets of the United States is such as
to make it impracticable, in the Representative's reasonable judgment, to
market any of the Firm Securities or the Additional Securities or to
enforce contracts for the sale of any of the Firm Securities or the
Additional Securities;
(viii) a banking moratorium shall have been declared by either
federal or state authorities;
(ix) if trading generally on the American Stock Exchange, the New
York Stock Exchange or NASDAQ has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or the NASD or
by order of the Commission or any other governmental authority;
(x) there shall have been a change in the general market, political
or economic conditions in the United States, such that in any such case,
in the Representative's reasonable judgment, it would be inadvisable to
proceed with the offering of the Firm Securities; or
(xi) any law shall be enacted or any regulation promulgated relating
to the business of any of the Companies which could materially adversely
affect any of the Companies.
(b) This Agreement may be terminated by the Company by giving written
notice to you (i) at any time before this Agreement becomes effective in
accordance with Section 14 hereof, or (ii) prior to the Closing Date if the
conditions set forth in Section 12 shall not have been satisfied at or prior to
such date.
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<PAGE> 33
(c) If this Agreement shall be terminated by the Company pursuant to
preceding clause (b)(i) because (x) the Company has made, or proposes to make, a
private placement which will provide it with substantial alternative funding
through another investment banking agent, the Representative shall be entitled
to a cash fee equal to 2% of the gross amount of such funding, whether
effectuated by the Company before or after such termination of this Agreement or
(y) because the Company is to be sold, whether by merger, sale of stock, sale of
assets or otherwise, the Representative shall be paid a cash fee of $200,000
should the acquisition or merger close; provided, however, that if in such event
the Company shall choose the Representative as its investment banker in
connection therewith, such $200,000 shall be a credit against any services
rendered by the Representative in such transaction.
(d) If this Agreement shall be terminated pursuant to this Section 15
other than by reason of the fault of the Representative, the Company, in
addition to the advance provided for in Section 7 hereof, shall pay to you your
accountable expenses, including the reasonable fees and out-of-pocket expenses
of your counsel, in an amount not to exceed $30,000.
16. RIGHT OF FIRST REFUSAL. Until January 1, 1998, the Company shall
notify you in writing at least thirty (30) days before a proposed public
offering by the Company of any of its securities (other than bank debt or
similar financing, securities offered solely to Company employees, consultants
or representatives, shares issuable pursuant to any dividend reinvestment plan
or securities issuable in transactions enumerated in Rule 145(a) under the
Securities Act) so that you, or, at your option, together with a group of
investment bankers associated with you, shall have the right of first refusal to
effect the public offering on terms at least as favorable to the Company as
those set forth in such notice (which notice will specify the price to the
underwriter or other method of determining the underwriting discount or fee).
You will notify the Company if you intend to exercise your right of first
refusal within thirty (30) days of receipt by you of such notice from the
Company. If you fail to exercise the right of first refusal within the thirty
(30) day period and the terms of the proposed subsequent financing thereafter
are altered in any material respect less favorable to the Company, the Company
shall again offer to you the right of first refusal to effect a subsequent
financing upon such terms and you shall have ten (10) days from the date of
receipt of such notice to notify the Company of your acceptance.
17. NOTICES. All communications under this Agreement shall be in writing
and, except as otherwise provided shall be delivered at or mailed, registered or
certified, return receipt requested, or telegraphed to the following addresses:
If to you or any other Underwriter:
Janney Montgomery Scott Inc.
Attention: Ann Green
26 Broadway
New York, New York 10004
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<PAGE> 34
Copies to:
Janney Montgomery Scott Inc.
As Representative of the Several Underwriters
Attention: Richard A. Thompson
1801 Market Street
20th Floor
Philadelphia, Pennsylvania 19103
and
Arthur M. Borden, Esq.
Rosenman & Colin LLP
575 Madison Avenue
New York, New York 10022
If to the Company:
Barringer Technologies Inc.
Attention: Stanley S. Binder, President
219 South Street
New Providence, N. J. 07974
Copy to:
John D. Hogoboom, Esq.
Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.
65 Livingston Avenue
Roseland, New Jersey 07068-1791
Any party may change its address by giving notice in accordance with this
Section .
18. PARTIES IN INTEREST. This Agreement is made solely for the benefit of
the Underwriters, the Company, directors and officers of the Company, and their
respective executors, administrators, successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successor" and "successor and assigns" shall not include any purchaser
from the Company or any of the several Underwriters of the Firm Securities or
the Additional Securities. All of the obligations of the Underwriters under this
Agreement are several and not joint.
19. SURVIVAL CLAUSE. The representations, warranties, indemnities,
agreements and other statements of the Underwriters and the Company and its
officers set forth in this Agreement and made pursuant to this Agreement will
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or controlling person
thereof or by or on behalf of the Company or any of its officers and directors
or (ii) any termination of this Agreement and (iii) delivery of and payment for
the Firm Securities and the Additional Securities.
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<PAGE> 35
20. REPRESENTATION OF UNDERWRITERS. You will act for the several
Underwriters in connection with this financing, and any action under or in
respect of this Agreement taken by you as Representative on behalf of the
Underwriters will be binding upon all of the Underwriters.
21. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of law.
22. COUNTERPARTS. This Agreement may be signed in one or more counterparts
and shall be deemed effective when each party hereto has signed a counterpart.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed duplicate hereof,
whereupon it will become a binding agreement among the Company and the
Underwriters in accordance with its terms.
Very truly yours,
BARRINGER TECHNOLOGIES INC.
By:______________________
The foregoing Agreement is hereby
confirmed and delivered as of the
date first above written.
JANNEY MONTGOMERY SCOTT INC.
By:__________________________________
(Authorized Signature)
Acting on their own behalf and as
Representative of the several Underwriters
named in Schedule I attached hereto.
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SCHEDULE I
LIST OF UNDERWRITERS
Number of
Underwriters Firm Securities
------------ ---------------
<PAGE> 1
Exhibit 4.1
WARRANT AGREEMENT
AGREEMENT, dated as of this ____ day of __________, 1996, by and
between BARRINGER TECHNOLOGIES INC., a Delaware corporation (the "Company"), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, as warrant agent (the "Warrant Agent").
W I T N E S S E T H
WHEREAS, the Company proposes to make a public offering (the "Public
Offering") of up to 1,953,125 shares (the "Shares") of the common stock, par
value $.01 per share ("Common Stock"), of the Company and up to 1,562,500 common
stock purchase warrants (the "Warrants") of the Company (hereinafter
collectively referred to as the "Shares" and the "Warrants"), each Warrant
exercisable to purchase a one-quarter of a share of Common Stock; and
WHEREAS, in relation to the Public Offering, the Company has filed a
registration statement on Form SB-2 (Registration No. 333-13703) (as amended or
supplemented, the "Registration Statement") and a related prospectus (as amended
or supplemented, the "Prospectus") with the Securities and Exchange Commission;
and
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants, the
issuance of certificates representing the Warrants, the exercise of the
Warrants, and the rights of the registered holders thereof (the "Registered
Holders");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the certificates representing the Warrants and
the respective rights and obligations thereunder of the Company, the Registered
Holders and the Warrant Agent, the parties hereto hereby agree as follows:
SECTION 1. Definitions. As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean the common stock, par value $.01 per
share, of the Company entitling the owners thereof one vote for each share on
all matters on which the holders of the Common Stock are entitled to vote, the
right to receive dividends subject to holders of convertible preferred and
preferred stock of the Company, and certain liquidation and dissolution rights
set forth in the Certificate of Incorporation of the Company, as amended (the
"Certificate of Incorporation").
<PAGE> 2
(b) "Corporate Office" shall mean the office of the Warrant Agent
(or its successor) at which at any particular time its principal business shall
be administered, which office is located at the date hereof at 40 Wall Street,
New York, New York.
(c) "Exercise Date" shall mean, as to any Warrant, the date on which
the Warrant Agent shall have received both (a) the Warrant Certificate
representing such Warrant, with the exercise form thereon duly executed by the
Registered Holder thereof or his attorney duly authorized in writing, and (b)
payment in cash, or by official bank or certified check made payable to the
Company, of an amount in lawful money of the United States of America equal to
the Exercise Price plus transfer taxes, if any.
(d) "Exercise Price" shall mean the purchase price to be paid upon
exercise of four Warrants (each Warrant exercisable to purchase one-quarter of a
share of Common Stock), in accordance with the terms hereof, which price shall
be $_____ per share, subject to (i) adjustment from time to time pursuant to the
provisions of Section 8 hereof, and (ii) subject to the Company's right to
reduce the Exercise Price, upon written notice to all Registered Holders
(defined below) of the Warrants, for a period of not less than thirty days.
(e) "Redemption Date" shall mean the date fixed for redemption of
the Warrants as specified on the Redemption Notice.
(f) "Redemption Notice" shall mean the notice provided to the
Registered Holder by the Company thirty days before the call for redemption of
its Warrants in accordance with the terms of Section 9 herein.
(g) "Redemption Notice Date" shall mean the date of the Redemption
Notice.
(h) "Redemption Price" shall mean the price at which the Company
may, at its option, redeem the Warrants, in accordance with the terms of Section
9 herein, which price shall be $.25 per Warrant.
(i) "Registered Holder" shall mean the person in whose name any
certificate representing Warrants shall be registered on the books maintained by
the Warrant Agent pursuant to Section 6.
(j) "Transfer Agent" shall mean American Stock Transfer & Trust
Company, as the Company's transfer agent, or its authorized successor, as such.
(k) "Warrant Expiration Date" shall mean the earlier of 5:00 P.M.
(New York time) on __________ ___, 1999 or (ii) Redemption Date, (i) provided
that, if in the State of New York, such date shall be a holiday or a day on
which banks are authorized to close, then 5:00 P.M. (New York time) on the next
following day which in the State of New York is not a holiday or a day on which
banks are authorized to close.
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SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) A Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase one-quarter of a share
of Common Stock upon the exercise thereof, in accordance with the terms hereof,
subject to modification and adjustment as provided in Section 8.
(b) From time to time, up to the Warrant Expiration Date, the
Transfer Agent shall execute and deliver stock certificates in required whole
number denominations representing up to an aggregate of 390,625 shares of Common
Stock, subject to adjustment as described herein, upon the exercise of Warrants
in accordance with this Agreement.
(c) From time to time, up to the Warrant Expiration Date, the
Warrant Agent shall execute and deliver Warrant Certificates in required whole
number denominations to the persons entitled thereto in connection with any
transfer or exchange permitted under this Agreement; provided that no Warrant
Certificates shall be issued except (i) those initially issued hereunder; (ii)
those issued upon the exercise of fewer than all Warrants represented by any
Warrant Certificate, to evidence any unexercised Warrants held by the exercising
Registered Holder; (iii) those issued upon any transfer or exchange pursuant to
Section 6 herein; (iv) those issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7; and (v) at the option of
the Company, in such form as may be approved by its Board of Directors, to
reflect (a) any adjustment or change in the Exercise Price or the number of
shares of Common Stock purchasable upon exercise of the Warrants made pursuant
to Section 8 hereof and (b) other modifications approved by Registered Holders
in accordance with Section 16 hereof.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in the form
annexed hereto as Exhibit A (the provisions of which are hereby incorporated
herein) and may have such letters, numbers or other marks of identification or
designation and such legends, summaries or endorsements printed, lithographed,
engraved or typed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or securities association on which
or through which the Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether upon initial
issuance, transfer, exchange or in lieu of mutilated, lost, stolen, or destroyed
Warrant Certificates) and issued in registered form. Warrants shall be numbered
serially with the letter W.
(b) Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or any Vice President and by its
Secretary or an Assistant Secretary, by manual signatures or by facsimile
signatures printed thereon, shall have imprinted thereon a facsimile of the
Company's seal and shall be countersigned by an authorized signatory of the
Warrant Agent. In case any officer of the Company who shall
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<PAGE> 4
have signed any of the Warrant Certificates shall cease to be such officer of
the Company before the date of issuance of the Warrant Certificates and issue
and delivery thereof, such Warrant Certificates may nevertheless be issued and
delivered with the same force and effect as though the person who signed such
Warrant Certificates had not ceased to be such officer of the Company. After
execution by the Company Warrant Certificates shall be delivered by the Warrant
Agent to the Registered Holder.
SECTION 4. Exercise.
Each Warrant may be exercised by the Registered Holder thereof at
any time after the effective date of the Registration Statement and until the
Warrant Expiration Date, upon the terms and subject to the conditions set forth
herein and in the applicable Warrant Certificate. A Warrant shall be deemed to
have been exercised immediately prior to the close of business on the Exercise
Date and the person entitled to receive the securities deliverable upon such
exercise shall be treated for all purposes as the holder of such securities upon
exercise of the Warrant Certificate as of the close of business on the Exercise
Date. As soon as practicable on or after the Exercise Date, the Warrant Agent
shall deposit the proceeds received from the exercise of a Warrant, and promptly
after clearance of checks received in payment of the Exercise Price pursuant to
such Warrants, cause to be issued and delivered by the Transfer Agent, to the
person or persons entitled to receive the same, a certificate or certificates
for the securities deliverable upon such exercise (plus a certificate for any
remaining unexercised Warrants of the Registered Holder, if applicable).
Notwithstanding the foregoing, in the case of payment made in the form of a
check drawn on an account of Janney Montgomery Scott Inc. (the "Representative")
or such other investment banks and brokerage houses as the Company shall
approve, certificates shall immediately be issued without any delay. Upon the
exercise of any Warrant and clearance of the funds received, the Warrant Agent
shall promptly remit the payment received for the Warrant to the Company or as
the Company may direct in writing.
SECTION 5. Reservation of Shares; Listing; Payment of Taxes; etc.
(a) The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issuance
upon exercise of Warrants, such number of shares of Common Stock as shall then
be issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of Common Stock which shall be issuable upon exercise of the
Warrants and payment of the Exercise Price in compliance with this Warrant
Agreement and the Warrant Certificate shall, at the time of delivery, be duly
and validly issued, fully paid, nonassessable and free from all taxes, liens and
charges with respect to the issue thereof (other than those which the Company
shall promptly pay or discharge).
(b) The Company will use reasonable efforts to obtain appropriate
approvals or registrations under state "blue sky" securities laws with respect
to the exercise of the Warrants; provided, however, that the Company shall not
be obligated to file any general consent to service of process or qualify as a
foreign corporation in any jurisdiction. With
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<PAGE> 5
respect to any such securities laws, however, Warrants may not be exercised by,
or shares of Common Stock issued to, any Registered Holder in any state in which
such exercise would be unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes
and other governmental charges that may be imposed with respect to the issuance
of Warrants, or the issuance, or delivery of any shares upon exercise of the
Warrants; provided, however, that if shares of Common Stock are to be delivered
in a name other than the name of the Registered Holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized to
requisition the Transfer Agent from time to time for certificates representing
shares of Common Stock required upon exercise of the Warrants, and the Company
will authorize the Transfer Agent to comply with all such proper requisitions.
SECTION 6. Exchange and Recordation of Transfer.
Subject to the restrictions on transfer contained in the Warrant
Certificates:
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants or may be
transferred in whole or in part. Warrant Certificates to be exchanged shall be
surrendered to the Warrant Agent at its Corporate Office, and upon satisfaction
of the terms and provisions hereof, the Company shall execute, and the Warrant
Agent shall countersign, issue and deliver in exchange therefor the Warrant
Certificate or Certificates which the Registered Holder making the exchange
shall be entitled to receive.
(b) The Warrant Agent shall keep books at its office, in which it
shall register Warrant Certificates and the transfer thereof in accordance with
its regular practice. Upon due presentment for recordation of transfer of any
Warrant Certificate at its office, the Company shall execute and the Warrant
Agent shall issue and deliver to the transferee or transferees a new Warrant
Certificate or Certificates representing an equal aggregate number of Warrants.
(c) With respect to all Warrant Certificates presented for
recordation of transfer, or for exchange or exercise, the exercise form on the
reverse thereof shall be duly endorsed, or be accompanied by a written
instrument or instruments of transfer and exercise, in form satisfactory to the
Company, duly executed by the Registered Holder or his attorney-in-fact duly
authorized in writing.
(d) A service charge may be imposed by the Warrant Agent upon the
Company for any exchange or recordation of transfer of Warrant Certificates. The
Company
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<PAGE> 6
may require payment by a Registered Holder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith.
(e) Prior to due presentment for recordation of transfer thereof,
the Company and the Warrant Agent may deem and treat the Registered Holder of
any Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer of the Company or
the Warrant Agent) for all purposes and shall not be affected by any notice to
the contrary. The Warrants, which the Company intends to publicly offer with the
Common Stock, will be separately transferable immediately following the
completion of the Public Offering.
SECTION 7. Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership and loss, theft,
destruction or mutilation of any Warrant Certificate and (in case of loss, theft
or destruction) of indemnity satisfactory to them, and (in the case of
mutilation) upon surrender and cancellation thereof, the Company shall execute
and the Warrant Agent shall (in the absence of notice to the Company and/or
Warrant Agent that the Warrant Certificate has been acquired by a bona fide
purchaser) countersign and deliver to the Registered Holder in lieu thereof a
new Warrant Certificate of like tenor representing an equal aggregate number of
Warrants. Registered Holders requesting a substitute Warrant Certificate will be
required to comply with such other reasonable regulations and pay such other
reasonable charges as the Warrant Agent may prescribe.
SECTION 8. Adjustment of Exercise Price and Number of Shares of
Common Stock or Warrants.
(a) Subject to the exceptions referred to in Section 8(g) below, in
the event the Company shall, at any time or from time to time after the date
hereof, sell any shares of Common Stock for a consideration per share less than
the current fair market value per share of the Common Stock on the date of the
sale or issue any shares of Common Stock as a stock dividend to the holders of
Common Stock, or subdivide or combine the outstanding shares of Common Stock
into a greater or lesser number of shares (any such sale, issuance, subdivision
or combination being herein called a "Change of Shares"), then, and thereafter
upon each Change of Shares, the Exercise Price in effect immediately prior to
such Change of Shares shall be changed to a price (including any applicable
fraction of a cent) determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding immediately prior to the
issuance of such additional shares plus the number of shares of Common Stock
which the aggregate consideration received (determined as provided in subsection
8(f)(F) below), if any, for the issuance of such additional shares would
purchase at such current market price per share of Common Stock, and the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an issuance is made.
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Upon each adjustment of the Exercise Price pursuant to this
Section 8, the total number of shares of Common Stock purchasable upon the
exercise of each Warrant shall (subject to the provisions contained in Section
8(b) hereof) be such number of shares (calculated to the nearest tenth)
purchasable at the Exercise Price immediately prior to such adjustment
multiplied by a fraction, the numerator of which shall be the Exercise Price in
effect immediately prior to such adjustment and the denominator of which shall
be the Exercise Price in effect immediately after such adjustment.
(b) The Company may elect, upon any adjustment of the Exercise Price
hereunder, to adjust the number of Warrants outstanding, in lieu of the
adjustment in the number of shares of Common Stock purchasable upon the exercise
of each Warrant as hereinabove provided, so that each Warrant outstanding after
such adjustment shall represent the right to purchase one quarter of a share of
Common Stock. Each Warrant held of record prior to such adjustment of the number
of Warrants shall become that number of Warrants (calculated to the nearest
tenth) determined by multiplying the number one by a fraction, the numerator of
which shall be the Exercise Price in effect immediately prior to such adjustment
and the denominator of which shall be the Exercise Price in effect immediately
after such adjustment. Upon each adjustment of the number of Warrants pursuant
to this Section 8, the Company shall, as promptly as practicable, cause to be
distributed to each Registered Holder of Warrant Certificates, on the date of
such adjustment, Warrant Certificates evidencing, subject to Section 10 hereof,
the number of additional Warrants to which such Holder shall be entitled as a
result of such adjustment or, at the option of the Company, cause to be
distributed to such Holder in substitution and replacement for the Warrant
Certificates held by him prior to the date of adjustment (and upon surrender
thereof, if required by the Company) new Warrant Certificates evidencing the
number of Warrants to which such Holder shall be entitled after such adjustment.
(c) In case of any reclassification, capital reorganization or other
similar change of outstanding shares of Common Stock, or in case of any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock), or in
case of any sale or conveyance to another corporation of the property of the
Company as, or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause effective
provision to be made so that each holder of a Warrant then outstanding shall
have the right thereafter, by exercising such Warrant, to purchase the kind and
number of shares of stock or other securities or property (including cash)
receivable upon such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock that might have been purchased upon exercise of such Warrant
immediately prior to such reclassification, capital reorganization or other
similar change, consolidation, merger, sale or conveyance. Any such provision
shall include provision for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 8. The
foregoing provisions shall similarly apply to successive reclassifications,
capital
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<PAGE> 8
reorganizations and other changes of outstanding shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
(d) Irrespective of any adjustments or changes in the Exercise Price
or the number of shares of Common Stock purchasable upon exercise of the
Warrants, the Warrant Certificates theretofore issued, unless the Company shall
exercise its option to issue new Warrant Certificates pursuant to Section 2(c)
hereof, need not be amended or replaced, but certificates thereafter issued
shall bear an appropriate legend or other notice of any adjustments.
(e) After each adjustment of the Exercise Price pursuant to this
Section 8, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Exercise Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Warrant after such adjustment, and, if the
Company shall have elected to adjust the number of Warrants, the number of
Warrants to which the Registered Holder of each Warrant shall then be entitled,
and the adjustment in Redemption Price resulting therefrom, and (iii) a brief
statement of the facts accounting for such adjustment. The Company will promptly
file such certificate with the Warrant Agent and cause a brief summary thereof
to be sent by ordinary first class mail to the Representative and to each
Registered Holder at his last address as it shall appear on the registry books
of the Warrant Agent. The affidavit of an officer of the Warrant Agent or the
Secretary or an Assistant Secretary of the Company that such notice has been
mailed shall, in the absence of fraud, be prima facie evidence of the facts
stated therein.
(f) For purposes of Section 8(a) and 8(b) hereof, the following
provisions (A) to (F) shall also be applicable:
(A) The number of shares of Common Stock outstanding at any
given time shall include shares of Common Stock owned or held by or
for the account of the Company and the sale or issuance of such
treasury shares or the distribution of any such treasury shares
shall not be considered a Change of Shares for purposes of said
sections.
(B) No adjustment of the Exercise Price shall be made unless
such adjustment would require an increase or decrease of at least
$.02 in such price; provided that any adjustments which by reason of
this clause (B) are not required to be made shall be carried forward
and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment(s) so
carried forward, shall require an increase or decrease of at least
$.02 in the Exercise Price then in effect hereunder.
(C) In case of (1) the sale by the Company for cash of any
rights or warrants to subscribe for or purchase, or any options for
the purchase of, Common Stock or any securities convertible into or
exchangeable for Common
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Stock without the payment of any further consideration other than
cash, if any (such convertible or exchangeable securities being
herein called "Convertible Securities"), or (2) the issuance by the
Company, without the receipt by the Company of any consideration
therefor, of any rights or warrants to subscribe for or purchase, or
any options for the purchase of, Common Stock or Convertible
Securities, in each case, if (and only if) the consideration payable
to the Company upon the exercise of such rights, warrants or options
shall consist of cash, whether or not such rights, warrants or
options, or the right to convert or exchange such Convertible
Securities, are immediately exercisable, and the price per share for
which Common Stock is issuable upon the exercise of such rights,
warrants or options or upon the conversion or exchange of such
Convertible Securities (determined by dividing (x) the minimum
aggregate consideration payable to the Company upon the exercise of
such rights, warrants or options, plus the consideration received by
the Company for the issuance or sale of such rights, warrants or
options, plus, in the case of such Convertible Securities, the
minimum aggregate amount of additional consideration, if any, other
than such Convertible Securities, payable upon the conversion or
exchange thereof, by (y) the total maximum number of shares of
Common Stock issuable upon the exercise of such rights, warrants or
options or upon the conversion or exchange of such Convertible
Securities issuable upon the exercise of such rights, warrants or
options) is less than the market price of the Common Stock on the
date of the issuance or sale of such rights, warrants or options,
then the total maximum number of shares of Common Stock issuable
upon the exercise of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities (as of the
date of the issuance or sale of such rights, warrants or options)
shall be deemed to be outstanding shares of Common Stock for
purposes of Sections 8(a) and 8(b) hereof and shall be deemed to
have been sold for cash in an amount equal to such price per share.
(D) In case of the sale by the Company for cash of any
Convertible Securities, whether or not the right of conversion or
exchange thereunder is immediately exercisable, and the price per
share for which Common Stock is issuable upon the conversion or
exchange of such Convertible Securities (determined by dividing (x)
the total amount of consideration received by the Company for the
sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, other than such
Convertible Securities, payable upon the conversion or exchange
thereof, by (y) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of such convertible
Securities) is less than the market price of the Common Stock on the
date of the sale of such Convertible Securities, then the total
maximum number of shares of Common Stock issuable upon the
conversion or exchange of such Convertible Securities (as of the
date of the sale of such Convertible Securities) shall be deemed to
be outstanding shares of Common Stock for purposes of Sections 8(a)
and 8(b)
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hereof and shall be deemed to have been sold for cash in an amount
equal to such price per share.
(E) If the exercise or purchase price provided for in any
right, warrant or option referred to in (C) above, or the rate at
which any Convertible Securities referred to in (C) or (D) above are
convertible into or exchangeable for Common Stock, shall change at
any time (other than under or by reason of provisions designed to
protect against dilution), the Exercise Price then in effect
hereunder shall forthwith be readjusted to such Exercise Price as
would have been obtained (1) had the adjustments made upon the
issuance or sale of such rights, warrants, options or Convertible
Securities been made upon the basis of the issuance of only the
number of shares of Common Stock theretofore actually delivered (and
the total consideration received therefor) upon the exercise of such
rights, warrants or options or upon the conversion or exchange of
such Convertible Securities, (2) had adjustments been made on the
basis of the Exercise Price as adjusted under clause (1) for all
transactions (which would have affected such adjusted Exercise
Price) made after the issuance or sale of such rights, warrants,
options or Convertible Securities, and (3) had any such rights,
warrants, options or Convertible Securities then still outstanding
been originally issued or sold at the time of such change. On the
expiration of any such right, warrant or option or the termination
of any such right to convert or exchange any such Convertible
Securities, the Exercise Price then in effect hereunder shall
forthwith be readjusted to such Exercise Price as would have been
obtained (a) had the adjustments made upon the issuance or sale of
such rights, warrants, options or Convertible Securities been made
upon the basis of the issuance of only the number of shares of
Common Stock theretofore actually delivered (and the total
consideration received therefor) upon the exercise of such rights,
warrants or options or upon the conversion or exchange of such
Convertible Securities and (b) had adjustments been made on the
basis of the Exercise Price as adjusted under clause (a) for all
transactions (which would have affected such adjusted Exercise
Price) made after the issuance or sale of such rights, warrants,
options or Convertible Securities.
(F) In case of the sale for cash of any shares of Common
Stock, any Convertible Securities, any rights or warrants to
subscribe for or purchase, or any options for the purchase of,
Common Stock or Convertible Securities, the consideration received
by the Company therefore shall be deemed to be the gross sales price
therefor without deducting therefrom any expense paid or incurred by
the Company or any underwriting discounts or commissions or
concessions paid or allowed by the Company in connection therewith.
(g) No adjustment to the Exercise Price of the Warrants or to the
number of shares of Common Stock purchasable upon the exercise of each Warrant
will be made, however,
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(i) upon the exercise of any of the options presently
outstanding under the Company's 1990 Stock Option Plan (the "1990
Stock Option Plan") for officers, directors and all employees of the
Company outstanding as of the date hereof; or
(ii) upon the issuance of any warrants issued pursuant to the
Company's 1991 Directors' Warrant Plan (the "1991 Warrant Plan"); or
(iii) upon the grant or exercise of any other options or
warrants which may hereafter be granted or exercised under the 1990
Stock Option Plan or under the 1991 Directors' Warrant Plan; or
(iv) upon the sale or exercise of the Warrants issued to the
Representative in connection with the Public Offering (the
"Underwriter's Warrants") or the exercise of the Warrants issuable
upon exercise of the Underwriter's Warrant; or
(v) upon the issuance or sale of Common Stock upon the
conversion of the Company's Class A Preferred Stock or Class B
Preferred Stock outstanding as of the date hereof; or
(vi) upon the issuance or sale of Common Stock upon conversion
or exchange of any convertible debentures outstanding as of the date
hereof; or
(vii) upon the issuance or sale of Common Stock upon the
exercise of warrants outstanding (other than those granted pursuant
to the 1991 Directors' Warrant Plan) as of the date of the Public
Offering; or
(viii) upon the sale or exercise of the Warrants; or
(ix) upon the issuance of any shares of Common Stock declared
or paid as dividends with respect to any Preferred Stock of the
Company outstanding as of the date hereof; or
(x) upon the issuance of any shares of Common Stock issued by
the Company pursuant to a Dividend Reinvestment Plan; or
(xi) upon the issuance of any shares of Common Stock issued
pursuant to the exercise of Options granted under a company Stock
Option Plan adopted by the Company for purposes of compensation to
the Company's employees, directors and representative]
(collectively, the "Exempt Securities")
(h) As used in this Section 8, the term "Common Stock" shall mean
and include the Common Stock authorized on the date of the original issue of the
Shares and Warrants and shall also include any capital stock of any class of the
Company thereafter
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authorized which shall not be limited to a fixed sum or percentage in respect of
the rights of the holders thereof to participate in dividends and in the
distribution of assets upon the voluntary liquidation, dissolution or winding up
of the Company; provided, however, that the shares issuable upon exercise of the
Warrants shall include only shares of such class designated in the Company's
Certificate of Incorporation, as amended, as Common Stock on the date of the
original issue of the Shares and Warrants or (i), in the case of any
reclassification, change, consolidation, merger, sale or conveyance of the
character referred to in Section 8(c) hereof, the stock, securities or property
provided for in such section or (ii), in the case of any reclassification or
change in the outstanding shares of Common Stock issuable upon exercise of the
Warrants as a result of a subdivision or combination or consisting of a change
in par value, or from par value to no par value, or from no par value to par
value, such shares of Common Stock as so reclassified or changed.
(i) Any determination as to whether an adjustment in the Exercise
Price in effect hereunder is required pursuant to Section 8, or as to the amount
of any such adjustment, if required, shall be binding upon the Registered
Holders of the Warrants and the Company if made in good faith by the Board of
Directors of the Company.
(j) If and whenever the Company shall declare any dividends or
distributions or grant to the holders of Common Stock, as such, rights or
warrants to subscribe for or to purchase, or any options for the purchase of,
Common Stock or securities convertible into or exchangeable for or carrying a
right, warrant or option to purchase Common Stock or, (other than Exempt
Securities), the Company shall notify each of the then Registered Holders of the
Warrants of such event prior to its occurrence to enable such Registered Holders
to exercise their Warrants and participate as holders of Common Stock in such
event.
SECTION 9. Redemption.
(a) On not less than thirty days' prior written notice at any time
commencing , 1996 and during the time the Warrants are outstanding, all of the
outstanding Warrants may be redeemed, at the option of the Company, at the
Redemption Price, provided that the closing bid price of the Common Stock as
reported by NASDAQ averages in excess of 200% of the Exercise Price of the
Warrants in effect at the time of determination for a period of 30 days ending
within 15 days of the Redemption Notice Date, subject to certain adjustment as
set forth in Section 9(f) below.
(b) In the event the conditions set forth in Section 9(a) are met,
and the Company shall desire to exercise its right so to redeem the Warrants, it
shall request the Warrant Agent to mail a Redemption Notice to each of the
Registered Holders of the Warrants to be redeemed, first class, postage prepaid,
not later than the thirtieth day before the date fixed for redemption, at his or
her last address as shall appear on the records of the Warrant Agent. Any notice
mailed in the manner provided herein shall be conclusively presumed to have been
duly given whether or not the Registered Holder receives such notice.
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(c) The Redemption Notice shall specify (i) the Redemption Price,
(ii) the Redemption Date, (iii) the place where the Warrant Certificates shall
be delivered and the Redemption Price to be paid, and (iv) that the right to
exercise the Warrant shall terminate at 5:00 P.M. (New York time) on the
Redemption Date. An affidavit of the Warrant Agent or of the Secretary or an
Assistant Secretary of the Company that the Redemption Notice has been mailed
shall, in the absence of fraud, be prima facie evidence of the facts stated
therein.
(d) Provided that the Company has irrevocably provided for the
payment of the Redemption Price, any right to exercise a Warrant shall terminate
at 5:00 P.M. (New York time) on the Redemption Date. After 5:00 P.M. on the
Redemption Date, Registered Holders of the Warrants shall have no further
rights, except to receive upon surrender of the Warrant the Redemption Price.
(e) From and after 5:00 P.M. (New York time) on the Redemption Date,
the Company shall, at the place specified in the Redemption Notice, upon
presentation and surrender to the Company by or on behalf of the Registered
Holder thereof of one or more Warrants to be redeemed, deliver or cause to be
delivered to or upon the written order of such Registered Holder a sum in cash
equal to the Redemption Price of each such Warrant.
(f) If the Exercise Price is adjusted pursuant to Section 8 hereof,
the Redemption Price shall be proportionately adjusted by the ratio by which the
total number of shares of Common Stock outstanding immediately prior to such
event bears to the total number of shares of Common Stock to be outstanding
immediately after such event.
SECTION 10. Fractional Warrants and Fractional Shares.
(a) Regardless of whether or not the number of shares of Common
Stock purchasable upon the exercise of each Warrant is adjusted pursuant to
Section 8 hereof, the Company shall nevertheless not be required to issue
fractions of shares upon exercise of the Warrants or otherwise, or to distribute
certificates that evidence fractional shares. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall pay to the
Registered Holder an amount in cash equal to such fraction multiplied by the
current market value of such fractional share, determined as follows:
(1) if the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the Nasdaq National Market System ("NMS"),
the current market value shall be the last reported sale price of
the Common Stock on such exchange or system on the last business day
prior to the date of exercise; or
(2) if the Common Stock is listed in the over-the-counter
market (other than on NMS) or admitted to unlisted trading
privileges thereon, the current market value shall be the mean of
the last reported bid and asked prices reported by the National
Quotation Bureau, Inc. on the last business day prior to the date of
the exercise; or
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<PAGE> 14
(3) if the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the current market value shall be an amount determined in
such reasonable manner as may be prescribed by the Board of
Directors of the Company.
SECTION 11. Warrant Holders Not Deemed Stockholders. No Registered
Holder shall, as such, be entitled to vote or to receive dividends or be deemed
the holder of Common Stock that may at any time be issuable upon exercise of
such Warrants for any purpose whatsoever, nor shall anything contained herein be
construed to confer upon the holder of Warrants, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issue or reclassification of stock, change of par value or change of stock to no
par value, consolidation, merger or conveyance or otherwise), or to receive
notice of meetings, or to receive dividends or subscription rights, until such
Registered Holder shall have exercised such Warrants and been issued shares of
Common Stock in accordance with the provisions hereof.
SECTION 12. Rights of Action. All rights of action with respect to
this Agreement are vested in the respective Registered Holders of the Warrants,
and any Registered Holder of a Warrant, without consent of the Warrant Agent or
of the holder of any other Warrant, may, on his own behalf and for his own
benefit, enforce against the Company his right to exercise his Warrants for the
purchase of shares of Common Stock in the manner provided in the Warrant
Certificate and this Agreement.
SECTION 13. Agreement of Warrant Holders. Every holder of a Warrant,
by his acceptance thereof, consents and agrees with the Company, the Warrant
Agent and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books of the
Warrant Agent by the Registered Holder thereof in person or by his
attorney-in-fact duly authorized in writing and only if the Warrant Certificates
representing such Warrants are surrendered at the office of the Warrant Agent,
duly endorsed or accompanied by a proper instrument of transfer satisfactory to
the Warrant Agent and the Company in their sole discretion, together with
payment of any applicable transfer taxes; and
(b) The Company may deem and treat the person in whose name the
Warrant Certificate is registered as the Registered Holder thereof and as the
absolute, true and lawful owner of the Warrants represented thereby for all
purposes, and the Company shall not be affected by any notice or knowledge to
the contrary, except as otherwise expressly provided in Section 7 hereof.
SECTION 14. Cancellation of Warrant Certificates. If the Company
shall purchase or acquire any Warrant or Warrants, whether upon exercise thereof
open market purchase, redemption or otherwise, the Warrant Certificate or
Warrant Certificates
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<PAGE> 15
evidencing the same shall thereupon be cancelled by the Warrant Agent and
retired. The Warrant Agent shall also cancel Warrant Certificates surrendered to
the Warrant Agent following exercise of any or all of the Warrants represented
thereby or delivered to it for transfer, splitup, combination or exchange.
SECTION 15. Concerning the Warrant Agent. The Warrant Agent acts
hereunder as agent and in a ministerial capacity for the Company, and its duties
shall be determined solely by the provisions hereof. The Warrant Agent shall
not, by issuing and delivering Warrant Certificates or by any other act
hereunder be deemed to make any representations as to the validity, value or
authorization of the Warrant Certificates or the Warrants represented thereby or
of any securities or other property delivered upon exercise of any Warrant or
whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
The Warrant Agent shall account promptly to the Company with respect
to Warrants exercised and concurrently pay the Company, as provided in Section
4, all moneys received by the Warrant Agent upon the exercise of such Warrants.
The Warrant Agent shall, upon request of the Company from time to time, deliver
to the Company such complete reports of registered ownership of the Warrants and
such complete records of transactions with respect to the Warrants and the
shares of Common Stock as the Company may request. The Warrant Agent shall also
make available to the Company for inspection by their agents or employees, from
time to time as either of them may request, such original books of accounts and
record as may be maintained by the Warrant Agent in connection with the issuance
and exercise of Warrants hereunder, such inspections to occur at the Warrant
Agent's office as specified in Section 17, during normal business hours.
The Warrant Agent shall not at any time be under any duty or
responsibility to any Registered Holder to make or cause to be made any
adjustment of the Exercise Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustments, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. It shall not (i) be liable for any
recital or statement of facts contained herein or for any action taken, suffered
or omitted by it in reliance on any Warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (ii) be responsible for any failure on
the part of the Company to comply with any of its covenants and obligations
contained in this Agreement or in any Warrant Certificate, or (iii) be liable
for any act or omission in connection with this Agreement except for its own
negligence or wilful misconduct.
The Warrant Agent may at any time consult with counsel satisfactory
to it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
15
<PAGE> 16
Any notice, statement, instruction, request, direction, order or
demand of the Company shall be sufficiently evidenced by an instrument signed by
the Chairman of the Board, President, any Vice President, its Secretary, or
Assistant Secretary (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable compensation
for its services hereunder and to reimburse it for its reasonable expenses
hereunder; it further agrees to indemnify the Warrant Agent and save it harmless
against any and all losses, expenses and liabilities, including judgments, costs
and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of its duties and powers hereunder except losses, expenses and
liabilities arising as a result of the Warrant Agent's negligence or wilful
misconduct.
The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or wilful misconduct), upon 30 days' prior
written notice to the Company and the Company may discharge the Warrant Agent
from its duties and liabilities hereunder upon 30 days' prior written notice to
the Warrant Agent. At least 15 days prior to the date such resignation or
discharge is to become effective, the Warrant Agent shall cause a copy of such
notice of resignation or discharge to be mailed to the Registered Holder of each
Warrant Certificate at the Company's expense. Upon such resignation or
discharge, or any inability of the Warrant Agent to act as such hereunder, the
Company shall appoint a new warrant agent in writing. If the Company shall fail
to make such appointment within a period of 15 days after it has been notified
in writing of such resignation by the resigning Warrant Agent, or within a
period of 15 days after the Warrant Agent has been notified by the Company of
such discharge, then the Registered Holder of any Warrant Certificate may apply
to any court of competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or by such a
court, shall be a bank or trust company having a capital and surplus, as shown
by its last published report to its stockholders, of not less than $10,000,000
or a stock transfer company. After acceptance in writing of such appointment by
the new warrant agent is received by the Company, the Warrant Agent's
resignation or discharge shall be deemed to be effective and such new warrant
agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named herein as the Warrant Agent, without any
further assurance, conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further assurance, conveyance,
act or deed, the same shall be done at the expense of the Company and shall be
legally and validly executed and delivered by the resigning Warrant Agent. Not
later than the effective date of any such appointment the Company shall file
notice thereof with the resigning Warrant Agent and shall forthwith cause a copy
of such notice to be mailed to the Registered Holder of each Warrant
Certificate.
Any corporation into which the Warrant Agent or any new warrant
agent may be converted or merged or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party or any corporation succeeding to the
16
<PAGE> 17
trust business of the Warrant Agent shall be a successor warrant agent under
this Agreement without any further act, provided that such corporation is
eligible for appointment as successor to the Warrant Agent under the provisions
of the preceding paragraph. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed to the Company and
to the Registered Holder of each Warrant Certificate.
The Warrant Agent, its subsidiaries and affiliates, and any of its
or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effects as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
SECTION 16. Modification of Agreement.
(a) Subject to the provisions of Section 4(b), the parties hereto
may by supplemental agreement make any changes or corrections in this Agreement
(i) that they shall deem appropriate to cure any ambiguity or to correct any
defective or inconsistent provision or manifest mistake or error herein
contained; (ii) to reflect an increase in the number of Warrants which are to be
governed by this Agreement resulting from an increase in the size of the Public
Offering; or (iii) that they may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Warrant Certificates; provided,
however, that except as otherwise indicated in this Section and this Agreement,
this Agreement shall not otherwise be modified, supplemented or altered in any
respect except with the consent in writing of the Registered Holders of Warrant
Certificates representing not less than two-thirds of the Warrants then
outstanding.
(b) The Company, shall have the right to reduce the Exercise Price
for a period of not less than thirty days on not less than thirty days, prior
written notice to the Registered Holders of the Warrants.
SECTION 17. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first class registered or certified mail, postage
prepaid as follows: if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company, at 219 South Street, New Providence, New Jersey,
07974, Attention: Richard S. Rosenfeld, Chief Financial Officer; if to the
Warrant Agent, at its Corporate Office.
SECTION 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, without
reference to principles of conflict of laws.
SECTION 19. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company and the Warrant Agent (and their respective
successors and assigns) and the holders from time to time of Warrant
Certificates. Nothing in
17
<PAGE> 18
this Agreement is intended or shall be construed to confer upon any other person
any right, remedy or claim, in equity or at law, or to impose upon any other
person any duty, liability or obligation.
SECTION 20. Termination. This Agreement shall terminate on the
earliest to occur of (i) the Expiration Date of all the Warrants, (ii) the date
upon which all Warrants have been exercised and (iii) the date on which the
Company certifies to the Warrant Agent that no Warrants are outstanding;
provided however, that notwithstanding any such termination, the Warrant Agent
shall be obligated to deliver funds to the Company in accordance with this
Agreement.
SECTION 21. Counterparts. This Agreement may be executed in all
counterparts, all of which taken together shall constitute a single document.
18
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
BARRINGER TECHNOLOGIES INC.
By: ___________________________
Stanley S. Binder
President and Chief Executive
Officer
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: _______________________________
Authorized Officer
19
<PAGE> 20
_____________ WARRANTS WARRANT
NO.____
NOT EXERCISABLE AFTER 5:00 P.M.,
(NEW YORK CITY TIME), ON __________ ___, 1999,
OR SUCH EARLIER DATE AS PROVIDED HEREIN
BARRINGER TECHNOLOGIES INC.
COMMON STOCK
NASDAQ: BARRW PURCHASE WARRANTS CUSIP 068509140
THIS CERTIFIES THAT:
or registered assigns is the registered holder (the "Registered Holder") of the
number of Warrants set forth above, each of which represents the right to
purchase one-quarter of a fully paid and nonassessable share of common stock,
par value $.01 per share (the "Common Stock"), of Barringer Technologies Inc., a
Delaware corporation (the "Company"), at any time until the Expiration Date
hereinafter referred to, by surrendering this Warrant Certificate, with the
exercise form set forth hereon duly executed with signatures guaranteed as
provided below, at the office maintained pursuant to the Warrant Agreement
hereinafter referred to for that purpose by American Stock Transfer & Trust
Company, or its successor as warrant agent (any such warrant agent being herein
called the "Warrant Agent"), and by paying in full the Exercise Price, plus
transfer taxes, if any. Payment of the Exercise Price shall be made in United
States currency, by certified check or money order payable to the order of the
Company.
Upon certain events provided for in the Warrant Agreement, the Exercise
Price and the number of shares of Common Stock issuable upon the exercise of
each Warrant are required to be adjusted.
The Warrants are subject to call for redemption by the Company at a price
of $0.25 per Warrant (the "Redemption Price") commencing on , 1997
provided that (i) the Company provides written notice (the "Redemption Notice")
of redemption to the Registered Holder and the Warrant Agent at least thirty
days' prior to the redemption date , and (ii) the average bid price per share
of the Common Stock as reported by NASDAQ exceeds 200% of the then current
Exercise Price for a period of 30 days ending within 15 days of the date that
the Redemption Notice is given by the Company to the Warrant Agent and
Registered Holders.
No Warrant may be exercised after 5:00 P.M. (New York City time) on the
expiration date (the "Expiration Date") which will be the earlier of (i)
__________ ___, 1999 and (ii) the business day preceding the redemption date
specified in a Redemption Notice. After the Expiration Date, all Warrants
evidenced hereby shall thereafter become void, and the holders thereof shall
have not rights thereunder, except for the right to receive the Redemption
Price, if applicable.
<PAGE> 21
Prior to the Expiration Date, subject to any applicable laws, rules or
regulations restricting transferability and to any restriction on
transferability that may appear on this Warrant Certificate in accordance with
the terms of the Warrant Agreement hereinafter referred to, the Registered
Holder shall be entitled to transfer this Warrant Certificate in whole or in
part upon surrender of this Warrant Certificate at the office of the Warrant
Agent maintained for that purpose with the form of assignment set forth hereon
duly executed, with signatures guaranteed by a member firm of a national
securities exchange, a commercial bank, a savings bank or a savings and loan
association or a trust company located in the United States, a member of the
National Association of Securities Dealers, Inc. or other eligible guarantor
institution which is a participant in a signature guarantee program (as such
terms are defined in Reg. 240.17Ad-15 under the Securities Exchange Act of 1934)
applicable to the Warrant Agent. Upon any such transfer, a new Warrant
Certificate or Warrant Certificates representing the same aggregate number of
Warrants will be issued in accordance with the instructions in the form of
assignment.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, there shall be issued to the Registered Holder a new
Warrant Certificate in respect of the Warrants not exercised.
Prior to the Expiration Date, the Registered Holder shall be entitled to
exchange this Warrant Certificate, with or without other Warrant Certificates,
for another Warrant Certificate or Warrant Certificates for the same aggregate
number of Warrants, upon surrender of this Warrant Certificate at the office
maintained for such purpose by the Warrant Agent.
No fractional shares will be issued upon the exercise of Warrants. As to
any final fraction of a share, which the registered holder of one or more
Warrant Certificates, the rights under which are exercised in the same
transaction, would otherwise be entitled to purchase upon such exercise, the
Company shall pay the cash value thereof determined as provided in the Warrant
Agreement.
This Warrant Certificate is issued under and in accordance with a Warrant
Agreement between the Company and the Warrant Agent (the "Warrant Agreement")
and is subject to the terms and provisions contained in said Warrant Agreement,
to all of which terms and provisions the Registered Holder consents by
acceptance hereof.
This Warrant Certificate shall not entitle the Registered Holder to any of
the rights of a stockholder of the Company, including, without limitation, the
right to vote, to receive dividends and other distributions, or to attend or
receive any notice of meetings of stockholders or any other proceedings of the
Company.
This Warrant Certificate shall not be valid for any purpose until it shall
have been countersigned by the Warrant Agent.
<PAGE> 22
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
COUNTERSIGNED:
DATED: AMERICAN STOCK TRANSFER & TRUST
COMPANY NEW YORK, NEW YORK
WARRANT AGENT
BARRINGER TECHNOLOGIES, INC.
_____________________________ BY:__________________________________
SECRETARY AUTHORIZED SIGNATURE
CHAIRMAN OF THE BOARD
<PAGE> 23
EXERCISE FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
Warrants represented by this Warrant Certificate, and to purchase
the securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
____________________________
____________________________
____________________________
____________________________
[please print or type name and address]
and be delivered to
____________________________
____________________________
____________________________
____________________________
[please print or type name and address]
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated above.
Accepted and Agreed To:
X______________________________
A-1
<PAGE> 24
Address:
- -------------------------------
- -------------------------------
- -------------------------------
- -------------------------------
Tax Payer Identification Number
- -------------------------------
Signature Guaranteed
- -------------------------------
A-2
<PAGE> 25
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ____________________ hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
___________________________
___________________________
___________________________
___________________________
[please print or type name and address]
_________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
_____________________________________________________________________
Attorney-in-fact to transfer this Warrant Certificate on the books of the
Company, with full power of substitution in the premises.
Dated:_________________________________________
Signed: _______________________________________
Signature Guaranteed: _________________________
THE SIGNATURE TO THE ASSIGNMENT OR THE EXERCISE FORM MUST CORRESPOND TO THE NAME
AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A COMMERCIAL BANK, TRUST COMPANY SAVINGS BANK OR SAVINGS AND LOAN
ASSOCIATION OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK
EXCHANGE, PACIFIC STOCK EXCHANGE OR MIDWEST STOCK EXCHANGE.
A-3
<PAGE> 1
Exhibit 4.2
UNDERWRITER'S WARRANT
VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON OR IF NOT A BUSINESS
DAY AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK CITY TIME, ON THE NEXT FOLLOWING
BUSINESS DAY, UNLESS EXTENDED BY BARRINGER TECHNOLOGIES INC., AS PROVIDED
HEREIN.
No. Date:
WARRANT TO PURCHASE
SHARES OF COMMON STOCK AND WARRANTS
OF
BARRINGER TECHNOLOGIES INC.
Securities
Subject to this Warrant:
125,000 Shares and
125,000 Underlying Warrants
This certifies that, for $________ and other value received, ____________,
or registered assigns (the "Warrant Holder") is entitled to purchase from
BARRINGER TECHNOLOGIES INC., a corporation incorporated under the laws of the
State of Delaware (the "Company"), subject to the terms and conditions hereof:
(a) the number of shares of Common Stock of the Company ("Common Stock")
stated above at the Share Purchase Price (as defined and specified herein) at
any time on or after 9:00 A.M. New York City time on _________________, 1997 and
before the Common Share Expiration Date (as defined herein), and
(b) the number of Underlying Warrants (as defined herein) of the Company
set forth above, at the Warrant Purchase Price (as defined and specified herein)
at any time on or after 9:00 A.M. New York City time on _____________________,
1997 and before the Warrant Expiration Date (as defined herein).
The Share Purchase Price and the number of Common Shares purchasable
hereunder are subject to adjustment as provided below. The exercise price of the
Underlying Warrants and the number of shares purchasable on exercise of such
warrants are subject to adjustment as provided in such warrants.
<PAGE> 2
ARTICLE I
DEFINITIONS
Section 1.01. The following terms as used in this Agreement shall have the
meanings set forth below:
(1) "Business Day" means a day other than a Saturday, Sunday or
other day on which banks in the State of New York are authorized by law to
remain closed;
(2) "Common Stock Expiration Date" means 5:00 P.M., New York City
time, on ________________________, 2001 or such later date to which the right to
purchase Common Shares pursuant to this Warrant shall be extended by the Company
by corporate resolution adopted prior to such date, or if any such expiration
date is not a Business Day, at or before 5:00 P.M. New York City time on the
next following Business Day;
(3) "Effective Date" means the effective date of the Offering;
(4) "Offering" means the public offering of 1,250,000 shares of
Common Stock and 1,250,000 Common Stock Purchase Warrants of the Company
underwritten by Janney Montgomery Scott, Inc. ("JMS") pursuant to Registration
Statement No. 333-13703 filed with the Securities and Exchange Commission (the
"Offering");
(5) "Representative's Warrants" means this warrant and all warrants
of like tenor (together evidencing the right to purchase an aggregate of 125,000
shares of Common Stock and 125,000 Underlying Warrants originally issued to
Janney Montgomery Scott Inc. ("JMS") or its designees in connection with the
Offering;
(6) "Securities" shall mean collectively the Shares of Common Stock
and Underlying Warrants purchasable on exercise of this Warrant and the shares
of Common Stock issuable upon exercise of the Underlying Warrants;
(7) "Stock Exercise Purchase Price" shall mean 115% of the Initial
Offering Price of the Common Stock, pursuant to the Offering;
(8) "Underlying Warrant" means a warrant identical in form with the
Common Stock Purchase Warrants offered by the Company in the Offering (the
"Public Warrants");
(9) "Warrant Exercise Price" shall mean 115% of the Initial Offering
Price of the Warrants, pursuant to the Offering, as of the date hereof and until
the Warrant Expiration date;
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<PAGE> 3
(10) "Warrant Expiration Date" means 5:00 P.M. New York City time on
_________, 1999, or such later date to which the right to exercise this Warrant
to purchase Underlying Warrants shall be extended by the Company by corporate
resolution adopted prior to ____________ or, if such Expiration Date is not a
Business Day, at or before 5:00 P.M. New York time on the next following
Business Day;
(11) "Warrant Holder" means the person or entity named above or any
person or entity in whose name this Warrant shall be registered upon the books
to be maintained by the Company for that purpose; and
(12) "Warrant Purchase Prices" means the Stock Exercise Price and
the Warrant Exercise Price, collectively, including their payment provisions.
ARTICLE II
DURATION AND EXERCISE OF REPRESENTATIVE'S COMMON SHARE WARRANT
Section 2.01. Subject to the provisions of Section 4.01 hereof, this
Representative's Warrant may be exercised at any time after 9:00 A.M., New York
City time, on or after 9:00 A.M., New York City time, on
_______________________, 1997 (a) before the Common Stock Expiration Date to
purchase shares of Common Stock, and (b) before the Warrant Expiration Date to
purchase Warrants. The Company shall give the Warrant Holder prompt written
notice of any such extension of the then Expiration Date. If this Warrant is not
exercised at or before the Warrant Expiration Date, it shall no longer entitle
the Warrant Holder to purchase Underlying Warrants and all rights hereunder to
purchase such Underlying Warrants shall thereupon cease. If not exercised at or
before the Common Stock Expiration Date, the Warrants shall become void and all
rights hereunder shall thereupon cease.
Section 2.02. (1) The Warrant Holder may exercise this Warrant, in whole
or in part, to purchase shares of Common Stock or Underlying Warrants, or both,
in such amounts as may be elected upon surrender of this Warrant with the
Subscription Form hereon duly executed, to the Company at its corporate office
at 212 South Street, New Providence, New Jersey 07974, together with the full
Warrant Purchase Price for each share of Common Stock and for each Underlying
Warrant to be purchased in lawful money of the United States, or by certified
check, bank draft or postal or express money order payable in United States
Dollars to the order of the Company and upon compliance with and subject to the
conditions set forth herein.
(2) Upon receipt of this Warrant with the Subscription Form
hereon duly executed and accompanied by payment of the Stock Exercise Price for
the number of shares of Common Stock and/or the Warrant Exercise Price for the
number for Underlying
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<PAGE> 4
Warrants for which this Warrant is then being exercised, the Company, subject to
Section 4.04, will cause to be issued and delivered to the Warrant Holder,
certificates for such securities in such denominations as are requested by the
Warrant Holder.
(3) In case the Warrant Holder shall exercise this Warrant
with respect to less than all of the shares of Common Stock and/or Underlying
Warrants which may be purchased pursuant to this Warrant, the Company will
execute a new Representative's Warrant exercisable for the balance of the Common
Shares and/or Underlying Warrants that may be purchased upon exercise of this
Warrant and deliver such new Representative's Warrant to the Warrant Holder.
(4) The Company covenants and agrees that it will pay when due
and payable any and all taxes which may be payable in respect of the issue of
this Warrant or the issue of any Security. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer of this
Warrant or of any Security to a name other than that of the Warrant Holder at
the time of surrender, and until the payment of such tax, shall not be required
to issue such Security.
ARTICLE III
ADJUSTMENT OF SHARE PURCHASE PRICES
AND NUMBER OF COMMON SHARES
Section 3.01. The Share Purchase Price at which this Warrant may be
exercised at any time specified in Section 1.01( ) to purchase Common Shares
shall be subject to adjustment from time to time as follows:
(1) If the Company shall (i) pay a dividend on its Common
Shares, (ii) subdivide its outstanding Common Shares or (iii) combine its
outstanding Common Shares into a smaller number of shares, the Share Purchase
Prices in effect immediately prior to each of those events shall be adjusted
proportionately so that the adjusted Share Purchase Prices will bear the same
relation to the Share Purchase Prices in effect immediately prior to the event
as the total number of Common Shares outstanding immediately prior to the event
will bear to the total number of Common Shares outstanding immediately after the
event. An adjustment made pursuant to this clause (1) shall become effective
immediately after the record date in the case of a dividend and immediately
after the effective date in the case of a subdivision or combination.
(2) If the Company hereafter (i) issues shares of Common Stock
for a consideration less than the then current market price per Share (as
defined in clause (4) below), (b) issues rights or warrants entitling the
holders to subscribe for or to purchase Common Shares at a price per Share less
than such market price, or (c) issues convertible securities convertible into
Shares of Common Stock at a price per Share less than such market price, then at
the record date of such event the Share Purchase Prices shall be
4
<PAGE> 5
adjusted so that it will equal the price determined by multiplying the Share
Purchase Prices in effect immediately prior to the adjustment by a fraction, of
which the numerator shall be (i) the number of Common Shares outstanding on the
record date plus (ii) the number of additional Common Shares issued for such
consideration below such market price or a number of additional Common Shares
which the aggregate exercise price of such rights or warrants would be purchased
at such market price, or which would be received on the conversion of such
convertible securities the aggregate exercise price of the rights or warrants or
conversion price of such convertible securities would purchase at the current
market price per Common Share (as determined in accordance with the provisions
of clause (4) below), issued for such consideration below such market price or a
number of additional Common Shares which the aggregate exercise price of such
rights or warrants would be purchased at such market price, or which would be
received on the conversion of such convertible securities and of which the
denominator shall be (x) the number of Common Shares outstanding on the record
date plus (y) the number of Common Shares offered for subscription purchase or
issuable on conversion of such convertible securities. Each adjustment shall
become effective retroactively immediately after the record date for the
determination of Common Shares entitled to receive the rights or warrants.
(3) Except in the case of distributions of Common Shares
subject to preceding clause (1), or of rights or cash, or of warrants to
purchase Common Shares subject to preceding clause (2), if the Company
distributes to all holders of shares evidences of its indebtedness or assets
(excluding cash dividends or distributions) or rights or warrants to subscribe
for or to purchase shares, evidences of indebtedness or assets, then in each
such case the Share Purchase Prices shall be adjusted so it will be equal to the
price determined by multiplying the Share Purchase Prices in effect immediately
prior to the adjustment by a fraction, of which the numerator shall be (i) the
total number of outstanding Common Shares, multiplied by (ii) the current market
price per Common Share (as determined in accordance with the provisions of
clause (4) be on the record date mentioned below, or less (iii) the fair market
value (as determined by the Board of Directors, whose determination shall be
deemed conclusive, unless arbitrary or unreasonable, described in a statement
mailed to the Warrant Holder) of the capital stock, assets or evidences of
indebtedness, or rights or warrants, so distributed, and of which the
denominator shall be (x) the total number of outstanding Common Shares
multiplied by (y) the current market price per Common Share. Each adjustment
shall become effective retroactively immediately after the record date for the
determination of stockholders entitled to receive a distribution.
(4) For the purpose of any computation under clause (2) or
clause (3) above, the current market price per Common Share at any date shall be
deemed to be the average of the daily closing prices for the thirty consecutive
business days commencing forty-five business days before the day in question.
The closing price for each day shall be the last reported sales price regular
way or, in case no such reported sale takes place on that day, the average of
reported closing bid and asked prices regular way, either on the New York Stock
Exchange or the American Stock Exchange, or, if at any time the Common
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<PAGE> 6
Shares are not listed or fitted to trading on such Exchanges, on the principal
national cities exchange on which the Common Shares are listed or admitted to
trading, or if not listed or admitted to trading on national securities
exchange, the average of the highest reported bid and lowest reported asked
prices as furnished by the National Association of Securities Dealers Inc.'s
Automated Quotations System, or the nearest comparable system or, in the absence
of either, the fair market value as determined by the Board of Directors (whose
determination shall be deemed conclusive, unless arbitrary or unreasonable) and
described in a statement mailed to the Warrant Holder.
No adjustment of the Share Purchase Prices shall be made if the amount of
the adjustment would be less than $.05, but any adjustment which would otherwise
be required to be made will be carried forward and be made at the time of and
together with the next subsequent adjustment which, together with all
adjustments so carried forward, amounts to $.05 or more.
Section 3.02. Upon each adjustment pursuant to this Article III of the
Share Purchase Prices for any period specified in Section 1.01( ), the number of
Common Shares purchasable in any such period shall be adjusted to the number of
shares of Common Shares, calculated to the nearest one hundredth of a share,
obtained by multiplying the number of Common Shares purchasable in such period
on exercise of the Warrant immediately prior to the adjustment by the Share
Purchase Price for that period in effect prior to the Adjustment and dividing
the product so obtained by the new Share Purchase Price for that period.
In case of such adjustment, this Warrant will represent, for each of the
aforesaid periods the right to purchase at the original Share Purchase Price for
the Common Shares for the applicable period the number of Common Shares or
fraction of such Share (depending on whether such Price is reduced or increased)
provided to be issued pursuant to the adjustment specified in this Section 3.02,
each of such Shares to be purchased at the Share Purchase Price for such period
provided for by the aforesaid adjustments to such Share Purchase Price.
Section 3.03. In case of any capital reorganization of the Company or of
any reclassification of the Common Shares, or the consolidation of the Company
with any other corporation or entity, or sale of the properties and assets of
the Company as, or substantially as, an entirety to any other entity, this
Warrant will be exercisable after such capital reorganization, reclassification,
consolidation or sale, upon the terms and conditions specified in this
Agreement, for the number of Common Shares, other securities or property which
the Warrant Holder would have been entitled to receive upon the capital
reorganization, reclassification, consolidation or sale if this Warrant had been
exercised immediately before the first such capital reorganization,
reclassification, consolidation or sale. In the case of a merger of the Company
into or with any other corporation or entity (provided that on such merger
securities of the Company are changed into, changed for, or converted into
securities of any other issuer), after such merger, this Warrant shall be
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<PAGE> 7
exercisable, upon the terms and conditions specified in this Agreement. The
subdivision or combination of Common Shares at any time outstanding into a
greater or lesser number of Shares shall not be deemed to be a reclassification
of the Common Shares of the Company for the purposes of this Section 3.03. The
Company shall not effect any consolidation, merger or sale unless prior to or
simultaneously with its consummation the successor entity (if other than the
Company) resulting from the consolidation or merger or the entity purchasing the
Company's assets and any other entity the shares of stock or other securities or
property of which are receivable as a result of the transaction agree, by
written instrument executed and delivered to the Warrant Holder, to (i) the
obligation to deliver to the Warrant Holder the Common Shares or other
securities or property to which the Warrant Holder will be entitled on exercise
of this Warrant, and (ii) all other obligations of the Company under this
Agreement.
Section 3.04. Whenever the Share Purchase Prices and the number of Common
Shares purchasable are adjusted as provided in this Article, the Company shall
compute the adjustment of the Share Purchase Prices and number of such shares
purchasable in each such period in accordance with Sections 3.01 and 3.02 and
shall prepare a certificate signed by its President or a Vice President and its
principal accounting officer setting forth the adjusted Share Purchase Prices
and number of such shares purchasable in each such period and showing in
reasonable detail the method of calculation of the adjustment and the facts
requiring the adjustment and upon which the calculation is based, and that
certificate shall forthwith be mailed to the Warrant Holder.
Section 3.05. If at any time after the date of this Agreement:
(1) the Company shall declare a dividend (or any other
distribution) on its Common Shares payable otherwise than in cash out of its
earned surplus; or
(2) the Company shall authorize the granting to the Holders of
its Common Shares of rights to subscribe for or purchase any shares of capital
stock of any class or of any other rights; or
(3) the Company shall authorize any reclassification of its
Common Shares (other than a subdivision or combination of its outstanding Common
Shares), any capital reorganization, or any consolidation or merger to which it
is a party and for which approval of any stockholder of the Company is required,
or the sale or transfer of all or substantially all of its assets; or
(4) events shall have occurred resulting in the voluntary or
involuntary dissolution, liquidation or winding up of the Company;
then the Company shall cause to be mailed to the Warrant Holder at least 20 days
(or 10 days in any case specified in clause (1) or (2) above) prior to the
applicable record date,
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<PAGE> 8
a notice stating the date on which a record is to be taken for the purpose of
the dividend, distribution or rights, or, if a record is not to be taken, the
date as of which the holders of record of Common Shares shall become or be
entitled to such dividend, distribution or rights or the date on which the
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Shares of record shall be entitled
to exchange their shares for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give any such notice or any defect therein
shall not affect the validity of the proceeding referred to in clauses (1), (2),
(3) and (4) above.
Section 3.06. The form of this Warrant need not be changed because any
change in the Share Purchase Prices or in the number of Common Shares
purchasable upon exercise of this Warrant pursuant to this Article and Warrants
issued after such change may state the same Share Purchase Prices and the same
number of Common Shares as are stated in the form of warrant initially issued
pursuant to this Agreement. However, the Company may at any time in its sole
discretion (which shall be conclusive) make any change in the form of this
Warrant that it may deem appropriate and that does not affect the substance
thereof; and any Representative's Warrant thereafter issued, whether in exchange
or substitution for an outstanding Representative's Warrant or otherwise, may be
in the form as so changed.
ARTICLE IV
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANT HOLDER
Section 4.01. The Warrant Holder, as such, shall not be entitled to vote
or receive dividends or be deemed the holder of Common Stock for any purpose,
nor shall anything contained in this Warrant be construed to confer upon the
Warrant Holder, as such, any of the rights of a stockholder of the Company or
any right to vote, give or withhold consent to any action by the Company
(whether upon any recapitalization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings or
other action affecting stockholders (except for notices provided for in this
Warrant), receive dividends or subscription rights, or otherwise until this
Warrant shall have been exercised to purchase Common Stock or to purchase
Underlying Warrants and such Underlying Warrants shall have become exercisable
and the Common Stock shall have become deliverable as provided in Article II or
pursuant to the terms of the Underlying Warrants, at which time the person or
persons in whose name or names the certificate or certificates for the Common
Stock being purchased shall be deemed the holder or holders of record of such
Common Stock for all purposes; provided, however, that any such exercise on any
date when the stock transfer books of the Company shall be closed shall
constitute the person or persons in whose name or names the certificate or
certificates for such shares
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<PAGE> 9
of Common Stock are to be issued as the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open and this Warrant shall not be deemed to have been
exercised, in whole or in part as the case may be, until such next succeeding
day on which stock transfer books are open for the purpose of determining
entitlement to dividends on such shares of Common Stock, and such exercise shall
be at the actual Exercise Prices in effect at such date.
Section 4.02. If this Warrant is lost, stolen, mutilated or destroyed, the
Company may, on such terms as it may in its discretion impose (which shall, in
the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as, and in substitution for, this
Warrant.
Section 4.03. (1) The Company covenants and agrees that at all times it
shall reserve and keep available for the exercise of this Warrant such number of
authorized shares of Common Stock as are sufficient to permit the exercise in
full of this Warrant.
(2) Prior to the issuance of any Common Stock upon exercise of
this Warrant, the Company covenants and agrees to secure the listing of such
shares of Common Shares upon any securities exchange or automated quotation
system upon which such Common Stock is then listed.
(3) The Company covenants that all Common Stock issued on
exercise of this Warrant, will be validly issued, fully paid, nonassessable and
free of preemptive rights.
Section 4.04. Anything contained herein to the contrary notwithstanding,
the Company shall not be required to issue any fractional shares of Common Stock
in connection with the exercise of this Warrant and other Warrants of like tenor
submitted for exercise concurrently herewith. In any case where the Warrant
Holder would, except for the provisions of this Section 4.04, be entitled under
the terms of this Warrant to receive a fraction of a share of Common Stock upon
the exercise of this Warrant, the Company shall, upon the exercise of this
Warrant and receipt of the Warrant Prices, issue the largest number of whole
shares purchasable upon exercise of this Warrant and any other like Warrants
tendered for exercise at the same time. The Warrant Holder, by the acceptance of
the Warrant, expressly waives his right to receive a certificate of any fraction
of a Common Share upon the exercise hereof. However with respect to any fraction
of a share called for upon any exercise hereof, the Company shall pay to the
Registered Holder an amount in cash equal to such fraction multiplied by the
current market value of such fractional share, determined as follows:
(1) if the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the Nasdaq National Market System ("NMS"),
the current market
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<PAGE> 10
value shall be the last reported sale price of the Common Stock on
such exchange or system on the last business day prior to the date
of exercise; or
(2) if the Common Stock is listed in the over-the-counter
market (other than on NMS) or admitted to unlisted trading
privileges thereon, the current market value shall be the mean of
the last reported bid and asked prices reported by the National
Quotation Bureau, Inc. on the last business day prior to the date of
the exercise; or
(3) if the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the current market value shall be an amount determined in
such reasonable manner as may be prescribed by the Board of
Directors of the Company.
Section 4.05. Notices to the Warrant Holder provided for in this Warrant
shall be deemed given or made by the Company if delivered or sent by mail,
certified or registered, return receipt requested, postage prepaid, addressed to
the Warrant Holder at his last known address as it shall appear on the books of
the Company.
ARTICLE V
TREATMENT OF WARRANT HOLDER
Section 5.01. Prior to due presentment for registration of transfer of
this Warrant, the Company may deem and treat the Warrant Holder as the absolute
owner of this Warrant (notwithstanding any notation of ownership or other
writing hereon) for the purpose of any exercise hereof and for all other
purposes and the Company shall not be affected by any notice to the contrary.
ARTICLE VI
SPLIT-UP, COMBINATION, EXCHANGE AND
TRANSFER OF WARRANTS
Section 6.01. This Warrant may be split up, combined or exchanged for
another Warrant or Warrants of like tenor to purchase a like aggregate number of
shares of Common Stock. If the Warrant Holder desires to split up, combine or
exchange this Warrant, he shall make such request in writing delivered to the
Company at its office in New Providence, New Jersey and shall surrender this
Warrant and any other Warrants to be so split up, combined or exchanged at said
office. Upon any such surrender for a split-up, combination or exchange, the
Company shall execute and deliver to the person entitled thereto a Warrant or
Warrants, as the case may be, as so requested. The Company
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<PAGE> 11
may require such Warrant Holder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split-up,
combination or exchange of Warrants.
Section 6.02. Any assignment permitted hereunder shall be made by
surrender of this Warrant to the Company at its principal office with the Form
of Assignment annexed hereto duly executed and with funds sufficient to pay any
transfer tax. In such event the Company shall, without charge, execute and
deliver a new Warrant in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be canceled. This Warrant may be
divided or combined with other Warrants which carry the same rights upon
presentation thereof at the principal office of the Company together with a
written notice signed by the Warrant Holder, specifying the names and
denominations in which new Warrants are to be issued. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen or destroyed Warrant shall
thereupon become void. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not the Warrant so lost, stolen, destroyed or mutilated shall be at
any time enforceable by anyone.
ARTICLE VII
REGISTRATION UNDER THE SECURITIES ACT OF 1933
Section 7.01. (1) If at any time, prior to , the Company proposes
to register pursuant to a registration statement to become effective on or
after , 1997 any of its securities (other than in connection with a
merger, acquisition or pursuant to Form S-8) it will give written notice by
registered mail, at least sixty (60) days prior to the filing of each such
registration statement, to the holders of this Warrant of the Underlying
Warrants, and of any shares of Common Stock issued on exercise of this Warrant
or the Underlying Warrants (collectively, the "Representative's Securities") of
its intention to do so. If any of the holders of such securities shall notify
the Company within twenty (20) days after receipt of any such notice of their
desire to include any such securities (including shares of Common Stock
issuable on exercise of any Warrants included in such Representative's
Securities) in such proposed registration statement, the Company shall afford
such holders the opportunity to have any such securities registered under such
registration statement. The Company agrees to give written notice of any such
proposed registration statement to any registered holder of any then
outstanding Representative's Securities and to JMS, at least (30) days prior to
filing any such post-effective amendment or registration statement.
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(2) Upon the written request of the then holders of at least
fifty percent (50%) in interest (taken as a single group) of the registered
holders of the Representative's Securities (the holder of any Warrant being
deemed for such purpose the holder of the Common Shares purchasable on exercise
of such Warrant) made not before ___________________ and not after
__________________, the Company shall file one post-effective amendment or new
registration statement as may be appropriate to cover a public offering of such
Securities (including any shares of Common Stock issuable on exercise of any
Warrants included in such Representative's Securities).
(3) The following provisions shall also be applicable to any
such post-effective amendment or registration statement:
(a) The holders whose Representative's Securities
are to be included therein (the "Sellers") shall furnish the Company with such
appropriate information (relating to the intentions of such holders) in
connection therewith as the Company shall reasonably request in writing.
Following the effective date of such post-effective amendment or registration
statement, the Company shall upon the request of any Seller forthwith supply
such number of prospectuses meeting the requirements of the Act as shall be
requested by such Seller to permit such Seller to make a public offering of all
the Representative's Securities held by such Seller or underlying any Warrants
held by such Seller. The Company shall use its best efforts to register such
securities for sale under the securities laws in such states as the Sellers
shall reasonably designate.
(b) All expenses incident to effectiveness of the
Registration Statement referred to in Section 7.01 including, but not limited
to, all registration and filing fees payable to the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc., fees and
disbursements of counsel and independent public accountants printing and other
expenses, (excluding underwriting commissions and any fees and disbursements of
any counsel employed by any selling shareholders on their own behalf), shall be
borne (i) in the case of a Registration Statement filed pursuant to Section
7.01(1) by the Company, any other selling stockholder and any Seller in
proportion to the number of shares of Common Stock respectively offered by them
therein (Warrants for such purpose being considered the equivalent of the shares
of Common Stock purchasable on exercise of such Warrants), and (ii) in the case
of a Registration Statement filed pursuant to Section 7.01 (2), by the Company
to the extent of $25,000 and the balance by the Sellers whose securities are
included in such registration statement pro rata in accordance with the shares
of Common Stock included by them therein (Warrants for such purpose being
considered equivalent to the Common Shares purchasable on exercise of such
Warrants).
(c) Prior to any public offering pursuant to
Section 7.01, the Company will register or qualify the securities under the
securities or Blue Sky laws of such jurisdictions as any Seller or any
underwriter may reasonably request in writing, and keep such registration or
qualification effective during the period such
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<PAGE> 13
Registration Statement is required to be kept effective, and do any and all acts
or things necessary or advisable to enable the disposition of the
Representative's Securities covered by the applicable Registration Statement,
provided that the Company shall not be required generally to do business in any
jurisdiction where it has not been so qualified, or to take any action which
would subject it to general service of process in any such jurisdiction where it
is not then so subject.
(d) The Company shall indemnify and hold harmless
each Seller and each underwriter, within the meaning of the Act, that may
purchase from or sell for any Seller any Representative's Securities from and
against any and all losses, claims, damages and liabilities caused by any true
statement or alleged untrue statement of a material fact in any registration
statement under the Act or any prospectus included therein required to be filed
or furnished pursuant to this Section 7.01, or caused by omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission based upon information furnished or required to be furnished in
writing to the Company by such Seller or underwriter expressly for use therein,
which indemnification shall include each person, if any, who controls any such
Seller or underwriter within the meaning of such Act; provided, however, that
the Company shall not be obliged to indemnify any such Seller or underwriter or
controlling person unless such Seller or underwriter shall at the same time
indemnify the Company, its directors, each officer signing the related
registration statement and each person, if any, who controls the Company within
the meaning of the Act from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or any prospectus required
to be filed or furnished by reason of this Section 7.01 or caused by any
omission or alleged omission to state therein a material fact or required to be
stated therein or necessary to make the statements therein not misleading,
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or alleged untrue statement or omission or alleged omission based upon
information furnished in writing to the Company by any such Seller or
underwriter expressly for use therein.
The Company's agreements in this Section 7.01 shall continue in effect
regardless of the exercise and surrender of this Warrant.
Section 7.02. Neither this Warrant nor the Securities issuable on exercise
t hereof may be sold or otherwise disposed of except as follows:
(a) to a person, who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom such securities may legally be
transferred without registration and without the delivery of a current
prospectus under the Act with respect thereto and then only against receipt of
an agreement of such person to comply with the provisions of this Warrant with
respect to any resale or owner disposition of such securities; or
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<PAGE> 14
(b) to any person upon delivery of a prospectus then meeting
the requirements of the Act relating to such securities (as to which a
registration statement under the Act shall then be in effect) and the offering
thereof for such sale or disposition.
Notwithstanding the above, this Warrant will be restricted from sale,
transfer, assignment or hypothecation for a period of one (1) year from the
effective date of the registration statement except to officers or partners of
JMS.
ARTICLE VIII
OTHER MATTERS
Section 8.01. The Company will from time to time promptly pay, subject to
the provisions of paragraph (4) of Section 2.02, all taxes and charges that may
be imposed upon the Company in respect of the issuance or delivery, but not the
transfer, of Representative's Securities.
Section 8.02. All the covenants and provisions of this option by or for
the benefit of the Company shall bind and inure to the benefit of its successors
and assigns hereunder.
Section 8.03. Notice or demand pursuant to this Warrant to be given or
made by the Warrant Holder to or on the Company shall be sufficiently given or
made if delivered or sent by registered or certified mail, postage prepaid,
return receipt requested, and addressed, until another address is designated in
writing by the Company, as follows:
Barringer Technologies Inc.
219 South Street
New Providence, N. J. 07974
Attention: Stanley S. Binder, President
Any notice or demand authorized by this Warrant to be given or made by the
Company to or on the Warrant Holder shall be given in accordance with the
provisions of Section 4.05.
Section 8.04. The validity, interpretation and performance of this Warrant
shall be governed by the laws of the State of New York without giving effect to
the conflict of Law principles thereof.
Section 8.05. Nothing in this Warrant expressed or nothing that may be
implied from any of the provisions hereof is intended, or shall be construed, to
confer upon, or give to, any person or corporation other than the Company and
the Warrant Holder any right, remedy or claim hereunder, and all covenants,
conditions, stipulations, promises and
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<PAGE> 15
agreements in this Warrant contained shall be for the sole and exclusive benefit
of the Company and its successors and of the Warrant Holder.
Section 8.06. The Article headings herein are for convenience only and are
not part of this Warrant and shall not affect the interpretation thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company under its corporate seal as of the __ day of .
Barringer Technologies Inc.
By:_________________________________
Name:
Title:
Attest:
_______________________
Secretary
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FORM OF ASSIGNMENT
(To Be Signed Only Upon Assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________________________ the right to purchase Common Shares
and Underlying Warrants evidenced by the within Warrant, and to transfer same
on the books of Barringer Technologies Inc. with full power of substitution.
Dated: ___________
By: ________________________________
Name:
Title:
(Signature must conform in all
respects to the name of Warrant Holder
as specified on the face of the
Warrant, without alteration,
enlargement or any change whatsoever,
and the signature must be guaranteed
in the usual manner)
Signature Guaranteed:
_____________________
<PAGE> 17
SUBSCRIPTION FORM
(To be Executed By A Warrant Holder Who Desires
To Exercise The Warrant In Whole Or In Part)
Barringer Technologies Inc.
Undersigned____________________________________________
(________________________________)
Please insert Social Security or other
identifying number of Subscriber
hereby irrevocably elects to exercise the right to purchase Common Shares and
Underlying Warrants to the extent represented by (all) (__________) of the
Warrants represented by the Warrant Certificate to which this Subscription form
is attached and tenders payments herewith to the order of Barringer Technologies
Inc. in the amount of ______________. The undersigned requests that certificates
for such Common Shares and Underlying Warrants be issued as follows:
Name: ______________________________________
Address: ______________________________________
Deliver to: ______________________________________
Address: ______________________________________
Social Security (or other identifying)
Number: ______________________________________
and, if said number of shares of Common Stock and Underlying Warrants shall not
be all such shares of Common Stock and Warrants purchasable hereunder, that a
new Warrant for the balance remaining of the shares of Common Stock and
Underlying Warrants purchasable under the within Warrant be registered in the
name of, and delivered to, the undersigned at the address stated below:
Address: ______________________________________
Date:__________________ Signature_________________________________
(Signature must conform in all
respects to the name of Warrant Holder
as specified on the face of the
Warrant, without alteration ,
enlargement or any change whatsoever.)
<PAGE> 1
Exhibit 5.1
[LOWENSTEIN, SANDLER, KOHL, FISHER & BOYLAN LETTERHEAD]
October 31, 1996
Barringer Technologies Inc.
219 South Street
New Providence, New Jersey 07974
Dear Sirs:
In connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of (i) 1,437,500 shares (the "Shares") of the Common Stock,
par value $.01 per share (the "Common Stock"), of Barringer Technologies Inc., a
Delaware corporation (the "Company"), (ii) 1,437,500 warrants to purchase shares
of Common Stock (the "Purchase Warrants"), (iii) 359,375 shares of Common Stock
issuable upon the exercise of the Purchase Warrants (together with such
indeterminate number of additional shares of Common Stock as may become issuable
pursuant to the anti-dilution provisions of the Purchase Warrants, the "Purchase
Warrant Shares"), (iv) 125,000 warrants to purchase shares of Common Stock and
Purchase Warrants (the "Underwriter's Warrants"), (v) 125,000 shares of Common
Stock issuable upon the exercise of the Underwriter's Warrants (together with
such indeterminate number of additional shares of Common Stock as may become
issuable pursuant to the anti-dilution provisions of the Underwriter's Warrants,
the "Underwriter's Warrant Shares"), (vi) 125,000 Purchase Warrants issuable
upon the exercise of the Underwriter's Warrants (together with such
indeterminate number of additional Purchase Warrants as may become issuable
pursuant to the anti-dilution provisions of the Underwriter's Warrants, the
"Underwriter's Purchase Warrants"), and (vii) 31,250 shares of Common Stock
issuable upon the exercise of the Underwriter's Purchase Warrants (together with
such indeterminate number of additional shares of Common Stock as may become
issuable pursuant to the anti-dilution provisions of the Underwriter's Purchase
Warrants, the "Underwriter's Purchase Warrant Shares"), we have
<PAGE> 2
Barringer Technologies Inc. October 31, 1996
Page 2
examined such corporate records, certificates and other documents, and such
questions of law, as we have considered necessary or appropriate for the
purposes of this opinion.
Upon the basis of such examination, we advise you that, in our opinion:
1. When the Registration Statement has become effective under the
Act, the terms of the issue and sale of the Shares have been duly established
in conformity with the Company's Certificate of Incorporation, as amended, so
as not to violate any applicable law or result in a breach of any agreement or
instrument binding on the Company and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
the Company, and the Shares have been duly issued and sold as contemplated in
the Registration Statement, the Shares will be validly issued, fully paid and
non-assessable.
2. When the Registration Statement has become effective under the
Act, the Warrant Agreement relating to the Purchase Warrants has been duly
authorized, executed and delivered, the terms of the Purchase Warrants and of
their issuance and sale have been duly established in conformity with the
Warrant Agreement so as not to violate any applicable law or result in a breach
of any agreement or instrument binding upon the Company and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Company, and the Purchase Warrants have been duly
executed and authenticated in accordance with the Warrant Agreement and issued
and sold as contemplated by the Registration Statement, the Purchase Warrants
will constitute valid and legally binding obligations of the Company, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
3. When the Registration Statement has become effective under the
Act, the terms of the Underwriter's Warrants and of their issuance and sale
have been duly established so as not to violate any applicable law or result in
a breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company, and the Underwriter's Warrants have
been duly executed and authenticated in accordance with the terms of the
Underwriter's Warrants and issued and sold as contemplated by the Registration
Statement, the Underwriter's Warrants will constitute valid and legally binding
obligations of the Company, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
4. Subject to the opinion set forth in paragraph 2 above, when the
Underwriter's Purchase Warrants have been duly issued as contemplated in the
Registration Statement upon the due exercise of the Underwriter's Warrants, and
the Company has received payment in full of the exercise price therefor, the
Underwriter's Purchase Warrants will constitute valid and legally binding
obligations of the Company, subject to bankruptcy, insolvency,
<PAGE> 3
Barringer Technologies Inc. October 31, 1996
Page 3
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
5. When the Purchase Warrant Shares, the Underwriter's Warrant
Shares and the Underwriter's Purchase Warrant Shares have been duly issued as
contemplated in the Registration Statement and the Warrant Agreement upon the
due exercise of the Purchase Warrants, the Underwriter's Warrants and the
Underwriter's Purchase Warrants so that the number of shares of Common Stock
then outstanding does not exceed the number of shares of Common Stock then
authorized, and the Company has received payment in full of the exercise price
therefor, the Purchase Warrant Shares, the Underwriter's Warrant Shares and the
Underwriter's Purchase Warrant Shares will be duly authorized, validly issued,
fully paid and non-assessable.
The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New Jersey and the General Corporation Law of
the State of Delaware, and we are expressing no opinion as to the effect of the
laws of any other jurisdiction.
In rendering this opinion, we have relied as to certain matters on
information obtained from public officials, officers of the Company and other
sources believed by us to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section
7 of the Act.
Very truly yours,
/s/ Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.
<PAGE> 1
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective as specified herein, between Barringer
Technologies Inc., a Delaware corporation (including any of its subsidiaries,
collectively the "Company"), located at 219 South Street, New Providence, New
Jersey 07974 and ("Executive") residing at .
NOW, THEREFORE, in consideration of the terms and mutual undertakings
herein contained, it is agreed by and between the Company and Executive as
follows:
1. Effective Date and Term of Employment:
This Agreement shall become effective on November 1, 1996 and
shall supersede any other agreements, if any, now in effect. This Agreement
shall remain in effect until the close of business one year from such effective
date ("Agreement Expiration Date"); provided, however, that on the Agreement
Expiration Date and on each anniversary of the Agreement Expiration Date (a
"Renewal Date"), this Agreement shall be renewed for a period of one additional
consecutive year unless either the Company or Executive provides written notice
to the other party at least ninety (90) days prior to a Renewal Date that the
Agreement shall terminate without renewal as of the corresponding Agreement
Expiration Date. When the Agreement extends for a period of one additional
consecutive year, the Agreement Expiration Date shall also extend by one year.
2. Duties and Responsibilities:
2.1 Executive will continue to serve as of the
Company and, as such, shall have such functions, duties and responsibilities,
not inconsistent with his title and office, as may be assigned to him by or
under the authority of the Board of Directors of the Company, and shall have
such authority and power as is necessary or appropriate to carry out his
assigned duties.
2.2 During the term of this Agreement the Executive shall,
without compensation other than that herein provided, also serve and continue to
serve, if and when elected and re-elected, as a director or member of any
committee of the Company and as an officer, director and/or member of any
committee of any subsidiary or affiliate of the Company.
2.3 During the term of this Agreement the Executive shall
devote his full time and undivided attention during normal business hours to the
business and affairs of the Company; provided however, that the Executive may
engage in charitable, educational, religious, civic and similar types of
activities (all of which shall be deemed to benefit the Company), speaking
engagements, memberships on the board of directors of other organizations, and
similar activities to the extent that such activities do not inhibit or prohibit
the performance of his duties hereunder or inhibit or conflict in any material
way with the business of the Company.
Page 1 of 10
<PAGE> 2
2.4 The Executive's principal place of employment shall be at
the Company's principal executive offices in New Providence, New Jersey, or at
such other location in the New Jersey/New York metropolitan area as the Company
may determine to relocate its principal executive offices.
3. Compensation and Benefits:
3.1 For all services rendered by the Executive in any capacity
during the term of this Agreement, the Executive shall be paid as compensation a
base salary, payable semi-monthly, at the rate of $ per annum ("Base
Salary"), which amount shall be reviewed by the Board of Directors annually
as of January 1, of each year and which may be increased at the discretion of
the Board of Directors. Such increased amount to be referred to hereinafter as
Current Salary.
3.2 The Executive shall be eligible to participate in the
Company's management cash bonus incentive arrangement from time to time in
effect and payable with respect to the immediately preceding full calendar year
on or before April 1 of each year; provided that for the purposes of this
Section 3.2 the term of this Agreement shall be deemed to have commenced on
January 1, 1996.
3.3 During the term of this Agreement the Executive shall be
entitled to all benefits, including without limitation, a private office,
secretarial, computer and other support services and facilities consistent with
his title and office, and to all fringe benefits generally made available to
executive officers of the Company. The Executive shall also be entitled to
reimbursement in accordance with the policies of the Company, upon proper
accounting, of ordinary and necessary expenses and disbursements reasonably
incurred by him in the course of his duties, to paid holidays in accordance with
the policies of the Company, and to paid vacation of four (4) weeks per year.
Should the Executive not use his entire annual vacation, he will be allowed to
carry over to the next year up to two (2) weeks of such unused vacation.
4. Employee Benefit Plans:
The Executive, his dependents and beneficiaries shall be
entitled to participate in all employee benefit plans to which officers of the
Company, their dependents and beneficiaries, are entitled during the term of
this Agreement, including, without limitation, medical and health insurance and
welfare plans, pension plans and other present or equivalent successor plans and
practices of the Company for which officers, their dependents and beneficiaries
are eligible, and to all payments or other benefits under any such plan or
practices subsequent to the term of this Agreement as a result of participation
in such plan or practice during the term of this Agreement.
5. Termination of Employment:
5.1 The Executive's employment under this Agreement shall
terminate upon the Executive's death or legal incapacity. In such event, the
Executive or his legal representative shall be entitled to that portion of his
Current Salary accrued to or payable as of the end of the month
Page 2 of 10
<PAGE> 3
during which such termination occurs. In addition, the Executive or his legal
representative shall be entitled to any accrued and unpaid vacation including
any allowable carry over, and to the pro-rata portion of any compensation due
pursuant to Section 3.2 that is earned in the year of death or legal incapacity.
5.2 The Company, may at its option, terminate the Executive's
employment under this Agreement if the Executive shall fail, or if the Board of
Directors shall find on the basis of medical evidence reasonably satisfactory to
it that the Executive is unable, by virtue or reason of physical injury or
physical or mental illness, to perform his duties hereunder on a full-time basis
for a period of ninety (90) consecutive days or more during any two hundred
seventy (270) day period or that the Executive's group and supplemental
long-term disability coverage, if any, as provided by the Company, commences the
payment of benefits. In such event, the Executive shall be entitled to that
portion of his Current Salary accrued to or payable as of the date of such
termination. In addition, the Executive shall be entitled to any accrued and
unpaid vacation including allowable carry over, and to the pro-rata portion of
any compensation due pursuant to Section 3.2 that is earned in the year of such
termination.
5.3 (a) The Company may terminate the Executive's employment
hereunder at any time for "cause", which includes but is not limited to the
following reasons:
i. an act or acts of dishonesty on the part of the
Executive constituting a felony or resulting or intended to result directly or
indirectly in gains or personal enrichment at the expense of the Company;
ii. the continued willful failure by the Executive to
perform substantially his duties with the Company (other than any such failure
resulting from his incapacity due to physical injury or physical or mental
illness) or a continuing material breach by the Executive of his obligations
hereunder for a period of thirty (30) days after a demand for substantial
performance is delivered to the Executive on behalf of the Board of Directors
which specifically identifies the manner in which the Board of Directors
believes that the Executive has not substantially performed his duties;
iii. willful abuse of corporate power, willful neglect or
willful misconduct in the performance of the Executive's duties and obligations
to the Company.
(b) For purposes of clauses ii and iii of Section 5.3(a),
no act, or failure to act, on the part of the Executive shall be considered
"willful" unless done or omitted to be done by the Executive without reasonable
belief in good faith that his action or omission was in, or not opposed to, the
best interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively presumed to have been
done or omitted to have been done by the Executive in good faith and in the best
interests of the Company, unless such action by the Board of Directors was taken
upon the recommendation of the Executive upon information provided by the
Executive which the Executive knew to be false or upon the omission of material
facts by the Executive, which facts
Page 3 of 10
<PAGE> 4
would have been adverse to the Executive's recommendation.
In such event, the Executive or his legal representative shall be
entitled to that portion of his Current Salary accrued to or payable as of the
date of termination. In addition, the Executive shall be entitled to any accrued
and unpaid vacation including any allowable carryover.
5.4 The Company may terminate the Executive's employment
hereunder at any time, with or without cause, upon at least thirty (30) days
prior written notice to the Executive. In such event, the Executive or his legal
representative shall be entitled to receive his Current Salary until the
applicable Agreement Expiration Date and the pro-rata portion of any
compensation due pursuant to Section 3.2 that is earned in the year of such
termination. In addition, the Executive shall be entitled to any accrued and
unpaid vacation including any allowable carryover.
5.5 The Executive may voluntarily terminate the Executive's
employment hereunder at any time without cause upon at least ninety (90) days
prior written notice to the Company. Upon receipt of the ninety (90) day notice,
the Company may, at its option, terminate the Executive during such ninety (90)
day period. In such event, the Executive or his legal representative shall be
entitled to that portion of his Current Salary accrued to or payable as of the
date of termination. In addition, the Executive shall be entitled to any accrued
and unpaid vacation including any allowable carry over.
5.6 The severance payments described in Section 6 ("Severance
Award") shall be payable to the Executive if Executive's employment with the
Company terminates during the term of this Agreement or, if the Company does not
renew this agreement such non-renewal will be deemed to be a termination without
cause, or for any of the following reasons:
(a) involuntarily, other than pursuant to Sections 5.1, 5.2, 5.3
and 5.5; or
(b) voluntarily within 90 days, following:
i. any reduction in Executive's Current Salary other than
pursuant to a general reduction of Executives' salaries; or
ii. any material reduction in the benefits provided to the
Executive pursuant to Sections 3.2, 3.3 and 4. It is the intent that this
provision will in no way limit the ability of the Company to reasonably alter,
which would include a reasonable reduction in benefits on account of a Change in
Control without triggering the Severance Award, provided that any such
alteration is uniformly applied to all similarly situated executives; or
iii. any relocation to which Executive has not agreed to an
office of the Company or related entity more than sixty (60) miles from the
office where the Executive was located at the time of the Change in Control or
any increase in Executive's required travel amounting to a constructive
relocation; or
Page 4 of 10
<PAGE> 5
iv. following a Change in Control, any material reduction
in the level of responsibility, position (including status, office, title,
reporting relationships or working conditions), authority or duties of the
Executive with the Company from that as existed within ninety (90) days
preceding the date of Change in Control. The intent of this provision is that
the Executive, following a Change in Control, will have a materially comparable
position with the Company or a successor or related entity as existed within
ninety (90) days preceding the date of Change in Control and that changes in
level of responsibility, position, authority or duties which are consistent with
the Change in Control will not be construed as constituting a material
reduction. If Executive believes that a material change has occurred, Executive
shall provide the Company or a successor or related entity with a notice and a
reasonable opportunity to cure (not to exceed forty-five (45) business days); or
(c). voluntarily within 90 days if, following a Change in Control, the
Company or any successor of the Company either announces that it will not honor
or cause the Company or any successor of the Company to not honor the terms of
this Agreement, or if the Company or any successor of the Company or related
entity at any time fails to confirm in writing to Executive, within forty-five
(45) business days of a request by the Executive, that it will honor the terms
of this agreement.
6. Severance Award:
The Severance Award, which shall be in lieu of additional
payments under this Agreement, shall consist of the following:
6.1 The Executive will be paid a sum (in equal monthly
installments) equal to the product of one month's Current Salary times the
number of years, including fractional years, employed by the Company or any of
its successor or affiliates not to exceed six (6) months Current Salary;
provided that, in the event the Executive's employment is terminated pursuant to
Section 5.6(b) or 5.6(c), the Executive will be paid a sum (in equal monthly
installments) equal to the product of two months Current Salary times the number
of years, including fractional years, employed by the Company or any of its
successor or affiliates. Such amount not to exceed twelve (12) months Current
Salary. Payments shall commence not later than thirty (30) days after the
Executive's date of termination.
6.2 All payments received pursuant to Section 5 or this
Section 6 shall be treated as salary for purposes of the Company's 401(k)
Savings Plan to the extent permitted by law.
6.3 Any amounts owed to the Company or any of its successors,
pursuant to the Employee Stock Option Exercise Plan, shall be canceled as to
interest and principal upon return by the Executive of the common stock securing
such obligations.
6.4 The Executive will receive continuation of all benefits
being provided at the time of termination pursuant to Section 4 for the number
of months computed by multiplying the number of full and fractional years
employed by the Company times two (2) but not to exceed twelve (12)
Page 5 of 10
<PAGE> 6
months.
6.5 Following a Change in Control, the Executive will fully
vest in any stock options or equity equivalents held by the Executive that are
not fully vested and exercisable on the Executive's date of termination. Should
any stock option or equity equivalent document contain a Change in Control
clause, then such clause shall supercede this clause 6.5.
7. Confidential Information:
7.1 The Executive agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not employed by the
Company or not engaged to render services to the Company, except with the prior
consent of the Board of Directors of the Company, any confidential information
obtained by him while in the employ of the Company, including, without
limitation, information relating to any of the Company's inventions, processes,
plans, devices, compilations of information, methods of distribution, customers,
client relationships, marketing strategies or trade secrets; provided, however,
that this provision shall not apply to any information or data which hereafter
becomes public information and shall not preclude the Executive from use or
disclosure of information for proper business purposes during the term of his
employment or from disclosure required by law or court order. This Section 7.1
shall be in addition to, and not in limitation or derogation of, any obligations
otherwise imposed by law upon the Executive in respect of confidential
information and trade secrets of the Company.
7.2 The Executive also agrees that, upon leaving the Company's
employ, he will not take with him, without the prior written consent of an
officer authorized to act in the matter by the Board of Directors of the
Company, and he will surrender to the Company, any record, list, drawing,
blueprint, specification or other document or property of the Company, together
with any copy and reproduction thereof, mechanical or otherwise, which is of a
confidential nature relating to the Company, or, without limitation, relating to
its or their methods of distribution, client relationships, marketing strategies
or any description of inventions, devices or processes, or which was produced,
developed or obtained by him or entrusted to him during the course of his
employment with the Company.
7.3 Should the Executive breach the terms and conditions of
Sections 7.1 and 7.2, then all amounts being paid pursuant to Section 6 shall be
terminated.
8. Competition:
8.1 The Executive agrees that he will not engage in
Competition, as defined in Section 8.2 below, during the period immediately
following the Executive's date of termination for the period over which the
Executive is entitled to receive severance payments pursuant to Section 6.1.
Should the Executive breach this section all amounts being paid pursuant to
Section 6 shall be terminated.
8.2 The word "Competition" for purposes of this Section 8
shall mean (a) directly or
Page 6 of 10
<PAGE> 7
indirectly, as a principal, partner, agent, director, employee, consultant, or
in any other capacity, to engage, participate or become interested in,
affiliated with or connected with, or render services to, furnish any aid,
assistance or advice to any person, corporation, firm or other organization
which is engaged in any business competitive with any type of business conducted
by the Company during the term of the Executive's employment (hereinafter a
"Competitor"), in any geographical area in which the Company is engaging in
business or is soliciting business; provided, however, that in no event shall
ownership of less than five (5%) of the outstanding capital stock of a
corporation in the management of which the Executive is not active be deemed
Competition with the Company within the meaning of this Section 8; or (b)
solicit any person who is a customer of the businesses conducted by the Company,
or that is solicited by the Company at any time during the term of Executive's
employment, to do business with a Competitor; or (c)induce or attempt to
persuade any employee of the Company to terminate his employment relationship in
order to enter into employment with a Competitor.
9. Injunctive Relief:
The Executive acknowledges that monetary damages will not
adequately compensate the Company for any violation of Sections 7 and 8 hereof
and consents to the entry of an injunction in any court of competent
jurisdiction to enforce the provision of Section 7 and 8 hereof.
10. Withholding:
Anything to the contrary notwithstanding, all payments
required to be made by the Company under this Agreement to the Executive or his
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
11. Nonassignability:
No right or benefit under this Agreement shall be assigned,
transferred, pledged or encumbered (a) by the Executive, or (b) by the Company,
except that the Company may assign this Agreement and all of its rights
hereunder to any entity with which it may merge or consolidate or to which it
may sell all or substantially all of its assets provided said entity shall
assume (by contract or by operation of law) the Company's obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Executive, his heirs
and legal representatives.
12. Notices:
Any notice, request, or other communication given hereunder
shall be in writing and, if given by the Executive to the Company, shall be
delivered personally or sent by telefax, by overnight delivery, or by certified
or registered mail, postage prepaid, addressed to the Company at its executive
offices located at the address hereinabove specified, Attention: President; and,
if given
Page 7 of 10
<PAGE> 8
by the Company to Executive, shall be delivered personally or sent by telefax,
by overnight delivery, or by certified or registered mail, postage prepaid,
addressed to the Executive at his residence address hereinabove specified.
Either party may change the address to which notices, requests and other
communications are to be addressed by notice given to the other in accordance
with the provisions of this Section 12. Notices, requests and other
communications shall be deemed to be given when received, which, in the case of
notice given by mail, shall be the time indicated on the receipt thereof.
13. Amendment or Modification; Waiver:
No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Board of Directors of the Company or any authorized committee of the Board of
Directors and shall be agreed to in writing, signed by the Executive and by an
officer of the Company thereunto duly authorized. No waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
subsequent breach of such condition or provision or a waiver of a similar or
dissimilar provision or condition at the same time or at any prior or subsequent
time.
14. Severability:
Anything in this Agreement to the contrary notwithstanding:
14.1 In the event that any provision of this Agreement, or
portion thereof, shall be determined to be invalid or unenforceable for any
reason, in whole or in part, such provision or portion thereof shall be deemed
modified to the extent necessary to render it valid while most nearly preserving
its original intent, and the remaining provisions of this Agreement and parts of
such provision not so invalid or unenforceable shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law;
14.2 Any provision of this Agreement, or portion thereof,
which may be invalid or unenforceable in any jurisdiction shall be limited by
construction thereof, to the end that such provision, or portion thereof, shall
be valid and enforceable in such jurisdiction; and
14.3 Any provision of this Agreement, or portion thereof,
which may for any reason be invalid or unenforceable in any jurisdiction shall
remain in effect and be enforceable in any jurisdiction in which such provision,
or portion thereof, shall be valid and enforceable.
15. Entire Agreement:
This Agreement constitutes the entire agreement of the parties
to this Agreement with respect to its subject matter, supersedes all prior
agreements, if any, of the parties to this Agreement with respect to its subject
matter, and may not be amended except as may be provided for in Section 13.
Page 8 of 10
<PAGE> 9
16. Applicable Law:
This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey applicable to contracts made
and performed in New Jersey.
17. Change in Control:
For purposes of this Agreement, "Change in Control" shall be
deemed to have occurred if:
i. any person, firm or corporation acquires directly or
indirectly the Beneficial Ownership (as defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) of any voting security of the
Company and immediately after such acquisition, the acquirer has Beneficial
Ownership of voting securities representing 50% or more of the total voting
power of all the then-outstanding voting securities of the Company;
ii. the individuals (a) who, as of the date of this
Agreement constitute the Board of Directors of the Company (the "Original
Directors") or (b) who thereafter are elected to the Board and whose election,
or nomination for election, to the Board was approved by a vote of at least 2/3
of the Original Directors then still in office (such Directors being called
"Additional Original Directors") or (c)who are elected to the Board and whose
election or nomination for election to the Board was approved by a vote of at
least 2/3 of the Original Directors and Additional Original Directors then still
in office, cease for any reason to constitute at least 3 of the members of the
Board;
iii. the stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization of the Company or consummation
of any such transaction if stockholder approval is not sought or obtained, other
than any such transaction which would result in at least 51% of the total voting
power represented by the voting securities of the surviving entity outstanding
immediately after such transaction being Beneficially Owned by holders of the
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder relative to
such other continuing holder being not altered substantially in the transaction;
or
iv. the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or a substantial portion of the Company's assets (i.e. 50%
or more in value of the total assets of the Company).
v. the Chief Executive Officer of the Company, at the time
of the execution of this Employment Agreement, ceases to be employed by the
Company.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
Executive and on behalf of the Company by its duly authorized officer, all as of
the date and year first above written.
Page 9 of 10
<PAGE> 10
BARRINGER TECHNOLOGIES INC.
BY:
-------------------------------------
Name:
Title:
----------------------------------------
EXECUTIVE
Page 10 of 10
<PAGE> 1
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective as specified herein, between Barringer
Technologies Inc., a Delaware corporation (including any of its subsidiaries,
collectively the "Company"), located at 219 South Street, New Providence, New
Jersey 07974 and ("Executive") residing at .
NOW, THEREFORE, in consideration of the terms and mutual undertakings
herein contained, it is agreed by and between the Company and Executive as
follows:
1. Effective Date and Term of Employment:
This Agreement shall become effective on November 1, 1996 and
shall supersede any other agreements, if any, now in effect. This Agreement
shall remain in effect until the close of business one year from such effective
date ("Agreement Expiration Date"); provided, however, that on the Agreement
Expiration Date and on each anniversary of the Agreement Expiration Date (a
"Renewal Date"), this Agreement shall be renewed for a period of one additional
consecutive year unless either the Company or Executive provides written notice
to the other party at least ninety (90) days prior to a Renewal Date that the
Agreement shall terminate without renewal as of the corresponding Agreement
Expiration Date. When the Agreement extends for a period of one additional
consecutive year, the Agreement Expiration Date shall also extend by one year.
2. Duties and Responsibilities:
2.1 Executive will continue to serve as of the
Company and, as such, shall have such functions, duties and responsibilities,
not inconsistent with his title and office, as may be assigned to him by or
under the authority of the Board of Directors of the Company, and shall have
such authority and power as is necessary or appropriate to carry out his
assigned duties.
2.2 During the term of this Agreement the Executive shall,
without compensation other than that herein provided, also serve and continue to
serve, if and when elected and re-elected, as a director or member of any
committee of the Company and as an officer, director and/or member of any
committee of any subsidiary or affiliate of the Company.
2.3 During the term of this Agreement the Executive shall
devote his full time and undivided attention during normal business hours to the
business and affairs of the Company; provided however, that the Executive may
engage in charitable, educational, religious, civic and similar types of
activities (all of which shall be deemed to benefit the Company), speaking
engagements, memberships on the board of directors of other organizations, and
similar activities to the extent that such activities do not inhibit or prohibit
the performance of his duties hereunder or inhibit or conflict in any material
way with the business of the Company.
Page 1 of 10
<PAGE> 2
2.4 The Executive's principal place of employment shall be at
the Company's principal executive offices in New Providence, New Jersey, or at
such other location in the New Jersey/New York metropolitan area as the Company
may determine to relocate its principal executive offices.
3. Compensation and Benefits:
3.1 For all services rendered by the Executive in any capacity
during the term of this Agreement, the Executive shall be paid as compensation a
base salary, payable semi-monthly, at the rate of $ per annum ("Base
Salary"), which amount shall be reviewed by the Board of Directors annually as
of January 1, of each year and which may be increased at the discretion of the
Board of Directors. Such increased amount to be referred to hereinafter as
Current Salary.
3.2 The Executive shall be eligible to participate in the
Company's management cash bonus incentive arrangement from time to time in
effect and payable with respect to the immediately preceding full calendar year
on or before April 1 of each year; provided that for the purposes of this
Section 3.2 the term of this Agreement shall be deemed to have commenced on
January 1, 1996.
3.3 During the term of this Agreement the Executive shall be
entitled to all benefits, including without limitation, a private office,
secretarial, computer and other support services and facilities consistent with
his title and office, and to all fringe benefits generally made available to
executive officers of the Company. The Executive shall also be entitled to
reimbursement in accordance with the policies of the Company, upon proper
accounting, of ordinary and necessary expenses and disbursements reasonably
incurred by him in the course of his duties, to paid holidays in accordance with
the policies of the Company, and to paid vacation of four (4) weeks per year.
Should the Executive not use his entire annual vacation, he will be allowed to
carry over to the next year up to two (2) weeks of such unused vacation.
4. Employee Benefit Plans:
The Executive, his dependents and beneficiaries shall be
entitled to participate in all employee benefit plans to which officers of the
Company, their dependents and beneficiaries, are entitled during the term of
this Agreement, including, without limitation, medical and health insurance and
welfare plans, pension plans and other present or equivalent successor plans and
practices of the Company for which officers, their dependents and beneficiaries
are eligible, and to all payments or other benefits under any such plan or
practices subsequent to the term of this Agreement as a result of participation
in such plan or practice during the term of this Agreement.
5. Termination of Employment:
5.1 The Executive's employment under this Agreement shall
terminate upon the Executive's death or legal incapacity. In such event, the
Executive or his legal representative shall be entitled to that portion of his
Current Salary accrued to or payable as of the end of the month
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during which such termination occurs. In addition, the Executive or his legal
representative shall be entitled to any accrued and unpaid vacation including
any allowable carry over, and to the pro-rata portion of any compensation due
pursuant to Section 3.2 that is earned in the year of death or legal incapacity.
5.2 The Company, may at its option, terminate the Executive's
employment under this Agreement if the Executive shall fail, or if the Board of
Directors shall find on the basis of medical evidence reasonably satisfactory to
it that the Executive is unable, by virtue or reason of physical injury or
physical or mental illness, to perform his duties hereunder on a full-time basis
for a period of ninety (90) consecutive days or more during any two hundred
seventy (270) day period or that the Executive's group and supplemental
long-term disability coverage, if any, as provided by the Company, commences the
payment of benefits. In such event, the Executive shall be entitled to that
portion of his Current Salary accrued to or payable as of the date of such
termination. In addition, the Executive shall be entitled to any accrued and
unpaid vacation including allowable carry over, and to the pro-rata portion of
any compensation due pursuant to Section 3.2 that is earned in the year of such
termination.
5.3 (a) The Company may terminate the Executive's employment
hereunder at any time for "cause", which includes but is not limited to the
following reasons:
i. an act or acts of dishonesty on the part of the
Executive constituting a felony or resulting or intended to result directly or
indirectly in gains or personal enrichment at the expense of the Company;
ii. the continued willful failure by the Executive to
perform substantially his duties with the Company (other than any such failure
resulting from his incapacity due to physical injury or physical or mental
illness) or a continuing material breach by the Executive of his obligations
hereunder for a period of thirty (30) days after a demand for substantial
performance is delivered to the Executive on behalf of the Board of Directors
which specifically identifies the manner in which the Board of Directors
believes that the Executive has not substantially performed his duties;
iii. willful abuse of corporate power, willful neglect or
willful misconduct in the performance of the Executive's duties and obligations
to the Company.
(b) For purposes of clauses ii and iii of Section 5.3(a),
no act, or failure to act, on the part of the Executive shall be considered
"willful" unless done or omitted to be done by the Executive without reasonable
belief in good faith that his action or omission was in, or not opposed to, the
best interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively presumed to have been
done or omitted to have been done by the Executive in good faith and in the best
interests of the Company, unless such action by the Board of Directors was taken
upon the recommendation of the Executive upon information provided by the
Executive which the Executive knew to be false or upon the omission of material
facts by the Executive, which facts
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would have been adverse to the Executive's recommendation.
In such event, the Executive or his legal representative shall be
entitled to that portion of his Current Salary accrued to or payable as of the
date of termination. In addition, the Executive shall be entitled to any accrued
and unpaid vacation including any allowable carryover.
5.4 The Company may terminate the Executive's employment
hereunder at any time, with or without cause, upon at least thirty (30) days
prior written notice to the Executive. In such event, the Executive or his legal
representative shall be entitled to receive his Current Salary until the
applicable Agreement Expiration Date and the pro-rata portion of any
compensation due pursuant to Section 3.2 that is earned in the year of such
termination. In addition, the Executive shall be entitled to any accrued and
unpaid vacation including any allowable carryover.
5.5 The Executive may voluntarily terminate the Executive's
employment hereunder at any time without cause upon at least ninety (90) days
prior written notice to the Company. Upon receipt of the ninety (90) day notice,
the Company may, at its option, terminate the Executive during such ninety (90)
day period. In such event, the Executive or his legal representative shall be
entitled to that portion of his Current Salary accrued to or payable as of the
date of termination. In addition, the Executive shall be entitled to any accrued
and unpaid vacation including any allowable carry over.
5.6 The severance payments described in Section 6 ("Severance
Award") shall be payable to the Executive if Executive's employment with the
Company terminates during the term of this Agreement or, if the Company does not
renew this agreement such non-renewal will be deemed to be a termination without
cause, or for any of the following reasons:
(a) involuntarily, other than pursuant to Sections 5.1, 5.2, 5.3
and 5.5; or
(b) voluntarily within 90 days, following:
i. any reduction in Executive's Current Salary other than
pursuant to a general reduction of Executives' salaries; or
ii. any material reduction in the benefits provided to the
Executive pursuant to Sections 3.2, 3.3 and 4. It is the intent that this
provision will in no way limit the ability of the Company to reasonably alter,
which would include a reasonable reduction in benefits on account of a Change in
Control without triggering the Severance Award, provided that any such
alteration is uniformly applied to all similarly situated executives; or
iii. any relocation to which Executive has not agreed to an
office of the Company or related entity more than sixty (60) miles from the
office where the Executive was located at the time of the Change in Control or
any increase in Executive's required travel amounting to a constructive
relocation; or
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iv. following a Change in Control, any material reduction
in the level of responsibility, position (including status, office, title,
reporting relationships or working conditions), authority or duties of the
Executive with the Company from that as existed within ninety (90) days
preceding the date of Change in Control. The intent of this provision is that
the Executive, following a Change in Control, will have a materially comparable
position with the Company or a successor or related entity as existed within
ninety (90) days preceding the date of Change in Control and that changes in
level of responsibility, position, authority or duties which are consistent with
the Change in Control will not be construed as constituting a material
reduction. If Executive believes that a material change has occurred, Executive
shall provide the Company or a successor or related entity with a notice and a
reasonable opportunity to cure (not to exceed forty-five (45) business days); or
(c). voluntarily within 90 days if, following a Change in Control, the
Company or any successor of the Company either announces that it will not honor
or cause the Company or any successor of the Company to not honor the terms of
this Agreement, or if the Company or any successor of the Company or related
entity at any time fails to confirm in writing to Executive, within forty-five
(45) business days of a request by the Executive, that it will honor the terms
of this agreement.
6. Severance Award:
The Severance Award, which shall be in lieu of additional
payments under this Agreement, shall consist of the following:
6.1 The Executive will be paid a sum (in equal monthly
installments) equal to the product of one month's Current Salary times the
number of years, including fractional years, employed by the Company or any of
its successor or affiliates not to exceed six (6) months Current Salary;
provided that, in the event the Executive's employment is terminated pursuant to
Section 5.6(b) or 5.6(c), the Executive will be paid a sum (in equal monthly
installments) equal to the product of two months Current Salary times the number
of years, including fractional years, employed by the Company or any of its
successor or affiliates. Such amount not to exceed twelve (12) months Current
Salary. Payments shall commence not later than thirty (30) days after the
Executive's date of termination.
6.2 All payments received pursuant to Section 5 or this
Section 6 shall be treated as salary for purposes of the Company's 401(k)
Savings Plan to the extent permitted by law.
6.3 Any amounts owed to the Company or any of its successors,
pursuant to the Employee Stock Option Exercise Plan, shall be canceled as to
interest and principal upon return by the Executive of the common stock securing
such obligations.
6.4 The Executive will receive continuation of all benefits
being provided at the time of termination pursuant to Section 4 for the number
of months computed by multiplying the number of full and fractional years
employed by the Company times two (2) but not to exceed twelve (12)
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months.
6.5 Following a Change in Control, the Executive will fully
vest in any stock options or equity equivalents held by the Executive that are
not fully vested and exercisable on the Executive's date of termination. Should
any stock option or equity equivalent document contain a Change in Control
clause, then such clause shall supercede this clause 6.5.
7. Confidential Information:
7.1 The Executive agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not employed by the
Company or not engaged to render services to the Company, except with the prior
consent of the Board of Directors of the Company, any confidential information
obtained by him while in the employ of the Company, including, without
limitation, information relating to any of the Company's inventions, processes,
plans, devices, compilations of information, methods of distribution, customers,
client relationships, marketing strategies or trade secrets; provided, however,
that this provision shall not apply to any information or data which hereafter
becomes public information and shall not preclude the Executive from use or
disclosure of information for proper business purposes during the term of his
employment or from disclosure required by law or court order. This Section 7.1
shall be in addition to, and not in limitation or derogation of, any obligations
otherwise imposed by law upon the Executive in respect of confidential
information and trade secrets of the Company.
7.2 The Executive also agrees that, upon leaving the Company's
employ, he will not take with him, without the prior written consent of an
officer authorized to act in the matter by the Board of Directors of the
Company, and he will surrender to the Company, any record, list, drawing,
blueprint, specification or other document or property of the Company, together
with any copy and reproduction thereof, mechanical or otherwise, which is of a
confidential nature relating to the Company, or, without limitation, relating to
its or their methods of distribution, client relationships, marketing strategies
or any description of inventions, devices or processes, or which was produced,
developed or obtained by him or entrusted to him during the course of his
employment with the Company.
7.3 Should the Executive breach the terms and conditions of
Sections 7.1 and 7.2, then all amounts being paid pursuant to Section 6 shall be
terminated.
8. Competition:
8.1 The Executive agrees that he will not engage in
Competition, as defined in Section 8.2 below, during the period immediately
following the Executive's date of termination for the period over which the
Executive is entitled to receive severance payments pursuant to Section 6.1.
Should the Executive breach this section all amounts being paid pursuant to
Section 6 shall be terminated.
8.2 The word "Competition" for purposes of this Section 8
shall mean (a) directly or
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indirectly, as a principal, partner, agent, director, employee, consultant, or
in any other capacity, to engage, participate or become interested in,
affiliated with or connected with, or render services to, furnish any aid,
assistance or advice to any person, corporation, firm or other organization
which is engaged in any business competitive with any type of business conducted
by the Company during the term of the Executive's employment (hereinafter a
"Competitor"), in any geographical area in which the Company is engaging in
business or is soliciting business; provided, however, that in no event shall
ownership of less than five (5%) of the outstanding capital stock of a
corporation in the management of which the Executive is not active be deemed
Competition with the Company within the meaning of this Section 8; or (b)
solicit any person who is a customer of the businesses conducted by the Company,
or that is solicited by the Company at any time during the term of Executive's
employment, to do business with a Competitor; or (c)induce or attempt to
persuade any employee of the Company to terminate his employment relationship in
order to enter into employment with a Competitor.
9. Injunctive Relief:
The Executive acknowledges that monetary damages will not
adequately compensate the Company for any violation of Sections 7 and 8 hereof
and consents to the entry of an injunction in any court of competent
jurisdiction to enforce the provision of Section 7 and 8 hereof.
10. Withholding:
Anything to the contrary notwithstanding, all payments
required to be made by the Company under this Agreement to the Executive or his
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
11. Nonassignability:
No right or benefit under this Agreement shall be assigned,
transferred, pledged or encumbered (a) by the Executive, or (b) by the Company,
except that the Company may assign this Agreement and all of its rights
hereunder to any entity with which it may merge or consolidate or to which it
may sell all or substantially all of its assets provided said entity shall
assume (by contract or by operation of law) the Company's obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Executive, his heirs
and legal representatives.
12. Notices:
Any notice, request, or other communication given hereunder
shall be in writing and, if given by the Executive to the Company, shall be
delivered personally or sent by telefax, by overnight delivery, or by certified
or registered mail, postage prepaid, addressed to the Company at its executive
offices located at the address hereinabove specified, Attention: President; and,
if given
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by the Company to Executive, shall be delivered personally or sent by telefax,
by overnight delivery, or by certified or registered mail, postage prepaid,
addressed to the Executive at his residence address hereinabove specified.
Either party may change the address to which notices, requests and other
communications are to be addressed by notice given to the other in accordance
with the provisions of this Section 12. Notices, requests and other
communications shall be deemed to be given when received, which, in the case of
notice given by mail, shall be the time indicated on the receipt thereof.
13. Amendment or Modification; Waiver:
No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Board of Directors of the Company or any authorized committee of the Board of
Directors and shall be agreed to in writing, signed by the Executive and by an
officer of the Company thereunto duly authorized. No waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
subsequent breach of such condition or provision or a waiver of a similar or
dissimilar provision or condition at the same time or at any prior or subsequent
time.
14. Severability:
Anything in this Agreement to the contrary notwithstanding:
14.1 In the event that any provision of this Agreement, or
portion thereof, shall be determined to be invalid or unenforceable for any
reason, in whole or in part, such provision or portion thereof shall be deemed
modified to the extent necessary to render it valid while most nearly preserving
its original intent, and the remaining provisions of this Agreement and parts of
such provision not so invalid or unenforceable shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law;
14.2 Any provision of this Agreement, or portion thereof,
which may be invalid or unenforceable in any jurisdiction shall be limited by
construction thereof, to the end that such provision, or portion thereof, shall
be valid and enforceable in such jurisdiction; and
14.3 Any provision of this Agreement, or portion thereof,
which may for any reason be invalid or unenforceable in any jurisdiction shall
remain in effect and be enforceable in any jurisdiction in which such provision,
or portion thereof, shall be valid and enforceable.
15. Entire Agreement:
This Agreement constitutes the entire agreement of the parties
to this Agreement with respect to its subject matter, supersedes all prior
agreements, if any, of the parties to this Agreement with respect to its subject
matter, and may not be amended except as may be provided for in Section 13.
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16. Applicable Law:
This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey applicable to contracts made
and performed in New Jersey.
17. Change in Control:
For purposes of this Agreement, "Change in Control" shall be
deemed to have occurred if:
i. any person, firm or corporation acquires directly or
indirectly the Beneficial Ownership (as defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) of any voting security of the
Company and immediately after such acquisition, the acquirer has Beneficial
Ownership of voting securities representing 50% or more of the total voting
power of all the then-outstanding voting securities of the Company;
ii. the individuals (a) who, as of the date of this
Agreement constitute the Board of Directors of the Company (the "Original
Directors") or (b) who thereafter are elected to the Board and whose election,
or nomination for election, to the Board was approved by a vote of at least 2/3
of the Original Directors then still in office (such Directors being called
"Additional Original Directors") or (c)who are elected to the Board and whose
election or nomination for election to the Board was approved by a vote of at
least 2/3 of the Original Directors and Additional Original Directors then still
in office, cease for any reason to constitute at least 3 of the members of the
Board;
iii. the stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization of the Company or consummation
of any such transaction if stockholder approval is not sought or obtained, other
than any such transaction which would result in at least 51% of the total voting
power represented by the voting securities of the surviving entity outstanding
immediately after such transaction being Beneficially Owned by holders of the
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder relative to
such other continuing holder being not altered substantially in the transaction;
or
iv. the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or a substantial portion of the Company's assets (i.e. 50%
or more in value of the total assets of the Company).
v. the Chief Executive Officer of the Company, at the time
of the execution of this Employment Agreement, ceases to be employed by the
Company.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
Executive and on behalf of the Company by its duly authorized officer, all as of
the date and year first above written.
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BARRINGER TECHNOLOGIES INC.
BY:
-------------------------------------
Name:
Title:
----------------------------------------
EXECUTIVE
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EXHIBIT 21
BARRINGER TECHNOLOGIES INC.
LIST OF SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
Barringer Instruments, Inc. Delaware
Barringer Consumer Products, LLC New Jersey
Barringer Research Ltd. Ontario, Canada
Barringer Europe, SARL France
Barringer Instruments UK, Ltd. United Kingdom
Barringer Instruments Ltd. Ontario, Canada
