<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 23, 1999
REGISTRATION NO. 333-64499
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE AMENDMENT NO. 2
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
IMPLANT SCIENCES CORPORATION
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
<TABLE>
<S> <C> <C>
MASSACHUSETTS 3842 04-2837126
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
107 AUDUBON ROAD, #5
WAKEFIELD, MASSACHUSETTS 01880
(781) 246-0700
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL PLACE OF BUSINESS AND PRINCIPAL
EXECUTIVE OFFICES)
ANTHONY J. ARMINI, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
107 AUDUBON ROAD, #5
WAKEFIELD, MASSACHUSETTS 01880
(781) 246-0700
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
COPIES TO:
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<S> <C>
ROBERT W. SWEET, JR., ESQ. WILLIAM M. PRIFTI, ESQ.
DAVID A. BROADWIN, ESQ. FIVE MARKET SQUARE, SUITE 109
FOLEY, HOAG & ELIOT LLP AMESBURY, MA 01913
ONE POST OFFICE SQUARE (978) 388-4942
BOSTON, MASSACHUSETTS 02109
(617) 832-1000
</TABLE>
------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As promptly as practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Units each consisting of one
share of Common Stock and
one Redeemable Common Stock
Purchase Warrant
("Warrants")(2)............. 1,150,000 $ 7.50 $ 8,625,000
- ---------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon
exercise of Warrants(2)..... 1,150,000 $ 9.00 $10,350,000
- ---------------------------------------------------------------------------------------------------------------------------------
Representative's Warrant...... 100,000 $ .001 $ 100
- ---------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon
exercise of Representative's
Warrant..................... 100,000 $14.40 $ 1,440,000
- ---------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon
exercise of Representative's
Redeemable Warrant.......... 100,000 $ 9.00 $ 900,000
- ---------------------------------------------------------------------------------------------------------------------------------
Totals........................ $21,315,100 $6,288(3)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(a) under the Securities Act of 1933. Other expenses
of the offering aggregate $903,000 and are itemized under Item 25 of Part II
of this Registration Statement.
(2) Includes shares or warrants represented by 150,000 Units, each consisting of
one share of Common Stock and one Warrant to purchase one share of Common
Stock, subject to an over-allotment option granted to the Underwriters by
the Registrant. See "Underwriting."
(3) Previously paid $7,770.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24: INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VI.C. of the Company's Amended and Restated Articles of
Organization provides that a director shall not have personal liability to the
Company or its stockholders for monetary damages arising out of the director's
breach of fiduciary duty as a director of the Company, to the maximum extent
permitted by Massachusetts law. Section 13(b)(1 1/2) of Chapter 156B of the
Massachusetts General Laws provides that the articles of organization of a
corporation may state a provision eliminating or limiting the personal liability
of a director to a corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided, however, that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under sections 61 or 62 of Chapter 156B of the
Massachusetts General Laws, which relate to liability for unauthorized
distributions and loans to insiders, respectively, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article VI.D. of the Company's Amended and Restated Articles of
Organization further provides that the Company shall, to the fullest extent
authorized by Chapter 156B of the Massachusetts General Laws, indemnify each
person who is, or shall have been, a director or officer of the Company or who
is or was a director or employee of the Company and is serving, or shall have
served, at the request of the Company, as a director or officer of another
organization or in any capacity with respect to any employee benefit plan of the
Company, against all liabilities and expenses (including judgments, fines,
penalties, amounts paid or to be paid in settlement, and reasonable attorneys'
fees) imposed upon or incurred by any such person in connection with, or arising
out of, the defense or disposition of any action, suit or other proceeding,
whether civil or criminal, in which they may be involved by reason of being or
having been such a director or officer or as a result of service with respect to
any such employee benefit plan. Section 67 of Chapter 156B of the Massachusetts
General Laws authorizes a corporation to indemnify its directors, officers,
employees and other agents unless such person shall have been adjudicated in any
proceeding not to have acted in good faith in the reasonable belief that such
action was in the best interests of the corporation or, to the extent such
matter related to service with respect to an employee benefit plan, in the best
interests of the participants or beneficiaries of such employee benefit plan.
The effect of these provisions would be to permit indemnification by the
Company for, among other liabilities, liabilities arising out of the Securities
Act of 1933, as amended (the "Securities Act").
Section 67 of Chapter 156B of the Massachusetts General Laws also affords a
Massachusetts corporation the power to obtain insurance on behalf of its
directors and officers against liabilities incurred by them in those capacities.
The Company intends to procure a directors and officers liability and company
reimbursement liability insurance policy that (i) insures directors and officers
of the Company against losses (above a deductible amount) arising from certain
claims made against them by reason of certain acts done or attempted by such
directors or officers and (ii) insures the Company against losses (above a
deductible amount) arising from any such claims, but only if the Company
II-1
<PAGE> 3
is required or permitted to indemnify such directors or officers for such losses
under statutory or common law or under provisions of the Company's Amended and
Restated Articles of Organization or Amended and Restated By-Laws.
Reference is hereby made to Section 7 of the Underwriting Agreement between
the Company and the Underwriters, filed as Exhibit 1.1 to this Registration
Statement, for a description of indemnification arrangements between the Company
and the Underwriters.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An itemized statement of expenses in connection with the issuance and
distribution of the securities to be registered, other than underwriting
discounts and commissions, appears below. All amounts are estimates, except for
the SEC registration fee, the NASD filing fee and the Nasdaq and Boston Stock
Exchange listing fees.
<TABLE>
<S> <C>
SEC Registration Fee................................. $ 7,862
NASD Filing Fee...................................... 3,200
Nasdaq and Boston Stock Exchange Listing Fees........ 23,750
Blue Sky Qualification Fees and Expenses............. 18,100
Accounting Fees and Expenses......................... 325,000
Legal Fees and Expenses.............................. 300,000
Transfer Agent Fees.................................. 3,000
Printing and Engraving Expenses...................... 100,000
Travel & Road Show................................... 50,000
Miscellaneous Expenses............................... 72,088
--------
Total...................................... $903,000
========
</TABLE>
ITEM 26: RECENT SALES OF UNREGISTERED SECURITIES.
The following information is furnished with regard to all securities sold
by the Company within the past three years which were not registered under the
Securities Act. The share numbers set forth below have been adjusted to reflect
the 7-for-1 stock split effected by the Company on September 9, 1998.
(a) On July 1, 1998, as partial consideration for terminating an
agreement with the acting Chief Financial Officer to the Company and his
resignation from the Company's board of directors, the Company provided the
following: (i) 12,000 shares of the Common Stock of the Company; and (ii)
warrants, with a three-year term, to purchase 86,640 shares of the Common
Stock of the Company at a price of $17.31 per share. In addition, as part
of this individual's original agreement, dated October 31, 1997, he was
also provided warrants, with a three year term, to purchase 9,000 shares of
Common Stock of the Company at a price of $1.51 per share. The Company
granted piggyback registration rights to this individual in any public
offering after the initial public offering of the Common Stock.
(b) On June 17, 1997, NAR Holding Corporation exercised its preemptive
rights to purchase 301,668 shares of Common Stock of the Company at a price
of $.49 per share.
The issuances described in this Item 26 were made in reliance upon the
exemption from registration set forth in Section 4(2) of the Securities Act
relating to sales by an issuer not involving any public offering. None of the
foregoing transactions involved a
II-2
<PAGE> 4
distribution or public offering. No underwriters were engaged in connection with
the foregoing issuances of securities, and no underwriting discounts or
commissions were paid.
ITEM 27: EXHIBITS
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<C> <S>
*1.1 Agreement Among Underwriters (preliminary copy)
*1.2 Underwriting Agreement (preliminary copy)
*1.3 Selected Dealer Agreement (preliminary copy)
*1.4 Representative's Warrant Agreement (preliminary copy)
*1.5 Consulting Agreement with the Representative (preliminary
copy)
*3.1 Restated Articles of Organization of the Company, dated
September 29, 1998
*3.2 By-Laws of the Company
3.3 Articles of Amendment to the Articles of Organization of the
Company, dated June 9, 1999
3.4 Restated Articles of Organization of the Company, dated June
9, 1999
*4.1 Specimen certificate for the Common Stock of the Company
+4.2 Specimen certificate for the Redeemable Warrants of the
Company
+4.3 Specimen certificate for the Units of the Company
*5.1 Opinion of Foley, Hoag & Eliot LLP
*9 Armini Voting Trust Agreement, dated November 1, 1991
*10.1 Employment Agreement with Anthony J. Armini, dated September
26, 1998
*10.2 Employment Agreement with Stephen N. Bunker, dated September
26, 1998
*10.3 Employment Offer Letter to Darlene Deptula-Hicks, dated June
15, 1998
*10.4 Employment Offer Letter to Alan Lucas, dated March 20, 1998
*10.5 Amendment to Employment Offer Letter to Alan Lucas, dated
September 24, 1998
*10.6 Form of Employee Agreement on Ideas, Inventions, and
Confidential Information used between 1993 and 1995
*10.7 Form of Employee Agreement on Ideas, Inventions, and
Confidential Information used in 1993
*10.8 Form of Employee Agreement on Ideas, Inventions, and
Confidential Information used between 1997 and 1998
*10.9 Loan Agreement between the Company and US Trust, dated May
1, 1996
*10.10 $100,000 Commercial Promissory Note signed by the Company in
favor of US Trust, dated May 1, 1996
*10.11 $300,000 Commercial Promissory Note signed by the Company in
favor of US Trust, dated May 1, 1996
*10.12 Guaranty of Loan Agreement between the Company and US Trust,
by Anthony J. Armini, dated May 1, 1996
*10.13 Security Agreement between the Company and US Trust, dated
May 1, 1996
*10.14 Lessor's Subordination and Consent between the Company and
Teacher's Insurance and Annuity Association of America,
dated May 1, 1996
*10.15 First Amendment to Loan Agreement between the Company and US
Trust, dated July 24, 1997
</TABLE>
II-3
<PAGE> 5
<TABLE>
<C> <S>
*10.16 $300,000 Commercial Promissory Note signed by the Company in
favor of US Trust, dated July 24, 1997
*10.17 $94,444.40 Commercial Promissory Note signed by the Company
in favor of US Trust, dated August 12, 1997
*10.18 Second Amendment to Loan Agreement between the Company and
US Trust, dated January 16, 1998
*10.19 $750,000 Commercial Promissory Note signed by the Company in
favor of US Trust, dated January 16, 1998
*10.20 Promissory Note signed by Anthony J. Armini in favor of the
Company, dated September 26, 1998
*10.21 Shareholders Agreement between NAR Holding Corporation and
Anthony J. Armini, dated July 15, 1987
*10.22 Lease between the Company and Teachers Insurance and Annuity
Association of America, dated September 29, 1995
*10.23 First Amendment to Lease and Expansion Agreement between the
Company and Teachers Insurance and Annuity Association of
America, dated July 29, 1998
*10.24 Standard Cooperative Research and Development Agreement
between the Company and the Naval Research Laboratory, dated
January 21, 1997**
*10.25 Cooperative Agreement between the Company and the United
States of America U.S. Army Tank-Automotive and Armaments
Command Armamanet Research, Development and Engineering
Center, dated September 30, 1997**
*10.26 Vendor Agreement Memorandum between the Company and
Osteonics, dated February 2, 1998**
*10.27 Sample Purchase Order between the Company and MicroSpring
Company, Inc., dated October 24, 1996**
*10.28 Asset Purchase Agreement between the Company and Falex
Corporation, dated November 17, 1995**
*10.29 Settlement between the Company and Erik Akhund, dated July
1, 1998
*10.30 1992 Stock Option Plan
*10.31 Form of Stock Option Agreement under the 1992 Stock Option
Plan
*10.32 1998 Incentive and Nonqualified Stock Option Plan
*10.33 Form of Incentive Stock Option under the 1998 Incentive and
Nonqualified Stock Option Plan
*10.34 Form of Nonqualified Stock Option under the 1998 Incentive
and Nonqualified Stock Option Plan
*10.35 Form of Nonqualified Stock Option for Non-Employee Directors
under the 1998 Incentive and Nonqualified Stock Option Plan
*10.36 Form of Lock-Up Agreement
*10.37 Agreement Appointing Transfer Agent and Registrar between
the Company and American Securities Transfer & Trust, Inc.,
dated October 19, 1998
*10.38 Certification of Corporate Secretary dated October 19, 1998
concerning Agreement Appointing Transfer Agent and Registrar
between the Company and American Securities Transfer &
Trust, Inc.
</TABLE>
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<PAGE> 6
<TABLE>
<C> <S>
*10.39 Research and Development Agreement between the Company and
Guidant Corporation, dated May 20, 1998**
*10.40 Letter Agreement between the Company and Guidant
Corporation, dated September 29, 1998**
*10.41 Form of Medical Advisory Board Agreement
*10.42 Form of Loan Agreement, dated January 7, 1999, between the
Company and the following employees in the following
amounts: Donald J. Dench ($12,500), Diane J. Ryan ($12,500),
Mark and Kathleen Gadarowski ($12,500), Gregory Huntington,
Sr. ($12,500), Leonard DeMild ($25,000), Michael Nelson
($12,500), Richard Sahagian ($12,500), Darryl Huntington
($12,500), Dennis Gadarowski ($12,500) and David Santos
($12,500)
*10.43 Terms and Conditions from Sample Purchase Order between the
Company and Biomet, Incorporated
+10.44 Unit and Warrant Agreement between the Company and American
Securities Transfer & Trust, Inc., dated April 9, 1999
*10.45 Agreement between the Company and U.S. Army Space and
Missile Defense Command, dated May 27, 199
*21.1 Subsidiaries of the Company
*23.1 Consent of Ernst & Young LLP
*23.2 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1)
*24.1 Power of Attorney
*27.1 Financial Data Schedule
*27.2 Financial Data Schedule -- Three Months Ended September 30,
1998
*27.3 Financial Data Schedule -- Three Months Ended September 30,
1997
*27.4 Financial Data Schedule -- Six Months Ended December 31,
1998
*27.5 Financial Data Schedule -- Six Months Ended December 31,
1997
*27.6 Financial Data Schedule -- Nine Months Ended March 31, 1999
*27.7 Financial Data Schedule -- Nine Months Ended March 31, 1998
</TABLE>
- -------------------------
* Previously filed.
** Filed under application for confidential treatment.
+ Replaces previously filed exhibit.
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
II-5
<PAGE> 7
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer 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 Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes to:
(1) File, during any period in which it offers or sells, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of such securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the termination of the offering.
(4) For determining any liability under the Securities Act, treat 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 small business issuer under Rule 424(b)(1) or
(4) of 497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective.
(5) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
II-6
<PAGE> 8
SIGNATURES
In accordance with 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 authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Wakefield, The Commonwealth of Massachusetts, on June
23, 1999.
IMPLANT SCIENCES CORPORATION
By: /s/ ANTHONY J. ARMINI
-----------------------------------
Anthony J. Armini
President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ANTHONY J. ARMINI President, Chief June 23, 1999
- --------------------------------------------------- Executive Officer and
Anthony J. Armini Chairman of the Board
of Directors
(Principal Executive
Officer)
*/s/ DARLENE M. DEPTULA-HICKS Vice President and Chief June 23, 1999
- --------------------------------------------------- Financial Officer
Darlene M. Deptula-Hicks (Principal Financial
and Accounting
Officer)
*/s/ STEPHEN N. BUNKER Vice President and Chief June 23, 1999
- --------------------------------------------------- Scientist, Director
Stephen N. Bunker
* /s/ ROBERT E. HOISINGTON Director June 23, 1999
- ---------------------------------------------------
Robert E. Hoisington
* /s/ SHUNKICHI SHIMIZU Director June 23, 1999
- ---------------------------------------------------
Shunkichi Shimizu
*By: /s/ ANTHONY J. ARMINI
---------------------------------------------
Anthony J. Armini, as Attorney-in-Fact
</TABLE>
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<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ------------
<C> <S> <C>
*1.1 Agreement Among Underwriters (preliminary copy).........
*1.2 Underwriting Agreement (preliminary copy)...............
*1.3 Selected Dealer Agreement (preliminary copy)............
*1.4 Representative's Warrant Agreement (preliminary copy)...
*1.5 Consulting Agreement with the Representative
(preliminary copy)......................................
*3.1 Restated Articles of Organization of the Company, dated
September 29, 1998......................................
*3.2 By-Laws of the Company..................................
3.3 Articles of Amendment to the Articles of Organization of
the Company, dated June 9, 1999.........................
3.4 Restated Articles of Organization of the Company, dated
June 9, 1999............................................
*4.1 Specimen certificate for the Common Stock of the
Company.................................................
+4.2 Specimen certificate for the Redeemable Warrants of the
Company.................................................
+4.3 Specimen certificate for the Units of the Company.......
*5.1 Opinion of Foley, Hoag & Eliot LLP......................
*9 Armini Voting Trust Agreement, dated November 1, 1991...
*10.1 Employment Agreement with Anthony J. Armini, dated
September 26, 1998......................................
*10.2 Employment Agreement with Stephen N. Bunker, dated
September 26, 1998......................................
*10.3 Employment Offer Letter to Darlene Deptula-Hicks, dated
June 15, 1998...........................................
*10.4 Employment Offer Letter to Alan Lucas, dated March 20,
1998....................................................
*10.5 Amendment to Employment Offer Letter to Alan Lucas,
dated September 24, 1998................................
*10.6 Form of Employee Agreement on Ideas, Inventions, and
Confidential Information used between 1993 and 1995.....
*10.7 Form of Employee Agreement on Ideas, Inventions, and
Confidential Information used in 1993...................
*10.8 Form of Employee Agreement on Ideas, Inventions, and
Confidential Information used between 1997 and 1998.....
*10.9 Loan Agreement between the Company and US Trust, dated
May 1, 1996.............................................
*10.10 $100,000 Commercial Promissory Note signed by the
Company in favor of US Trust, dated May 1, 1996.........
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ------------
<C> <S> <C>
*10.11 $300,000 Commercial Promissory Note signed by the
Company in favor of US Trust, dated May 1, 1996.........
*10.12 Guaranty of Loan Agreement between the Company and US
Trust, by Anthony J. Armini, dated May 1, 1996..........
*10.13 Security Agreement between the Company and US Trust,
dated May 1, 1996.......................................
*10.14 Lessor's Subordination and Consent between the Company
and Teacher's Insurance and Annuity Association of
America, dated May 1, 1996..............................
*10.15 First Amendment to Loan Agreement between the Company
and US Trust, dated July 24, 1997.......................
*10.16 $300,000 Commercial Promissory Note signed by the
Company in favor of US Trust, dated July 24, 1997.......
*10.17 $94,444.40 Commercial Promissory Note signed by the
Company in favor of US Trust, dated August 12, 1997.....
*10.18 Second Amendment to Loan Agreement between the Company
and US Trust, dated January 16, 1998....................
*10.19 $750,000 Commercial Promissory Note signed by the
Company in favor of US Trust, dated January 16, 1998....
*10.20 Promissory Note signed by Anthony J. Armini in favor of
the Company, dated September 26, 1998...................
*10.21 Shareholders Agreement between NAR Holding Corporation
and Anthony J. Armini, dated July 15, 1987..............
*10.22 Lease between the Company and Teachers Insurance and
Annuity Association of America, dated September 29,
1995....................................................
*10.23 First Amendment to Lease and Expansion Agreement between
the Company and Teachers Insurance and Annuity
Association of America, dated July 29, 1998.............
*10.24 Standard Cooperative Research and Development Agreement
between the Company and the Naval Research Laboratory,
dated January 21, 1997**................................
*10.25 Cooperative Agreement between the Company and the United
States of America U.S. Army Tank-Automotive and
Armaments Command Armamanet Research, Development and
Engineering Center, dated September 30, 1997**..........
*10.26 Vendor Agreement Memorandum between the Company and
Osteonics, dated February 2, 1998**.....................
*10.27 Sample Purchase Order between the Company and
MicroSpring Company, Inc., dated October 24, 1996**.....
*10.28 Asset Purchase Agreement between the Company and Falex
Corporation, dated November 17, 1995**..................
*10.29 Settlement between the Company and Erik Akhund, dated
July 1, 1998............................................
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ------------
<C> <S> <C>
*10.30 1992 Stock Option Plan..................................
*10.31 Form of Stock Option Agreement under the 1992 Stock
Option Plan.............................................
*10.32 1998 Incentive and Nonqualified Stock Option Plan.......
*10.33 Form of Incentive Stock Option under the 1998 Incentive
and Nonqualified Stock Option Plan......................
*10.34 Form of Nonqualified Stock Option under the 1998
Incentive and Nonqualified Stock Option Plan............
*10.35 Form of Nonqualified Stock Option for Non-Employee
Directors under the 1998 Incentive and Nonqualified
Stock Option Plan.......................................
*10.36 Form of Lock-Up Agreement...............................
*10.37 Agreement Appointing Transfer Agent and Registrar
between the Company and American Securities Transfer &
Trust, Inc., dated October 19, 1998.....................
*10.38 Certification of Corporate Secretary dated October 19,
1998 concerning Agreement Appointing Transfer Agent and
Registrar between the Company and American Securities
Transfer & Trust, Inc...................................
*10.39 Research and Development Agreement between the Company
and Guidant Corporation, dated May 20, 1998**...........
*10.40 Letter Agreement between the Company and Guidant
Corporation, dated September 28, 1998**.................
*10.41 Form of Medical Advisory Board Agreement................
*10.42 Form of Loan Agreement, dated January 7, 1999, between
the Company and the following employees in the following
amounts: Donald J. Dench ($12,500), Diane J. Ryan
($12,500), Mark and Kathleen Gadarowski ($12,500),
Gregory Huntington, Sr. ($12,500), Leonard DeMild
($25,000), Michael Nelson ($12,500), Richard Sahagian
($12,500), Darryl Huntington ($12,500), Dennis
Gadarowski ($12,500) and David Santos ($12,500).........
*10.43 Terms and Conditions from Sample Purchase Order between
the Company and Biomet, Incorporated....................
+10.44 Unit and Warrant Agreement between the Company and
American Securities Transfer & Trust, Inc., dated April
9, 1999.................................................
*10.45 Agreement between the Company and U.S. Army Space and
Missile Defense Command, dated May 27, 1999.............
*21.1 Subsidiaries of the Company.............................
*23.1 Consent of Ernst & Young LLP............................
*23.2 Consent of Foley, Hoag & Eliot LLP (included in Exhibit
5.1)....................................................
*24.1 Power of Attorney.......................................
*27.1 Financial Data Schedule.................................
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ------------
<C> <S> <C>
*27.2 Financial Data Schedule -- Three Months Ended September
30, 1998
*27.3 Financial Data Schedule -- Three Months Ended September
30, 1997
*27.4 Financial Data Schedule -- Six Months Ended December 31,
1998
*27.5 Financial Data Schedule -- Six Months Ended December 31,
1997
*27.6 Financial Data Schedule -- Nine Months Ended March 31,
1999
*27.7 Financial Data Schedule -- Nine Months Ended March 31,
1998
</TABLE>
- -------------------------
* Previously filed.
** Filed under application for confidential treatment.
+ Replaces previously filed exhibit.
<PAGE> 1
EXHIBIT 3.3
FEDERAL IDENTIFICATION
NO. 04-2837126
Examiner
The Commonwealth of Massachusetts
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(GENERAL LAWS, CHAPTER 156B, SECTION 72)
Name
Approved
We, Anthony J. Armini, *President/*
and Stephen N. Bunker, "Clerk /*
of Implant Sciences Corporation
(Exact name of corporation)
located at 107 Audubon Road, #5, Wakefield, Ma 01880
(Street address of corporation in Massachusetts)
certified that these Articles of Amendment affecting articles numbered:
3 and 4
(Number those articles 1, 2, 3, 4, 5 and/or 6 being amended)
of the Articles of Organization were duly adopted at a meeting held on June 8,
1999, by vote of:
3,985,320 shares of Common Stock of 4,069,320 shares outstanding and
(type, class & series, if any)
0 shares of Preferred Stock of 0 shares outstanding and
(type, class & series, if any)
__shares of __________________________ of ________ shares outstanding and
(type, class & series, if any)
C [ ]
P [ ]
M [ ]
R.A. [ ]
1**being at least a majority of each type, class or series outstanding and
entitled to vote thereon:
VOTED: As set forth on the attached Exhibit A.
*Delete the inapplicable words. **Delete the inapplicable clause.
(1) For amendments adopted pursuant to Chapter 156B, Section 70.
(2) For amendments adopted pursuant to Chapter 156B, Section 71.
P.C.
NOTE: IF THE SPACE PROVIDED UNDER ANY ARTICLE OR ITEM ON THIS FORM IS
INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON ONE SIDE ONLY OF SEPARATE 8 1/2 X
11 SHEETS OF PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH. ADDITIONS TO MORE THAN
ONE ARTICLE MAY BE MADE ON A SINGLE SHEET SO LONG AS EACH ARTICLE REQUIRING EACH
ADDITION IS CLEARLY INDICATED.
<PAGE> 2
To change the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
<TABLE>
<CAPTION>
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
<S> <C> <C> <C> <C>
Common: Common: 20,000,000 $.10
Preferred: Preferred: 5,000,000 $.10
</TABLE>
Change the total authorized to:
<TABLE>
<CAPTION>
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
<S> <C> <C> <C> <C>
Common: Common: 17,142,857 $.09
Preferred: Preferred: 5,000,000 $.10
</TABLE>
<PAGE> 3
Article IV is amended so that Continuation Sheet IV.A. of the Amended and
Restated Articles of Organization is replaced by the attached.
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
Later effective date:_____________________________
SIGNED UNDER THE PENALTIES OF PERJURY, this 8th day of June, 1999.
/s/ Anthony J. Armini, *President
- ---------------------------------
/s/ Stephen N. Bunker, "Clerk
- ---------------------------------
*Delete the inapplicable words.
<PAGE> 4
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(GENERAL LAWS, CHAPTER 156B, SECTION 72)
I hereby approve the within Articles of Amendment and, the filing fee in the
amount of $________ having been paid, said articles are deemed to have been
filed with me this ______ day of __________________, 19______.
Effective date:_______________________________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
Rashmi Dyal-Chand
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, MA 02109
<PAGE> 5
Continuation Sheet IV.A.
IV.A. DESIGNATION AND CLASSIFICATION OF STOCK
The aggregate number of shares of capital stock which the Corporation
has authority to issue is 22,142,857 consisting of:
(i) 17,142,857 shares of Common Stock, $.09 par value per share
(the "Common Stock"); and
(ii) 5,000,000 shares of Preferred Stock, $.10 par value per share
(the "Preferred Stock").
<PAGE> 1
EXHIBIT 3.4
FEDERAL IDENTIFICATION
NO. 04-2837126
Examiner
The Commonwealth of Massachusetts
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
RESTATED ARTICLES OF ORGANIZATION
(GENERAL LAWS, CHAPTER 156B, SECTION 74)
Name
Approved
We, Anthony J. Armini, *President
and Stephen N. Bunker, "Clerk
of Implant Sciences Corporation
(Exact name of corporation)
located at 105 Audubon Road, #5, Wakefield, Ma 01880
(Street address of corporation in Massachusetts)
do hereby certify that the following Restatement of the Articles of Organization
was duly adopted at a meeting held on June 8, 1999 by a vote of
3,951,678 shares of Common Stock of 4,069,320 shares outstanding and
(type, class & series, if any)
0 shares of Preferred Stock of 0 shares outstanding and
(type, class & series, if any)
__ shares of __ of ______ shares outstanding and
(type, class & series, if any)
1**being at least a majority of each type, class or series outstanding and
entitled to vote thereon:
C [ ]
P [ ]
M [ ]
R.A. [ ]
ARTICLE I
The name of the corporation is:
Implant Sciences Corporation
ARTICLE II
The purpose of the corporation is to engage in the following business
activities:
See Continuation Sheet II.A.
*Delete the inapplicable words. **Delete the inapplicable clause.
P.C.
NOTE: IF THE SPACE PROVIDED UNDER ANY ARTICLE OR ITEM ON THIS FORM IS
INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON ONE SIDE ONLY OF SEPARATE 8 1/2 X
11 SHEETS OF PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH. ADDITIONS TO MORE THAN
ONE ARTICLE MAY BE MADE ON A SINGLE SHEET SO LONG AS EACH ARTICLE REQUIRING EACH
ADDITION IS CLEARLY INDICATED.
<PAGE> 2
ARTICLE III
State the total number of shares and par value, if any, of each class of stock
which the corporation is authorized to issue:
<TABLE>
<CAPTION>
WITHOUT PAR VALUE WITH PAR VALUE
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
<S> <C> <C> <C> <C>
Common: Common: 20,000,000 $.10
Preferred: Preferred: 5,000,000 $.10
</TABLE>
ARTICLE IV
If more than one class of stock is authorized, state a distinguishing
designation for each class. Prior to the issuance of any shares of a class, if
shares of another class are outstanding, the corporation must provide a
description of the preferences, voting powers, qualifications, and special or
relative rights or privileges of that class and of each other class of which
shares are outstanding and of each series then established within any class.
See Continuation Sheets IV.A. - IV.C.
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are:
N/A
ARTICLE VI
**Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
See Continuation Sheets VI.A. - VI.E.
**If there are no provisions state "None".
NOTE: THE PRECEDING SIX (6) ARTICLES ARE CONSIDERED TO BE PERMANENT AND MAY ONLY
BE CHANGED BY FILING APPROPRIATE ARTICLES OF AMENDMENT.
<PAGE> 3
ARTICLE VII
The effective date of the restated Articles of Organization of the corporation
shall be the date approved and filed by the Secretary of the Commonwealth. If a
later effective date is desired, specify such date which shall not be more than
thirty days after the date of filing.
ARTICLE VIII
THE INFORMATION CONTAINED IN ARTICLE VIII IS NOT A PERMANENT PART OF THE
ARTICLES OF ORGANIZATION.
a. The street address (post office boxes are not acceptable) of the principal
office of the corporation in Massachusetts is:
b. The name, residential address and post office address of each director and
officer of the corporation is as follows:
<TABLE>
<CAPTION>
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
<S> <C> <C> <C>
President:
Treasurer: See Continuation Sheet VIII.A.
Clerk:
Directors:
</TABLE>
c. The fiscal year (i.e., tax year) of the corporation shall end on the last day
of the month of: June
d. The name and business address of the resident agent, if any, of the
corporation is:
N/A
**We further certify that the foregoing Restated Articles of Organization affect
no amendments to the Articles of Organization of the corporation as heretofore
amended, except amendments to the following articles. Briefly describe
amendments below:
See Continuation Sheet VIII.B.
SIGNED UNDER THE PENALTIES OF PERJURY, this 8th day of June , 1999.
/s/ Anthony J. Armini, *President
- ---------------------------------
/s/ Stephen N. Bunker, "Clerk
- ---------------------------------
*Delete the inapplicable words. **If there are no amendments, state "None".
<PAGE> 4
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
(GENERAL LAWS, CHAPTER 156B, SECTION 74)
I hereby approve the within Restated Articles of Organization and, the filing
fee in the amount of $________ having been paid, said articles are deemed to
have been filed with me this ______ day of __________________, 19______.
Effective date: _______________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
Rashmi Dyal-Chand
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, MA 02109
Telephone: (617) 832-1287
<PAGE> 5
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet II.A.
------------------------
II.A. PURPOSES
To engage on its own behalf and for others in the business of
developing, manufacturing, marketing and selling services and products that
enhance the surface properties and performance of metal, ceramic, and plastic
biomedical, semiconductor, and other devices; and to buy, sell and distribute
goods, wares and merchandise of every kind and description.
To acquire, hold, dispose of, buy, sell, underwrite, handle on
commission and otherwise deal in, and to guaranty, any stocks, shares, bonds,
notes and obligations of and interests in corporations, joint-stock companies,
trusts, associations, partnerships, limited liability companies, firms or
persons and all forms of public and municipal securities of this or any other
country, or any right or interest therein, and while owner thereof, to exercise
all rights, powers and privileges of ownership in the same manner and to the
same extent that an individual might.
To acquire, hold, use, construct, maintain and dispose of buildings,
plants, factories, mills, machinery, works, patent rights and privileges,
inventions, formulae, trademarks and names, secret processes and all other real
and personal property, tangible or intangible, of whatever kind and wherever
situated, or any right or interest therein, for the purposes of the foregoing
businesses, and as a going business or otherwise, all or any part of the assets
of any corporation, joint-stock company, trust, association, partnership,
limited liability company, firm or person, and in such cases to assume all or
any part of its or his liabilities.
To engage in, transact and carry on any or all of the above businesses
or any other business or activity necessary or convenient for or incidental to
any or all of the foregoing or which can advantageously be conducted in
connection therewith, and to engage in, transact and carry on any business or
activity which a business corporation organized under the provisions of Chapter
156B of the General Laws of Massachusetts, as amended from time to time, or any
successor statute, may lawfully engage in, transact or conduct.
<PAGE> 6
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet IV.A.
------------------------
IV.A. DESIGNATION AND CLASSIFICATION OF STOCK
The aggregate number of shares of capital stock which the Corporation
has authority to issue is 25,000,000 consisting of:
(i) 20,000,000 shares of Common Stock, $.10 par value per share (the
"Common Stock"); and
(ii) 5,000,000 shares of Preferred Stock, $.10 par value per share (the
"Preferred Stock").
<PAGE> 7
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet IV.B.
________________________
IV.B. DESCRIPTION OF THE COMMON STOCK
The description of the Common Stock is as follows:
Each holder of Common Stock shall at every meeting of
stockholders be entitled to one vote in person or by proxy for each share of
Common Stock held by him. The holders of the Common Stock shall be entitled to
such dividends as may from time to time be declared by the Board of Directors
out of any funds legally available for the declaration of dividends, subject to
any provisions of these Articles of Organization, as amended from time to time,
and subject to the relative rights and preferences of any shares of Preferred
Stock authorized and issued hereunder. Subject to the relative rights and
preferences of any shares of Preferred Stock authorized and issued hereunder,
upon the dissolution or liquidation of the Corporation, whether voluntary or
involuntary, the holders of shares of Common Stock shall be entitled to receive
pro rata all assets of the Corporation available for distribution to its
stockholders.
<PAGE> 8
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet IV.C.
------------------------
IV.C. DESCRIPTION OF THE PREFERRED STOCK
The description of the Preferred Stock is as follows:
1. Certificate of Designation. The Board of Directors is authorized,
subject to limitations prescribed by law and the provisions of this Article IV,
to provide for the issuance of shares of Preferred Stock with or without series,
and, by filing a certificate pursuant to the applicable law of The Commonwealth
of Massachusetts (the "Certificate of Designation"), to establish from time to
time the number of shares to be included in each such series and to fix the
designation, preferences, voting powers, qualifications and special or relative
rights or privileges of the shares of each such series. In the event that at any
time the Board of Directors shall have established and designated one or more
series of Preferred Stock consisting of a number of shares less than the total
number of authorized shares of Preferred Stock, the remaining authorized shares
of Preferred Stock shall be deemed to be shares of an undesignated series of
Preferred Stock until designated by the Board of Directors as being a part of a
series previously established or a new series then being established by the
Board of Directors. Notwithstanding the fixing of the number of shares
constituting a particular series, the Board of Directors may at any time
thereafter authorize the issuance of additional shares of the same series except
as set forth in the Certificate of Designation.
2. Authority of Board. The authority of the Board of Directors with
respect to each series of Preferred Stock shall include, but not be limited to,
determination of the following:
(a) the number of shares constituting that series, which
number may be increased or decreased (but not below the number of shares of such
series then outstanding) from time to time by the Board of Directors, and the
distinctive designation of that series;
(b) whether any dividend shall be paid on shares of that
series, and, if so, the dividend rate on the shares of that series; whether
dividends shall be cumulative and, if so, from which date or dates, and the
relative rights of priority, if any, of payment of dividends on shares of that
series;
(c) whether shares of that series shall have voting rights in
addition to the voting rights provided by law and, if so, the terms of such
voting rights;
(d) whether shares of that series shall be convertible into
shares of Common Stock or another security and, if so, the terms and conditions
of such conversion, including provisions for adjustment of the conversion rate
in such events as the Board of Directors shall determine;
(e) whether shares of that series shall be redeemable and, if
so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable and the amount per share payable in
case of redemption, which amount may vary under different conditions and at
different redemption dates; and whether that series shall have a sinking fund
for the redemption or purchase of shares of that series and, if so, the terms
and amount of such sinking fund;
<PAGE> 9
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
(f) whether, in the event of purchase or redemption of the
shares of that series, any shares of that series shall be restored to the status
of authorized but unissued shares or shall have such other status as shall be
set forth in the Certificate of Designation;
(g) the rights of the shares of that series in the event of
the sale, conveyance, exchange or transfer of all or substantially all of the
property and assets of the Corporation, or the merger or consolidation of the
Corporation into or with any other corporation or entity, or the merger of any
other corporation or entity into it, or the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, and the relative
rights of priority, if any, of shares of that series to payment in any such
event;
(h) whether shares of that series shall carry any preemptive
right in or preemptive right to subscribe to any additional shares of Preferred
Stock or any shares of any other class of stock which may at any time be
authorized or issued, or any bonds, debentures or other securities convertible
into shares of stock of any class of the Corporation, or options or warrants
carrying rights to purchase such shares or securities; and
(i) any other designations, preferences, voting powers,
qualifications, and special or relative rights or privileges of the shares of
that series.
<PAGE> 10
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet VI.A.
------------------------
VI.A. CERTAIN TRANSACTIONS APPROVED BY THE BOARD OF DIRECTORS
Except as otherwise provided in these Articles of Organization, the
Corporation may authorize, by a vote of a majority of the shares of each class
of stock outstanding and entitled to vote thereon, (a) the sale, lease or
exchange of all or substantially all of its property and assets, including its
goodwill, upon such terms and conditions as it deems expedient, and (b) the
merger or consolidation of the Corporation into any other corporation or entity,
provided that such sale, lease, exchange, merger or consolidation shall have
been approved by a majority of the members of the Board of Directors.
<PAGE> 11
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet VI.B.
------------------------
VI.B. LIMITATION OF LIABILITY OF DIRECTORS
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director notwithstanding any provision of law imposing such liability;
provided, however, that this Article shall not eliminate or limit any liability
of a director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Sections 61 and 62 of the Massachusetts General Laws, Chapter 156B, as amended
or any successor statute (the "Massachusetts Business Corporation Law"), or (iv)
with respect to any transaction from which the director derived an improper
personal benefit.
No amendment or repeal of this Article shall adversely affect the
rights and protection afforded to a director of the Corporation under this
Article for acts or omissions occurring prior to such amendment or repeal.
If the Massachusetts Business Corporation Law is subsequently amended
to further eliminate or limit the personal liability of directors or to
authorize corporate action to further eliminate or limit such liability, then
the liability of the directors of the Corporation shall, without any further
action of the Board of Directors or the stockholders of the Corporation, be
eliminated or limited to the fullest extent permitted by the Massachusetts
Business Corporation Law.
<PAGE> 12
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet VI.C.
------------------------
VI.C. INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
1. Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative, investigative or
otherwise (hereinafter a "Proceeding"), by reason of the fact that he or she is
or was (a) a director of the Corporation, (b) an officer of the Corporation
elected or appointed by the stockholders or the Board of Directors, or (c)
serving, at the request of the Corporation as evidenced by a vote of the Board
of Directors prior to the occurrence of the event to which the indemnification
relates, as a director, officer, employee or agent of another person, including
service with respect to an employee benefit plan (a person described in (a), (b)
or (c) may hereinafter be referred to as an "Indemnitee"), whether the basis of
such Proceeding is alleged action in an official capacity as such a Director or
officer of the Corporation or as such other director, officer, employee or agent
or in any other capacity while serving as such a Director or officer of the
Corporation or as such other director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Massachusetts Business Corporation Law (but in the case of an
amendment to the Massachusetts Business Corporation Law, only to the extent that
such amendment permits the Corporation to provide broader indemnification rights
than permitted prior thereto), against all expense, liability and loss
(including, but not limited to, attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such Indemnitee in connection therewith and such indemnification
shall continue as to an Indemnitee who has ceased to be such a director,
officer, employee or agent and shall inure to the benefit of the Indemnitee's
heirs, executors and administrators; provided, however, that, except as provided
in Section 3 of this Article VI.C. with respect to Proceedings to enforce rights
to indemnification, the Corporation shall indemnify any such Indemnitee in
connection with a Proceeding (or part thereof) initiated by such Indemnitee only
if such Proceeding (or part thereof) was authorized or ratified by the Board of
Directors of the Corporation. The right to indemnification conferred in this
Article VI.C. shall be a contract right and shall include the right to be paid
by the Corporation for expenses incurred in defending any Proceeding in advance
of its final disposition (hereinafter an "Advancement of Expenses"); provided,
however, that, if the Massachusetts Business Corporation Law so requires, an
Advancement of Expenses incurred by an Indemnitee shall be made only upon
delivery to the Corporation of an undertaking (hereinafter an "Undertaking"), by
such Indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (hereinafter a "Final Adjudication") that such Indemnitee is not entitled
to be indemnified for such expenses under this Article VI.C. or otherwise. The
Corporation may accept any Undertaking without reference to the financial
ability of the Indemnitee to make repayment.
2. Indemnification of Employees and Agents of the Corporation. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification, and to an Advancement of Expenses,
to any employee or agent of the Corporation to the fullest extent of the
provisions of this Article VI.C.
3. Right of Indemnitee to Bring Suit. If a claim under this Article
VI.C. is not paid in full by the Corporation within sixty (60) days after a
written claim has been received by the
<PAGE> 13
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Corporation, except in the case of a claim for an Advancement of Expenses, in
which case the applicable period shall be twenty (20) days, the Indemnitee may
at any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim. If the Indemnitee is successful in whole or in part in any
such suit, or in a suit brought by the Corporation to recover an Advancement of
Expenses pursuant to the terms of an Undertaking, the Indemnitee shall also be
entitled to be paid the expense of prosecuting or defending such suit. In any
suit brought by the Indemnitee to enforce a right to indemnification hereunder
(but not in a suit brought by the Indemnitee to enforce a right to an
Advancement of Expenses) it shall be a defense that the Indemnitee has not met
the applicable standard of conduct set forth in the Massachusetts Business
Corporation Law. In addition, in any suit by the Corporation to recover an
Advancement of Expenses pursuant to the terms of an Undertaking, the Corporation
shall be entitled to recover such expenses upon a Final Adjudication that the
Indemnitee has not met the applicable standard of conduct set forth in the
Massachusetts Business Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or Stockholders)
to have made a determination prior to the commencement of such suit that
indemnification of the Indemnitee is proper in the circumstances because the
Indemnitee has met the applicable standard of conduct set forth in the
Massachusetts Business Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel or
stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall create a presumption that the Indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an Advancement of Expenses hereunder,
or by the Corporation to recover an Advancement of Expenses pursuant to the
terms of an Undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such Advancement of Expenses, under this
Article VI.C. or otherwise shall be on the Corporation.
4. Non-Exclusivity of Rights. The rights to indemnification and to
Advancement of Expenses conferred in this Article VI.C. shall not be exclusive
of any other right which any person may have or hereafter acquire under these
Articles of Organization, the By-Laws or any statute, agreement, vote of
stockholders or of disinterested Directors or otherwise.
5. Insurance; Offset. The Corporation may maintain insurance, at its
expense, to protect itself and any Director, officer, employee or agent of the
Corporation or any director, officer, employee or agent of another person
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Massachusetts Business Corporation Law. The Corporation's obligation
to provide indemnification under this Article VI.C. shall be offset to the
extent of any other source of indemnification or any otherwise applicable
insurance coverage under a policy maintained by the Corporation or any other
person.
6. Amendments. Without the consent of a person entitled to the
indemnification and other rights provided in this Article VI.C. (unless
otherwise required by the Massachusetts Business Corporation Law), no amendment
modifying or terminating such rights shall adversely affect such person's rights
under this Article VI.C. with respect to the period prior to such amendment.
7. Savings Clause. If this Article VI.C. or any portion hereof shall be
found invalid on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify
<PAGE> 14
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
each Indemnitee as to any expenses, liabilities and losses with respect to any
Proceeding to the fullest extent permitted by any applicable portion of this
Article VI.C. that shall not have been found invalid and to the fullest extent
permitted by applicable law.
<PAGE> 15
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet VI.D.
------------------------
VI.D. MAKING AND AMENDING BY-LAWS; PLACES OF MEETINGS OF STOCKHOLDERS;
PARTNERSHIP IN ANY BUSINESS ENTERPRISE
1. The Board of Directors shall have power to make, alter, amend and
repeal the By-Laws of the Corporation in whole or in part, except with respect
to any provision thereof which by law, these Articles of Organization or such
By-Laws requires action by the stockholders, who shall also have power to make,
alter, amend and repeal the By-Laws of the Corporation. Any By-Laws made by the
Board of Directors under the powers conferred hereby may be altered, amended, or
repealed by the Board of Directors or the stockholders.
2. Meetings of the stockholders may be held anywhere in the United
States.
3. The Corporation may be a partner in any business enterprise it would
have power to conduct by itself.
<PAGE> 16
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet VI.E.
------------------------
VI.E. TRANSACTIONS WITH AFFILIATED PERSONS
The Corporation may enter into contracts or transact business with one
or more of its directors, officers or stockholders or with any corporation,
organization or other concern in which one or more of its directors, officers or
stockholders are directors, officers, stockholders or are otherwise interested
and may enter into other contracts or transactions in which one or more of its
directors, officers or stockholders are in any way interested. In the absence of
fraud, no such contract or transaction shall be invalidated or in any way
affected by the fact that such one or more of the directors, officers or
stockholders of the Corporation have or may have any interest which is or might
be adverse to the interest of the Corporation even though the vote or action of
directors, officers or stockholders having such adverse interest may have been
necessary to obligate the Corporation upon such contract or transaction.
At any meeting of the Board of Directors (or of any duly authorized
committee thereof) at which any such contract or transaction shall be authorized
or ratified, any director having such adverse interest may vote or act thereat
with like force and effect as if he had no such interest, provided in such case
that the nature of such interest (though not necessarily the extent or details
thereof) shall be disclosed or shall have been known to the directors. A general
notice that a director or officer is interested in any corporation, organization
or other concern of any kind referred to above shall be a sufficient disclosure
as to the interest of such director or officer with respect to all contracts and
transactions with such corporation, organization or other concern. No director
shall be disqualified from holding office as a director or an officer of the
Corporation by reason of any such adverse interest, unless the Board of
Directors shall determine that such adverse interest is detrimental to the
Corporation. In the absence of fraud, no director, officer or stockholder having
such adverse interest shall be liable on account of such adverse interest to the
Corporation or to any stockholder or creditor thereof or to any other person for
any loss incurred by it under or by reason of such contract or transaction, nor
shall any such director, officer or stockholder be accountable on such ground
for any gains or profits realized thereon.
<PAGE> 17
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet VIII.A.
--------------------------
VIII.A. OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
Name Residential Address Post Office Address
- ---- ------------------- -------------------
<S> <C> <C>
President: Anthony J. Armini 5 Skytop Drive Same
Manchester, MA
Vice President: Darlene Deptula-Hicks 2 Sarah's Way Same
Newton, NH
Treasurer: Darlene Deptula-Hicks Same as above Same
Clerk: Stephen N. Bunker 95 Audubon Road Same
Wakefield, MA
Directors:
Anthony J. Armini Same as above Same
Stephen N. Bunker Same as above Same
Robert Hoisington 1000 South Woodward Same
Unit No. 150
Birmingham, MI
Shunkichi Shimizu TK Holdings, Inc. Same
PNC Center
201 E. 5th Street
Suite 1440
Cincinnati, OH 45202
</TABLE>
<PAGE> 18
IMPLANT SCIENCES CORPORATION
AMENDED AND RESTATED ARTICLES OF ORGANIZATION
Continuation Sheet VIII.B.
--------------------------
VIII.B. BRIEF DESCRIPTION OF AMENDMENTS
Article III: Article III has been amended to increase the number of
authorized shares of Common Stock from 17,142,857 shares,
$.09 par value, to 20,000,000 shares, $.10 par value.
Article IV: Article IV has been amended to revise descriptions of the Common
Stock and the Preferred Stock.
<PAGE> 1
Exhibit 4.2
SPECIMEN WARRANT CERTIFICATE
VOID AFTER
REDEEMABLE COMMON STOCK PURCHASE WARRANT CERTIFICATE
TO PURCHASE SHARES OF COMMON STOCK
IMPLANT SCIENCES CORPORATION
NUMBER WARRANTS
THIS CERTIFIES THAT, FOR VALUE RECEIVED CUSIP 45320R116
or registered assigns (the "Registered Holder") is the owner of the number of
Redeemable Common Stock Purchase Warrants (the "Warrants") specified above. One
(1) Warrant initially entitles the Registered Holder to purchase, subject to the
terms and conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined) including, without limitation, the right of the Company (as
hereinafter defined) to redeem this Warrant, one (1) fully paid and
nonassessable share of Common Stock, $.10 par value per share, of Implant
Sciences Corporation, a Massachusetts corporation (the "Company"), at any time
after the Separation Date (the date on which this Warrant trades separately from
the Unit with which it was issued as more particularly described in the Warrant
Agreement (as defined below), (the "Initial Warrant Exercise Date"), and the
Expiration Date (as hereinafter defined) unless this Warrant is sooner redeemed
upon the presentation and surrender of this Warrant Certificate with the
Subscription Form on the reverse hereof duly executed, at the corporate office
of American Securities Transfer & Trust Inc., P.O. Box 1596, Denver, Colorado
80201, as Warrant Agents, or their successors (collectively, the "Warrant
Agents"), accompanied by payment of $9.00 subject to adjustment (the "Purchase
Price"), in lawful money of the United States of America in cash or by official
bank or certified check made payable to the Warrant Agent for the account of the
Company.
This Warrant Certificate and each Warrant represented hereby are issued pursuant
to and are subject in all respects to the terms and conditions set forth in the
Unit and Warrant Agreement (the "Warrant Agreement"), dated April 9, 1999, by
and between the Company and the Warrant Agent. The Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitations of rights, obligations,
duties and immunities of the Warrant
<PAGE> 2
Agent, the Company and the holders (the words holders or holder meaning the
registered holders or registered holder) of the Warrants.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on
___________ or such earlier date as the Warrants shall be redeemed. The
Expiration Date may, but need not be, extended from time to time, in the sole
and absolute discretion of the Company. If such date shall in the State of New
York be a holiday or a day on which the banks are authorized to close, then the
Expiration Date shall mean 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.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such securities
is effective or an exemption thereunder is available. The Company has covenanted
and agreed that it will file a registration statement under the federal
securities laws, use its best efforts to cause the same to become effective, use
its best efforts to keep such registration statement current, if required under
the Act, while any of the Warrants are outstanding, and deliver a prospectus
which complies with Section 10(a)(3) of the Act to the Registered Holder
exercising this Warrant. This Warrant shall not be exercisable by a Registered
Holder in any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
<PAGE> 3
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, commencing _________ ,
this Warrant may be redeemed by the Company, in whole or in part, at a
redemption price of $.20 per Warrant provided that the closing bid price of the
Common Stock averages at least $10.50 for twenty (20) consecutive trading days.
On and after 5:00 p.m. on the date immediately prior to the date fixed for
redemption, the Registered Holder shall have no rights with respect to the
Warrants except to receive the $.20 per Warrant upon surrender of this Warrant
Certificate.
Under certain circumstances, the Underwriters shall be entitled to receive
an aggregate of five percent (5%) of the Purchase Price of the Warrants
represented hereby.
Prior to due presentment for registration or transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon 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, except as provided in the
Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to its conflict of
law principles.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated:
IMPLANT SCIENCES CORPORATION
<PAGE> 4
CHAIRMAN OF THE BOARD
COUNTERSIGNED:
AMERICAN SECURITIES TRANSFER & TRUST, INC.
(DENVER, CO)
AS WARRANT AGENT
BY:
AUTHORIZED OFFICER
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder irrevocably elects to exercise
_________________ Warrants represented by this Warrant Certificate, and to
purchase the shares of Common Stock issuable upon the exercise of such Warrants,
and requests that Certificates for such shares shall be issued in the name of:
________________________________________________________________________________
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
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 below.
Dated: __________________________ __________________________________
(SIGNATURE)
__________________________________
___________________________________
(ADDRESS)
___________________________________
(TAXPAYER IDENTIFICATION NUMBER)
___________________________________
(SIGNATURE GUARANTEED)
<PAGE> 5
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Transfer Warrants
For Value Received, _____________________ hereby sell, assign and transfer unto:
________________________________________________________________________________
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
________________________________________________________________ of the Warrants
represented by this Warrant Certificate, and hereby irrevocably constitute and
appoint
__________________________________________________________ Attorney, to transfer
this Warrant Certificate on the books of the Company, with full power of
substitution in the premises.
Dated: ______________________ __________________________________
(SIGNATURE)
__________________________________
(SIGNATURE)
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
<PAGE> 1
EXHIBIT 4.3
SPECIMEN UNIT CERTIFICATE
EACH UNIT CONSISTING OF ONE SHARE OF
COMMON STOCK, PAR VALUE $.10,
AND ONE REDEEMABLE COMMON STOCK
PURCHASE WARRANT
CUSIP 45320R 20 7
THIS CERTIFICATE
IS TRANSFERABLE
IN DENVER, CO
IMPLANT SCIENCES CORPORATION
THIS CERTIFIES THAT, FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of the number of
Units specified above, each of which consists of one share of Common Stock, par
value $.10, and one Redeemable Common Stock Purchase Warrant (the "Warrant").
Each Warrant entitles the holder to purchase one share of Common Stock, at an
exercise price of $9.00 at any time commencing upon separation of the Common
Stock and Warrants (the "Commencement Date") and ending __________, 200_. The
Warrants are redeemable by the Company at a redemption price of $.20 per Warrant
at any time, provided that the reported closing bid price of the Common Stock as
reported on the Nasdaq SmallCap Market, Inc. (or if the Common Stock is not
traded on such market then on the principal trading market for the Common Stock)
averages at least $10.50 for a period of 20 consecutive trading days.
The shares of Common Stock and Warrants comprising the Units shall be
separately tradeable until at least ________________, 1999 or such later time as
may be determined by the underwriter for the initial public offering of the
Units. The Warrants can only be redeemed if a current prospectus covering the
Warrants and the shares of Common Stock issuable thereunder is then in effect.
The terms of the Warrants are governed by a Unit and Warrant Agreement dated as
of April 9, 1999 (the "Unit and Warrant Agreement") between the Company and
American Securities Transfer & Trust, Inc. as Warrant Agent (the "Agent") and
are subject to the terms and provisions contained therein and on the face of the
certificates covered thereby, to all of which terms and provisions the holder of
this Unit Certificate consents by acceptance hereof.
Copies of the Unit and Warrant Agreement are on file at the office of
the Agent at American Securities Transfer & Trust, Inc., 1825 Lawrence Street,
Suite 444, Denver, Colorado 80202, and are available to any Unit or Warrant
holder on written request and without cost.
This Unit Certificate is not valid unless countersigned by the Transfer
Agent and Registrar of the Company.
IN WITNESS WHEREOF, the Company has caused this Unit Certificate to be
duly executed manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted heron.
Dated:
------------------------
Countersigned and Registered
American Securities Transfer & Trust, Inc.
PO Box 1596
Denver, Colorado 80201
Transfer Agent and Registrar
By
----------------------------
Authorized Signature
Implant Sciences Corporation
Corporate Seal
Implant Sciences Corporation
By:
---------------------------
Treasurer, Vice President
and Chief Financial Officer
By:
---------------------------
President and Chief Executive
Officer
<PAGE> 2
IMPLANT SCIENCES CORPORATION
The Registered Holder hereby is entitled, at any time commencing on the
Separation Date (as defined in the Unit and Warrant Agreement, dated April 9,
1999), to exchange each Unit represented by this Unit Certificate for Common
Stock Certificates representing one share of Common Stock for each Unit
represented by this Unit Certificate and Warrant Certificates representing one
Warrant for each Unit represented by this Unit Certificate upon surrender of
this Unit Certificate to the Unit Agent at its Corporate Office specified in the
Unit and Warrant Agreement together with any documentation required by such
Agent.
REFERENCE IS MADE TO THE UNIT AND WARRANT AGREEMENT REFERRED TO ON THE
FRONT SIDE HEREOF AND THE PROVISIONS OF SUCH UNIT AND WARRANT AGREEMENT SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH ON THE FACE OF
THIS CERTIFICATE. COPIES OF THE UNIT AND WARRANT AGREEMENT MAY BE OBTAINED UPON
WRITTEN REQUEST FROM THE UNIT AGENT, AT 1825 LAWRENCE STREET, SUITE 444, DENVER,
COLORADO 80202.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
COM PROP - as community property
UNIF GIFT MIN ACT - ________ Custodian ________
(Cust) (Minor)
under Uniform Gifts to Minors
Act _________________________
(State)
UNIF TRF MIN ACT - ________ Custodian ________
(Cust) (Minor)
under Uniform Transfers to Minors
Act _____________________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received, _____________________________________________ hereby
sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________
| |
| |
|_____________________________________|
_______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Units represented by the within Certificate, and do(es) hereby irrevocably
constitute and appoint
_______________________________________________________________________________
Attorney to transfer the said Unit(s) on the books of the within named Company
with full power of substitution in the premises.
Dated ___________________
______________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THIS UNIT CERTIFICATE IN EVERY
PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED: ______________________________________________
THE SIGNATURE(S) MUST BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE> 1
EXHIBIT 10.44
UNIT AND WARRANT AGREEMENT
Implant Sciences Corporation, a Massachusetts corporation (the
"Company"), and American Securities Transfer & Trust, Inc. ("AST"), 1825
Lawrence Street, Suite 444, Denver, Colorado 80202, a Colorado corporation (the
"Agent"), agree as follows:
1. Purpose. The Company proposes to publicly offer and issue
1,150,000 units ("Units"), each Unit consisting of (i) one
share (a "Share") of the Company's common stock, $.10 par
value per share ("Common Stock"), and (ii) one Redeemable
Common Stock Purchase Warrant (a "Warrant") permitting the
purchase of one Share of Common Stock. The Agent has agreed to
serve as Transfer Agent for the Common Stock and the preferred
stock, $.10 par value per share, of the Company pursuant to
that certain Agreement Appointing Transfer Agent and
Registrar, dated October 19, 1998, between the Company and the
Agent (the "Transfer Agent Agreement"). The Company and the
Agent now wish to provide for the Agent to act as transfer
agent for the Units and warrant agent for the Warrants.
Subject to the terms and conditions of this Agreement and the
Transfer Agent Agreement, the Company hereby authorizes the
Agent to originally issue, register and countersign
certificates representing the Units and the Warrants covered
by this Agreement upon being furnished with an appropriate
written request signed by an officer of the Company, a
certified copy of the resolutions of the Board of Directors or
a copy of
<PAGE> 2
the minutes of a meeting of the Board of Directors authorizing
such issuance and, if specifically requested by the Agent, an
opinion of counsel regarding the status of such securities
under the Securities Act of 1933, as amended (the "Securities
Act"), and any other applicable Federal or state statutes. The
Agent hereby agrees to serve as transfer agent for the Units
and warrant agent for the Warrants and to establish and
maintain such books and records as may be required for the
performance of its agency duties and responsibilities, and to
establish and maintain ledgers for the Company and to make
entries therein of all Certificates (as defined in Section 5)
issued, canceled and transferred.
2. Units. The Common Stock and the Warrants which comprise the
Units will trade only as Units until (a) at least 30 days from
the date of the Prospectus for the initial public offering of
the Units (the "Prospectus Date") or (b) such later time as
may be determined by Westport Resources Investment Services,
Inc. (the "Representative"). Such time being hereinafter
referred to as the "Separation Date." In the event that the
Separation Date shall occur as a result of the decision of the
Representative, the Company shall promptly so notify the Agent
in writing. After the occurrence of the Separation Date, Units
shall be treated as separate Shares and Warrants on the books
and ledgers maintained by the Agent. After the Separation Date
the Agent shall cease to issue certificates representing Units
2
<PAGE> 3
and shall issue certificates representing Shares and Warrants
and/or make other appropriate book entries upon the exchange,
split up, or transfer of a Unit.
3. Warrants. Subject to this Agreement including, without
limitation, Sections 4, 8, 12, and 13, each Warrant will
entitle the registered holder of a Warrant ("Warrant Holder")
to purchase from the Company one Share at $9.00 (the "Exercise
Price"). A Warrant Holder may exercise all or any number of
Warrants resulting in the purchase of a whole number of
Shares.
4. Exercise Period. Subject to this Agreement including, without
limitation, Section 8, the Warrants may be exercised at any
time after the Separation Date (the "Commencement Date") and
ending at 5:00 p.m., New York City time three years after the
Prospectus Date (as such date may be extended in accordance
with the provisions of Section 8(h) hereof, the "Expiration
Date"). After the Expiration Date, any unexercised Warrants
will be void and all rights of Warrant Holders shall cease.
5. Certificates. The Unit Certificates shall be in registered
form only and shall be substantially in the form set forth in
Exhibit A attached to this Agreement. Unit Certificates shall
be signed by, or shall bear the facsimile signature of, the
President or a Vice President of the Company and the Treasurer
or an Assistant Treasurer of
3
<PAGE> 4
the Company and shall bear a facsimile of the Company's
corporate seal. If any person, whose facsimile signature has
been placed upon any Unit Certificate as the signature of an
officer of the Company, shall have ceased to be such officer
before such Unit Certificate is countersigned, issued and
delivered, such Unit Certificate shall be countersigned,
issued and delivered with the same effect as if such person
had not ceased to be such officer. Any Unit Certificate may be
signed by, or made to bear the facsimile signature of, any
person who at the actual date of the preparation of such Unit
Certificate shall be a proper officer of the Company to sign
such Unit Certificate even though such person was not such an
officer upon the date of the Agreement.
The Warrant Certificates shall be in registered form
only and shall be substantially in the form set forth in
Exhibit B attached to this Agreement. Warrant Certificates
shall be signed by, or shall bear the facsimile signature of,
the President or a Vice President of the Company and the
Treasurer or an Assistant Treasurer of the Company and shall
bear a facsimile of the Company's corporate seal. If any
person, whose facsimile signature has been placed upon any
Warrant Certificate as the signature of an officer of the
Company, shall have ceased to be such officer before such
Warrant Certificate is countersigned, issued and delivered,
such Warrant Certificate shall be countersigned, issued and
delivered with the same effect as if such person had not
ceased to be such officer. Any Warrant Certificate may be
signed by, or made to bear the facsimile signature of, any
person who at the actual date of the preparation of such
Warrant Certificate shall be a proper officer of the Company
to
4
<PAGE> 5
sign such Warrant Certificate even though such person was not
such an officer upon the date of the Agreement.
The Company shall furnish the Agent with a sufficient
quantity of blank Certificates and from time to time will
renew such supply upon the reasonable request of the Agent.
Such blank Certificates shall be properly signed by officers
of the Company authorized by law and in accordance with the
Company's by-laws to sign such Certificates and, if requested
by the Agent, shall bear the corporate seal or a facsimile
thereof.
Unit Certificates and Warrant Certificates are
sometimes hereinafter referred to collectively as
"Certificates." The holder of a Certificate is referred to
herein as a "Holder".
6. Countersigning. Certificates shall be manually countersigned
by the Agent and shall not be valid for any purpose unless so
countersigned. The Agent hereby is authorized to countersign
and deliver to, or in accordance with the proper instructions
of, any Unit Holder or Warrant Holder any Certificate which is
properly issued.
7. Registration of Transfer and Exchanges. Subject to this
Agreement including, without limitation, Sections 1 and 2, the
Agent shall from time to time register the transfer of any
outstanding Certificate upon records maintained by the Agent
for such
5
<PAGE> 6
purpose upon surrender of such Certificate to the Agent for
transfer, accompanied by appropriate instruments of transfer
in form satisfactory to the Company and the Agent and duly
executed by the Holder or a duly authorized attorney. Upon any
such registration of transfer, a new Certificate or
Certificates shall be issued in the name of and to the
transferee and the surrendered Certificate shall be canceled.
8. Exercise and Redemption of Warrants.
(a) Subject to this Agreement including, without
limitation, Sections 8(i), 12 and 13, any one Warrant
or any multiple of one Warrant evidenced by any
Warrant Certificate may be exercised upon any single
occasion on or after the Exercise Date, and on or
before the Expiration Date (as more particularly set
forth in Section 4). A Warrant shall be exercised by
the Warrant Holder by surrendering to the Agent the
Warrant Certificate evidencing such Warrant with the
exercise form on the reverse of such Warrant
Certificate duly completed and executed and
delivering to the Agent, by good check or bank draft
payable to the order of the Company, the Exercise
Price for each Share to be purchased.
(b) Upon receipt of a Warrant Certificate with the
exercise form thereon duly executed together with
payment in full of the Exercise Price for the Shares
for which Warrants are then being exercised, the
Agent shall requisition from any transfer agent for
the Shares, and upon receipt shall make delivery of,
certificates evidencing the total number of whole
Shares for which Warrants
6
<PAGE> 7
are then being exercised in such names and
denominations as are required for delivery to, or in
accordance with the instructions of, the Warrant
Holder. Such certificates for the Shares shall be
deemed to be issued, and the person to whom such
Shares are issued of record shall be deemed to have
become a holder of record of such Shares, as of the
date of the surrender of such Warrant Certificate and
payment of the Exercise Price, whichever shall last
occur; provided that if the books of the Company with
respect to the Shares shall be deemed to be closed,
the person to whom such Shares are issued of record
shall be deemed to have become a record holder of
such Shares, as of the date on which such books shall
next be open (whether before, on or after the
Expiration Date), whichever shall have last occurred.
(c) If less than all the Warrants evidenced by a Warrant
Certificate are exercised upon a single occasion, a
new Warrant Certificate for the balance of the
Warrants not so exercised shall be issued and
delivered to, or in accordance with, transfer
instructions properly given by the Warrant Holder
until the Expiration Date.
(d) All Warrant Certificates surrendered upon exercise of
the Warrants shall be canceled and shall not be
reissued.
(e) Upon the exercise of any Warrant, the Agent shall
promptly deposit the payment into an escrow account
established by mutual agreement of the Company and
the Agent at a federally insured commercial bank. All
funds deposited in the escrow account will be
disbursed on a weekly basis to the
7
<PAGE> 8
Company once they have been determined by the Warrant
Agent to be collected funds. Once the funds are
determined to be collected, the Warrant Agent shall
cause the share certificate(s) representing the
exercised Warrants to be issued.
(f) Usual and customary out-of-pocket expenses incurred
by American Securities Transfer & Trust, Inc. while
acting in the capacity as Agent will be paid by the
Company. These expenses, including costs of delivery
of Share certificates to the Warrant Holder upon
exercise of Warrants, will be deducted from the
exercise fee submitted prior to distribution of funds
to the Company. A detailed accounting statement
relating to the number of Shares exercised, names of
registered Warrant Holder(s) and the net amount of
exercised funds remitted will be given to the Company
with the payment of each exercise amount.
(g) Except as otherwise provided in Section 9 of this
Agreement, at the time of exercise of the Warrant(s),
the transfer fee is to be paid by the Company. In the
event the shareholder must pay the fee and fails to
remit same, the fee will be deducted from the
proceeds prior to distribution to the Company.
(h) The Company in its sole discretion, may extend the
Expiration Date. If the Company elects to do so, it
will give not less than 30 days prior written notice
of such extension, specifying the date to which the
Expiration Date has been extended, to the Agent, the
Warrant Holders and to any stock exchange or Self
Regulatory Organization on which the Warrants may be
listed.
8
<PAGE> 9
(i) The Company may redeem the Warrants after the
Warrants become exercisable, by giving notice to the
Agent, if the Common Stock of the Company shall have
had a Closing Price (hereinafter defined) of not
less than $10.50 for a period of 20 consecutive
trading days after the Warrants became exercisable.
The Company shall pay Warrant Holders $.20 per
Warrant for each Warrant not exercised prior to the
close of business on the date specified in the
notice ("Redemption Call Date"). Whenever the
Exercise Price is adjusted pursuant to Section 13, a
similar and proportionate adjustment will be made in
the redemption price. Such notice shall contain a
certification by the Company that the above
condition to redemption of the Warrants has been
satisfied. Notice of redemption shall be mailed by
the Agent to all registered holders of Warrants in
accordance with the provisions of Section 20, at
least 30 days, but no more than 60 days, prior to
the Redemption Call Date. The Agent shall mail such
notice to all registered holders of Warrants on a
date designated by the Company, but in no event
shall such designated date be earlier than the fifth
business day after the date on which the Agent
received notice of the redemption from the Company.
The right to exercise the Warrants shall expire at
the close of business on the Redemption Call Date.
At the time of any such notice or any time after
such notice or prior to the Redemption Call Date,
the Company may deposit, or cause its nominee to
deposit, the aggregate redemption price (the
calculation
9
<PAGE> 10
of which shall be certified by the Company or its
agents) for disbursal of the monies so deposited upon
proper surrender of the Warrants. In the event the
Warrant Holder shall not, within three years after
the Redemption Call Date, claim the amount deposited
for the redemption of the Warrants, the depositary
shall upon demand pay over to the Company such
unclaimed amounts and shall thereafter be relieved
from all responsibility.
(j) As used in this Warrant Agreement, the term "Closing
Price" of the shares of Common Stock for a day or
days shall mean (i) if the shares of Common Stock are
not listed or admitted for trading on a national
securities exchange, (A) the closing bid price of the
shares of Common Stock in the Nasdaq Small Cap Market
(or on the Nasdaq Stock Market, if so quoted) or (B)
if the shares of Common Stock are not so quoted, in
the over-the-counter market, as reported by the
National Quotation Bureau, Inc., or an equivalent
generally accepted reporting service, or (ii) if the
shares of Common Stock are listed or admitted for
trading on a national securities exchange, the last
reported sale price regular way, or, in case no such
reported sale takes place on such day or days, the
reported closing bid price regular way, in either
case on the principal national securities exchange on
which the shares of Common Stock are listed or
admitted for trading.
9. Transfer Taxes and Fees. The Company will pay all transfer
taxes and fees attributable to the initial issuance of Shares
upon exercise of Warrants. The Company
10
<PAGE> 11
shall not, however, be required to pay any transfer taxes and
fees which may be payable in respect to any transfer involved
in any issue of Unit Certificates or Warrant Certificates or
in the issue of any certificates of Shares in the name other
than that of the Warrant Holder upon the exercise of any
Warrant.
10. Mutilated or Missing Certificates. On receipt by the Company
and the Agent of evidence satisfactory as to the ownership of
and the loss, theft, destruction or mutilation of any
Certificate, the Company shall execute and the Agent shall
countersign and deliver in lieu thereof, a new Certificate
representing an equal aggregate number of Units or Warrants as
the case may be. In the case of loss, theft or destruction of
any Certificate, the Holder requesting issuance of a new
Certificate shall be required to secure an indemnity bond from
an approved surety bonding company. In the event a Certificate
is mutilated, such Certificate shall be surrendered and
canceled by the Agent prior to delivery of a new Certificate.
Applicants for a substitute Certificate shall also comply with
such other regulations and pay such other reasonable charges
as the Agent may prescribe.
11. Reservation of Shares. For the purpose of enabling the Company
to satisfy all obligations to issue Shares upon exercise of
Warrants, the Company will at all times reserve and keep
available free from preemptive rights, out of the aggregate of
its authorized but unissued shares, the full number of Shares
which may be issued upon the exercise of the Warrants and such
Shares will upon issue be fully paid and
11
<PAGE> 12
nonassessable by the Company and free from all taxes, liens,
charges and security interests with respect to the issue
thereof.
12. Governmental Restrictions. If any Shares issuable upon the
exercise of Warrants require registration or approval of any
governmental authority, the Company will endeavor to secure
such registration or approval; provided that in no event shall
such Shares be issued, and the Company shall have the
authority to suspend the exercise of all Warrants, until such
registration or approval shall have been obtained. If any such
period of suspension continues past the Expiration Date, all
Warrants, the exercise of which have been requested on or
prior to the Expiration Date, shall be exercisable upon the
removal of such suspension until the close of business on the
business day immediately following the expiration of such
suspension.
Notwithstanding any other provision of this Agreement or of
the Warrants to the contrary, the Warrants shall not be
exercisable by the holder of any Warrant Certificate (a) if a
registration statement covering the issuance of the shares of
Common Stock subject to such Warrant is not effective at the
time of exercise or an exception from registration not
available or (b) if such holder is resident in a jurisdiction
under the securities or blue sky laws of which the shares of
Common Stock issuable upon exercise of such Warrant
Certificate are not registered or qualified or exempt from
registration or qualification or in which a current prospectus
12
<PAGE> 13
meeting the requirements of the laws of such jurisdiction
cannot be lawfully delivered by or on behalf of the Company.
The Company covenants and agrees that it will file a
registration statement under the Securities Act, (which
registration statement may be the registration statement for
the Company's initial public offering), use its best efforts
to cause such registration statement to become effective, use
its best efforts to keep such registration statement current,
if required under the Securities Act, while any of the
Warrants are outstanding, and deliver a prospectus which
complies with Section 10(a) (3) of the Securities Act to any
Holder exercising a Warrant (if so required by the Securities
Act).
13. Adjustment of Exercise Price, Number of Shares, or Number of
Warrants. The Exercise Price, the number and kind of
securities purchasable upon the exercise of each Warrant, and
the number of Warrants outstanding shall be subject to
adjustment from time to time upon the happening of the events
enumerated in this Section 13.
(a) In case the Company shall at any time after the date
of this Warrant Agreement (i) pay a dividend in
shares of Common Stock or other stock of the Company
or make a distribution in shares of Common Stock or
such other stock to holders of all its outstanding
shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, (iii) combine the
outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or (iv)
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<PAGE> 14
issue by reclassification of its shares of Common
Stock other securities of the Company (including any
such reclassification in connection with a
consolidation or merger in which the Company is the
continuing corporation), the number and kind of
shares purchasable upon exercise of each Warrant
outstanding immediately prior thereto shall be
adjusted so that the holder of each Warrant shall be
entitled to receive at the same aggregate Warrant
Exercise Price the kind and number of shares of
Common Stock or other securities of the Company which
the holder would have owned or have been entitled to
receive after the happening of any of the events
described above had such Warrant been exercised in
full immediately prior to the earlier of the
happening of such event or any record date with
respect thereto. In the event of any adjustment of
the total number of shares of Common Stock
purchasable upon the exercise of the then outstanding
Warrants pursuant to this paragraph (a), the Exercise
Price shall be adjusted to be the amount resulting
from dividing the number of shares of Common Stock
(including fractional shares of Common Stock) covered
by such Warrant immediately after such adjustment
into the total amount payable upon exercise of such
Warrant in full immediately prior to such adjustment.
An adjustment made pursuant to this paragraph 13(a)
shall become effective immediately after the
effective date of such event retroactive to the
record date, if any, for such event. Such adjustment
shall be made successively whenever any event listed
above shall occur.
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<PAGE> 15
(b) In case the Company shall issue rights, options, or
warrants to all holders of its outstanding shares of
Common Stock, entitling them (for a period expiring
within 45 days after the record date for the
determination of stockholders entitled to receive
such rights, options, or warrants) to subscribe for
or purchase shares of Common Stock (or securities
exchangeable for or convertible into shares of Common
Stock) at a price per share of Common Stock (or
having an exchange or conversion price per share of
Common Stock, with respect to a security exchangeable
for or convertible into shares of Common Stock) which
is less than 95% of the current Market Price per
share of Common Stock (as defined in paragraph (d) of
Section 13) on such record date, then the Exercise
Price shall be adjusted by multiplying the Exercise
Price in effect immediately prior to such record date
by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock
which the aggregate offering price of the total
number of shares of Common Stock so to be offered (or
the aggregate initial exchange or conversion price of
the exchangeable or convertible securities to be
offered) would purchase at such Market Price and of
which the denominator shall be the number of shares
of Common Stock outstanding on such record date plus
the number of additional shares of Common Stock to be
offered for subscription or purchase (or into which
the exchangeable or convertible securities so to be
offered are initially exchangeable or convertible).
Such adjustment shall become effective at the
15
<PAGE> 16
close of business on such record date; however, to
the extent that shares of Common Stock (or securities
exchangeable for or convertible into shares of Common
Stock) are not delivered after the expiration of such
rights, options, or warrants, the Exercise Price
shall be readjusted (but only with respect to
Warrants exercised after such expiration) to the
Exercise Price which would then be in effect had the
adjustments made upon the issuance of such rights,
options, or warrants been made upon the basis of
delivery of only the number of shares of Common Stock
(or securities exchangeable for or convertible into
shares of Common Stock) actually issued. In case any
subscription price may be paid in a consideration,
part or all of which shall be in a form other than
cash, the value of such consideration shall be as
determined by the Board of Directors of the Company
and shall be described in a statement filed with the
Warrant Agent. Shares of Common Stock owned by or
held for the account of the Company shall not be
deemed outstanding for the purpose of any such
computation.
(c) In case the Company shall distribute to all holders
of its shares of Common Stock (including any such
distribution made in connection with a consolidation
or merger in which the Company is the surviving
corporation) evidences of its indebtedness or assets
(other than cash dividends and distributions payable
out of consolidated net income in accordance with
Delaware law or earned surplus and dividends or
distributions payable in shares of stock described in
paragraph (a) above) or rights, options, or warrants
or
16
<PAGE> 17
exchangeable or convertible securities containing the
right to subscribe for or purchase shares of Common
Stock (excluding those expiring within 45 days after
the record date mentioned in (b) above), then the
Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the
record date for the determination of stockholders
entitled to receive such distribution by a fraction,
of which the numerator shall be the current Market
Price per share of Common Stock (as defined in
paragraph (d) of this Section 13) on such record
date, less the fair market value (as determined by
the Board of Directors of the Company, whose
determination shall be conclusive and described in a
statement filed with the Warrant Agent) of the
portion of the evidences of indebtedness or assets so
to be distributed or of such rights, options or
warrants applicable to one share of Common Stock and
of which the denominator shall be such current Market
Price per share of Common Stock. Such adjustment
shall be made whenever any such distribution is made
and shall become effective on the date of
distribution retroactive to the record date for the
determination of stockholders entitled to receive
such distribution.
(d) For the purpose of any computation under paragraphs
(b) and (c) of this Section 13, the current Market
Price per share of Common Stock at any date shall be
deemed to be the average daily Closing Prices of the
shares of Common Stock for the 15 consecutive trading
days commencing 20 trading days before the day in
question.
17
<PAGE> 18
(e) No adjustment in the Exercise Price shall be required
unless such adjustment would require any increase or
decrease of at least one percent or more of the
Exercise Price; provided, however, that any
adjustments which by reason of this paragraph (e) are
not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section 13 shall be made to
the nearest cent or to the nearest one-hundredth of a
share, as the case may be
(f) Unless the Company shall have exercised its election
as provided in paragraph (g) of this Section 13, upon
each adjustment of the Exercise Price as a result of
the calculations made in paragraphs (b) or (c) of
this Section 13, each Warrant outstanding prior to
the making of the adjustment in the Exercise Price
shall thereafter evidence the right to purchase at
the adjusted Exercise Price, that number of shares of
Common Stock (calculated to the nearest hundredth)
obtained by (i) multiplying the number of shares of
Common Stock purchasable upon exercise of a Warrant
prior to adjustment of the number of shares of Common
Stock by the Exercise Price in effect prior to
adjustment of the Exercise Price and (ii) dividing
the product so obtained by the Exercise Price in
effect after such adjustment of the Exercise Price.
(g) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number
of Warrants in substitution for any adjustment in the
number of shares of Common Stock purchasable upon the
exercise of a Warrant as provided in paragraph (f) of
this Section 13. Each of the Warrants
18
<PAGE> 19
outstanding after such adjustment of the number of
Warrants shall be exercisable for one 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
hundredth) obtained by dividing the Exercise Price in
effect prior to adjustment of the Exercise Price by
the Exercise Price in effect after adjustment of the
Exercise Price. The Company shall cause the Agent to
send to each Warrant Holder an announcement of its
election to adjust the number of Warrants, indicating
the record date for the adjustment, and, if known at
the time, the amount of the adjustment to be made.
This record date may be the date on which the
Exercise Price is adjusted or any day thereafter, but
shall be at least ten days later than the date such
announcement is sent to the Warrant Holders. Upon
each adjustment of the number of Warrants pursuant to
this paragraph (g), the Company shall, as promptly as
practicable, cause to be distributed to holders of
record of Warrant Certificates on such record date
Warrant Certificates evidencing, the additional
Warrants to which such holders shall be entitled as a
result of such adjustment, or at the option of the
Company, shall cause to be distributed to such
holders of record in substitution and replacement for
the Warrant Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof
if required by the Company, new Warrant Certificates
evidencing all the Warrants to which such holders
shall be entitled after such adjustment. Warrant
Certificates so to be distributed shall be issued,
19
<PAGE> 20
executed, and countersigned in the manner specified
in this Agreement (but may bear, at the option of the
Company, the adjusted Exercise Price) and shall be
registered in the names of the holders of record of
Warrant Certificates on the record date specified in
the announcement sent to Warrant Holders.
(h) In case of any capital reorganization of the Company,
or of any reclassification of the shares of Common
Stock (other than a reclassification of the shares of
Common Stock referred to in paragraph (a) of this
Section 13, or in case of the consolidation of the
Company with, or other merger of the Company with, or
merger of the Company into, any other corporation
(other than a reclassification of the shares of
Common Stock referred to in paragraph (a) of this
Section 13 or a consolidation or merger which does
not result in any reclassification or change of the
outstanding shares of Common Stock) or of the sale of
the properties and assets of the Company as, or
substantially as, an entirety to any other
corporation or entity, each Warrant shall after such
capital reorganization, reclassification of shares of
Common Stock, consolidation, merger or sale, be
exercisable, upon the terms and conditions specified
in this Warrant Agreement, for the number of shares
or other securities, assets, or cash to which a
holder of the number of shares of Common Stock
purchasable (at the time of such capital
reorganization, reclassification of shares of Common
stock, consolidation, merger or sale) upon exercise
of such Warrant would have been entitled upon such
capital reorganization, reclassification of shares of
Common Stock,
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<PAGE> 21
consolidation, merger, or sale; and in any such case,
if necessary, the provisions set forth in this
Section 13 with respect to the rights and interests
thereafter of the holders of the Warrants shall be
appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to any shares or other
securities, assets, or cash thereafter deliverable
on the exercise of the Warrants. The subdivision or
combination of shares of Common Stock at any time
outstanding into a greater or lesser number of shares
shall not-be deemed to be a reclassification of the
shares of Common Stock for the purposes of this
paragraph. The Company shall not effect any such
consolidation, merger, or sale, unless prior to or
simultaneously with the consummation thereof the
successor corporation or entity (if other than the
Company) resulting from such consolidation or merger
or the corporation or entity purchasing such assets
or other appropriate corporation or entity shall
assume, by written instrument executed and delivered
to, and in form reasonably acceptable to, the Warrant
Agent, the obligations to deliver to the holder of
each Warrant such shares, securities, assets, or cash
as, in accordance with the foregoing provisions, such
holders may be entitled to purchase and the other
obligations under this Warrant Agreement.
(i) In the event that at any time, as a result of an
adjustment made pursuant to this Section 13 the
holders of a Warrant or Warrants shall become
entitled to purchase any shares or securities of the
Company other than the shares of Common Stock,
thereafter the number of such other shares or
securities so
21
<PAGE> 22
purchasable upon exercise of each Warrant and the
Exercise Price for such shares or securities shall be
subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to
the provisions with respect to the shares of Common
Stock contained in paragraphs (a) through (h) of
Section 13, inclusive, and the other provisions of
this Agreement, with respect to the shares of Common
Stock shall apply on like terms to any such other
shares.
(j) In any case in which this Section 13 shall require
that an adjustment in the Exercise Price be made
effective as of a record date for a specified event,
the Company may elect to defer until the occurrence
of such event issuing to the holder of any Warrant
exercised after such record date the shares of Common
Stock if any, issuable upon exercise over and above
the shares of Common Stock, if any, issuable upon
such exercise on the basis of the Exercise Price in
effect prior to such adjustment; provided, however,
that the Warrant Agent shall deliver as soon as
practicable to such holder a due bill or other
appropriate instrument provided by the Company and in
form acceptable to the Warrant Agent, evidencing such
holder's right to receive such additional shares of
Common Stock upon the occurrence of the event
requiring such adjustment.
14. Notice to Warrant Holders. Upon any adjustment as described in
Section 13, the Company within 20 business days thereafter
shall (i) cause to be filed with the Agent
22
<PAGE> 23
a certificate signed by a Company officer setting forth the
details of such adjustment, the method of calculation and the
facts upon which such calculation is based, which certificate
shall be conclusive evidence of the correctness of the matters
set forth therein, and (ii) cause written notice of such
adjustments to be given to each Warrant Holder (or Unit
Holders, if prior to the Separation Date) as of the record
date applicable to such adjustment. Also, if the Company
proposes to enter into any reorganization, reclassification,
sale of substantially all of its assets, consolidation,
merger, dissolution, liquidation or winding up, the Company
shall give notice of such fact at least 20 days prior to the
consummation of such action to all Warrant Holders (or Unit
Holders, if prior to the Separation Date) which notice shall
set forth such facts as indicate the effect of such action (to
the extent such effect may be known at the date of such
notice) on the Exercise Price and the kind and amount of the
shares or other securities and property deliverable upon
exercise of the Warrants. Without limiting the obligation of
the Company hereunder to provide notice to each Warrant Holder
(or Unit Holder, if prior to the Separation Date), failure of
the Company to give notice shall not invalidate any corporate
action taken by the Company.
15. No Fractional Warrants or Shares. The Company shall not be
required to issue fractions of Warrants upon the reissue of
Warrants, any adjustments as described in Section 13 or
otherwise; but the Company in lieu of issuing any such
fractional interest, shall round up or down to the nearest
full Warrant. If the total Warrants surrendered by exercise
would result in the issuance of a fractional share, the
23
<PAGE> 24
Company shall not be required to issue a fractional share but
rather the aggregate number of shares issuable will be rounded
up or down to the nearest full share.
16. Rights of Warrant Holders. No Warrant Holder, as such, shall
have any rights of a shareholder of the Company, either at law
or equity, and the rights of the Warrant Holders, as such, are
limited to those rights expressly provided in this Agreement
or in the Warrant Certificates. The Company and the Agent may
treat the registered Warrant Holder in respect of any Warrant
Certificates as the absolute owner thereof for all purposes
notwithstanding any notice to the contrary.
17. Agent. The Company hereby appoints the Agent to act as the
agent of the Company and the Agent hereby accepts such
appointment upon all of the terms and conditions set forth in
this Agreement including, without limitation, the following
terms and conditions by all of which the Company and every
Unit Holder and Warrant Holder, by acceptance of his Units or
Warrants, shall be bound:
(a) Statements contained in this Agreement and in the
Certificates shall be taken as statements of the
Company. The Agent assumes no responsibility for the
correctness of any of the same except such as
describes the Agent or for action taken or to be
taken by the Agent.
(b) The Agent shall not be responsible for any failure of
the Company to comply with any of the Company's
covenants contained in this Agreement or in the
Warrant Certificates.
24
<PAGE> 25
(c) The Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the
Company) and the Agent shall incur no liability or
responsibility to the Company or to any Unit Holder
or Warrant Holder in respect of any action taken,
suffered or omitted by it hereunder in good faith and
in accordance with the opinion or the advice of such
counsel; provided the Agent shall have exercised
reasonable care in the selection and continued
employment of such counsel.
(d) The Agent shall incur no liability or responsibility
to the Company or to any Unit Holder or Warrant
Holder for any action taken in reliance upon any
notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument
believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Agent compensation
for all services rendered by the Agent in the
execution of this Agreement in accordance with the
fee schedule attached in Exhibit C hereto, to
reimburse the Agent for all reasonable out-of-pocket
expenses, taxes and governmental charges and all
other charges of any kind or nature incurred by the
Agent in the execution of this Agreement and to
indemnify the Agent and save it harmless against any
and all liabilities, including judgments, costs and
reasonable counsel fees, for this Agreement except
those costs and fees arising as a result of the
Agent's negligence or bad faith.
25
<PAGE> 26
(f) The Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any
other action likely to involve expense unless the
Company or one or more Unit Holders or Warrant
Holders shall furnish the Agent with reasonable
security and indemnity for any costs and expenses
which may be incurred in connection with such action,
suit or legal proceeding, but this provision shall
not affect the power of the Agent to take such action
as the Agent may consider proper, whether with or
without any such security or indemnity. All rights of
action under this Agreement or under any of the
Warrants may be enforced by the Agent without the
possession of any of the Warrant Certificates or the
production thereof at any trial or other proceeding
relative thereto, and any such action, suit or
proceeding instituted by the Agent shall be brought
in its name as Agent, and any recovery of judgement
shall be for the ratable benefit of the Unit Holders
or Warrant Holders, as the case may be, as their
respective rights or interest may appear.
(g) The Agent and any shareholder, director, officer or
employee of the Agent may buy, sell or deal in any of
the Units or Warrants or other securities of the
Company or become pecuniarily interested in any
transaction in which the Company may be interested,
or contract with or lend money to the Company or
otherwise act as fully and freely as though it were
not Agent under this Agreement. Nothing herein shall
preclude the Agent from acting in any other capacity
for the Company or for any other legal entity.
26
<PAGE> 27
(h) At any time the Agent may apply to the Company or its
counsel for instructions or information, and may
consult with its own counsel, with respect to any
matter arising in connection with the agency created
hereby and the Agent shall not be liable for any
action taken or omitted in accordance with such
instructions, information or the advice or opinion of
such officer or counsel. The Agent shall not be
liable for acting upon any paper or document believed
by it to be genuine and to have been signed by the
proper person(s). The Agent shall also not be liable
for recognizing stock certificates which it
reasonably believes bear the proper manual or
facsimile signatures of the officers of the Company
and the proper counter-signature of a transfer agent
or registrar, or of a co-transfer agent or
co-registrar. The Agent, if it so elects, may rely
conclusively, for any and all purposes, upon any
advice or transfer or transfers made in the course of
transferring or registering original issuances,
retirements or cancellation of Units or Warrants;
upon advice of stop transfer orders placed, released
or in effect against outstanding Certificates; and
upon any certification or notification as to the
number of Certificates issued, the Certificates
representing such Units or Warrants and other
information which the Agent may receive from time to
time from any co-transfer agent or co-registrar. The
Agent shall further not be liable for relying upon
all information contained in Certification of
Corporate Secretary or otherwise supplied to the
Agent by the Company in accordance with the terms of
this Agreement. The Agent may deliver to the Company
from time
27
<PAGE> 28
to time at its discretion, for safekeeping or
disposition by the Company in accordance with law,
such records, papers, stock certificates which have
been cancelled in transfer or exchanges and other
documents accumulated in the execution of its duties
hereunder as the Agent may deem expedient, other than
those which the Agent is itself required to maintain
pursuant to applicable laws and regulations. Upon
delivery of such records, the Company shall assume
all responsibility for any failure thereafter to
produce any record, paper, cancelled stock
certificate or other document so returned, if and
when required. The Agent will endeavor to notify the
Company of, and will follow instructions received
from the Company with respect to, any request or
demand for the inspection of the Company's books.
However, the Agent reserves the right to exhibit the
records to any person if it is advised by its counsel
that it may be held liable for the failure to exhibit
such records to such person.
18. Successor Agent. Any corporation into which the Agent may be
merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to the corporate trust business of the
Agent, shall be the successor to the Agent hereunder without
the execution or filing of any paper or any further act of a
party or the parties hereto. In any such event or if the name
of the Agent is changed, the Agent or such successor may adopt
the countersignature of the original Agent and
28
<PAGE> 29
may countersign Certificates either in the name of the
predecessor Agent or in the name of the successor Agent.
19. Change of Agent. The Agent may resign or be discharged by the
Company from its duties under this Agreement, by the Agent or
the Company, as the case may be, giving notice in writing to
the other, and by giving a date when such resignation or
discharge shall take effect, which notice shall be sent at
least 30 days prior to the date so specified. If the Agent
shall resign, be discharged or shall otherwise become
incapable of acting, the Company shall appoint a successor to
the Agent. If the Company shall fail to make such appointment
within a period of 30 days after it has been notified in
writing of such resignation or incapacity by the Agent after
discharging the Agent, then any Unit Holder or Warrant Holder
may apply to the District Court for Denver County, Colorado,
for the appointment of a successor to the Agent. Pending
appointment of a successor to the Agent, either by the Company
or by such Court, the duties of the Agent shall be carried out
by the Company. Any successor Agent, whether appointed by the
Company or by such Court, shall be a bank or a trust company,
in good standing, organized under the laws of any State of the
United States of America, and having at the time of its
appointment as Agent, a combined capital and surplus of at
least four million dollars. After appointment, the successor
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Agent
without further act or deed and the former Agent shall deliver
and transfer to the successor Agent any property at the time
held by it
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thereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for effecting the delivery
or transfer. Failure to give any notice provided for in this
section, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the
Agent or the appointment of the successor Agent, as the case
may be.
20. Notices. Any notice or demand authorized by this Agreement to
be given or made by the Agent or by any Unit Holder or Warrant
Holder to or on the Company shall be sufficiently given or
made if sent by mail, first class, certified or registered,
postage prepaid, addressed (until another address is filed in
writing by the Company with the Agent), as follows:
Implant Sciences Corporation
107 Audubon Road, #5
Wakefield, MA 01880
Attn: President
With a copy to:
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, MA 02109
Attn: Dave Broadwin, Esq.
Any notice or demand authorized by this Agreement to be given
or made by any Unit Holder, Warrant Holder or by the Company
to or on the Agent shall be sufficiently given or made if sent
by mail, first class, certified or registered, postage
prepaid,
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addressed (until another address is filed in writing by the
Agent with the Company), as follows:
American Securities Transfer & Trust, Inc.
1825 Lawrence Street, Suite 444
Denver, CO 80202-1817
Any distribution, notice or demand required or authorized by
this Agreement to be given or made by the Company or the Agent
to or on the Unit Holders or Warrant Holders shall be
sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed to the
Unit Holders or Warrant Holders at their last known addresses
as they shall appear on the registration books for the
Certificates maintained by the Agent.
21. Supplements and Amendments. The Company and the Agent may make
such modifications to this Agreement and to the Warrants that
they deem necessary and desirable that do not materially
adversely affect the interests of the Unit Holders and Warrant
Holders. No other modifications may be made to the Units and
Warrants without the consent of the majority of the Unit
Holders and Warrant Holders, respectively. Reduction of the
number of securities purchasable upon the exercise of any
Warrant, increase in the exercise price and shortening of the
expiration date with respect to any Warrant requires the
consent of the holder of such Warrant unless such modification
occurs in connection with a stock split, stock dividend,
recapitalization, reclassification or similar event.
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22. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Agent shall bind
and inure to the benefit of their respective successors and
assigns hereunder.
23. Termination. This Agreement shall terminate at the close of
business on the Expiration Date or such earlier date upon
which all Warrants have been exercised or redeemed; provided,
however, that if exercise of the Warrants is suspended
pursuant to Section 12 and such suspension continues past the
Expiration Date, this Agreement shall terminate at the close
of business on the business day immediately following
expiration of such suspension. The provisions of Section 17
shall survive such termination.
24. Governing Law. This Agreement and each Certificate issued
hereunder shall be deemed to be a contract made under the laws
of the State of New York and for all purposes shall be
construed in accordance with the laws of said State.
25. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give any person or corporation other than the
Company, the Agent and the Unit Holders and Warrant Holders
any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Agent and the Unit
Holders and Warrant Holders.
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26. Counterparts. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes
be deemed to be an original and all such counterparts shall
together constitute but one and the same instrument.
Date: April 9, 1999
- ------------------------
Implant Sciences Corporation,
a Massachusetts corporation
By: /s/ Darlene M. Deptula-Hicks
---------------------------------------
Vice President and
Chief Financial Officer
SEAL
ATTEST:
/s/ Stephen N. Bunker
- ------------------------
Secretary:
American Securities Transfer & Trust, Inc.,
a Colorado corporation
By: /s/ Gregory D. Tubbs
---------------------------------------
Vice President:
SEAL
ATTEST:
/s/ illegible
- ------------------------
Secretary:
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