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UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. 1)*
BIGMAR, INC.
(Name of Issuer)
COMMON STOCK, $0.001 PAR VALUE
(Title of Class of Securities)
089893 10 1
(CUSIP Number)
CYNTHIA R. MAY
JERICHO II, LLC
13260 SPENCER ROAD
HEMLOCK, MICHIGAN 48626
(517) 797-5502
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
OCTOBER 21, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [_]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 10 pages)
_______________________
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
- -----------------------
CUSIP NO. 089893 10 1
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
JERICHO II, LLC IRS IDENTIFICATION NO. 38-3328404
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
Not Applicable
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Michigan
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 5,192,308
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 5,192,308
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,192,308
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
55.4%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 10 pages
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SCHEDULE 13D
- -----------------------
CUSIP NO. 089893 10 1
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CYNTHIA R. MAY
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
Not Applicable
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
5,209,908
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
5,209,908
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,209,908
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
55.5%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D (the "Statement") relates to shares of
common stock, par value $.001 per share ("Common Stock") of Bigmar, Inc.
("Bigmar" or the "Issuer"), a Delaware corporation. The principal executive
offices of the Issuer are located at 9711 Sportsman Club Road, Johnstown, Ohio
43031.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c) and (f) This statement is being filed by Jericho II LLC
("Jericho"), a Michigan limited liability company and Cynthia R. May, a member
of Jericho.
The principal executive offices of Jericho are located at 13260 Spencer
Road, Hemlock, Michigan 48626. Jericho is a private company engaged in investing
the funds of its principals in equity and debt securities. The name, principal
occupation, business address and citizenship of each of the members of Jericho
is set forth on Schedule I hereto.
Ms. May is a director of Saginaw Control & Engineers; her business address
is 95 Midland Road, Saginaw, Michigan 48603. Ms. May is a citizen of the United
States. Ms. May has the sole power to manage and trade, and otherwise buy, sell,
assign, and endorse for transfer the shares of Bigmar held by and issuable to
Jericho. In addition, Ms. May is also a member of GRQ, LLC ("GRQ"), a Michigan
limited liability company and has the sole power to manage and trade, and
otherwise buy, sell, assign, and endorse for transfer shares of Bigmar held
by GRQ.
(d) and (e) During the last five years, neither Ms. May, Jericho nor, to
the best of Jericho's knowledge, any of the individuals named in Schedule I
hereto, has been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As more fully described in Item 4 below, Jericho holds a currently
exercisable Common Stock Warrant and a currently exercisable Preferred Stock
Warrant (each as defined below and collectively, the "Warrants"), representing
the right to purchase up to an aggregate of 1,500,000 shares of newly issued
Bigmar Common Stock. Jericho used working capital to acquire the Common Stock
Warrant and received the Preferred Stock Warrant in exchange for guaranteeing
certain obligations of Bigmar. Should Jericho purchase Bigmar Common Stock or
Preferred Stock pursuant to the Warrants, Jericho expects that it would finance
such purchase from various sources, including cash on hand or the liquidation of
securities held by Jericho.
Pursuant to the terms of the Stock Purchase Agreement dated October 20,
1998, Jericho acquired 3,692,308 shares of Bigmar Common Stock for a total
consideration of $6,000,000. The purchase was financed using working capital.
On various dates from August 12, 1998 to October 6, 1998 GRQ purchased, for
$34,081.26, an aggregate of 17,600 shares of Common Stock of Bigmar in
open-market purchases using its working capital.
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ITEM 4. PURPOSE OF TRANSACTION
COMMON STOCK WARRANT. On October 23, 1997, Protyde Pharmaceuticals, Inc.
("Protyde"), a Delaware corporation, sold to Jericho a Warrant to purchase
500,000 shares of Common Stock of Bigmar (the "Common Stock Warrant") in
exchange for a payment of $10,000 by Jericho to Protyde. The Common Stock
Warrant has an exercise price of $5.00 per share and expires on July 24, 2002.
The Common Stock Warrant is filed as Exhibit 1 hereto.
PREFERRED STOCK WARRANT. Jericho received a warrant to purchase 1,000,000 shares
of Bigmar's Series A Convertible Preferred Stock ("Preferred Stock") on May 28,
1998 (the "Preferred Stock Warrant"), as consideration for the execution and
delivery of a guaranty by Jericho of Bigmar's obligations to a commercial bank
in the amount of up to $6,000,000. The Preferred Stock Warrant has a term of ten
years and is currently exercisable at the price of $2.5625 per share. The
Preferred Stock is convertible to Common Stock on a one-to-one basis. The
conversion rate of the Preferred Stock will adjust for stock splits, dividends,
combinations and similar events as well as an anti-dilution adjustment for
issuances below $2.5625. The Preferred Stock votes together with the Common
Stock and outstanding shares of Preferred Stock carry a vote equal to five times
the number of shares of Common Stock into which the Preferred Stock is then
convertible. The Preferred Stock has a liquidation preference equal to $2.5625
per share. The Preferred Stock Warrants include a net exercise clause which
permits the holder to convert the Preferred Stock Warrants into a number of
shares of Common Stock having a fair market value equal to the spread between
the exercise price and then fair market value of the Bigmar Common Stock. The
Preferred Stock Warrant also provides that shares of Common Stock issued on
conversion of the Preferred Stock are entitled to certain piggyback registration
rights. The Preferred Stock Warrant is filed as Exhibit 2 hereto. The
Certificate of Designation, Preferences and Rights of the Preferred Stock is
filed as Exhibit 3 hereto.
The foregoing summary of the contents of the Warrants is qualified in its
entirety by reference to the exhibits hereto.
COMMON STOCK PURCHASE BY JERICHO: Pursuant to the Stock Purchase Agreement dated
October 20, 1998 Jericho purchased, for investment purposes, 3,692,308 shares of
Bigmar common stock for a total purchase price of $6,000,000. The Stock Purchase
Agreement is attached as Exhibit 4 hereto.
Common Stock Purchases by GRQ: On various dates from August 12, 1998 to
October 6, 1998 GRQ purchased, for investment purposes, an aggregate of 17,600
shares of Common Stock of Bigmar in open-market transactions for $34,081.26.
Except as set forth in this Item 4, neither Ms. May, Jericho nor, to the
best of Jericho's knowledge, any of the individuals named in Schedule I hereto,
has any plans or proposals that relate to or that would result in any of the
actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) and (b) Jericho owns beneficially 5,192,308 shares of Bigmar Common Stock.
These shares include (i) a Common Stock Warrant for the purchase of 500,000
shares at a price of $5.00 per share, (ii) a Preferred Stock Warrant for the
purchase of 1,000,000 shares at a price of $2.5625 per share, and (iii)
3,692,308 shares of Common Stock. In the aggregate, assuming exercise of the
Warrants, Jericho may thus be deemed the beneficial owner of approximately 55.4%
of the aggregate of (i) the 4,185,000 shares of Bigmar Common Stock outstanding
on August 14, 1998 (as reported on Bigmar's Quarterly Report on Form 10-Q for
the quarterly period ending June 30, 1998)
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plus (ii) the 1,500,000 shares issuable on exercise of the Warrants, plus (iii)
the 3,692,308 shares acquired pursuant to the Stock Purchase Agreement dated
October 20, 1998.
Cynthia May, owns beneficially 5,209,908 shares of Bigmar Common stock.
These shares include, (i) 3,692,308 shares of Bigmar Common Stock held of record
by Jericho, over which Ms. May has sole investment and dispositive power, (ii)
the Common Stock Warrant held by Jericho for the purchase of 500,000 shares of
Bigmar Common Stock, (iii) the Preferred Stock Warrant held by Jericho for the
purchase of 1,000,000 shares of Bigmar Preferred Stock, and (iv) 17,600 shares
of Bigmar Common Stock held of record by GRQ, LLC, over which Ms. May has sole
investment and dispositive power. In the aggregate, assuming exercise of the
Warrants by Jericho, Ms. May would thus be deemed the beneficial owner of
approximately 55.5% of (i) the 4,185,000 shares of Bigmar Common Stock
outstanding on August 14, 1998 (as reported on Bigmar's Quarterly Report on Form
10-Q for the quarterly period ending June 30, 1998) plus (ii) the 1,500,000
shares issuable on exercise of the Warrants, plus (iii) the 3,692,308 shares
acquired pursuant to the Stock Purchase Agreement dated October 20, 1998.
John Tramontana, a member of Jericho and the President and Chief Executive
Officer of Bigmar is the beneficial owner of 2,392,031 shares of Bigmar, which
includes 125,000 shares issuable on exercise of currently exercisable options.
Except as set forth above, neither Cynthia May, Jericho nor, to the best of
Jericho's knowledge, any of the individuals named in Schedule I hereto, is the
beneficial owner of Bigmar Common Stock.
(c) Pursuant to the Stock Purchase Agreement dated October 20, 1998,
Jericho purchased 3,692,308 shares of Bigmar Common Stock at approximately
$1.625 per share for a total purchase price of $6,000,000.
During the past sixty days, GRQ has executed several open-market purchases
of Bigmar Common Stock representing a total of 12,100 shares for an aggregate
purchase price of $21,768.75. The transactions were as follows: (i) 2,000 shares
purchased for $2.0625 per share on September 17, 1998, (ii) 500 shares purchased
for $2.0625 per share on September 18, 1998, (iii) 600 shares purchased for
$2.0625 per share on September 21, 1998, (iv) 3,000 shares purchased for $1.625
per share on October 6, 1998, (v) 6,000 shares purchased for $1.75 per share on
October 6, 1998.
Except as set forth above, neither Cynthia May, Jericho nor, to the best of
Jericho's knowledge, any of the individuals named in Schedule I hereto, has
effected any transaction in Bigmar Common Stock during the past 60 days.
(d) As an indirect beneficial owner, Cynthia May shares the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares of Bigmar Common Stock with the record owner of the
shares.
No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
shares of Bigmar Common Stock issuable on exercise of the Warrants or owned by
Jericho.
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(e) Inapplicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Except as provided in the Warrants and the Certificate of Designation,
Preferences and Rights of the Preferred Stock, Stock Purchase Agreement, or as
set forth herein, neither Ms. May, Jericho nor, to the best of Jericho's
knowledge, any of the individuals named in Schedule I hereto, has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of Bigmar, including, but not limited to,
transfer or voting of any securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or losses, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 - Common Stock Purchase Warrants issued by Bigmar, Inc. to
Jericho II LLC dated October 23, 1997. Filed as Exhibit 1
to Schedule 13-D filed July 8, 1998, and incorporated herein
by reference.
Exhibit 2 - Series A Convertible Preferred Stock Purchase Warrant issued
by Bigmar, Inc. to Jericho II, LLC dated May 28, 1998. Filed
as Exhibit 2 to Schedule 13-D filed July 8, 1998, and
incorporated herein by reference.
Exhibit 3 - Certificate of Designation, Preferences and Rights of Series
A Convertible Preferred Stock of Bigmar, Inc., as filed with
the Secretary of State of Delaware, June 5, 1998. Filed as
Exhibit 3 to Schedule 13-D filed July 8, 1998, and
incorporated herein by reference.
Exhibit 4 - Stock Purchase Agreement dated October 20, 1998. Filed
herewith.
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SIGNATURE
---------
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
JERICHO II, LLC
Date: October 23, 1998 By: /s/ Cynthia R. May
----------------------
Cynthia R. May
Title: Member
CYNTHIA R. MAY
/s/ Cynthia R. May
----------------------
8
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF JERICHO II LLC
-----------------
The name, present principal occupation or employment, and business address
of each of the members of Jericho II, LLC ("Jericho") is set forth below. Each
individual listed below is a citizen of the United States.
Members
- ---------------------------------------
Cynthia R. May
Director, Saginaw Control & Engineers
95 Midland Road
Saginaw, MI 48603
Harold Baldauf
Director, Saginaw Control & Engineers
95 Midland Road
Saginaw, MI 48603
John Tramontana
Chairman, Bigmar, Inc.
via Cadepiano 24
CH-6917 Barbengo
SWITZERLAND
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EXHIBIT INDEX
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Exhibit Description
- ------- -----------
Exhibit 1 - Common Stock Purchase Warrants issued by Bigmar, Inc. to
Jericho II LLC dated October 23, 1997. Filed as Exhibit 1
to Schedule 13-D filed July 8, 1998, and incorporated
herein by reference.
Exhibit 2 - Series A Convertible Preferred Stock Purchase Warrant issued
by Bigmar, Inc. to Jericho II, LLC dated May 28, 1998. Filed
as Exhibit 2 to Schedule 13-D filed July 8, 1998, and
incorporated herein by reference.
Exhibit 3 - Certificate of Designation, Preferences and Rights of
Bigmar, Inc. relating to the Series A Convertible Preferred
Stock, as filed with the Secretary of State of Delaware,
June 5, 1998. Filed as Exhibit 3 to Schedule 13-D filed
July 8, 1998, and incorporated herein by reference.
Exhibit 4 - Stock Purchase Agreement dated October 20, 1998. Filed
herewith.
<PAGE>
Exhibit 4
Conformed Copy
COMMON STOCK PURCHASE AGREEMENT
-------------------------------
This Common Stock Purchase Agreement dated as of October 20, 1998 is
entered into by Bigmar, Inc., a Delaware corporation (the "Company") and Jericho
II, LLC, a Michigan limited liability company (the "Purchaser").
In consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:
1. Sale of Shares.
--------------
1.1. Sale. Subject to the terms and conditions of this Agreement, the
----
Company hereby sells and issues to the Purchaser, and the Purchaser hereby
purchases, that number of whole shares of Common Stock of the Company, $0.001
par value per share, equal to the quotient of $6,000,000 divided by the last
closing bid price for a share of Common Stock of the Company as quoted by the
Nasdaq National Market on October 21, 1998, rounded up to the nearest number of
whole shares, for total consideration of $6,000,000. The shares purchased
hereunder are referred to herein as the "Shares".
1.2. Shares. The Shares will not be registered under the Securities
------
Act of 1933, as amended (the "Securities Act"), or any other applicable
securities laws and is being issued in reliance on exemptions from the
registration and prospectus delivery requirements of the Securities Act.
2. Purchase Price and the Closing.
------------------------------
2.1. Closing. The closing of the sale and purchase of the Shares
-------
under this Agreement shall take place at the offices of the Company
simultaneously with the execution of this Agreement (the "Closing"). At the
Closing, the Company will deliver to the Purchaser a copy of a letter of
instructions issued by it to its transfer agent instructing the transfer agent
to issue to the Purchaser a stock certificate representing the Shares registered
in the name of the Purchaser (the "Certificate"), and the Purchaser will deliver
to the Company written evidence of the wire transfer of the Purchase Price.
2.2. Purchase Price. The Purchaser shall pay to the Company
--------------
$6,000,000 (the "Purchase Price"), payable by wire transfer in immediately
available funds at the Closing. The Purchase Price shall be wired to Bricker &
Eckler LLP, counsel to the Company, in accordance with the wire transfer
instructions provided by letter dated October 19, 1998 from the Company to the
Purchaser.
2.3. Release of Purchase Price. Bricker & Eckler will not disburse
-------------------------
the Purchase Price to or on behalf of the Company until (i) Bricker & Eckler has
received the Certificate, (ii) Bricker & Eckler has sent a facsimile of the
Certificate to the Purchaser, and (iii) Bricker & Eckler has sent the
Certificate to the Purchaser by overnight courier. The Company will not accept,
receive or direct disbursement of the Purchase Price until the preceding
conditions have been satisfied.
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3. Representation of the Company. The Company hereby represents and
-----------------------------
warrants to the Purchaser as follows:
3.1. Organization and Good Standing. The Company and each of its
------------------------------
subsidiaries is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, has full corporate power and authority to conduct
its business as presently conducted and as proposed to be conducted by it, and
is duly qualified to do business and in good standing as a foreign corporation
or other legal entity in each jurisdiction in which the failure to be so
qualified would have a material adverse effect on the Company. The Company has
full corporate power and authority to enter into and perform this Agreement and
to carry out the transactions contemplated by this Agreement.
3.2. Capitalization. The authorized capital stock of the Company
--------------
consists of 20,000,000 shares of Common Stock, $0.001 par value per share, of
which 4,185,000 shares were issued and outstanding as of August 14, 1998, and
5,000,000 shares of Preferred Stock, $0.001 par value per share, of which no
shares are issued and outstanding. All of the issued and outstanding shares of
Common Stock have been duly authorized and validly issued and are fully paid and
nonassessable.
3.3. Issuance of the Shares. The issuance, sale and delivery of the
----------------------
Shares to the Purchaser in accordance with this Agreement has been duly
authorized by all necessary corporate action on the part of the Company. The
Shares when so issued, sold and delivered against payment therefor in accordance
with the provisions of this Agreement will be duly and validly issued, fully
paid and nonassessable.
3.4. Authority for Agreements. The execution, delivery and
------------------------
performance by the Company of this Agreement has been duly authorized by all
necessary corporate action, and this Agreement has been duly executed and
delivered by the Company. This Agreement constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms.
4. Representation of Purchaser.
---------------------------
The Purchaser represents and warrants to the Company as follows:
4.1. Investment. The Purchaser is acquiring the Shares for its own
----------
account for investment and not with a view to, or for sale in connection with,
any distribution thereof, nor with any present intention of distributing or
selling the same; and the Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof.
4.2. Authority. The Purchaser has full power and authority or
---------
capacity and competence to enter into and to perform this Agreement in
accordance with its terms.
4.3. Accredited Investor. The Purchaser is an "accredited investor"
-------------------
as defined in Regulation D under the Securities Act.
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4.4. Access to Information. The Purchaser has received and reviewed
---------------------
copies of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and all filings under the Securities and Exchange Act of 1934,
as amended, subsequent to such Annual Report, and has been given the opportunity
to discuss the financial condition and operations of the Company with officers
of the Company.
5. Sale or Transfer of Shares; Legend.
----------------------------------
5.1. Restriction on Transfer. The Shares shall not be sold or
-----------------------
transferred unless either (i) they first shall have been registered under the
Securities Act, or (ii) the Company first shall have been furnished with an
opinion of legal counsel reasonably acceptable to the Company that such sale or
transfer is exempt from the registration requirements of the Securities Act.
5.2. Legend. Each certificate representing the Shares shall bear a
------
legend substantially in the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of in the absence
of (i) an effective registration statement under the Securities Act, or
(ii) to the extent applicable, Rule 144 under the Securities Act (or
similar rule under the Securities Act relating to disposition of
securities), or (iii) an opinion of counsel reasonably satisfactory to
counsel for the issuer that exemption from registration under the
Securities Act is available."
The foregoing legend may be removed from the certificates representing any
Shares, at the request of the holder thereof, at such time as they become
eligible for resale pursuant to Rule 144(k) under the Securities Act.
6. Piggyback Registration Rights.
-----------------------------
6.1. Rights. If the Company at any time proposes for any reason to
------
register shares of the Company's Common Stock under the Securities Act (other
than on Form S-4 or Form S-8 promulgated under the Securities Act or any
successor forms thereto or other than in connection with an exchange offer or
offering solely to the Company's stockholders), it shall promptly give written
notice to the Purchaser of its intention to so register the such shares and,
upon the written request, given within 10 days after delivery of any such notice
by the Company, of the Purchaser to include in such registration Shares held by
the Purchaser (which request shall specify the number of Shares proposed to be
included in such registration), the Company shall use its commercially
reasonable efforts to cause all such Shares to be included in such registration
on the same terms and conditions as the securities otherwise being sold in such
registration; provided, however, that if the managing underwriter advises the
-------- -------
Company that the inclusion of all Shares proposed to be included in such
registration would interfere with the successful marketing (including pricing)
of the shares proposed to be registered by the Company, then the number of
Shares proposed to be included in such registration shall be reduced or
eliminated provided (i) that shares held by stockholders of the Company other
than the Purchaser being included in such registration shall be reduced in the
same proportion as the reduction to the
3
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Shares requested for inclusion and (ii) no shares held by stockholders of the
Company shall be included except in accordance with written registration rights
held by such other stockholders.
6.2. Expenses. The Company shall bear the expense of all
--------
registrations effected pursuant to this section, including in each case, without
limitation, all registration and filing fees (including all expenses incident to
filing with the NASD), fees and expenses of complying with securities and blue
sky laws, printing expenses, and fees and expenses of the Company's counsel and
accountants, but excluding any underwriters' or brokers' discounts or
commissions.
7. Expenses. The Company shall pay all reasonable expenses incurred by
--------
the Purchaser in connection with the issuance and sale of the Shares, including
expenses incurred in connection with any filings by the Purchaser with the
Securities and Exchange Commission, and including specifically the fees and
expenses of Palmer & Dodge LLP, counsel to the Purchaser, and any other
reasonable out-of-pocket expenses incurred by the Purchaser. The Company shall
bear its own legal and other expenses incurred in connection with the
transactions contemplated by this Agreement.
8. Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
9. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
day and year first above written.
BIGMAR, INC. JERICHO II, LLC
By: /s/ John Tramontana By: /s/ Cynthia R. May
__________________________ ___________________________
President Title: Managing Parnter
4
