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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Barringer Laboratories, Inc.
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(Name of Issuer)
Common Stock, Par Value $.01 Per Share
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(Title of Class of Securities)
068508100
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(CUSIP Number)
J. Francis Lavelle
1175 Post Road East
Westport, Connecticut 06880
(203) 227-2454
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 9, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a Statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this Schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with the Statement [ ].
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CUSIP No. 068508100 13D Page 2 of 6 Pages
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1 NAME OF REPORTING PERSON J. Francis Lavelle
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
PF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION United States
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Number of 7 SOLE VOTING POWER 1,524,635
Shares
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Beneficially 8 SHARED VOTING POWER -0-
Owned by
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Each Reporting 9 SOLE DISPOSITIVE POWER 1,524,635
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Person With 10 SHARED DISPOSITIVE POWER -0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,524,635
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.4%
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14 TYPE OF REPORTING PERSON IN
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CUSIP No. 068508100 13D Page 3 of 6 Pages
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This Amendment No. 1 amends and supplements the Statement on Schedule 13D,
originally filed with the Securities and Exchange Commission on May 13, 1998
(the "Schedule 13D") by J. Francis Lavelle. Capitalized terms not defined herein
have the meanings assigned thereto in the Schedule 13D.
ITEM 2. IDENTITY AND BACKGROUND.
Item 2 of the Schedule 13D is hereby supplemented as follows:
On March 9, 2000, the Reporting Person resigned as a director of the
Issuer. The Reporting Person's business address is c/o The Nassau Group,
Inc., 1175 Post Road East, Westport, Connecticut 06880.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Schedule 13D is hereby supplemented as follows:
The aggregate purchase price for the 858,333 additional Shares acquired by
the Reporting Person since the filing of the Schedule 13D, was $156,250.00,
including payment of commissions. The purchase of these Shares was funded from
cash available to the Reporting Person.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended in its entirety as follows:
The Reporting Person acquired his Shares for investment purposes. The
Reporting Person believed that, at the time the Reporting Person acquired the
Shares, the Shares represented an attractive investment opportunity. The
Reporting Person will continue to evaluate his investment in the Issuer on the
basis of various factors, including the Issuer's business, financial condition,
results of operations and prospects, general economic and industry conditions,
the securities markets in general and those for the Issuer's securities in
particular, the Reporting Person's own financial condition, other investment
opportunities and other future developments. Based upon such evaluation, the
Reporting Person will take such actions in the future as the Reporting Person
may deem appropriate in light of the circumstances existing from time to time.
Without limiting the generality of the foregoing, depending on market and other
factors, the Reporting Person may determine to dispose of some or all of the
Shares owned by the Reporting Person.
Except as set forth above in this Item 4 and in Items 2 and 6, the
Reporting Person has no plans or proposals with respect to any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended in its entirety as follows:
(a) As of the close of business on March 8, 2000, the Reporting Person
beneficially owned 1,524,635 Shares representing approximately 22.4% of such
class of stock, based upon the 6,803,180 Shares outstanding as of 6,803,180 (as
indicated in the Issuer's Schedule 14A filed with the Securities
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CUSIP No. 068508100 13D Page 4 of 6 Pages
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and Exchange Commission on March 3, 2000). This amount includes 50,469 Shares
that the Reporting Person has the right to acquire upon exercise of the warrants
described in Item 6 of the Schedule 13D.
(b) The Reporting Person has the sole power to vote or to direct the vote
and to dispose or to direct the disposition of 1,474,166 Shares that he
beneficially owns. Upon exercise of the warrants described in Item 6 of the
Schedule 13D, the Reporting Person will have sole power to vote or to direct the
vote or to dispose or to direct the disposition of the other 50,469 Shares that
he beneficially owns.
(c) On January 4, 1999, the Reporting Person purchased 361,111
additional Shares from the Issuer in a private placement for an aggregate
purchase price of $65,000. On January 5, 1999, the Reporting Person purchased
472,222 additional Shares from the Issuer in a private placement for an
aggregate purchase price of $85,000. Also on January 5, 1999, the Reporting
Person received from the Issuer 25,000 additional Shares as payment of
director's fees in lieu of cash.
(d) No other person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, any Shares which
the Reporting Person may be deemed to beneficially own.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Item 6 is hereby supplemented as follows:
On or about each of October 19, 1999, November 29, 1999, December 13, 1999,
January 19, 2000 and February 3, 2000, the Issuer issued and sold to the
Reporting Person a convertible note in the principal amount of $12,000 (or an
aggregate principal amount of $60,000). The form of convertible note, together
with the security agreement and the registration rights agreement, are attached
hereto as Exhibits 1, 2 and 3, respectively, and are incorporated herein by
reference.
Each convertible note issued by the Issuer to the Reporting Person gives
the Issuer the right, at its sole option, to convert the balance thereof to
Shares at a conversion price of $.06 per Share. The Issuer has committed itself
under each convertible note to take all reasonable action to increase the
authorized and unissued Shares so that it can convert the notes to Shares as
soon as reasonably practicable. Each convertible note has a maturity date of one
year and will require the payment of interest at the rate of ten percent (10%)
per annum on the balance of the note only in the event that the note is not
converted to Shares. Pursuant to the terms of the security agreement, the
obligations of the Issuer arising under each convertible note are secured by a
pledge of essentially all of the Issuer's assets.
Except as described in the Schedule 13D and this Amendment No. 1, there are
no contracts, arrangements, understandings or relationships (legal or otherwise)
between the Reporting Person and any other person with respect to any securities
of the Issuer, including, but not limited to, transfer or voting of any of such
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
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CUSIP No. 068508100 13D Page 5 of 6 Pages
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Form of Convertible Note
Exhibit 2 Form of Security Agreement
Exhibit 3 Form of Registration Rights Agreement
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CUSIP No. 068508100 13D Page 6 of 6 Pages
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SIGNATURES
After reasonable inquiry and to the best of the knowledge and belief
of the undersigned, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
Dated: March 9, 2000
/s/ J. Francis Lavelle
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J. Francis Lavelle
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Exhibit 1
FORM OF CONVERTIBLE NOTE
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES ACTS OR LAWS, AND HAVE BEEN ISSUED AND SOLD IN RELIANCE
UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH ACTS AND LAWS,
INCLUDING BUT NOT LIMITED TO THE EXEMPTION CONTAINED IN SECTION 4(2) OF THE
SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS A
REGISTRATION STATEMENT HAS BECOME AND IS THEN EFFECTIVE WITH RESPECT TO SUCH
SECURITIES OR BARRINGER LABORATORIES, INC. HAS RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT, TO THE EFFECT THAT THE PROPOSED SALE OR TRANSFER
IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
ALL APPLICABLE STATE SECURITIES ACTS AND LAWS.
Convertible Note
of
Barringer Laboratories, Inc.
$____________________ October __, 1999
BARRINGER LABORATORIES, INC., a Delaware corporation (the "Company"),
for value received, hereby promises to pay to the order of ________________ (the
"Investor") or his permitted assigns (in each case, the "Holder") at 15000 West
6th Avenue, Suite 300, Golden, Colorado 80401-5047, the sum of
$___________________. The Company shall only pay interest (to the extent
permitted by law) on any overdue principal on this Note at the rate of 10% per
annum, from the due date of such principal until payment in full thereof is
made. The principal amount then outstanding of this Note shall be due and
payable in full on the 730th day from the date hereof (the "Maturity Date").
This Note is originally being issued pursuant to a Subscription Agreement, dated
October ___, 1999 (the "Original Issue Date"), between the Company, the Investor
and, perhaps others (collectively, the "Investors") (each Investor's
Subscription Agreement are collectively referenced herein as the "Subscription
Agreement"). All Notes issued under the Subscription Agreement are referred to
herein as the "Notes."
The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the Holder hereof, by the
acceptance of this Note, agrees:
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1. SECURITY. The obligations evidenced by, arising under or in
connection with, this Note are secured by a security interest, created pursuant
to a certain Security Agreement, dated as of the date hereof (the "Security
Agreement"), among the Company and the Investors, in the Collateral (as defined
in the Security Agreement).
2. FINANCING STATEMENTS. The Company shall execute and deliver
to the Investor (i) the Security Agreement; (ii) Uniform Commercial Code
Financing Statements (Form UCC-1) or appropriate local equivalent in appropriate
form for filing under the Uniform Commercial Code or appropriate local
equivalent of each jurisdiction as may be necessary to perfect the security
interests purported to be created by the Security Agreement; and (iii) all other
documents necessary or, in the reasonable opinion of the Investor, desirable, to
perfect the security interests in the Collateral purported to be created by the
Security Agreement.
3. AMENDMENTS. This Note may not be amended, modified or
waived in any respect unless set forth in writing and signed by the Company and
the Holder.
4. NOTICES. So long as this Note remains outstanding, the
Company shall maintain an office or agency (which shall initially be the
principal place of business of the Company located at 15000 West 6th Avenue,
Suite 300, Golden, Colorado 80401-5047) where notices, presentations and demands
to or upon the Company in respect of this Note may be given. All notices to be
given by the Company to the Holder in respect of this Note shall be delivered or
mailed to the address of the Holder set forth on the records of the Company or
such other address as shall be designated in writing by the Holder to the
Company.
5. EVENTS OF DEFAULT. (a) The following shall constitute an
"Event of Default" under this Note:
(i) Default shall be made in any payment of principal
of or interest on this Note when the same shall become due and
payable, and such principal or interest shall remain unpaid
for 30 days after the date upon which such payment was due;
(ii) any representation or warranty made by the
Company under or in connection with the Subscription
Agreement, the Security Agreement, the Registration Rights
Agreement, dated as of the date hereof, between the Company
and the Investors (the "Registration Rights Agreement," and
together with the Subscription Agreement and the Security
Agreement, the "Transaction Documents"), or any certification
or other instrument furnished in connection with any
Transaction Document or the transactions contemplated thereby,
shall prove to have been false or misleading in any material
respect;
(iii) default shall be made in the due observance or
performance of any covenant or agreement (other than as
contemplated by clause (i) above) to be observed or performed
by the Company or any of its subsidiaries for the benefit of
the Holder under this Note or any Transaction Document and
such default shall remain uncured and unwaived for a period of
30 days after written notice thereof is given to the Company
by the Holder, unless the Holder determines that the
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Company has diligently instituted and is continuing
diligently to pursue corrective action sufficient to cure
such default;
(iv) The Company shall (A) voluntarily commence any
proceeding or file any petition seeking relief under Title 11
of the United States Code or any other Federal or state
bankruptcy, insolvency or similar law, (B) consent to the
institution of any such proceeding or the filing of any such
petition, (C) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official
for the Company or such Subsidiary or for all or a substantial
part of its properties, (D) file an answer admitting the
material allegations of a petition filed against it in any
such proceeding, (E) make a general assignment for the benefit
of creditors, or (F) admit in writing its inability to pay its
debts as they become due;
(v) an involuntary proceeding shall be commenced or
an involuntary petition shall be filed in a court of competent
jurisdiction seeking (A) relief in respect of the Company, or
of all or a substantial part of the properties thereof, under
Title 11 of the United States Code or any other Federal or
state bankruptcy, insolvency or similar law, (B) the
appointment of a receiver, trustee, custodian, sequestrator or
similar official for the Company or for a substantial part of
the properties thereof, or (C) the winding up or liquidation
of the Company; and an order or decree approving or ordering
any of the foregoing shall be issued by a court having
jurisdiction and continue unstayed and in effect for 60 days;
or
(vi) an unappealed final judgment for the payment of
money in excess of $250,000 shall be rendered against the
Company or and the same shall remain undischarged or unbonded
for a period of 60 consecutive days during which execution
shall be effectively stayed.
(b) In case of any Event of Default and at any time thereafter during
the continuance of such Event of Default, the holders of a majority in principal
amount of the Notes then outstanding may, by written notice to the Company,
declare the Notes to be due and payable in full both as to principal and
interest, together with a prepayment premium equal to 1% of the principal amount
of the Note as of the date thereof; PROVIDED, HOWEVER, that no notice need be
given to the Company if acceleration is based upon the Events of Default
described in clauses (v) or (vi) of paragraph (a) above, in either of which
cases this Note shall automatically become due and payable without any action on
the part of the holders.
(c) In case an Event of Default shall have occurred and be continuing,
the Holder may proceed to protect and enforce its rights either by suit in
equity or by action at law, whether for the specific performance of any covenant
or agreement contained in the Transaction Documents or this Note or in aid of
the exercise of any power granted in the Transaction Documents or in this Note,
or proceed to enforce the payment of this Note or to enforce any other legal or
equitable right of the Holder. No remedy conferred hereunder is intended to be
exclusive of any other
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remedy and each such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or currently or hereafter existing at law or
in equity or by statute or otherwise.
6. CONVERSION.
6.1 ELECTION BY COMPANY. The Company has the right, at
any time until the Maturity Date, to convert this
Note in accordance with the provisions of Subsection
6.2 hereof, in whole or in part, into fully paid and
nonassessable shares of the Common Stock, par value
[$0.01] per share, of the Company (the "Common
Stock"). The number of shares of Common Stock into
which this Note may be converted at any given time
shall be determined by dividing the unpaid principal
amount by the Conversion Price. As used herein, the
term "Conversion Price" shall mean a price of $0.06
per share, subject to adjustment as set forth in
Section 8.
6.2 CONVERSION PROCEDURE. The Company anticipates that it
will be in position to take all action as is
necessary to increase the authorized but unissued
shares of its common stock by year-end 1999.
Therefore, the Company shall use its best efforts to
convert this Note into shares of Common Stock and
shall issue and deliver to the Holder a certificate
or certificates for the number of Shares so converted
to which the Holder is entitled in accordance with
the terms and conditions of the Subscription
Agreement on or before year-end 1999, or as soon as
reasonably practicable thereafter. Such conversion
shall be deemed to have been made immediately prior
to the close of business on the date that the Company
issues a certificate or certificates representing
such Shares and the person or persons entitled to
receive the Shares shall be treated for all purposes
as the record holder or holders of such Shares as of
such date. On such date that the full outstanding
principal balance of this Note is converted to Common
Stock as provided herein, this Note shall be deemed
to be paid in full. On such date, the Holder shall
take reasonable action to surrender this Note to the
Company and to reflect that it has been paid in full.
6.3 NO FRACTIONAL SHARES. No fractional shares of Common
Stock shall be issued upon conversion of this Note.
In lieu of the Company issuing any fractional shares
to the Holder upon the conversion of this Note, the
Company shall pay to the Holder in immediately
available funds the amount of outstanding principal
that is not so converted. Upon conversion in whole of
this Note and the proper issuance of a certificate or
certificates representing the Shares and payment in
lieu of fractional shares, the Company shall be
forever released from all its obligations and
liabilities under this Note.
7. RESERVATION OF COMMON STOCK. During, or reasonably
practicable after, the fourth quarter of fiscal year 1999, the Company shall
take all action as is reasonably necessary to increase the amount of authorized
but unissued shares of Common Stock.
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Thereafter, the Company shall at all times duly reserve a sufficient number of
shares of authorized Common Stock for issuance upon conversion of all Notes.
Upon issuance, sale and delivery of a certificate or certificates representing
the Shares, such Shares shall be validly issued and outstanding, fully paid and
nonassessable with no personal liability attaching to the ownership thereof, and
shall not be subject to preemptive or any similar rights of any person or
entity.
8. ADJUSTMENT OF CONVERSION PRICE. (a) If, at any time after
the Original Issue Date, the number of outstanding shares of Common Stock is (i)
increased by a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, or (ii) decreased by a
combination or reverse split of shares of Common Stock, then, following the
record date fixed for the determination of holders of Common Stock entitled to
receive the benefits of such stock dividend, subdivision, split-up, combination
or reverse split, the Conversion Price shall be adjusted to a new amount equal
to the product of (A) the Conversion Price in effect on such record date and (B)
the quotient obtained by dividing (x) the number of shares of Common Stock
outstanding on such record date (without giving effect to the event referred to
in the foregoing clause (i) or (ii)) by (y) the number of shares of Common Stock
which would be outstanding immediately after the event referred to in the
foregoing clause (i) or (ii), if such event had occurred immediately following
such record date.
(b) If, at any time after the Original Issue Date, the Company
shall issue or be deemed to have issued (as provided below) shares of Common
Stock without consideration or for a consideration per share less than the
Conversion Price in effect immediately prior to such issuance or deemed
issuance, then such Conversion Price shall be lowered to a price equal to the
quotient obtained by dividing (i) an amount equal to the sum of (A) the product
of (x) the number of shares of Common Stock outstanding immediately prior to
such issuance or deemed issuance and (y) the then existing Conversion Price, and
(B) the total consideration received or deemed received by the Company upon such
issuance or deemed issuance, by (ii) the total number of shares of Common Stock
outstanding immediately after such issuance or deemed issuance. For the purposes
of any adjustment of the Conversion Price pursuant to this paragraph, the
following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of
cash paid therefor without deducting therefrom any discounts,
commissions or other expenses allowed, paid or incurred by the
Company for any underwriting or otherwise in connection with
such issuance.
(ii) In the case of the issuance of Common Stock for
no consideration, the consideration shall be deemed to be $.01
per share.
(iii) In the case of the issuance of Common Stock for
a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
market value thereof as determined in good faith by the Board
of Directors, irrespective of any accounting treatment.
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(iv) In the case of the issuance of options to
purchase or rights to subscribe for Common Stock, securities
by their terms convertible into or exchangeable for Common
Stock, or options to purchase or rights to subscribe for such
convertible or exchangeable securities:
(A) The shares of Common Stock deliverable
upon exercise of such options to purchase or rights
to subscribe for Common Stock shall be deemed to have
been issued at the time such options or rights were
issued and for a consideration equal to the
consideration (determined in the manner provided in
clauses (i) through (iii) above), if any, received by
the Company upon the issuance of such options or
rights plus the minimum purchase price provided in
such options or rights for the Common Stock covered
thereby.
(B) The shares of Common Stock deliverable
upon conversion of or in exchange for any such
convertible or exchangeable securities or upon the
exercise of options to purchase or rights to
subscribe for such convertible or exchangeable
securities and subsequent conversions or exchanges
thereof shall be deemed to have been issued at the
time such securities were issued or such options or
rights were issued and for a consideration equal to
the consideration received by the Company for any
such securities and related options or rights
(excluding any cash received on account of accrued
interest or accrued dividends), plus the additional
consideration, if any, to be received by the Company
upon the conversion or exchange of such securities or
the exercise of any related options or rights (the
consideration in each case to be determined in the
manner provided in the clauses (i) through (iii)
above).
(C) Upon any change in the exercise price of
shares of Common Stock deliverable upon exercise of
any such options or rights or conversion of or
exchange for such convertible or exchangeable
securities, other than a change resulting from the
antidilution provisions thereof, the Conversion Price
shall be readjusted to such Conversion Price as would
have obtained had the adjustment made upon the
issuance of such options, rights or securities not
converted prior to such change been made upon the
basis of such change.
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(D) Upon expiration of any such options or
rights, the termination of any such rights to convert
or exchange, or the expiration of any options or
rights related to such convertible or exchangeable
securities, the Conversion Price shall be readjusted
to such Conversion Price as would have obtained had
such options, rights, securities or options or rights
related to such securities not been issued.
(E) No further adjustments of the Conversion
Price shall be made upon the actual issuance of such
Common Stock or of such convertible or exchangeable
securities upon exercise of such options or rights,
or upon the actual issuance of such Common Stock upon
conversion or exchange of such convertible or
exchangeable securities.
(c) All calculations under this Section shall be made to the
nearest cent ($.01).
(d) Whenever the Conversion Price shall be adjusted as
provided above, the Company shall deliver to the Holder a statement, signed by
its President or Chief Financial Officer, showing in detail the facts requiring
such adjustment and the Conversion Price that shall be in effect after the
adjustment.
9. ADJUSTMENT OF SHARES. Following any Corporate
Reorganization (as defined below) after the Original Issue Date, this Note shall
be convertible into the kind and number of shares of capital stock or other
securities or property which the Holder would have owned or have been entitled
to receive with respect to the Shares had this Note been converted immediately
prior to such Corporate Reorganization. The foregoing provision shall similarly
apply to successive Corporate Reorganizations. "Corporate Reorganization" means
(i) any capital reorganization or reclassification of the capital stock of the
Company, other than (A) a change in par value or from par value to no par value,
or (B) as a result of a stock dividend or subdivision, split-up, or combination
of shares, and (ii) any merger or consolidation of the Company pursuant to which
the stockholders of the Company are to receive cash, securities, or other
properties in exchange for the shares of capital stock of the Company then held
by them.
10. EXTENSION OF MATURITY. Should the principal of or premium
or interest on this Note become due and payable on other than a business day,
the maturity thereof shall be extended to the next succeeding business day, and,
with respect to the interest on the principal, interest shall be payable thereon
at the rate per annum herein specified during such extension. The term "business
day" shall mean any day that is not a Saturday, Sunday or legal holiday in the
State of Delaware.
11. COSTS AND EXPENSES. The Company agrees to pay all
reasonable costs and expenses, including reasonable attorneys' fees, incurred by
the Holder in collecting or enforcing this Note.
12. NO WAIVERS. No delay by the Holder in exercising any power
or right hereunder shall operate as a waiver of any power or right, nor shall
any single or partial exercise
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of any power or right preclude other or further exercise thereof, or the
exercise of any other power or right hereunder or otherwise.
13. TRANSFER OF NOTE. Subject to the restrictions on transfer
set forth herein and in the Subscription Agreement, this Note and all rights
hereunder are transferable in whole or in part. Any transfer shall be effected
by the Holder in person or by duly authorized attorney by surrendering this
Note, properly endorsed, at the office of the Company. Each taker and holder of
this Note, by taking or holding the same, consents and agrees that this Note
shall be deemed negotiable, and, when appropriately endorsed the holder hereof
may be treated by the Company and all other persons dealing with this Note as
the absolute owner hereof for any purposes and as the person entitled to
exercise the rights represented by this Note, or to the transfer hereof on the
books of the Company, any notice to the contrary notwithstanding; but until such
transfer on such books, the Company may treat the registered holder hereof as
the owner hereof for all purposes, any notice to the contrary notwithstanding.
14. Governing Law. This Note shall be governed by and
construed and enforced in accordance with the laws of the State of Colorado.
Whenever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
15. Notices. All notices, demands or other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, mailed by certified mail, return receipt requested, sent by
overnight courier service, or telecopied (transmission confirmed and a copy sent
by personal delivery, certified mail or overnight courier service) to the
following addresses or such other address as may be designated in writing by
either party in accordance with the terms of this provision:
Holder:
------------------------
------------------------
------------------------
------------------------
Telecopier:
-------------
The Company: Barringer Laboratories, Inc.
15000 West 6th Avenue
Suite 300
Golden, Colorado 80401-5047
Telecopier: (303) 277-1689
IN WITNESS WHEREOF, the Company has caused this Convertible Note to be
issued as of the date first set forth hereinabove.
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BARRINGER LABORATORIES, INC.
By:
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Name:
Title:
<PAGE>
EXHIBIT 2
FORM OF SECURITY AGREEMENT
This Security Agreement ("AGREEMENT") is entered into this ____ day of
October, 1999, by and between Barringer Laboratories, Inc., a Delaware
corporation, ("BARRINGER"), and _________________________ ( "SECURED PARTY").
RECITALS:
A. Pursuant to the Subscription Agreement for Shares of Common Stock
between Barringer and Secured Party dated October __, 1999 ("SUBSCRIPTION
AGREEMENT"), Secured Party has made payment to Barringer in consideration for
the purchase of ______________________ shares of Barringer's common stock, $.01
par value ("SHARES").
B. Until such time as Barringer takes all necessary action to issue the
Shares, payment for the Shares is evidenced by a Convertible Note in the
principal amount of $___________________________("Note") dated as of the same
date hereof.
C. Until such time as Barringer takes all necessary action to issue the
Shares, Barringer has agreed to secure the payment of the Note by the grant of a
security interest in Barringer's assets under the terms of this Agreement.
NOW THEREFORE, for good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties agree as follows:
1. GRANT OF SECURITY INTEREST. (a) As collateral security for the
prompt payment in full when due of the Secured Obligations (hereinafter
defined), Barringer hereby grants, conveys, and assigns to Secured Party a
security interest in and to the Collateral (hereinafter defined). The security
interest in the Collateral is granted to secure and enforce the following
(collectively, the "SECURED OBLIGATIONS"):
(i) Payment of the Note in accordance with its terms; and
(ii) Performance of any and all of Barringer's other
obligations to Secured Party under: (A) the Note, (B) this Agreement, and (C)
any and all renewals, extensions for any period, rearrangements or refinancings
of the Note or of any other obligations under the Note or this Agreement.
(b) A copy of this Agreement may be used as a financing statement.
2. PROPERTY. The following property (collectively, "COLLATERAL") is
subject to the security interest herein granted:
(a) All Receivables of Barringer now owned or hereafter acquired or
arising, together with all customer lists, original books and records, ledger
and account cards, computer tapes, discs, printouts and records, whether now in
existence of hereafter created. "Receivables" means all rights of Barringer to
the payment of money, whether or not earned and howsoever evidenced or arising,
including (without limitation) all present and future "Accounts", accounts
<PAGE>
receivable, "Chattel Paper", "Instruments," and rights to payment which are
"General Intangibles" (as those terms are used in the Uniform Commercial Code as
enacted in the State of Colorado ("Commercial Code")), all security therefor and
any goods represented by any of the foregoing including returned or repossessed
goods;
(b) All Inventory of Barringer, whether now owned or hereafter acquired
and wherever located. "Inventory" includes all Goods (as defined in Article 9 of
the Commercial Code) intended for sale or lease or to be furnished under
contracts of service, all raw materials and work in process therefor, all
finished goods thereof, all materials and supplies of every nature used or
usable or consumed or consumable in connection with the manufacture, packing,
shipping, advertising, selling, leasing or furnishing of such Goods, and all
accessories thereto and all documents of title therefor evidencing the same;
(c) All Equipment of Barringer, whether now owned or hereafter acquired
and wherever located. "Equipment" includes all of Barringer's Goods other than
Inventory, all replacements and substitutions therefor and all accessions
thereto, and specifically includes, without limitation, all present and future
machinery, equipment, vehicles, manufacturing equipment, shop equipment, office
and record keeping equipment, furniture, fixtures, parts, tools and all other
Goods (except Inventory) used or acquired for use by Barringer for any business
or enterprise;
(d) All General Intangibles and Deposit Accounts (as defined in Article
9 of the Commercial Code) of Barringer, whether now owned or hereafter acquired,
including (without limitation) all present and future domestic and foreign
patents, patent applications, trademarks, trademark applications, copyrights,
trade names, trade secrets, patent and trademark licenses (whether Barringer is
licensor or licensee), shop drawings, engineering drawings, blueprints,
specifications, parts lists, manuals, operating instructions, customer and
supplier lists, licenses, permits, franchises, the right to use Barringer's
corporate name and the goodwill of Barringer's business;
(e) All Investment Property (as defined in the Commercial Code)
including but not limited to stock and other securities evidencing ownership of
any other organization, company or entity as well as all amendments, extensions,
renewals and replacements of the above, together with all certificates, other
instruments, options, rights, interest, and other distributions issued as an
addition to, in substitution or in exchange for, or on account of, the same, all
whether now existing or hereafter arising and whether now owned or hereafter
acquired; and
(f) All products and proceeds of any and all of the foregoing and all
products and proceeds of any other Collateral including the proceeds of any
insurance covering any of the Collateral, as well as all Deposit Accounts (as
defined in the Commercial Code), money, cash, and the like.
3. BARRINGER'S WARRANTIES, REPRESENTATIONS, AND COVENANTS. In addition
to any other warranties, representations, or covenants, Barringer warrants,
represents, and covenants that:
(a) It has the power and authority to enter into this Agreement, which
constitutes a legal, valid, and binding agreement enforceable against it in
accordance with its terms.
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(b) It will not breach any other agreement or provision of law by
entering into or performing this Agreement.
(c) Upon Secured Party's reasonable request, Barringer shall take all
action and execute all documents necessary or appropriate to consummate and give
effect to this Agreement;
(d) Barringer shall not, without Secured Party's prior written consent,
which shall not be unreasonably withheld, create, incur, assume, or suffer to
exist any debt or other obligation for borrowed money other than current
accounts payable and similar current liabilities incurred in the ordinary course
of business from the date of this Agreement;
(e) Barringer shall use diligent efforts to protect and preserve the
Collateral, including to maintain in good standing, to enforce, and to not
breach, all existing and future contracts to which Barringer is a party; and
(f) Upon reasonable notice from Secured Party, it will permit Secured
Party or their representatives to inspect any of Barringer's corporate books and
financial records and discuss with its officers its affairs, finances, and
accounts.
4. POWER OF ATTORNEY. Barringer hereby appoints Secured Party as
attorney-in-fact and grants Secured Party a proxy to do, after and during the
continuance of an Event of Default (as herein defined), any act that Barringer
is obligated by this Agreement to do and to exercise any and all rights and
powers as Barringer might exercise with respect to the Collateral. This power of
attorney is a power coupled with an interest and shall be irrevocable until the
Secured Obligations are satisfied. Secured Party shall be under no duty to
exercise or withhold the exercise of any of the rights, powers, or privileges
expressly or implicitly granted to Secured Party in this Agreement, and shall
not be liable for any failure to do so or any delay in doing so. Secured Party
shall not be liable for any act or omission or for any error of judgment or any
mistake of fact or law in its individual capacity or in its capacity as
attorney-in-fact except acts or omissions resulting from its willful misconduct
or gross negligence. This power of attorney is conferred on the Secured Party to
protect, preserve, and realize upon its security interest in the Collateral.
5. EVENTS OF DEFAULT. Any one or more of the following events
constitutes an event of default ("EVENT OF DEFAULT"):
(a) Barringer's failure to pay on the due date any amount of principal
or interest owing under the Note.
(b) The occurrence of a default, or of any event that with the giving
of notice or the passage of time could constitute a default, under any agreement
of Barringer evidencing an obligation of Barringer for borrowed money.
(c) A breach of or failure by Barringer to perform any of the terms of:
(i) the Note (other than the failure to make payment due under Note which
payment is the subject of subsection (a)), or(ii) this Agreement.
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(d) Any levy, seizure, attachment, or similar legal service of or on
the Collateral not discharged by within ten (10) days, or any sale, transfer, or
disposition of any interest in the Collateral, other than in the ordinary course
of business, without Secured Party's prior written consent.
6. REMEDIES. (a) Upon the occurrence of any Event of Default, Secured
Party may in its sole discretion, with or without notice to Barringer and in
addition to all other rights and remedies at law or in equity:
(i) Declare the entire balance of the Note immediately due and
payable; and
(ii) Sell or otherwise dispose of the Collateral in accordance
with the terms hereof.
(b)(i) In addition to all other rights and remedies granted to Secured
Party in this Agreement and in any other agreement securing, evidencing, or
relating to the Secured Obligations, Secured Party shall have all of the rights
and remedies of a secured party under the Commercial Code Without limiting the
generality of the foregoing, Secured Party may:
(A) Without demand or notice to Barringer, collect,
receive, or take possession of the Collateral or any part thereof;
(B) Sell or otherwise dispose of the Collateral, or
any part thereof, in one or more parcels at public or private sale or sales, at
Secured Party's offices or elsewhere, for cash, on credit, or for future
delivery; and
(C) Bid and become a purchaser at any sale free of
any right or equity of redemption of Barringer, which right or equity is hereby
expressly waived and released by Barringer.
(ii) Upon Secured Party's request, Barringer shall assemble
the Collateral and make it available to Secured Party at any place designated by
Secured Party that is reasonably convenient to Barringer and Secured Party.
(iii) Secured Party shall have the right to determine the
order in which any or all of the Collateral shall be subjected to the remedies
for which this Agreement or the Note provide. Secured Party shall have the right
to determine the order in which any or all portions of the indebtedness secured
by this Agreement are satisfied from the proceeds realized upon the exercise of
such remedies. Barringer, any party who consents to this Agreement, and any
party who hereafter acquires a security interest in the Collateral and who has
actual or constructive notice of this Agreement, hereby waives any and all right
to require the marshaling of Collateral in connection with the exercise of any
of the remedies for which this Agreement or the Note provide.
(iv) Unless the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Secured Party
shall give Barringer reasonable notice of the time and place of any public sale
or of the time after which any private sale or other disposition of the
Collateral is to be made, and notice given at least ten (10) days before the
time of the sale or other disposition shall be conclusively presumed to be
reasonable. Without
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limiting what constitutes a sale of the Collateral in a reasonable manner, a
public sale in the following fashion shall be conclusively presumed to be
reasonable:
(A) Notice is given at least ten (10) days before the
date of sale by publication once in a newspaper of general circulation published
in the county in which the sale is to be held;
(B) The sale is held in a county in which the
Collateral or any part is located or in a county in which Barringer has its
place of business;
(C) Payment is in cash or by certified check
immediately following the close of the
sale;
(D) The sale is by auction, but need not be by a
professional auctioneer; and
(E) The Collateral is sold as is and without any
preparation for sale.
(v) Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Barringer shall be liable for all expenses of retaking, holding,
preparing for sale, or the like, and all attorneys' fees and other expenses
incurred by Secured Party in connection with the collection of the Secured
Obligations and the enforcement of Secured Party's rights hereunder, all of
which expenses and fees shall constitute Secured Obligations.
(vi) Secured Party shall apply the Collateral against the
Secured Obligations in the following manner:
(A) First, to Secured Party for any unpaid expenses
owed to it by Barringer under this Agreement or the Note;
(B) Second, for any unpaid interest owed to Secured
Party by Barringer under this Agreement or the Notes;
(C) Third, any surplus then remaining shall be
paid to Secured Party towards principal amounts owed to it by Barringer under
this Agreement or the Note; and
(D) Fourth, any surplus then remaining shall be paid
to Barringer.
(c) Secured Party may cause any or all of the Collateral held by it to
be transferred into Secured Party's name or the name or names of Secured Party's
nominee or nominees.
(d) Secured Party shall have no obligation to offer to sell the
Collateral. If Secured Party offers to sell the Collateral, it shall have no
obligation to consummate a sale of the Collateral if, in its reasonable business
judgment, none of the offers received by it reasonably approximates the
Collateral's fair value. If Secured Party elects not to sell the Collateral, it
may elect to follow the procedures set forth in the Commercial Code for
retaining the Collateral in satisfaction of Barringer's obligation, subject to
Barringer's rights under such procedures.
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(f) Secured Party shall be entitled to the appointment of a receiver
for the Collateral as a matter of right regardless of whether the Collateral's
apparent value exceeds the outstanding principal amount of the Notes and any
receiver appointed may serve without bond. Employment by Secured Party shall not
disqualify a person from serving as receiver.
7. OBLIGATIONS ABSOLUTE. Barringer's obligations under this Agreement
shall be irrevocable, absolute and unconditional and shall not be released,
discharged, reduced, or in any way impaired by any circumstance whatsoever,
including, without limitation, any amendment, modification, extension, or
renewal of the Secured Obligations, or any other document or instrument
evidencing, securing, or otherwise relating to the Secured Obligations, or any
release, subordination, or impairment of Collateral, or any waiver, consent,
extension, indulgence, compromise, settlement, or other action or inaction in
respect of the Secured Obligations, or any other document or instrument
evidencing, securing, or otherwise relating to the Secured Obligations, or any
exercise or failure to exercise any right, remedy, power, or privilege in
respect of the Secured Obligations.
8. INSURANCE. Barringer shall have and maintain, or cause to be
maintained, insurance at all times with respect to all Collateral against such
risks as Secured Party may reasonably require, in such form, for such periods,
and written by such companies as may be satisfactory to Secured Party. All
policies of insurance shall have endorsed a loss payable clause acceptable to
Secured Party and such other endorsements as Secured Party may from time to time
request, and Barringer will promptly provide Secured Party with the original
policies or certificates of such insurance. Barringer shall promptly notify
Secured Party of any loss or damage that may occur to the Collateral. Secured
Party is hereby authorized to make proof of loss if it is not made promptly by
Barringer. All proceeds of any insurance on the Collateral shall be held by
Secured Party as a part of the Collateral. Such proceeds shall be paid out from
time to time upon order of Barringer for the purpose of paying the reasonable
cost of repairing or restoring the property damaged. Any proceeds that have not
been so paid out within one hundred twenty (120) days following their receipt by
Secured Party shall be applied to the prepayment of principal on the Note. In
the event of failure to provide insurance as herein provided, Secured Party may,
at Secured Party's option, provide such insurance at Barringer's expense.
9. INSPECTION; AND PROTECTION OF SECURED PARTY'S SECURITY. (a) Secured
Party may make or cause to be made reasonable entries upon and inspections of
Barringer's premises to inspect the Collateral.
(b) If Barringer fails to perform its obligations under this Agreement
or the Note, or if any action or proceeding is commenced that affects the
Collateral or title thereto or the interest of Secured Party therein, including
insolvency or arrangements or proceedings involving a bankrupt or decedent, then
Secured Party, at its option, may make such appearance, disburse such sums, and
take such action as it deems necessary, in its sole discretion, to protect its
interest, including but not limited to (i) disbursement of attorneys' fees, (ii)
entry upon Barringer's property to make repairs to the Collateral, and (iii)
procurement of satisfactory insurance. Any amounts disbursed by Secured Party
pursuant to this Section, with interest thereon, shall become additional
indebtedness of Barringer secured by this Agreement. Unless Barringer and
Secured Party agree to other terms of payment, such amounts shall be immediately
due and payable and shall bear interest from the date of disbursement at the
rate of eighteen percent
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(18%) per annum, be collected from Barringer under applicable law. Nothing
contained in this Section shall require Secured Party to incur any expense or
take any action.
10. BARRINGER AND LIEN NOT RELEASED. From time to time, Secured Party
may, at its option, without notice to Barringer or without Barringer's consent,
and without liability on Secured Party's part, and notwithstanding Barringer's
breach of any provision of this Agreement or the Note, extend the time for
payment of Barringer's indebtedness or any part thereof, reduce the payments
thereon, release anyone liable on any of said indebtedness, accept a renewal
note or notes therefor, modify the terms and the time of payment of said
indebtedness, release from the lien of this Agreement any part of the
Collateral, take or release other or additional security, reconvey any part of
the Collateral, consent to any plan of or relating to the Collateral, and agree
in writing with Barringer to modify the rate of interest or period of
amortization of the Note or change the amount of any installments payable
thereunder. Any actions taken by Secured Party pursuant to this Section shall
not affect the obligation of Barringer to pay the sums secured by this Agreement
and to observe the covenants of Barringer contained herein, shall not affect the
guaranty of any person for payment of the indebtedness secured hereby, and shall
not affect the lien or priority of lien hereof on the Collateral. Barringer
shall pay Secured Party a reasonable service charge, together with such
attorneys' fees as may be incurred at Secured Party's option for any such action
if taken at Barringer's request.
11. FORBEARANCE BY SECURED PARTY NOT A WAIVER. Any forbearance by
Secured Party in exercising any right or remedy hereunder, or otherwise afforded
by law, shall not be a waiver of or preclude the exercise of any right or
remedy. Secured Party's acceptance of payment of any sum secured by this
Agreement after the due date of such payment shall not be a waiver of Secured
Party's right to either require prompt payment when due of all other sums so
secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other liens or charges by
Secured Party shall not be a waiver of its right to accelerate the maturity of
the indebtedness secured by this Agreement, nor shall Secured Party's receipt of
any awards, proceeds or damages as provided in this Agreement operate to cure or
waive Barringer's default in payment of sums secured by this Agreement.
12. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Agreement is
intended to be a security agreement pursuant to the Commercial Code for any of
the items specified above as part of the Collateral that, under applicable law,
may be subject to a security interest pursuant to the Commercial Code, and
Barringer hereby grants Secured Party a security interest in said Collateral.
Secured Party may file any appropriate document in the appropriate index as a
financing statement for any of the items specified above as part of the
Collateral. Barringer shall execute and deliver to Secured Party, upon its
request, any financing statements, as well as extensions, renewals and
amendments thereof, and reproductions of this Agreement in such form as Secured
Party may require to perfect a security interest with respect to said items.
Barringer shall pay all costs of filing such financing statements and any
extensions, renewals, amendments, and releases thereof, and shall pay all
reasonable costs and expenses of any record searches for financing statements
Secured Party may reasonably require. Consistent with but not as a limitation on
Barringer's covenants under Section 3(b) and 3(h)(i), without Secured Party's
prior written consent, Barringer shall not create or suffer to be created any
other security interest in the Collateral, including replacements and additions
thereto. Upon the occurrence of an Event of Default, Secured Party shall have
the remedies of a secured party under the Commercial Code, and at Secured
Party's option may also invoke the
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other remedies for which this Agreement or the Note provide. In exercising any
of said remedies, Secured Party may proceed against any part of the Collateral
separately or together and in any order whatsoever, without in any way affecting
the availability of its remedies under the Commercial Code or of the other
remedies for which Agreement or the Note provide.
13. ACCELERATION IN EVENT OF BARRINGER'S INSOLVENCY. If either:
(a) Barringer voluntarily files a petition under the federal Bankruptcy
Act, as such Act may from time to time be amended, or under any similar or
successor federal statute relating to bankruptcy, insolvency, arrangements or
reorganizations, or under any state bankruptcy or insolvency act, or files an
answer in an involuntary proceeding admitting insolvency or inability to pay
debts, or if Barringer shall be adjudged a bankrupt,
(b) A trustee or receiver is appointed for Barringer's property,
(c) Any of the Collateral becomes subject to the jurisdiction of a
federal bankruptcy court or similar state court,
(d) Barringer makes an assignment for the benefit of its creditors, or
(e) There is an attachment, receivership, execution or other judicial
seizure of any of the Collateral,
then Secured Party may, at its option, declare all sums secured by this
Agreement to be immediately due and payable without prior notice to Barringer,
and Secured Party may invoke any remedies permitted by this Agreement. Any
attorneys' fees and other expenses incurred by Secured Party in connection with
Barringer's bankruptcy or any of the other events described in this Section
shall be additional indebtedness of Barringer secured by this Agreement.
14. NOTICES. All notices, demands or communications ("NOTICES") under
this Agreement shall be in writing and shall be addressed to the party as set
forth below. All Notices shall be given by: (i) personal delivery, (ii)
electronic communication, provided the transmitting device used by the party
provides documentary confirmation of receipt, (iii) certified mail return
receipt requested, or (iv) a nationally recognized overnight courier service.
All Notices shall be effective and shall be deemed delivered (i) if by personal
delivery or by overnight courier, on the date of delivery if delivered on or
before 4:30 p.m. on such day; otherwise, it shall be deemed to have been
delivered on the next business day following delivery, (ii) if by electronic
communication, on the day of receipt unless received after 4:30 p.m., in which
event it shall be deemed to have been received on the next business day
following receipt of the electronic communication, and (iii) if solely by mail,
on the first to occur or actual receipt or the third business day following the
date of posting (as evidenced by the postal receipt for the posting). A party
may change its address by Notice to the other party.
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If to Secured Party:
-------------------------
-------------------------
-------------------------
-------------------------
Telephone No.:
Telecopier No.:
If to Barringer:
Barringer Laboratories, Inc.
15000W. 6th Avenue
Golden, Colorado 80401
Attention:
Telephone No: (303) 277-1687
Telecopier No.: (303) 277-1689
15. FURTHER ASSURANCES. Without further consideration, each party shall
take such further actions and execute such further documents as may be
reasonably requested by the other party in order to effectuate the purpose and
intent of this Agreement.
16. GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the Laws of Colorado, except to the extent its laws would
otherwise apply the laws of another jurisdiction.
17. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS; AMENDMENT AND WAIVER.
This Agreement contains the entire understanding of the parties and supersedes
all prior agreements and understandings between the parties relating to the
subject matter hereof. No amendment or modification to this Agreement shall be
effective unless be in writing and signed by all parties. No waiver by a party
of any breach by any other party of any provision of this Agreement shall be
deemed a waiver of any preceding or succeeding breach of the same or any other
provisions hereof. No such waiver shall be effective unless in writing and then
only to the extent expressly set forth in writing.
18. OTHER REMEDIES. Regardless of whether or not provided in other
Sections hereof, no right or remedy expressly conferred herein shall be
exclusive of any other right or remedy now or hereafter available at law or in
equity. No provision of this Agreement regarding remedies shall be construed as
a limitation on the nature of the remedies to which a party may be entitled with
respect to a breach of other provisions of this Agreement.
19. SECTION AND OTHER HEADINGS; PRONOUNS; AND CONSTRUCTION. The section
and other headings contained in this Agreement are for reference only and have
no legal significance. The use of pronouns is generic and they shall mean any
gender as appropriate. The terms "include" or "including," or similar
terminology, shall be construed as meaning without limitation as to the nature
or scope of the referenced matters. This Agreement shall be deemed to have been
drafted by both parties, and therefore the rule against construing ambiguities
against the party drafting a contract shall be inapplicable to this Agreement.
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20. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable in whole or in part in any jurisdiction, such
provision, only to the extent invalid or unenforceable, shall be severable from
this Agreement, and the other provisions of this Agreement (along with the
provision at issue, to the extent that it would be valid and enforceable, and
such provision shall be deemed to be so reformed) shall remain in full force and
effect in such jurisdiction and the remaining provisions hereof shall be
liberally construed to carry out the purpose and intent of this Agreement. The
invalidity or unenforceability, in whole or in part, of any provision of this
Agreement in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction, nor shall the invalidity or
unenforceability of any provision of this Agreement with respect to any person
or entity affect the validity or enforceability of such provision with respect
to any other person or entity.
21. ASSIGNMENT. Secured Party may at any time and from time to time
assign its rights and obligations under this Agreement and the Collateral and
any portion of the Collateral. In each case, the assignee shall be entitled to
all of the rights and remedies of Secured Party under this Agreement in relation
thereto.
22. ATTORNEY'S FEES. If a suit or action is brought by Secured Party
under this Agreement to enforce any of its terms, Secured Party shall be
entitled to reasonable attorneys fees.
23. TERMINATION. Upon the full performance and the full and irrevocable
payment of the Secured Obligations, this Agreement shall terminate.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above written.
SECURED PARTY:
- ----------------------------
- ----------------------------
BARRINGER:
BARRINGER LABORATORIES, INC.
By:
------------------------
Its:
------------------------
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EXHIBIT 3
FORM OF
REGISTRATION RIGHTS AGREEMENT, dated as of October __, 1999
(the "Agreement"), between Barringer Laboratories, Inc., a
Delaware corporation (the "Company"), AND (together, the
"Investors").
The Company and the Investors have entered into Subscription Agreements
dated as of October ___, 1999, pursuant to which, among other things, the
Company sold, pursuant to the terms and conditions thereof, to the Investors in
the aggregate principal amount of __________ shares of Common Stock, par value
$.01 per share (the "Common Stock") for $_________________.
In consideration of the foregoing and of the covenants and obligations
set forth below, the parties agree as follows:
1. REGISTRATION ON REQUEST.
(a) REQUEST. Subject to the limitations set forth in Section 1(b), upon
written notice to the Company by any Investor requesting registration of its
Registrable Securities (as defined in Section 9(b)), the Company shall use its
best efforts to effect the registration under the Securities Act of 1933 (the
"Securities Act") of all or part of the Registrable Securities in minimum
amounts of 25% of Registrable Securities held by each such requesting Investor
or Investors (each, an "Initiating Investor"). The Company promptly shall give
notice of such requested registration to all other Holders (as defined in
Section 9(b)) of Registrable Securities who are entitled pursuant to Section 2
to join in such registration and, thereupon, the Company shall use its best
efforts to effect, on the earliest possible date, the registration under the
Securities Act for public sale (in accordance with the method of disposition
specified in the notice from the requesting Holders) of: (i) the Registrable
Securities that the Company has been requested to register by such Initiating
Investor or Investors; and (ii) the other Registrable Securities that the
Company has been requested to register by the Holders thereof but only if
written notice was given to the Company within 20 days after the giving of such
notice by the Company.
(b) LIMITATIONS. The Company shall not be required to effect a
registration pursuant to Section 1(a) on more than a total of three occasions,
with no more than one request by any Investor; provided further, that a request
may not be made unless the requesting Investor can establish that at least 10%
of the Common Stock will be the subject of the requested registration; it being
further understood and agreed that a registration effected under Section 2 shall
not be counted as a registration under this Section.
(c) EFFECTIVE REGISTRATION STATEMENT. A registration requested pursuant
to this Section 1 shall not be deemed to have been effected, and shall not be
deemed a requested registration for purposes of Section 1(a) and Section 1(b):
(i) unless a registration statement filed under the Securities Act (a
"Registration Statement") covering all Registrable Securities specified in a
notice from an Initiating Investor has become effective and remained effective
in compliance with the provisions of the Securities Act with respect to the
disposition of all of such Registrable Securities covered by such Registration
Statement until the earlier of such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof set forth in such Registration Statement; (ii) if
after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the Securities and Exchange
Commission (the "Commission") or other governmental agency or court for any
reason not attributable to the Initiating Investors; or (iii) if the conditions
to closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived, other than by
reason of a failure on the part of the Initiating Investors.
<PAGE>
(d) PRIORITY IN REQUESTED REGISTRATION. So long as the Initiating
Investors hold at least 25% of the Registrable Securities issued to the
Investors on the date of this Agreement, the Company shall have the right to
include in any Registration Statement initiated by an Investor pursuant to this
Section 1, for sale in accordance with the method of disposition specified by
the requesting Investors, Common Stock to be sold by the Company for its own
account. If, in the good-faith judgment of the managing underwriter of any
underwritten offering the inclusion of all of the Registrable Securities
requested for inclusion pursuant to this Section 1 and the Common Stock proposed
to be sold by the Company for its own account would adversely affect the
successful marketing of the proposed offering, then the number of shares of
Common Stock to be included in the offering shall be reduced to the required
level, first, by excluding Common Stock to be sold by the Company for its own
account and second, by reducing the participation of such Initiating Investors
and other Holders in such offering pro rata among such Initiating Investors and
other Holders, based upon the amount of Registrable Securities owned by such
Initiating Investors and other Holders. The Company will not cause any other
registration statement with respect to its Registrable Securities for its own
account to become effective less than 120 days after the effective date of any
registration requested pursuant to this Section 1, except in the case of: (i) a
registration of securities pursuant to a Registration Statement on Form S-8 or
Form S-4 or any successor form thereto; (ii) any registration statement covering
only securities proposed to be issued in exchange for securities or assets of
another corporation; (iii) any registration statement relating solely to
employee stock option, stock purchase, benefit or similar plans; or (iv) other
registrations required under Section 1.
2. INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If at any time and from
time to time the Company proposes to register any shares of its capital stock
under the Securities Act, whether or not for sale for its own account, on a form
and in the manner that would permit registration of Registrable Securities for
the sale to the public under the Securities Act, the Company will give written
notice to all Holders of its intention to do so. Upon the written request of a
Holder given within 20 days after the giving of any such notice by the Company,
the Company will use its best efforts to cause to be included in such
Registration Statement all of the Registrable Securities so requested for
inclusion by Holders. If the Registration Statement is to cover, in whole or in
part, any underwritten distribution, the Company shall use its best efforts to
cause the Registrable Securities requested for inclusion pursuant to this
Section to be included in the underwriting on the same terms and conditions
(including any lock-up) as the shares otherwise being sold through the
underwriters.
(b) PRIORITY IN INCIDENTAL REGISTRATIONS. If, in the good faith
judgment of the managing underwriter of any underwritten offering, the inclusion
of all of the Registrable Securities requested for inclusion pursuant to this
Section 2 might adversely affect the successful marketing of the proposed
offering, then the number of shares of capital stock and Registrable Securities,
if any, to be included in such registration shall be reduced, such reduction
shall be applied, FIRST by excluding (on a pro rata basis) capital stock of the
Company to be sold by persons other than the Holders, and Registrable Securities
proposed to be sold by all Holders and SECOND, by excluding shares of capital
stock to be sold by the Company for its own account. Notwithstanding the
foregoing provisions, the Company may withdraw or discontinue any registration
statement referred to in this Section 2 without incurring any liability to
Holders of Registrable Securities.
3. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Section 1 or 2 to effect the registration of
Registrable Securities under the Securities Act, the Company will, at its
expense, as expeditiously as possible:
(i) prepare and, in any event within 45 days after a request for
registration has been given to the Company, file with the Commission a
Registration Statement with respect to such Registrable Securities and use its
best efforts to cause such Registration Statement to become effective; PROVIDED
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that the Company may withdraw or discontinue any registration of its securities
which is being effected pursuant to Section 2 at any time prior to the effective
date of the Registration Statement;
(ii) prepare and file with the Commission such amendments and
supplements to any Registration Statement referred to in clause (i) of this
Section 3 and the prospectus used in connection therewith as may be necessary to
keep such Registration Statement effective and updated until such time as all of
the Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the Holder or Holders set forth in such Registration
Statement and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the Holder or Holders thereof set forth in such Registration
Statement; PROVIDED that before filing a Registration Statement or prospectus,
or any amendments or supplements thereto, the Company will furnish, at the
Company's expense, to one counsel selected jointly by the Holders holding a
majority of the Registrable Securities covered by such Registration Statement to
represent all Holder's of Registrable Securities covered by such Registration
Statement, copies of all documents proposed to be filed, which documents will be
subject to the review of such counsel;
(iii) furnish to each Holder of such Registrable Securities: (a) such
number of copies of any Registration Statement referred to in clause (i) of this
Section 3 and of each amendment and supplement thereto (in each case including
all exhibits); (b) such number of copies of the prospectus included in such
Registration Statement (including each preliminary prospectus and summary
prospectus), and any other prospectus filed under Rule 424 under the Securities
Act in conformity with the requirements of the Securities Act; and (c) such
other documents as such Holder may reasonably request,
(iv) use its best efforts to register or qualify such Registrable
Securities covered by any Registration Statement referred to in clause (i) of
this Section 3 under such other securities or blue sky laws of such domestic
jurisdictions as each Holder shall reasonably request, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
Holder to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction where, but for the requirements of this clause (iv), it
would not be obligated to be so qualified or to consent to general service of
process in any such jurisdiction;
(v) use its best efforts to cause such Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
domestic governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Registrable
Securities;
(vi) cause representatives of the Company to participate in any "road
show" or "road shows" reasonably requested by any underwriter of an underwritten
or "best efforts" offering of any Registrable Securities;
(vii) notify each seller of any such Registrable Securities covered by
a Registration Statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or of the Company's becoming
aware that the prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of any such seller, prepare and furnish to such seller a reasonable
number of copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the sellers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing;
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(viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its Holders, as
soon as reasonably practicable (but not more than eighteen months) after the
effective date of the Registration Statement, an earnings statement which shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder;
(ix) use its best efforts to list such Registrable Securities on any
securities exchange or automated quotation system on which securities of the
same class are then listed, if such Registrable Securities are not already so
listed and if such listing is then permitted under the rules of such exchange or
system, and to provide a transfer agent and registrar for such Registrable
Securities covered by a Registration Statement not later than the effective date
of such Registration Statement;
(x) enter into such customary agreements (including an underwriting
agreement in customary form) and take such other actions as sellers of a
majority of such Registrable Securities or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities;
(xi) obtain a "cold comfort" letter or letters from the Company's
independent public accountants in customary form and covering matters of the
type customarily covered by "cold comfort" letters as the seller or sellers of a
majority of such Registrable Securities shall reasonably request;
(xii) obtain an opinion of counsel for the Company in customary form
and covering matters of the type customarily covered in opinions of issuer's
counsel as the seller or sellers of a majority of such Registration Securities
shall reasonably request; and
(xiii) make available for inspection by any seller of such Registrable
Securities covered by a Registration Statement by any underwriter participating
in any disposition to be effected pursuant to such Registration Statement and by
any attorney, accountant or other agent retained by any such seller or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company's
officers, directors and employees to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in connection
with such Registration Statement.
4. EXPENSES. With respect to each registration effected pursuant
to Section 1 or 2, all Registration Expenses (defined below)
in connection with such registration and the public offering
in connection therewith shall be borne by the Company;
PROVIDED that Holders participating in any such registration
shall bear their pro rata share of the underwriting discounts
and selling commissions (on the basis of the number of
Registrable Securities of each such person included in such
registration). "Registration Expenses" shall mean any and all
expenses incidental to performance of or compliance with this
Agreement, including, without limitation, (i) all registration
and filing fees of the Commission or the National Association
of Securities Dealers, Inc., (ii) all fees and expenses of
complying with securities or blue sky laws (including fees and
disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities),
(iii) all printing, messenger and delivery expenses, (iv) all
fees and expenses incurred in connection with the listing of
the Registrable Securities on any securities exchange or
automated quotation system pursuant to Section 3(ix), (v) the
fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any
special audits and/or "cold comfort" letters required by or
incident to such performance and compliance, (vi) the
reasonable fees and disbursements of one counsel selected
(under Section 3(ii)) by the Holders of a majority of the
Registrable Securities
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being registered to represent all Holders of the Registrable
Securities being registered in connection with each such
registration, (vii) any fees and disbursements of underwriters
customarily paid by the issuers or sellers of securities,
including fees and disbursements of counsel for the
underwriters, but excluding underwriting discounts and
commissions, (viii) liability insurance if the Company so
desires or if the underwriters so require, and (ix) the
reasonable fees and expenses of any special experts retained
by the Company in connection with the requested registration.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of a registration of
any Registrable Securities pursuant to Section 1 or 2, the Company will
indemnify and hold harmless each Holder of such Registrable Securities included
in a Registration Statement pursuant to the provisions of this Agreement and any
underwriter (as defined in the Securities Act) of such Registrable Securities,
and their respective Affiliates, and each of their successors from and against,
and will reimburse such Holder, underwriter and Affiliate with respect to, any
and all claims, actions, demands, losses, damages, liabilities, costs and
expenses to which such Holder, underwriter or Affiliate may become subject under
the Securities Act or otherwise, including, without limitation, the reasonable
fees and expenses of legal counsel (including those incurred in connection with
any claim for indemnity hereunder) insofar as such claims, actions, demands,
losses, damages, liabilities, costs or expenses (or actions, or proceedings,
whether commenced or threatened in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading or arise out of any
violation by the Company of any rule or regulation under the Securities Act or
any state securities laws applicable to the Company and relating to action of
inaction required of the Company in connection with such registration; PROVIDED
that the Company will not be liable in any case to the extent, but only to the
extent, that any such claim, action, demand, loss, damage, liability, cost or
expense arises out of or is based upon an untrue statement or omission made in
reliance upon and in strict conformity with information furnished by such Holder
or such underwriter in writing specifically for use in the preparation thereof.
This indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Holder, underwriter or Affiliate and
shall survive the transfer of such securities by such Holder or such
underwriter.
(b) INDEMNIFICATION BY THE HOLDERS. Each Holder of Registrable
Securities, severally and not jointly, which Registrable Securities are included
in a registration pursuant to the provisions of this Agreement, will indemnify
and hold harmless the Company, each person, if any, who controls the Company
within the meaning of the Securities Act, each officer of the Company who signs
the Registration Statement including such Registrable Securities, each director
of the Company, each underwriter and any person who controls the underwriter and
each of their successors from and against, and will reimburse the Company and
such officer, director, underwriter or controlling person with respect to, any
and all claims, actions, demands, losses, damages, liabilities, costs or
expenses to which the Company or such officer, director, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such claims, actions, demands, losses, damages, liabilities, costs or
expenses arise out of or are based upon any untrue statement of any material
fact contained in such Registration Statement, any prospectus contained therein
or any amendment or supplement thereto, or arise out of or are based upon the
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading; PROVIDED that such Holder will be liable in any
such case to the extent, but only to the extent, that any such claim, action,
demand, loss, damage, liability, cost or expense arises out of or is based
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upon an untrue statement or omission made in reliance upon and in strict
conformity with written information furnished by such Holder specifically for
use in the preparation thereof.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by a party to be
indemnified pursuant to the provisions of Section 5(a) or 5(b) (an "indemnified
party") of notice of the commencement of any action involving the subject matter
of the foregoing indemnity provisions, such indemnified party will, if a claim
thereof is to be made against the indemnifying party pursuant to the provisions
of Section 5(a) or 5(b), notify the indemnifying party of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to an indemnified party otherwise than
under this Section and shall not relieve the indemnifying party from liability
under this Section unless, and to the extent, such indemnifying party is
prejudiced by such omission. In case such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to participate in, and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after the notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the indemnified
party will not be liable to such indemnified party pursuant to the provisions of
this Section 5(a) and 5(b) for any legal expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; PROVIDED that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it that are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified party shall have the right to select a separate counsel
and to assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred. No indemnifying party shall be liable to an indemnified party
for any settlement of any action or claim without the consent of the
indemnifying party and no indemnifying party may unreasonably withhold its
consent to any such settlement. No indemnifying party will, except with the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability and equitable claims in respect to such claim or litigation.
(d) CONTRIBUTION. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either: (i) any Holder exercising rights under this Agreement or any underwriter
makes a claim for indemnification pursuant to this Section but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section provides for indemnification in such
case; or (ii) contribution under the Securities Act may be required on the part
of any such Holder or underwriter, as the case may be, in circumstances for
which indemnification is provided under this Section 5, then, and in each such
case, the Company on the one hand and such Holder or underwriter, as the case
may be, on the other, will nevertheless contribute to the aggregate claims,
actions, demands, losses, damages, liabilities, costs or expenses to which they
may be subject (after contribution from others) in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of
the Holder of Registrable Securities or the underwriter, as the case may be, on
the other, in connection with the statements or omissions that resulted in such
claims, actions, demands, losses, damages, liabilities, costs or expenses, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Holder of Registrable Securities or the
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underwriter, as the case may be, on the other, and each party's relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; PROVIDED that, in any such case, (A) no
person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation
and (B) no such Holder or underwriter will be required to contribute any
amount in excess of the proceeds received by such Holder or underwriter, as
the case may be, from the sales of Registrable Securities covered by the
Registration Statement.
(e) OTHER INDEMNIFICATION. Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.
6. REPORTING REQUIREMENTS UNDER SECURITIES EXCHANGE ACT OF 1934.
(a) EXCHANGE ACT REPORTING. The Company shall keep effective its
registration under Section 12 of the Securities Exchange Act of 1934 (the
"Exchange Act"), and shall timely file such information, documents and reports
as the Commission may require or prescribe under the Exchange Act, or the
Company shall timely file such information, documents and reports as the
Commission may require or prescribe under Section 13 of the Exchange Act.
(b) FURNISHING INFORMATION TO HOLDERS. The Company shall forthwith upon
request furnish any Holder of Registrable Securities (a) a written statement by
the Company that it has complied with such reporting requirements, (b) a copy of
the most recent Form 10-K or Form 10-Q filed by the Company and a copy of the
most recent annual or quarterly report of the Company distributed to its
shareholders, and (c) such other reports and documents filed by the Company with
the Commission as such Holder may reasonably request in availing itself of an
exemption for the sale of Registrable Securities without registration under the
Securities Act.
(c) RULE 144. The Company acknowledges and agrees that the purposes of
the requirements contained in this Section 6 are to enable any such Holder to
comply with the current public information requirements contained in paragraph
(c) of Rule 144 under the Securities Act should such Holder ever wish to dispose
of any of the securities of the Company acquired by it without registration
under the Securities Act in reliance upon Rule 144 (or any other similar or
successor exemptive provision). In addition, the Company shall take such other
measures and file such other information, documents and reports as shall
hereafter be required by the Commission as a condition to the availability of
Rule 144 under the Securities Act (or any similar or successor exemptive
provision hereafter in effect). The Company also covenants to use its best
efforts, to the extent that it is reasonably within its power to do so, to
qualify for the use of Form S-3. From and after the effective date of the first
Registration Statement filed by the Company, the Company agrees to use its best
efforts to facilitate and expedite transfers of Registrable Securities pursuant
to Rule 144 under the Securities Act (or any similar or successor exemptive
provision hereafter in effect), which efforts shall include timely instructions
to its transfer agent to expedite such transfers of Registrable Securities.
7. SHAREHOLDER INFORMATION. The Company may require each Holder of
Registrable Securities as to which any registration is to be effected pursuant
to this Agreement to furnish the Company in a timely manner such information
with respect to such Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request in writing and as shall
be required by law or by the Commission.
8. SPECIFIC ENFORCEMENT. All of the parties acknowledge that the
parties will be irreparably damaged in the event that this Agreement is not
specifically enforced. Upon a breach or threatened
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breach of the terms, covenants or conditions of this Agreement by any of the
parties hereto, the other parties shall, in addition to all other remedies, be
entitled to a temporary or permanent injunction, without showing any actual
damage, or a decree for specific performance, in accordance with the provisions
of this Agreement.
9. SECTION HEADINGS; DEFINITIONS; CERTAIN INTERPRETATIONS.
(a) Section headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.
(b) As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" shall mean (a) any person or entity directly or indirectly
controlling, controlled by or under common control with another person or
entity; (b) any person or entity owning or controlling 10% or more of the
outstanding voting securities of such other person or entity; (c) any partner,
officer, director, employee or shareholder of such entity or any parent, spouse,
child, brother, sister or other relative with a relationship (by blood, marriage
or adoption) not more remote than first cousin of any of the foregoing; or (d)
any liquidating trust, trustee or other similar person or entity for any such
person or entity.
"Holder" shall mean (a) the Investors and (b) any other person to which
the rights of registration under this Agreement have been transferred or
assigned by the Investors or their respective transferees.
"Registrable Securities" shall mean (a) shares of Common Stock
(including shares issued upon the conversion of any Notes or the exercise of any
other exchange, conversion or similar right), and (b) any securities issued in
respect of any such shares by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger or
consolidation or reorganization; provided that, such securities shall cease to
be Registrable Securities when such securities have been sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction.
(c) Except as otherwise expressly provided in this Agreement, the
following rules of interpretation apply to this Agreement: (i) the singular
includes the plural and the plural includes the singular, (ii) "or" or "any" are
not exclusive and "include" and "including" are not limiting; (iii) a reference
to any agreement or other contract includes permitted supplements and
amendments; (iv) a reference to a law includes any amendment or modification to
such law and any rules or regulations issued thereunder; (v) a reference to a
person includes its successors and assigns; and (vi) a reference in this
Agreement to a Section is to the Section of this Agreement.
10. NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing and sufficient if delivered personally or
sent by facsimile (with confirmation of receipt) or by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
If to the Company: Barringer Laboratories, Inc.
15000 West 6th Avenue
Suite 300
Golden, Colorado 80401-5047
Attn: President
Facsimile: (303) 277-1689
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If to the Investors:
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Facsimile:
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Facsimile:
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Facsimile:
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or to such other address or facsimile number as the party to whom notice is to
be given may have furnished to the other party in writing in accordance
herewith. Each such notice, request or communication shall be effective when
received or, if given by mail, when delivered at the address specified in this
Section or on the fifth business day following the date on which such
communication is posted, whichever occurs first.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
12. ENFORCEABILITY. It is the desire and intent of the parties hereto
that the provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO ANY
CHOICE OR CONFLICT OF LAWS PROVISIONS).
14. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. EACH OF THE COMPANY
AND THE HOLDER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF ANY FEDERAL AND STATE COURT IN DELAWARE SITTING IN DELAWARE AND
IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE LITIGATED
EXCLUSIVELY IN SUCH COURTS. EACH OF THE COMPANY AND THE HOLDER AGREES NOT TO
COMMENCE ANY LEGAL PROCEEDING RELATED HERETO OR THERETO EXCEPT IN SUCH COURT.
EACH OF THE COMPANY AND THE HOLDER IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING IN ANY
SUCH COURT AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
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THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE HOLDER AND THE COMPANY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
15. WAIVERS, AMENDMENTS. No waiver of any right hereunder by any party
shall operate as a waiver of any other right, or of the same right with respect
to any subsequent occasion for its exercise, or of any right to damages. No
waiver by any party of any breach of this Agreement shall be held to constitute
a waiver of any other breach or a continuation of the same breach. All remedies
provided by this Agreement are in addition to all other remedies provided by
law. This Agreement may not be amended except by a writing executed by the
Company and by Holders holding at least 51% of the Registrable Securities;
PROVIDED that the provisions of this Section 16 may not be amended unless such
amendment is executed by each Holder.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. The Investors' rights, including the right to request registration
pursuant to Section 1, are assignable to any assignee or transferee of all or a
portion of the Registrable Securities held by the Investors. In addition, and
whether or not any express assignment shall have been made, the provisions of
this Agreement which are for the benefit of the parties hereto other than the
Company shall also be for the benefit of and enforceable by any subsequent
Holder of any Registrable Securities, subject to the provisions contained
herein.
17. TERMINATION. This Agreement shall terminate upon the earliest to
occur of the following events:
(a) termination by mutual written agreement of the Investors and the
Company;
(b) all Registrable Securities have been sold to or through a broker or
dealer or underwriter in a public distribution or public securities transaction;
or
(c) the fifth anniversary of the date hereof.
18. ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties with respect to the transactions contemplated by this
Agreement and supersedes all prior agreements or understandings among the
parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
BARRINGER LABORATORIES, INC.
By:
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Name:
Title:
INVESTORS:
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Name: Name:
Title: Title:
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Name: Name:
Title: Title:
