<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. __)
BioSource International, Inc.
__________________
(Name of Issuer)
Common Stock, par value $0.001 per share
___________________________
(Title of Class of Securities)
09066H104
---------
(CUSIP Number)
Genstar Capital LLC
555 California Street, Suite 4850
San Francisco, California 94104
(415) 834-2350
______________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
Scott R. Haber
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111-2562
(415) 391-0600
January 10, 2000
__________________________________________________________
(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 statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
(Continued on following pages)
(Page 1 of 17 Pages)
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 09066H104 PAGE 2 OF 17 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Genstar Capital LLC
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
AF, OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0- shares of Common Stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0- shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0- shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0- shares of Common Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
-0- shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
OO
- ------------------------------------------------------------------------------
2
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 09066H104 PAGE 3 OF 17 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Genstar Capital Partners II, L.P.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
AF, OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0- shares of Common Stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0- shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0- shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0- shares of Common Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
-0- shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
PN
- ------------------------------------------------------------------------------
3
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 09066H104 PAGE 4 OF 17 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stargen II LLC
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
AF, OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0- shares of Common Stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0- shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0- shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0- shares of Common Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
-0- shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
OO
- ------------------------------------------------------------------------------
4
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 09066H104 PAGE 5 OF 17 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jean-Pierre L. Conte
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
PF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0- shares of Common Stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0- shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0- shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0- shares of Common Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
-0- shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
5
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 09066H104 PAGE 6 OF 17 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Richard F. Hoskins
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
PF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0- shares of Common Stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0- shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0- shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0- shares of Common Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
-0- shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
6
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 09066H104 PAGE 7 OF 17 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Richard D. Paterson
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
PF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Canada
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0- shares of Common Stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0- shares of Common Stock
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0- shares of Common Stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0- shares of Common Stock
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
-0- shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
7
<PAGE>
Item 1. Security and Issuer.
--------------------
This statement relates to shares of common stock, par value $0.001 per
share (the "Common Stock"), of BioSource International, Inc., a Delaware
corporation ("BioSource" or the "Company"). The Company's principal executive
offices are located at 820 Flynn Road, Camarillo, California 93012.
Item 2. Identity and Background.
------------------------
(a)-(c), (f). This statement is being filed by (1) Genstar Capital
LLC, a Delaware limited liability company ("Genstar Capital"), (2) Genstar
Capital Partners II, L.P., a Delaware limited partnership ("Genstar Capital
Partners"), (3) Stargen II LLC, a Delaware limited liability company
("Stargen"), (4) Jean-Pierre L. Conte ("Mr. Conte"), (5) Richard F. Hoskins
("Mr. Hoskins") and (6) Richard D. Paterson ("Mr. Paterson"). Genstar Capital,
Genstar Capital Partners, Stargen, Mr. Conte, Mr. Hoskins and Mr. Paterson are
sometimes collectively referred to herein as the "Reporting Persons." The
agreement among the Reporting Persons relating to the joint filing of this
statement is attached as Exhibit 1 hereto.
Genstar Capital, Genstar Capital Partners and Stargen are each
principally engaged in the business of investing in securities of the Company
and other companies. Genstar Capital is the general partner of Genstar Capital
Partners. The address of the principal business and office of each of Genstar
Capital, Genstar Capital Partners and Stargen is 555 California Street, Suite
4850, San Francisco, California 94104.
Mr. Conte, Mr. Hoskins and Mr. Paterson are the managers and managing
directors of Genstar Capital and members of Stargen. Mr. Paterson is the
Administrative Member of Stargen. Mr. Conte and Mr. Hoskins are each United
States citizens, and Mr. Paterson is a Canadian citizen, and the present
principal occupation or employment of each is as a manager and managing director
of Genstar Capital. The business address of each of Mr. Conte, Mr. Hoskins and
Mr. Paterson is 555 California Street, Suite 4850, San Francisco, California
94104.
(d), (e). During the last five years, none of Genstar Capital,
Genstar Capital Partners, Stargen, Mr. Conte, Mr. Hoskins or Mr. Paterson has
(1) been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (2) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
Pursuant to the terms of a Securities Purchase Agreement dated January
10, 2000 (the "Purchase Agreement") by and among BioSource, on the one hand, and
Genstar Capital Partners and Stargen (the "Investors"), on the other hand,
BioSource agreed to issue and sell, and
8
<PAGE>
Genstar Capital Partners and Stargen agreed to purchase, 364,244 and 7,056
shares, respectively, of the Company's Series B Preferred Stock (the "Shares"),
initially convertible into 1,456,976 and 28,224 shares, respectively, of Common
Stock, or an effective price of $6.06 per share of Common Stock. Pursuant to the
Purchase Agreement, BioSource also agreed to issue to Genstar Capital Partners
and Stargen warrants (each, a "Warrant" and collectively, the "Warrants") to
purchase 1,262,542 and 24,458 shares, respectively, of Common Stock at a per
share exercise price of $7.77. In consideration for the Shares and Warrants,
Genstar Capital Partners and Stargen will pay the Company $8,829,270 and
$171,042, respectively.
The source of funds for the acquisition of the Shares and Warrants by
Genstar Capital Partners and Stargen will be capital contributions from their
respective partners and members.
The Purchase Agreement is attached hereto as Exhibit 2 and is
incorporated by reference herein.
Item 4. Purpose of Transaction.
-----------------------
Purchase Agreement
- ------------------
The Investors have agreed to purchase, and the Company has agreed to
sell, the Shares and Warrants pursuant to the Purchase Agreement. The closing
of the sale of the Shares and Warrants is subject to customary closing
conditions, including Genstar Capital Partners and Stargen receiving the
required financing from their respective partners and members. It is
anticipated that the closing will occur in February 2000 (the "Closing Date").
The Shares will vote with the Common Stock on an as-converted basis.
Initially, the Shares will represent an aggregate of 19.99% of the voting power
of the Company.
Pursuant to the Purchase Agreement, the Company has agreed that for a
period of 90 days after the Closing Date, it will not enter into any contract to
issue equity or equity-linked securities in a private transaction, other than
pursuant to certain exceptions, including a merger, consolidation or acquisition
of assets, or in connection with a strategic partnership, collaboration or joint
venture or as consideration for the acquisition of a business, product or
license, the issuance of securities in an underwritten public offering, the
issuance of securities upon exercise or conversion of the Company's options,
warrants or other convertible securities or the grant of additional stock
options or additional securities under the Company's stock option, stock
purchase or restricted stock plan for the benefit of the Company's employees,
consultants or directors.
Investor Rights Agreement
- -------------------------
Pursuant to the Purchase Agreement, the Company, Genstar Capital
Partners and Stargen have agreed to enter into an Investor Rights Agreement to
be dated the Closing Date.
9
<PAGE>
Pursuant to the Investor Rights Agreement, so long as the Investors own (i) not
less than 750,000 shares of Common Stock, the Investors are entitled to
designate two (2) persons reasonably acceptable to BioSource to serve on the
Company's Board of Directors, and (ii) not less than 495,000 shares of Common
Stock, the Investors are entitled to designate one (1) person reasonably
acceptable to BioSource to serve on the Company's Board of Directors. On the
Closing Date, BioSource will increase the size of its Board of Directors from
five (5) to seven (7) members and will appoint two directors designated by the
Investors to fill the vacancies created thereby. The Investors intend to
designate Mr. Conte and Robert J. Weltman to serve as directors of the Company.
Pursuant to the Investor Rights Agreement, for 30 days after receiving
notice of the Company's proposed offering of any shares of, or securities
convertible into or exercisable for any shares of, any class of capital stock of
the Company ("Additional Securities"), the Investors will have the exclusive
right to negotiate with the Company with respect to the purchase of such
Additional Securities. If the Company and one or more of the Investors do not
agree to enter into an agreement for the purchase and sale of the Additional
Securities on or before the expiration of this 30-day period, then the Company
is permitted to sell the Additional Securities to any other person for a period
of 120 days following the expiration of the initial 30-day period.
In addition to the negotiation rights described in the preceding
paragraph, so long as the Investors hold not less than 50% of the aggregate
Shares and Warrants they purchased pursuant to the Purchase Agreement (or an
equivalent amount of Common Stock issued upon conversion or exercise thereof),
BioSource must give the Investors 30 days' notice prior to offering any
Additional Securities to any other person. For 15 days after receiving the
Company's notice, the Investors have a right to purchase such Additional
Securities at the price and on the terms contained in the Company's notice. If
the Investors do not agree to purchase the Additional Securities within this 15-
day period and/or fail to consummate the purchase within 60 days after agreeing
to purchase the Additional Securities, then the Company is permitted to sell
such Additional Securities to any other person on substantially the same terms
as those set forth in the Company's notice to the Investors.
Pursuant to the Investor Rights Agreement, the Company has granted the
Investors the right to require the Company to register the shares of Common
Stock issuable upon conversion of the Shares and upon exercise of the Warrants,
subject to certain exceptions. The Investor Rights Agreement provides that the
Investors may initiate three registrations and also provides that the Investors
will have piggyback registration rights and the right to request the Company to
register the Investors' securities on Form S-3. The Company is obligated to pay
all expenses incurred in connection with such registrations (other than brokers'
fees, underwriting discounts and commissions and similar selling expenses
applicable to the Investors' securities, which will be borne by the Investors).
The Company has agreed to indemnify the Investors and related persons against
certain liabilities under the securities laws in connection with the sale of
securities under such registrations.
10
<PAGE>
A copy of the Investor Rights Agreement is attached hereto as Exhibit
5 and is incorporated by reference herein.
Certificate of Designations
- ---------------------------
The terms of the Shares are set forth in the Certificate of
Designation, Preferences, Rights and Limitations of Series B Preferred Stock of
BioSource International, Inc. (the "Certificate of Designations"). The Shares
will be entitled to receive dividends at a rate of 8% of the original issue
price payable in additional Shares. Unless all dividends on the outstanding
Shares shall have been paid, no dividends or other distributions may be paid to
the holders of Common Stock (other than those that are payable in shares of
Common Stock or other securities of the Company). Upon a liquidation,
dissolution or winding-up of the Company, holders of the Shares are entitled to
receive a liquidation preference equal to the original issue price, plus all
accrued but unpaid dividends, before any liquidating distribution may be made
with respect to the Common Stock. For purposes of the Certificate of
Designations, a sale of all or substantially all of the assets of the Company or
acquisition of the Company pursuant to a merger, consolidation, share exchange,
reorganization or otherwise is treated as a liquidation, thereby entitling
holders of the Shares to receive the liquidation preference.
The Shares are convertible into shares of Common Stock initially at a
rate of four shares of Common Stock for each Share. Initially, the effective
conversion price per share of Common Stock will be $6.06. The conversion ratio
is subject to anti-dilution adjustment under certain circumstances as set forth
in the Certificate of Designations. Holders of the Shares have the right to
require the Company to redeem the Shares at the original issue price plus all
accrued and unpaid dividends on and after the fourth anniversary of the date of
issuance of the Shares. If during a test period (as defined below), the Common
Stock has an average market price (defined as the average closing price for 30
consecutive trading days) that is less than the effective conversion price per
share of Common Stock, then the anniversary date upon the which the Shares are
redeemable would be reduced by one year. The "test period" is the first six
months of a calendar year or the last six months of a calendar year.
So long as the Shares are outstanding, the Company may not take any of
the following actions without the prior written consent of a the holders of
greater than two-thirds of the outstanding Shares: (1) create a new class or
series of stock that ranks senior to or on parity with the Shares as to dividend
rights, redemption rights, conversion rights or liquidation preferences, (2)
sell, convey or otherwise dispose of all of its assets, property or business or
dissolve, liquidate or wind up the Company, (3) amend its certificate of
incorporation or bylaws in any manner that adversely affects the preferences,
privileges, restrictions or other rights of the holders of Shares, (4) increase
or decrease the number of authorized shares of Series B Preferred Stock, (5)
increase or decrease the number of authorized seats on the Company's Board of
Directors, (6) declare, pay or set aside for payment any dividend or other
distribution in respect of the Company's capital stock, (7) call for redemption,
redeem, purchase or otherwise acquire for any consideration any of the Company's
capital stock (other than certain repurchases from employees, directors,
consultants or other persons performing services for the Company) or
11
<PAGE>
Series B Preferred Stock or (8) merge or consolidate the Company (other than
where the holders of voting securities of the Company immediately prior to such
merger or consolidation beneficially own, directly or indirectly, a majority of
the combined voting power of the surviving entity resulting from such merger or
consolidation).
A copy of the Certificate of Designations is attached hereto as
Exhibit 6 and is incorporated by reference herein.
Warrants
- --------
The Warrants represent the right to purchase shares of the Company's
Common Stock at an exercise price of $7.77 per share. Payment of the exercise
price may be made in cash, cancellation of indebtedness of the Company to the
holder of the Warrant or through the exchange of Warrants for shares of Common
Stock equal to the value of the amount equal to the value of the Warrants being
exchanged. The exercise price and the number of shares issuable upon exercise
of the Warrants is subject to anti-dilution adjustment under certain
circumstances as set forth in the Warrants.
A copy of the Warrant to be issued to Genstar Capital Partners is
attached hereto as Exhibit 3 and is incorporated by reference herein. A copy of
the Warrant to be issued to Stargen is attached hereto as Exhibit 4 and is
incorporated by reference herein.
Concurrently with its approval of the Purchase Agreement and the
transactions contemplated hereby, the Board of Directors of the Company amended
the Company's stockholder rights plan to exempt Genstar Capital and its
affiliates from the applicable provisions of the rights plan.
The Reporting Persons intend to acquire the Shares and Warrants for
investment purposes. Depending on the factors discussed herein, the Reporting
Persons may, from time to time, exercise all or a portion of the Warrants or
convert all or a portion of the Shares and may acquire, retain or sell all or a
portion of the Shares, Warrants and/or Common Stock issued upon conversion of
the Shares or exercise of the Warrants in the open market or in privately
negotiated transactions. Any actions the Reporting Persons might undertake will
be dependent upon the Reporting Persons' review of numerous factors, including,
among other things, the price levels of the Common Stock; general market and
economic conditions; ongoing evaluation of the Company's business, financial
condition, operations and prospects; the relative attractiveness of alternative
business and investment opportunities; and other future developments.
Except as set forth above, the Reporting Persons have no present plans
or intentions which would result in or relate to any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
12
<PAGE>
Item 5. Interest in Securities of the Issuer.
-------------------------------------
(a), (b). As of the close of business on January 10, 2000, none of
the Reporting Persons beneficially owned any Common Stock directly.
Pursuant to the Purchase Agreement, the Investors have agreed to
purchase from the Company, and the Company has agreed to issue and sell to the
Investors, an aggregate of 371,300 Shares which initially will be convertible
into 1,485,200 shares of Common Stock, representing 19.99% of the 7,429,716
shares of Common Stock outstanding as of January 7, 2000. Also pursuant to the
Purchase Agreement, the Investors have agreed to purchase from the Company, and
the Company has agreed to issue and sell to the Investors, Warrants to purchase
an aggregate of 1,287,000 shares of Common Stock, representing 14.8% of the
shares of Common Stock outstanding (assuming exercise of the Warrants).
Assuming exercise of the Warrants and conversion of the Shares into Common
Stock, the Shares and Warrants would represent, in the aggregate, 27.2% of the
shares of Common Stock outstanding.
Assuming consummation of the sale of Shares and Warrants pursuant to
the Purchase Agreement, Genstar Capital Partners and Stargen will acquire the
following Shares and Warrants:
<TABLE>
<CAPTION>
Name of Investor Number of Shares Number of Shares of Percentage of
- ---------------- ---------------- ------------------- -------------
of Preferred Stock Common Stock Issuable Outstanding Shares
------------------- --------------------- ------------------
Upon Conversion of (Assuming Conversion of
------------------ -----------------------
Preferred Stock the Preferred Stock
--------------- -------------------
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Genstar Capital 364,244 1,456,976 19.61%
Partners
- ---------------------------------------------------------------------------------------------
Stargen 7,056 28,224 0.38%
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Name of Investor Number of Shares of Common Percentage of Outstanding
- ---------------- -------------------------- -------------------------
Stock Issuable Upon Exercise of Shares (Assuming Exercise
------------------------------- -------------------------
Warrants of the Warrants)
-------- ----------------
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Genstar Capital Partners 1,262,542 14.5%
- -----------------------------------------------------------------------------------------------
Stargen 24,458 0.3%
- -----------------------------------------------------------------------------------------------
</TABLE>
On and after the Closing Date, Genstar Capital Partners will have the
sole power to dispose or direct the disposition of the Shares and Warrants which
it would hold directly or the shares of Common Stock issued upon conversion of
such Shares or exercise of such Warrants. On and after the Closing Date,
Genstar Capital Partners will have the power to vote or direct the
13
<PAGE>
vote of such Shares on an as-converted basis, but will not have the power to
vote or direct the vote of any of the shares of Common Stock which it would own
upon exercise of such Warrants prior to the receipt of such shares of Common
Stock upon exercise of such Warrants.
Genstar Capital is the sole general partner of Genstar Capital
Partners and in such capacity may be deemed to have the power to dispose or
direct the disposition of the Shares and Warrants that Genstar Capital Partners
would hold on and after the Closing Date, and shares of Common Stock which
Genstar Capital Partners would hold upon conversion of such Shares or exercise
of such Warrants, and to vote or direct the vote of such Shares on an as-
converted basis or such shares of Common Stock.
On and after the Closing Date, Stargen will have the sole power to
dispose or direct the disposition of the Shares and Warrants which it would hold
directly and the shares of Common Stock issued upon conversion of such Shares or
exercise of such Warrants. On and after the Closing Date, Stargen will have the
power to vote or direct the vote of such Shares on an as-converted basis, but
will not have the power to vote or direct the vote of any of the shares of
Common Stock which it would own upon exercise of such Warrants prior to the
receipt of such shares of Common Stock upon exercise of such Warrants.
Messrs. Conte, Hoskins and Paterson are the managers and managing
directors of Genstar Capital and are members of Stargen, and Mr. Paterson is the
Administrative Member of Stargen and in such capacity may be deemed to have the
power to dispose or direct the disposition of the Shares and Warrants which the
Investors would hold on and after the Closing Date, and shares of Common Stock
which the Investors would own upon conversion of such Shares and exercise of
such Warrants, and may be deemed to have the power to vote or direct the vote of
such Shares on an as-converted basis or such shares of Common Stock.
The Reporting Persons may be deemed to be acting as a group in
relation to their respective holdings in BioSource but do not affirm the
existence of any such group.
Except as set forth in this Item 5(a)-(b), each of the persons named
in this Item 5(a)-(b) disclaims beneficial ownership of any Common Stock owned
beneficially or of record by any other person named in this Item 5(a)-(b).
(c). Except as set forth herein, none of the Reporting Persons has
effected any transaction in the Common Stock during the past 60 days.
(d). Not applicable.
(e). Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
---------------------------------------------------------------------
to Securities of the Issuer.
----------------------------
Item 4 above summarizes certain provisions of the Purchase Agreement,
the Investor Rights Agreement, the Warrants and the Certificate of Designations.
14
<PAGE>
A copy of the Purchase Agreement is attached hereto as Exhibit 2 and
is incorporated by reference herein. A copy of the Genstar Warrant is attached
hereto as Exhibit 3 and is incorporated by reference herein. A copy of the
Stargen Warrant is attached hereto as Exhibit 4 and is incorporated by reference
herein. A copy of the Investor Rights Agreement is attached hereto as Exhibit 5
and is incorporated by reference herein. A copy of the Certificate of
Designations is attached hereto as Exhibit 6 and is incorporated by reference
herein.
Except as set forth herein, none of the Reporting Persons has any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any person with respect to any securities of BioSource, including but not
limited to any contracts, arrangements, understandings or relationships
concerning the transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or losses, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
---------------------------------
Exhibit 1 Joint Filing Agreement.
Exhibit 2 Securities Purchase Agreement, dated January 10,
2000, among BioSource International, Inc.,
Genstar Capital Partners II, L.P. and Stargen II
LLC.
Exhibit 3 Warrant to Purchase Common Stock of BioSource
International, Inc., to be issued to Genstar
Capital Partners II, L.P. on the Closing Date.
Exhibit 4 Warrant to Purchase Common Stock of BioSource
International, Inc., to be issued to Stargen II
LLC on the Closing Date.
Exhibit 5 Investor Rights Agreement, to be dated the
Closing Date, among BioSource International,
Inc., Genstar Capital Partners II, L.P. and
Stargen II LLC.
Exhibit 6 Certificate of Designation of Preferences, Rights
and Limitations of Series B Preferred Stock of
BioSource International, Inc.
Exhibit 7 Power of Attorney.
15
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
Dated: January 20, 2000
GENSTAR CAPITAL LLC
By: /s/ Jean-Pierre L. Conte
---------------------------------
Name: Jean-Pierre L. Conte
Its: Managing Member
GENSTAR CAPITAL PARTNERS II, L.P.
By: Genstar Capital LLC, its general partner
By: /s/ Jean-Pierre L. Conte
-------------------------------
Name: Jean-Pierre L. Conte
Its: Managing Member
STARGEN II LLC
By: /s/ Jean-Pierre L. Conte
-------------------------------
Name: Jean-Pierre L. Conte
Its: Member
/s/ Jean-Pierre L. Conte
------------------------------------
Jean-Pierre L. Conte
/s/ Jean-Pierre L. Conte
------------------------------------
Jean-Pierre L. Conte
Attorney-in-fact for
Richard F. Hoskins
/s/ Jean-Pierre L. Conte
------------------------------------
Jean-Pierre L. Conte
Attorney-in-fact for
Richard D. Paterson
16
<PAGE>
EXHIBIT INDEX
-------------
Exhibit 1 Joint Filing Agreement.
Exhibit 2 Securities Purchase Agreement, dated January 10, 2000,
among BioSource International, Inc., Genstar Capital
Partners II, L.P. and Stargen II LLC.
Exhibit 3 Warrant to Purchase Common Stock of BioSource
International, Inc., to be issued to Genstar Capital
Partners II, L.P. on the Closing Date.
Exhibit 4 Warrant to Purchase Common Stock of BioSource
International, Inc., to be issued to Stargen II LLC on
the Closing Date.
Exhibit 5 Investor Rights Agreement, to be dated the Closing Date,
among BioSource International, Inc., Genstar Capital
Partners II, L.P. and Stargen II LLC.
Exhibit 6 Certificate of Designation of Preferences, Rights and
Limitations of Series B Preferred Stock of BioSource
International, Inc.
Exhibit 7 Power of Attorney.
17
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
----------------------
In accordance with Rule 13d-1(k) promulgated under the Securities
Exchange Act of 1934, as amended, the undersigned hereby agree to the joint
filing with all other Reporting Persons (as such term is defined in the Schedule
13D referred to below) on behalf of each of them of a statement on Schedule 13D
(including amendments thereto) with respect to the common stock, par value
$0.001 per share, of BioSource International, Inc., a Delaware corporation, and
that this Agreement may be included as an Exhibit to such joint filing. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as
of the 20th day of January, 2000.
GENSTAR CAPITAL LLC
By: /s/ Jean-Pierre L. Conte
--------------------------------
Name: Jean-Pierre L. Conte
Its: Managing Member
GENSTAR CAPITAL PARTNERS II, L.P.
By: Genstar Capital LLC, its general partner
By: /s/ Jean-Pierre L. Conte
-------------------------------
Name: Jean-Pierre L. Conte
Its: Managing Member
STARGEN II LLC
By: /s/ Jean-Pierre L. Conte
-------------------------------
Name: Jean-Pierre L. Conte
Its: Member
/s/ Jean-Pierre L. Conte
------------------------------------
Jean-Pierre L. Conte
/s/ Jean-Pierre L. Conte
------------------------------------
Jean-Pierre L. Conte
Attorney-in-fact for
Richard F. Hoskins
/s/ Jean-Pierre L. Conte
------------------------------------
Jean-Pierre L. Conte
Attorney-in-fact for
Richard D. Paterson
<PAGE>
EXHIBIT 2
SECURITIES PURCHASE AGREEMENT
-----------------------------
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of January 10,
2000, by and among BIOSOURCE INTERNATIONAL, INC., a corporation organized under
the laws of the State of Delaware (the "Company"), and the purchasers (each a
"Purchaser" and collectively the "Purchasers")) set forth on the execution page
hereof (the "Execution Page").
R E C I T A L S
- - - - - - - -
A. The Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act").
B. The Purchasers desire to purchase subject to the terms and conditions
stated in this Agreement, (i) 371,300 shares of the Company's Series B
Convertible Preferred Stock, par value $.001 per share (the "Preferred Stock")
with the terms and conditions set forth in the Certificate of Designation of
Preferences, Rights and Limitations of Series B Preferred Stock of BioSource
International, Inc. in the form attached hereto as Exhibit A (the "Certificate
---------
of Designations"), and (ii) warrants in the form attached hereto as Exhibit B
---------
(including any warrants issued in replacement thereof, the "Warrants"), to
acquire 1,287,000 shares of the Company's common stock, par value $.001 per
share (the "Common Stock"). The shares of Common Stock issuable upon conversion
of or otherwise pursuant to the Preferred Stock are referred to herein as the
"Conversion Shares." The shares of Common Stock issuable upon exercise of or
otherwise pursuant to the Warrants are referred to herein as the "Warrant
Shares."
C. The exercise price of the Warrants shall be $7.77 per share of Common
Stock which represents a price of 112% of the market value of the Common Stock
(based on the closing price of the Common Stock of $6.9375 per share on January
7, 2000).
D. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto are executing and delivering an Investor Rights Agreement in the
form attached hereto as Exhibit C (the "Investor Rights Agreement"), pursuant to
---------
which the Company has agreed to provide certain rights to the Purchasers,
including registration rights under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
1. CERTAIN DEFINITIONS.
-------------------
1
<PAGE>
For purposes of this Agreement, the following terms shall have the meanings
ascribed to them as provided below:
"Business Day" shall mean any day on which the principal United States
securities exchange or trading market on which the Common Stock is listed or
traded as reported by NTMS (as defined below) is open for trading.
"Investment Amount" for each Purchaser shall mean the dollar amount to be
invested in the Company at the Closing pursuant to this Agreement by such
Purchaser, as set forth on the Execution Page hereto executed by such Purchaser.
"Material Adverse Effect" shall mean any event, condition or circumstance
that has had or is reasonably likely to have a material adverse effect on (i)
the Securities, (ii) the ability of the Company to perform its obligations
hereunder (including, without limitation, the issuance of the Shares and the
Warrants), under the Certificate of Designations (including, without limitation,
the issuance of the Conversion Shares), under the Warrants (including, without
limitation, the issuance of the Warrant Shares) or under the Investor Rights
Agreement or (iii) the business, operations, properties, prospects or financial
condition of the Company and its subsidiaries, taken as a whole.
"NTMS" shall mean the Research Service of Nasdaq Trading and Market
Services (or a comparable reporting service of national reputation if the
Research Service of Nasdaq Trading and Market Services is not then reporting
closing bid prices of such security).
"Securities" shall mean the Shares, the Conversion Shares, the Warrants and
the Warrant Shares.
"Shares" means the shares of Preferred Stock to be issued and sold by the
Company and purchased by the Purchasers at the Closing.
2. PURCHASE AND SALE OF SHARES AND WARRANTS.
----------------------------------------
a. Generally. Subject to the satisfaction (or waiver) of the conditions
---------
set forth in Section 6 and Section 7 below, the Purchasers shall purchase the
number of Shares and Warrants determined as provided in this Section 2, and the
Company shall issue and sell such number of Shares and Warrants to the
Purchasers for the Investment Amount as provided below.
b. Number of Closing Shares and Warrants; Form of Payment; Closing Date.
--------------------------------------------------------------------
i. On the Closing Date (as defined below), the Company shall sell
and the Purchasers shall buy (A) 371,300 shares of Preferred Stock at $24.24 per
share, and (B) Warrants to purchase 1,287,000 shares of Common Stock at an
exercise price of $7.77 per share.
ii. On the Closing Date, each Purchaser shall pay an amount in cash
equal to its Investment Amount against delivery of certificates representing the
Shares and duly executed
2
<PAGE>
Warrants being purchased by such Purchaser, and the Company shall deliver to
each Purchaser certificates representing the Shares being purchased by such
Purchaser and duly executed Warrants being purchased by such Purchaser.
iii. Subject to the satisfaction (or waiver) of the conditions set
forth in Section 6 and Section 7 below, the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at 10:00 a.m. on
the date which is the earlier of (i) 30 days from the date hereof, or (ii) two
business days after the Purchasers have received all investment funds pursuant
to their call on investors (the "Closing Date"). The Closing shall occur at the
offices of Troop Steuber Pasich Reddick & Tobey, LLP, Los Angeles, California,
or at such other place as the Purchasers and the Company may otherwise mutually
agree.
3. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES.
----------------------------------------------
The Purchasers represent and warrant to the Company as follows:
a. Purchase for Own Account. Each Purchaser is purchasing the Shares and
------------------------
Warrants for its own account and not with a present view towards the
distribution thereof. Each Purchaser understands that it must bear the economic
risk of this investment indefinitely, unless the Securities are registered
pursuant to the Securities Act and any applicable state securities or blue sky
laws or an exemption from such registration is available, and that the Company
has no present intention of registering any such Securities other than as
contemplated by the Investor Rights Agreement. Notwithstanding anything in this
Section 3(a) to the contrary, by making the foregoing representation, the
Purchasers do not agree to hold the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption from
registration under the Securities Act and any applicable state securities laws.
b. Information. The Purchasers have been furnished all materials
-----------
relating to the business, finances and operations of the Company and its
subsidiaries and materials relating to the offer and sale of the Securities that
have been requested by them. The Purchasers have been afforded the opportunity
to ask questions of the Company and have received what they believe to be
satisfactory answers to any such inquiries. Each Purchaser understands that its
investment in the Securities involves a high degree of risk. Neither such
inquiries nor any other due diligence investigation conducted by the Purchasers
or their counsel or any of their representatives shall modify, amend or affect
the Purchasers' right to rely on the Company's representations and warranties
contained in Section 4 below.
c. Governmental Review. Each Purchaser understands that no United States
-------------------
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
d. Authorization; Enforcement. Each Purchaser has the requisite power and
--------------------------
authority to enter into and perform its obligations under this Agreement and to
purchase the Shares and the Warrants in accordance with the terms hereof. This
Agreement has been duly and validly authorized, executed and delivered on behalf
of such Purchaser and is a valid and binding
3
<PAGE>
agreement of such Purchaser enforceable against such Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
e. Transfer or Resale. Each Purchaser understands that (i) except as
------------------
provided in the Investor Rights Agreement, the Securities have not been and are
not being registered under the Securities Act or any state securities laws, and
may not be transferred unless (a) subsequently registered thereunder, or (b)
such Purchaser shall have delivered to the Company an opinion of counsel
reasonably acceptable to the Company (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the
effect that the Securities to be sold or transferred may be sold or transferred
under an exemption from such registration, or (c) sold under Rule 144
promulgated under the Securities Act (or a successor rule), or (d) sold or
transferred to an affiliate of such Purchaser or a partner or member of such
Purchaser pursuant to an exemption under the Securities Act; and (ii) neither
the Company nor any other person is under any obligation to register such
Securities under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder, in each case, other
than pursuant to the Investor Rights Agreement.
f. Legends. Each Purchaser understands that the Shares and the Warrants
-------
and, until such time as the Shares (or the Conversion Shares) and the Warrants
(or the Warrant Shares) have been registered under the Securities Act as
contemplated by the Investor Rights Agreement or otherwise may be sold by the
Purchaser under Rule 144, the certificates for the Shares, Conversion Shares,
Warrants and Warrant Shares may bear a restrictive legend in substantially the
following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
the securities laws of any state of the United States. The
securities represented hereby may not be offered or sold in
the absence of an effective registration statement for the
securities under applicable securities laws unless offered,
sold or transferred under an available exemption from the
registration requirements of those laws.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if (a) the sale of such Security is registered under the Securities Act
or (b) in connection with the resale of such Security, such holder provides the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, or a "no action" letter from the
staff of the SEC, in either case to the effect that a public sale or transfer of
such Security may be made without registration under the Securities Act or (c)
when such Security may be sold by a person who is not an "affiliate" of the
Company under Rule 144(k). Each Purchaser agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been
removed, pursuant to an effective registration statement or under an exemption
from the registration requirements of the Securities Act. The Company
acknowledges that the Purchasers
4
<PAGE>
may distribute the Shares or Warrants to their respective partners or members in
accordance with the terms of their respective organizational documents and the
legend set forth above shall be removed for Securities held by holders who can
sell such Securities pursuant to Rule 144(k).
g. Accredited Investor Status. Each Purchaser is an "accredited investor"
--------------------------
as that term is defined in Rule 501(a) of Regulation D. Neither the Purchasers
nor any of their respective affiliates is registered as a broker or dealer
under Section 15(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), affiliated with any broker or dealer registered under Section
15(a) of the Exchange Act, or a member of the NASD (as defined below).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
---------------------------------------------
The Company represents and warrants to the Purchasers as follows:
a. Organization and Qualification. The Company and each of its
------------------------------
subsidiaries is a corporation duly organized and existing under the laws of the
jurisdiction in which it is incorporated, and has the requisite corporate power
to own its properties and to carry on its business as now being conducted. The
Company and each of its subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which the nature
of the business conducted by it makes such qualification necessary and where the
failure so to qualify would have, individually or in the aggregate, a Material
Adverse Effect. Schedule 4(a) sets forth the Company's jurisdiction of
-------------
incorporation and the name of each of the Company's subsidiaries and its
jurisdiction of incorporation. All of the outstanding equity securities of each
subsidiary is owned by the Company or one or more of its subsidiaries.
b. Authorization; Enforcement. (i) The Company has the requisite
--------------------------
corporate power and authority to enter into and perform its obligations under
this Agreement, the Certificate of Designations, the Warrants and the Investor
Rights Agreement, to issue and sell the Shares and the Warrants in accordance
with the terms hereof and to issue the Conversion Shares upon conversion of the
Shares and the Warrant Shares upon exercise of the Warrants in accordance with
the terms of the Certificate of Designations and Warrants, respectively; (ii)
the execution, delivery and performance of this Agreement, Certificate of
Designations, the Warrants and the Investor Rights Agreement by the Company and
the consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Shares and the Conversion Shares and the issuance of the Warrants and the
reservation for issuance and issuance of the Warrant Shares) have been duly
authorized by the Company's Board of Directors and no further consent or
authorization of the Company, its Board of Directors or its shareholders is
required; (iii) this Agreement has been duly executed and delivered by the
Company; and (iv) this Agreement constitutes, and, upon execution and delivery
by the Company and the other parties thereto to the extent required of the
Investor Rights Agreement and the Warrants, such agreements will constitute,
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other laws
affecting creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). The Company
5
<PAGE>
has delivered to the Purchasers all correspondence and filings between the
Company and/or its representatives and the NASD with respect to this Agreement
and the transactions contemplated hereby. The Board of Directors of the Company
has taken all actions necessary under the Delaware General Corporation Law to
ensure that Section 203 does not and will not apply to the transactions
contemplated hereby or any "business combination" with any "interested
stockholder" after the date hereof. On or prior to the Closing, the Company will
file the Certificate of Designations with the Secretary of State of the State of
Delaware. The Board of Directors of the Company has taken all actions necessary
under the terms of its Shareholder Rights Plan to ensure that such Shareholder
Rights Plan does not and will not apply to the transactions contemplated hereby.
c. Capitalization. The capitalization of the Company as of the date
--------------
hereof is set forth on Schedule 4(c), including the authorized capital stock,
-------------
the number of shares issued and outstanding, the number of shares issuable and
reserved for issuance pursuant to the Company's stock option plans, the number
of shares issuable and reserved for issuance pursuant to securities exercisable
for, or convertible into or exchangeable for any shares of capital stock. All
of such outstanding shares of the Company's capital stock have been, or upon
issuance will be, validly issued, fully paid and nonassessable. Except as set
forth on Schedule 4(c), no shares of capital stock of the Company (including the
-------------
Shares, the Conversion Shares and the Warrant Shares) are subject to preemptive
rights or any other similar rights of the shareholders of the Company or any
liens or encumbrances. Except for the Securities and as disclosed in Schedule
--------
4(c), as of the date of this Agreement, (i) there are no outstanding securities,
- ----
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever to which the Company is a party relating to the issuance by
the Company of securities or rights convertible into or exercisable or
exchangeable for, any shares of capital stock of the Company, or arrangements by
which the Company is or may become bound to issue additional shares of capital
stock of the Company, and (ii) there are no agreements or arrangements under
which the Company is obligated to register the sale of any of its securities
under the Securities Act (except the Investor Rights Agreement). The Company
has made available to the Purchasers through its filings with the SEC true and
correct copies of the Company's Certificate of Incorporation as in effect on the
date hereof ("Certificate of Incorporation"), the Company's By-laws as in effect
on the date hereof (the "By-laws") and all other instruments and agreements
governing securities convertible into or exercisable or exchangeable for capital
stock of the Company, except for stock options granted under any employee
benefit plan or director stock option plan of the Company.
d. Issuance of Shares. The Shares are duly authorized and when issued and
------------------
paid for in accordance with the terms hereof, will be validly issued, fully paid
and non-assessable, and free from all taxes, liens, claims and encumbrances
(other than those imposed through acts or omissions of the Purchaser thereof),
and will not be subject to preemptive rights, rights of first refusal or other
similar rights of shareholders of the Company and will not impose personal
liability upon the holder thereof. The Conversion Shares are duly authorized
and reserved for issuance, and, upon conversion of the Shares in accordance with
the terms of the Certificate of Designations, will be validly issued, fully paid
and non-assessable and free from all taxes and liens, claims and encumbrances
(other than those imposed through acts or omissions of the Purchaser thereof),
and will not be subject to preemptive rights or other similar rights of
shareholders of the Company and will not impose personal liability upon the
holder thereof. The
6
<PAGE>
Warrant Shares are duly authorized and reserved for issuance, and, upon exercise
of the Warrants in accordance with the terms thereof, will be validly issued,
fully paid and non-assessable and free from all taxes and liens, claims and
encumbrances (other than those imposed through acts or omissions of the
Purchaser thereof), and will not be subject to preemptive rights or other
similar rights of shareholders of the Company and will not impose personal
liability upon the holder thereof.
e. No Conflicts. The execution, delivery and performance of this
------------
Agreement, the Investor Rights Agreement and the Warrants by the Company, and
the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance and
issuance of the Shares, the Conversion Shares, the Warrant Shares and the
issuance of the Warrants) will not (i) conflict with or result in a violation of
the Certificate of Incorporation (as amended by the Certificate of Designations)
or By-laws or (ii) conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument to which the Company is a party, or result in
a violation of any law, rule, regulation, order, judgment or decree (including
(assuming the accuracy of the representations and warranties of the Purchasers)
the United States federal and state securities laws and regulations) applicable
to the Company or by which any property or asset of the Company is bound or
affected (except, with respect to clause (ii), for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). The
Company is not in violation of its Certificate of Incorporation, By-laws and
other organizational documents and is not in default (and no event has occurred
which, with notice or lapse of time or both, would put the Company in default)
under, nor has there occurred any event giving others (with notice or lapse of
time or both) any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company is a party,
except for actual or possible violations, defaults or rights as would not,
individually or in the aggregate, have a Material Adverse Effect. The
businesses of the Company are not being conducted in violation of any law,
ordinance or regulation of any governmental entity, except for actual or
possible violations, if any, the sanctions for which either singly or in the
aggregate would not have a Material Adverse Effect. Except as specifically
contemplated by this Agreement and as required under the Securities Act and any
applicable state securities laws, the Company is not required to obtain any
consent, approval, authorization or order of, or make any filing or registration
with, any court or governmental agency or any regulatory or self regulatory
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement including without limitation the issuance and sale of the
Shares and Warrants as provided hereby and the issuance of the Conversion Shares
upon conversion of the Shares, the Warrants (including without limitation the
issuance of the Warrant Shares) or the Investor Rights Agreement, in each case
in accordance with the terms hereof or thereof. The Company is not in
violation of the listing requirements of the Nasdaq National Market ("NASDAQ")
and does not reasonably anticipate that the Common Stock will be delisted by
NASDAQ in the foreseeable future based on its rules (and interpretations
thereof) as currently in effect.
f. SEC Documents; Financial Statements. The Company has timely filed all
-----------------------------------
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC
7
<PAGE>
pursuant to the Exchange Act, and has filed all registration statements and
other documents required to be filed by it with the SEC pursuant to the
Securities Act (all of the foregoing filed prior to the date hereof, and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents"). The Company has made available to the Purchasers
true and complete copies of the SEC Documents. As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any statements made in any such SEC Documents that are or were
required to be updated or amended under applicable law have been so updated or
amended. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company as of the
dates thereof and the results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal and
recurring year-end audit adjustments which are not material). Except as set
forth in the SEC Documents, the Company has no liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary course of
business subsequent to the date of such SEC Documents and (ii) obligations under
contracts and commitments incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected in such
SEC Documents, which liabilities and obligations referred to in clauses (i) and
(ii), individually or in the aggregate, would not have a Material Adverse
Effect.
g. Absence of Certain Changes. Except as disclosed in the SEC Documents,
--------------------------
there has been no change or development which individually or in the aggregate
has had or could have a Material Adverse Effect.
h. Absence of Litigation. Except as disclosed in the SEC Documents, there
---------------------
is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company, threatened against or affecting the
Company, or any of their directors or officers in their capacities as such which
would have, individually or in the aggregate, a Material Adverse Effect.
i. Acknowledgment Regarding the Purchaser's Purchase of the Securities.
-------------------------------------------------------------------
The Company acknowledges and agrees that the Purchasers are not acting as
financial advisors or, acting as fiduciaries of the Company (or in any similar
capacity) with respect to this Agreement or the transactions contemplated
hereby, and the relationship between the Company and the
8
<PAGE>
Purchasers is "arms length" and that any statement made by the Purchasers or any
of their respective representatives or agents in connection with this Agreement
and the transactions contemplated hereby is not advice or a recommendation and
is merely incidental to the Purchasers' purchases of Securities and has not been
relied upon by the Company, its officers or directors in any way. The Company
further represents to the Purchasers that the Company's decision to enter into
this Agreement has been based solely on an independent evaluation by the Company
and its representatives.
j. No Brokers. The Company has not engaged any person to which or to whom
----------
brokerage commissions, finder's fees, financial advisory fees or similar
payments are or will become due in connection with this Agreement or the
transactions contemplated hereby.
k. Form S-3 Eligibility. The Company is currently eligible to register
--------------------
the resale of its Common Stock on a registration statement on Form S-3 under the
Securities Act. There exist no facts or circumstances (including without
limitation any required approvals or waivers of any circumstances that may delay
or prevent the obtaining of accountant's consents) that would prohibit or delay
the preparation and filing of a registration statement on Form S-3 with respect
to the Registrable Securities (as defined in the Investor Rights Agreement).
l. Intellectual Property. The Company owns or possesses sufficient legal
---------------------
rights to all patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information and proprietary rights and processes necessary
for its business without any conflict with, or infringement of, the rights of
others. The Company has not received any communications alleging that the
Company has violated or, by conducting its business, would violate any of the
patents, trademarks, service marks, trade names, copyrights, trade secrets or
other proprietary rights or processes of any other person or entity. The
Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of such employee's best efforts to
promote the interest of the Company or that would conflict with the Company's
business. Neither the execution or delivery of this Agreement, nor the carrying
on of the Company's business by the employees of the Company, nor the conduct of
the Company's business as proposed, will, to the Company's knowledge, conflict
with or result in a breach of the terms, conditions, or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
such employee is now obligated. The Company does not believe it is or will be
necessary to use any inventions of any of its employees (or persons it currently
intends to hire) made prior to their employment by the Company. Set forth in
Schedule 4(l)_ is a listing of all patents, trademarks and licenses of the
Company.
m. Taxes. The Company has filed all tax returns and reports as required
-----
by law. These returns and reports are true and correct in all material
respects. The Company has paid all taxes and other assessments due.
n. Environmental Laws. The Company is not in violation of any applicable
------------------
statute, law or regulation relating to the environment or occupational health
and safety, and to its knowledge, no material expenditures are or will be
required in order to comply with any such
9
<PAGE>
existing statute, law or regulation. No Hazardous Materials (as defined below)
are used or have been used, stored, or disposed of by the Company or, to the
Company's knowledge, by any other person or entity on any property owned, leased
or used by the Company. For the purposes of the preceding sentence, "Hazardous
Materials" shall mean (a) materials which are listed or otherwise defined as
"hazardous" or "toxic" under any applicable local, state, federal and/or foreign
laws and regulations that govern the existence and/or remedy of contamination on
property, the protection of the environment from contamination, the control of
hazardous wastes, or other activities involving hazardous substances, including
building materials or (b) any petroleum products or nuclear materials.
o. ERISA Compliance. The Company is in compliance in all material
----------------
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"). The Company does not have and has never
had any "defined benefit plan" as defined under ERISA and is not and has never
been obligated to contribute to a "multi-employer plan" as defined in ERISA.
p. No Misrepresentations. No representation, warranty, acknowledgement or
---------------------
certification of the Company contained in this Agreement, any schedule, annex or
exhibit hereto or any certificate furnished by the Company to the Purchasers
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
5. COVENANTS.
---------
a. Satisfaction of Conditions. The parties shall use reasonable best
--------------------------
efforts to satisfy in a timely manner each of the conditions set forth in
Section 6 and Section 7 of this Agreement.
b. Form D; Blue Sky Laws. The Company agrees to file a Form D with
---------------------
respect to the Securities as required under Regulation D and to provide a copy
thereof to the Purchasers promptly after such filing. The Company shall, on or
prior to the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Securities for sale to the Purchasers
pursuant to this Agreement under applicable securities or "blue sky" laws of the
states of the United States or obtain exemption therefrom.
c. Reporting Status. So long as the Purchasers beneficially own any
----------------
Securities or have the right to acquire any Securities pursuant to this
Agreement, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and shall not terminate its status as an
issuer required to file reports under the Exchange Act even if the Exchange Act
or the rules and regulations thereunder would permit such termination.
d. Use of Proceeds. The Company shall not use the net proceeds from the
---------------
sale of the Shares and the Warrants to repurchase any outstanding equity
securities of the Company.
e. Upfront Fee; Expenses. At the Closing, the Company shall pay to
---------------------
Genstar Capital LLC a sum equal to three percent (3%) of the aggregate
Investment Amount and
10
<PAGE>
reimburse each Purchaser for the out-of-pocket expenses reasonably incurred by
it and its affiliates and advisors in connection with the negotiation,
preparation, execution and delivery of this Agreement, the Investor Rights
Agreement, the Warrants and the other agreements to be executed in connection
herewith, including, without limitation, its reasonable attorneys' fees and
expenses (the "Expenses").
f. Financial Information. So long as the Purchasers hold not less than
---------------------
20% of the aggregate amount of Shares and Warrants being purchased pursuant to
this Agreement, following the Closing, the Company agrees to send to the
Purchasers within ten days after the filing with the SEC, to the extent not
available through the SEC's EDGAR system, a copy of its Annual Report on Form
10-K, its Quarterly Reports on Form 10-Q, its proxy and information statements
and any Current Reports on Form 8-K and to send to the Purchasers at such time
as they are generally available to management month end summary financial
statements, but in no event later than 30 days after the end of each month.
g. Reservation of Shares. The Company has and shall at all times have
---------------------
authorized and reserved for the purpose of issuance a sufficient number of
shares of Common Stock to provide for the issuance of the Shares as provided in
Section 2 hereof, the full conversion of the Shares and the issuance of the
Conversion Shares, and the full exercise of the Warrants and the issuance of the
Warrant Shares in connection therewith and as otherwise required hereby and by
the Warrants. The Company shall not reduce the number of shares of Common Stock
reserved for issuance under this Agreement (except as a result of the issuance
of the Conversion Shares upon conversion of the Shares), the Warrants (except as
a result of the issuance of the Warrant Shares upon the exercise of the
Warrants) or the Investor Rights Agreement, without the consent of the
Purchaser, such consent not to be unreasonably withheld, conditioned or delayed.
h. Listing. On the Closing Date, the Company shall have applied for the
-------
listing of the Conversion Shares and Warrant Shares, in each case, upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed or quoted and shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all
Conversion Shares from time to time issuable upon conversion of the Shares and
all Warrant Shares from time to time issuable upon exercise of the Warrants.
The Company shall use all commercially reasonable efforts to continue the
listing and trading of its Common Stock on NASDAQ and will comply in all
respects with the Company's reporting, filing and other obligations under the
bylaws or rules of NASDAQ and the NASD or any other exchanges, as applicable.
The Company shall use all commercially reasonable efforts to obtain from the
NASD a letter reasonably satisfactory to the Purchasers confirming that no
shareholder approval of the transactions contemplated hereby is required under
the rules of the NASD. The Company shall deliver to the Purchasers all
correspondence and filings between the Company and/or its representatives and
the NASD with respect to this Agreement and the transactions contemplated
hereby.
i. Additional Equity Capital. The Company agrees that during the period
-------------------------
beginning on the date hereof and ending on the date which is 90 days following
the Closing Date (the "Lock-Up Period"), the Company will not, without the prior
written consent of the Purchasers or their designees, such consent not to be
unreasonably withheld, conditioned or delayed,
11
<PAGE>
contract with any party to obtain additional financing in which any equity or
equity-linked securities are issued (including any debt financing with an equity
component) (an "Equity Financing") pursuant to any offering exempt from the
registration requirements of the Securities Act which grants any registration
rights exercisable within six months of the Closing Date. The limitations
referred to in this Section 5(i) shall not apply to (i) any transaction
involving issuances of securities as consideration in a merger, consolidation or
acquisition of assets, or in connection with any strategic partnership,
collaboration or joint venture (the primary purpose of which is not to raise
equity capital), or as consideration for the acquisition of a business, product
or license by the Company, (ii) the issuance of securities pursuant to an
underwritten public offering, (iii) the issuance of securities upon exercise or
conversion of the Company's options, warrants or other convertible securities
outstanding as of the date hereof as set forth in Schedule 4(c) or (iv) the
-------------
grant of additional options or warrants, or the issuance of additional
securities, under any duly authorized Company stock option, stock purchase or
restricted stock plan for the benefit of the Company's employees, consultants or
directors.
j. Operations in the Ordinary Course. Between the date of this Agreement
---------------------------------
and the Closing Date, the Company shall, and shall cause its subsidiaries to,
conduct its business in all material respects in the ordinary course consistent
with past practice, and shall use reasonable best efforts to preserve intact its
business organization and maintain its existing relations and goodwill with
customers, suppliers, regulators, distributors, creditors, lessors and others
having business dealings with it.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
----------------------------------------------
The obligation of the Company hereunder to issue and sell Shares and
Warrants to the Purchasers at the Closing hereunder is subject to the
satisfaction, at or before the Closing Date, of each of the following conditions
thereto; provided, however, that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion.
a. The representations and warranties of the Purchasers shall be true and
correct as of the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date, which representations and warranties shall be true and correct as of such
date), and the Purchasers shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Purchasers at or
prior to the Closing Date.
b. No statute, rule, regulation, executive order, decree, ruling,
injunction, action, proceeding or interpretation shall have been enacted,
entered, promulgated, endorsed or adopted by any court or governmental authority
of competent jurisdiction or any self-regulatory organization, or the staff of
any thereof, having authority over the matters contemplated hereby which
questions the validity of, or challenges or prohibits the consummation of, any
of the transactions contemplated by this Agreement.
12
<PAGE>
7. CONDITIONS TO PURCHASERS' OBLIGATION TO PURCHASE SHARES AND WARRANTS.
--------------------------------------------------------------------
The obligation of the Purchasers hereunder to purchase Shares and Warrants
to be purchased by them hereunder is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions; provided, however that
these conditions are for the Purchasers' sole benefit and may be waived by the
Purchasers at any time in the Purchasers' sole discretion:
a. The Company shall have delivered to the Purchasers duly executed
certificates representing the number of Shares and duly executed Warrants as
provided in Section 2(b) above.
b. The representations and warranties of the Company shall be true and
correct as of the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date, which representations and warranties shall be true and correct as of such
date) and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date. The Purchasers shall have received a certificate, executed
on behalf of the Company by its Chief Financial Officer, dated as of the Closing
Date, to the foregoing effect and attaching true and correct copies of the
resolutions adopted by the Company's Board of Directors authorizing the
execution, delivery and performance by the Company of its obligations under this
Agreement, the Certificate of Designations, the Warrants and the Investor Rights
Agreement.
c. No statute, rule, regulation, executive order, decree, ruling,
injunction, action, proceeding or interpretation shall have been enacted,
entered, promulgated, endorsed or adopted by any court or governmental authority
of competent jurisdiction or any self-regulatory organization, or the staff of
any thereof, having authority over the matters contemplated hereby which
questions the validity of, or challenges or prohibits the consummation of, any
of the transactions contemplated by this Agreement.
d. The Purchasers shall have received an opinion of the Company's
counsel, dated as of the Closing Date, in the form of Exhibit D attached hereto.
---------
e. From the date of this Agreement through the Closing Date, there shall
not have occurred any Material Adverse Effect.
8. GOVERNING LAW; MISCELLANEOUS.
----------------------------
a. Governing Law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of California applicable to
contracts made and to be performed in the State of California. Each of the
parties irrevocably consents to the jurisdiction of the United States federal
courts and the state courts located in the State of California in any suit or
proceeding based on or arising under this Agreement and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in such
courts.
13
<PAGE>
Each of the parties irrevocably waives the defense of an inconvenient forum to
the maintenance of such suit or proceeding. Each of the parties further agrees
that service of process upon such party mailed by first class mail to the
address set forth in Section 8(f) shall be deemed in every respect effective
service of process upon such party in any such suit or proceeding. Nothing
herein shall affect the right of the Purchasers to serve process in any other
manner permitted by law. Each of the parties, agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
b. Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed Execution Page(s)
hereof to be physically delivered to the other party within five (5) days of the
execution hereof.
c. Headings. The headings of this Agreement are for convenience of
--------
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
------------
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments; Waiver. This Agreement and the
------------------------------------
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Purchasers
make any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by
an instrument in writing. Any waiver by the Purchasers, on the one hand, or the
Company, on the other hand, of a breach of any provision of this Agreement shall
not operate as or be construed to be a waiver of any other breach of such
provision of or any breach of any other provision of this Agreement. The
failure of the Purchasers, on the one hand, or the Company, on the other hand to
insist upon strict adherence to any term of this Agreement on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
f. Notices. Any notices required or permitted to be given under the
-------
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. The addresses
for such communications shall be:
14
<PAGE>
If to the Company:
BioSource International, Inc.
820 Flynn Road
Camarillo, California 93012
Facsimile No.: (805) 383-5382
Attention: James Chamberlain, President and Chief Executive
Officer
With a copy, which shall not constitute notice, to:
Troop Steuber Pasich Reddick & Tobey, LLP
2029 Century Park East, 24th Floor
Los Angeles, CA 90067
Facsimile No.: (310) 728-2222
Attention: Scott W. Alderton, Esq.
If to a Purchaser, to the address set forth under such Purchaser's name on the
Execution Page hereto executed by such Purchaser, with a copy, which shall not
constitute notice, to:
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, CA 94111-2562
Facsimile No.: (415) 395-8095
Attention: Scott Haber, Esq.
Each party hereto may from time to time change its address or facsimile
number for notices under this Section 8 by giving at least ten (10) days' prior
written notice of such changed address or facsimile number, in the case of the
Purchasers to the Company, and in the case of the Company to the Purchasers.
g. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchasers, such consent not to be
unreasonably withheld, conditioned or delayed. The Purchasers shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Company, such consent not to be unreasonably withheld,
conditioned or delayed, except to an affiliate of such Purchaser, and provided
further, that any such assignee shall agree in writing with the Company to be
bound by the terms and conditions hereof and of the Investor Rights Agreement.
h. Third Party Beneficiaries. This Agreement is intended for the benefit
-------------------------
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by any other
person.
i. Survival. The representations and warranties of the Company shall
--------
survive for
15
<PAGE>
one (1) year following the Closing Date (other than Section 4(d) which shall
survive indefinitely), notwithstanding any due diligence investigation conducted
by or on behalf of the Purchasers. Moreover, none of the representations and
warranties made by the Company herein shall act as a waiver of any rights or
remedies the Purchasers may have under applicable federal or state securities
laws. The Company agrees to indemnify and hold harmless the Purchasers and each
of the Purchasers' respective officers, directors, employees, partners, members,
agents and affiliates for loss or damage relating to the Securities purchased
hereunder arising as a result of or related to any breach by the Company of any
of its representations or covenants set forth herein, including advancement of
expenses as they are incurred.
j. Publicity. The Company shall have the right to approve the issuance
---------
of any press releases or any other public statements with respect to the
transactions contemplated hereby. Within five days after the Closing Date, the
Company shall file a Current Report on Form 8-K or other appropriate form with
the SEC disclosing the transactions contemplated hereby. Nothing contained in
this Section 8(j) shall prevent the Company from satisfying its disclosure
obligations under the federal or state securities laws or pursuant to any rule
of any trading market that is a principal trading market for any of the
Company's securities.
k. Further Assurances. Each party shall do and perform, or cause to be
------------------
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. Termination. In the event that the Closing shall not have occurred on
-----------
or before March 31, 2000, or such other date as the Company and the Purchasers
may mutually agree, this Agreement shall terminate at the close of business on
such date. Notwithstanding any termination of this Agreement, any party not in
breach of this Agreement shall preserve all rights and remedies it may have
against another party hereto for a breach of this Agreement prior to or relating
to the termination hereof.
l. California Corporate Securities Law. THE SALE OF THE SECURITIES THAT
-----------------------------------
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS EXEMPT.
16
<PAGE>
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused this
Agreement to be duly executed as of the date first above written.
COMPANY:
BIOSOURCE INTERNATIONAL, INC.
By: /s/ James Chamberlain
-----------------------------------------
James Chamberlain
President and Chief Executive Officer
The Purchasers:
GENSTAR CAPITAL PARTNERS II, L.P.
By: Genstar Capital LLC
By: /s/ Jean-Pierre L. Conte
-----------------------------------------
Jean-Pierre L. Conte
Managing Director
Investment Amount: $8,829,270.00
Shares of Series B Preferred: 364,244
No. of Warrants: 1,262,542
Address: 555 California Street, Suite 4850
San Francisco, CA 94104
Telecopy No.: (415) 834-2383
Attention: Jean-Pierre L. Conte
STARGEN II LLC
By: /s/ Jean-Pierre L. Conte
-----------------------------------------
Jean-Pierre L. Conte
Member
Investment Amount: $171,042.00
Shares of Series B Preferred: 7,056
No. of Warrants: 24,458
Address: 555 California Street, Suite 4850
San Francisco, CA 94104
Telecopy No.: (415) 834-2383
Attention: Jean-Pierre L. Conte
17
<PAGE>
EXHIBIT 3
THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK
ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION
UNDER THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE
SALE OF SUCH SECURITIES IS MADE PURSUANT TO SEC RULE 144.
WARRANT TO PURCHASE COMMON STOCK
OF
BIOSOURCE INTERNATIONAL, INC.
NO. February __, 2000
THIS CERTIFIES THAT, for value received by BioSource International, Inc., a
Delaware corporation (the "Company"), GenStar Capital Partners II, LP, or its
-------
permitted registered assigns ("Holder"), is entitled, subject to the terms and
------
conditions of this Warrant, at any time or from time to time after the issuance
date of this Warrant (the "Effective Date"), and before 5:00 p.m. Pacific Time
---------------
on the fifth (5th) anniversary of the Effective Date (the "Expiration Date"), to
---------------
purchase from the Company 1,262,542 shares of Common Stock of the Company, at a
price per share of $7.77 (the "Purchase Price"). Both the number of shares of
---------------
Common Stock purchasable upon exercise of this Warrant and the Purchase Price
are subject to adjustment and change as provided herein.
1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall
have the following respective meanings:
1.1 "Fair Market Value" of a share of Common Stock as of a particular
-----------------
date shall mean:
(a) If traded on a securities exchange or the Nasdaq National
Market, the Fair Market Value shall be deemed to be the average of the closing
prices of the Common Stock of the Company on such exchange or market over the
five (5) trading days ending immediately prior to the applicable date of
valuation;
(b) If actively traded over-the-counter, the Fair Market Value shall
be deemed to be the average of the closing bid prices over the thirty (30)-day
period ending immediately prior to the applicable date of valuation; and
(c) If there is no active public market, the Fair Market Value shall
be the value thereof, as agreed upon by the Company and the Holder; provided,
however, that if the Company and the Holder cannot agree on such value, such
value shall be determined by an independent valuation firm experienced in
valuing businesses such as the Company and jointly selected in good faith by the
Company and the Holder. Fees and expenses of the valuation firm shall be paid
for by the Company.
<PAGE>
1.2 "Registered Holder" shall mean any Holder in whose name this Warrant
-----------------
is registered upon the books and records maintained by the Company.
1.3 "Warrant" as used herein, shall include this Warrant and any warrant
-------
delivered in substitution or exchange therefor as provided herein.
1.4 "Common Stock" shall mean the Common Stock of the Company and any
------------
other securities at any time receivable or issuable upon exercise of this
Warrant.
2. EXERCISE OF WARRANT.
2.1 Payment. Subject to compliance with the terms and conditions of this
-------
Warrant and applicable securities laws, this Warrant may be exercised, in whole
or in part at any time or from time to time, on or before the Expiration Date by
the delivery (including, without limitation, delivery by facsimile) of the form
of Notice of Exercise attached hereto as Exhibit A (the "Notice of Exercise"),
duly executed by the Holder, at the principal office of the Company, and as soon
as practicable after such date, surrendering
(a) this Warrant at the principal office of the Company, and
(b) payment, (i) in cash (by check) or by wire transfer, (ii) by
cancellation by the Holder of indebtedness of the Company to the Holder; or
(iii) by a combination of (i) and (ii), of an amount equal to the product
obtained by multiplying the number of shares of Common Stock being purchased
upon such exercise by the then effective Purchase Price (the "Exercise Amount").
---------------
2.2 Net Issue Exercise. In lieu of the payment methods set forth in
------------------
Section 2.1(b) above, the Holder may elect to exchange all or some of this
- --------------
Warrant for shares of Common Stock equal to the value of the amount of the
Warrant being exchanged on the date of exchange. If Holder elects to exchange
this Warrant as provided in this Section 2.2, Holder shall tender to the Company
-----------
the Warrant for the amount being exchanged, along with written notice of
Holder's election to exchange some or all of the Warrant, and the Company shall
issue to Holder the number of shares of the Common Stock computed using the
following formula:
X = Y (A-B)
-------------
A
Where: X = the number of shares of Common Stock to be
issued to Holder.
Y = the number of shares of Common Stock
purchasable under the amount of the
Warrant being exchanged (as adjusted to the
date of such calculation).
A = the Fair Market Value of one share of the
Common Stock.
B = Purchase Price (as adjusted to the date of
such calculation).
2.3 "Easy Sale" Exercise. In lieu of the payment methods set forth in
-------------------
Sections 2.1(b) and 2.2, above, when permitted by law and applicable regulations
- -----------------------
(including Nasdaq and NASD rules), the Holder may pay the Purchase Price through
a "same day sale" commitment from the Holder (and if applicable a broker-dealer
that is a member of the National Association of Securities Dealers (an "NASD
----
Dealer")), whereby the Holder irrevocably elects to exercise this
- ------
2
<PAGE>
Warrant and to sell a portion of the shares so purchased to pay the Purchase
Price and the Holder (or, if applicable, the NASD Dealer) commits upon sale (or,
in the case of the NASD Dealer, upon receipt) of such shares to forward the
Purchase Price directly to the Company.
2.4 Stock Certificates; Fractional Shares. As soon as practicable on or
-------------------------------------
after the date of any exercise of this Warrant, the Company shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Common Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share equal to such
fraction of the current Fair Market Value of one whole share of Common Stock as
of such date of exercise. No fractional shares or scrip representing fractional
shares shall be issued upon an exercise of this Warrant.
2.5 Partial Exercise; Effective Date of Exercise. In case of any partial
--------------------------------------------
exercise of this Warrant, the Company shall cancel this Warrant upon surrender
hereof and shall execute and deliver a new Warrant of like tenor and date for
the balance of the shares of Common Stock purchasable hereunder. This Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above. The person
entitled to receive the shares of Common Stock issuable upon exercise of this
Warrant shall be treated for all purposes as the holder of record of such shares
as of the close of business on the date the Holder is deemed to have exercised
this Warrant.
2.6 Vesting. This Warrant shall vest fully upon issuance.
-------
3. VALID ISSUANCE: TAXES. All shares of Common Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and non-assessable,
and the Company shall pay all taxes and other governmental charges that may be
imposed in respect of the issue or delivery thereof. The Company shall not be
required to pay any tax or other charge imposed in connection with any transfer
involved in the issuance of any certificate for shares of Common Stock in any
name other than that of the Registered Holder of this Warrant, and in such case
the Company shall not be required to issue or deliver any stock certificate or
security until such tax or other charge has been paid, or it has been
established to the Company's reasonable satisfaction that no tax or other charge
is due.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of
shares of Common Stock issuable upon exercise of this Warrant (or any shares of
stock or other securities or property receivable or issuable upon exercise of
this Warrant) and the Purchase Price are subject to adjustment upon occurrence
of the following events:
4.1 Adjustment for Stock Splits, Stock Subdivisions or Combinations of
------------------------------------------------------------------
Shares. The Purchase Price of this Warrant shall be proportionally decreased and
- ------
the number of shares of Common Stock issuable upon exercise of this Warrant (or
any shares of stock or other securities at the time issuable upon exercise of
this Warrant) shall be proportionally increased to reflect any stock split or
subdivision of the Company's Common Stock. The Purchase Price of this Warrant
shall be proportionally increased and the number of shares of Common Stock
issuable upon exercise of this Warrant (or any shares of stock or other
securities at the time issuable upon exercise of this Warrant) shall be
proportionally decreased to reflect any combination of the Company's Common
Stock.
4.2 Adjustment for Dividends or Distributions of Stock or Other
-----------------------------------------------------------
Securities or Property. In case the Company shall make or issue, or shall fix a
- ----------------------
record date for the determination
3
<PAGE>
of eligible holders entitled to receive, a dividend or other distribution with
respect to the Common Stock (or any shares of stock or other securities at the
time issuable upon exercise of the Warrant) payable in (a) securities of the
Company or (b) assets or (c) cash dividends paid or payable solely out of
retained earnings, but only if such cash dividends are Extraordinary Dividends
(as defined below), then, in each such case, the Holder of this Warrant on
exercise hereof at any time after the consummation, effective date or record
date of such dividend or other distribution, shall receive, in addition to the
shares of Common Stock (or such other stock or securities) issuable on such
exercise prior to such date, and without the payment of additional consideration
therefor, the securities, assets or cash to which such Holder would have been
entitled upon such date if such Holder had exercised this Warrant on the date
hereof and had thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares and all such
additional securities, assets or cash distributed with respect to such shares as
aforesaid during such period giving effect to all adjustments called for by this
Section 4. "Extraordinary Dividends" shall mean dividends or distributions
- ---------
declared with respect to the Common Stock that are in an amount greater than 3%
of the aggregate Fair Market Value of the shares of capital stock receiving such
dividends as of the trading day prior to the declaration of such dividends or
distributions.
4.3 Reclassification. If the Company, by reclassification of securities
----------------
or otherwise, shall change any of the securities as to which purchase rights
under this Warrant exist into the same or a different number of securities of
any other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change, and the Purchase Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 4. No adjustment
shall be made pursuant to this Section 4.3 upon any conversion or redemption of
-----------
the Common Stock which is the subject of Section 4.5.
-----------
4.4 Adjustment for Capital Reorganization, Merger or Consolidation. In
--------------------------------------------------------------
case of any capital reorganization of the capital stock of the Company (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), or any merger or consolidation of the Company
with or into another corporation, or the sale of all or substantially all the
assets of the Company then, and in each such case, as a part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Purchase Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 4. The foregoing provisions of this Section 4.4 shall similarly
--------- -----------
apply to successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other corporation that are at
the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors. In all events, appropriate adjustment (as determined in good
faith by the Company's Board of Directors) shall be made in the application of
the provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.
4
<PAGE>
4.5 Conversion of Common Stock. In case all or any portion of the
--------------------------
authorized and outstanding shares of Common Stock of the Company are redeemed or
converted or reclassified into other securities or property pursuant to the
Company's Certificate of Incorporation or otherwise, or the Common Stock
otherwise ceases to exist, then, in such case, the Holder of this Warrant, upon
exercise hereof at any time after the date on which the Common Stock is so
redeemed or converted, reclassified or ceases to exist (the "Termination Date"),
----------------
shall receive, in lieu of the number of shares of Common Stock that would have
been issuable upon such exercise immediately prior to the Termination Date, the
securities or property that would have been received if this Warrant had been
exercised in full and the Common Stock received thereupon had been
simultaneously converted immediately prior to the Termination Date, all subject
to further adjustment as provided in this Warrant. Additionally, the Purchase
Price shall be immediately adjusted to equal the quotient obtained by dividing
(x) the aggregate Purchase Price of the maximum number of shares of Common Stock
for which this Warrant was exercisable immediately prior to the Termination Date
by (y) the number of shares of Common Stock of the Company for which this
Warrant is exercisable immediately after the Termination Date, all subject to
further adjustment as provided herein.
4.6 Issuances Below Market. In case the Company shall issue or sell (a)
----------------------
Common Stock, (b) rights, warrants or options entitling the holders thereof to
subscribe for or purchase shares of Common Stock or (c) any security convertible
into Common Stock, in each case at a price, or having an exercise or conversion
price, per share less than the Purchase Price (excluding any issuance for which
an appropriate and full adjustment has been made pursuant to Section 4.2), the
Purchase Price shall be immediately reduced by multiplying the Purchase Price by
a fraction of which (A) the numerator shall be the number of shares of Common
Stock outstanding immediately prior to such issuance or sale plus the number of
shares of Common Stock which the aggregate consideration received or receivable
(I) for the total number of shares of Common Stock, rights, warrants or options
or convertible securities so issued or sold and (II) upon the exercise or
conversion of all such rights, warrants, options or securities, would purchase
at such Purchase Price, and (B) the denominator shall be the number of shares of
Common Stock outstanding immediately prior to such issuance plus (without
duplication) the number of shares of Common Stock subject to all such rights,
warrants, options and convertible securities. The issuance of any shares of
Common Stock or other rights, warrants, options or convertible securities
pursuant to (a) the effectuation of a split or subdivision of the outstanding
shares of Common Stock or a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock, (b) Common Stock (or securities exercisable or
convertible into Common Stock) issuable or issued to employees, consultants or
directors of the Company after the Purchase Date directly or pursuant to a stock
option plan or restricted stock plan approved by the Board of Directors of the
Company, (c) securities issued pursuant to the conversion or exercise of
convertible or exercisable securities outstanding or deemed outstanding on the
date of this Warrant, and (d) securities issued or issuable in connection with
the acquisition, merger, consolidation, or other business combination by or of
the Company with, by, or of any person, shall not be deemed to constitute an
issuance or sale to which this Section 4.6 applies.
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the
Purchase Price, or number or type of shares issuable upon exercise of this
Warrant, the Chief Financial Officer or Controller of the Company shall compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
5
<PAGE>
Price. The Company shall promptly send (by facsimile and by either first class
mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.
6. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to
the Company of the ownership of and the loss, theft, destruction or mutilation
of this Warrant, and of indemnity reasonably satisfactory to it, and (in the
case of mutilation) upon surrender and cancellation of this Warrant, the Company
will execute and deliver in lieu thereof a new Warrant of like tenor as the
lost, stolen, destroyed or mutilated Warrant.
7. RESERVATION OF COMMON STOCK. The Company hereby covenants that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant such number of shares of Common Stock or other shares of capital stock
of the Company as are from time to time issuable upon exercise of this Warrant
and, from time to time, will take all steps necessary to amend its Certificate
of Incorporation to provide sufficient reserves of shares of Common Stock
issuable upon exercise of this Warrant, including, without limitation, engaging
in best efforts to obtain the requisite stockholder approval of any necessary
amendment to the Certificate of Incorporation. All such shares shall be duly
authorized, and when issued upon such exercise, shall be validly issued, fully
paid and non-assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and clear of all
preemptive rights, except encumbrances or restrictions arising under federal or
state securities laws. Issuance of this Warrant shall constitute full authority
to the Company's Officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the exercise of this Warrant.
8. TRANSFER AND EXCHANGE. Subject to the terms and conditions of this
Warrant and compliance with all applicable securities laws, this Warrant and all
rights hereunder may be transferred to any Registered Holder's parent,
subsidiary or affiliate, or, if the Registered Holder is a partnership, to any
partner of such Registered Holder, or, if the Registered Holder is a limited
liability company, to any member of such Registered Holder, in whole or in part,
on the books of the Company maintained for such purpose at the principal office
of the Company referred to above, by the Registered Holder hereof in person, or
by duly authorized attorney, upon surrender of this Warrant properly endorsed
and upon payment of any necessary transfer tax or other governmental charge
imposed upon such transfer. Upon any permitted partial transfer, the Company
will issue and deliver to the Registered Holder a new Warrant or Warrants with
respect to the shares of Common Stock not so transferred. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that when
this Warrant shall have been so endorsed, the person in possession of this
Warrant may be treated by the Company, and all other persons dealing with this
Warrant, as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented hereby, any notice to the contrary
notwithstanding; provided, however that until a transfer of this Warrant is duly
registered on the books of the Company, the Company may treat the Registered
Holder hereof as the owner for all purposes.
9. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees that,
absent an effective registration statement filed with the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
---
(the "Securities Act") covering the disposition or sale of this Warrant or the
--------------
Common Stock issued or issuable upon exercise hereof, as the case may be, and
registration or qualification under applicable state securities laws, such
Holder will not sell, transfer, pledge, or hypothecate any or all of this
Warrant or such Common Stock, as the case may be, unless either (i) the Company
has received an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that such registration is not
required
6
<PAGE>
in connection with such disposition, (ii) the sale of such securities is made
pursuant to SEC Rule 144or (iii) such sale or transfer is to the Holder's
parent, subsidiary or affiliate, or, if the Holder is a partnership, to any
partner of such Holder, or, if the Holder is a limited liability company, to any
member of such Holder, pursuant to an exemption under the Securities Act.
10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the
Holder hereby represents, warrants and covenants that any shares of stock
purchased upon exercise of this Warrant shall be acquired for investment only
and not with a view to, or for sale in connection with, any distribution
thereof; that the Holder has had such opportunity as such Holder has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Holder to evaluate the merits and risks of its
investment in the Company; that the Holder is able to bear the economic risk of
holding such shares as may be acquired pursuant to the exercise of this Warrant
for an indefinite period; that the Holder understands that the shares of stock
acquired pursuant to the exercise of this Warrant will not be registered under
the Securities Act (unless otherwise required pursuant to exercise by the Holder
of the registration rights, if any, granted to the Registered Holder) and will
be "restricted securities" within the meaning of Rule 144 under the Securities
Act and that the exemption from registration under Rule 144 will not be
available for at least one (1) year from the date of exercise of this Warrant,
subject to any special treatment by the SEC for exercise of this Warrant
pursuant to Section 2.2, and even then will not be available unless a public
-----------
market then exists for the stock, adequate information concerning the Company is
then available to the public, and other terms and conditions of Rule 144 are
complied with; and that all stock certificates representing shares of stock
issued to the Holder upon exercise of this Warrant or upon conversion of such
shares may have affixed thereto a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
11. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company. In the absence of affirmative action by such Holder to purchase Common
Stock by exercise of this Warrant or Common Stock upon conversion thereof, no
provisions of this Warrant, and no enumeration herein of the rights or
privileges of the Holder hereof shall cause such Holder hereof to be a
stockholder of the Company for any purpose.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Holder that:
7
<PAGE>
12.1 Due Authorization; Consents. All corporate action on the part of
---------------------------
the Company, its officers, directors and shareholders necessary for (a) the
authorization, execution and delivery of, and the performance of all obligations
of the Company under, this Warrant, and (b) the authorization, issuance,
reservation for issuance and delivery of all of the Common Stock issuable upon
exercise of this Warrant, has been duly taken. This Warrant constitutes a valid
and binding obligation of the Company enforceable in accordance with its terms,
subject, as to enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium, reorganization and similar laws affecting creditors' rights
generally and to general equitable principles. All consents, approvals and
authorizations of, and registrations, qualifications and filings with, any
federal or state governmental agency, authority or body, or any third party,
required in connection with the execution, delivery and performance of this
Warrant and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the issuance and delivery of all of the
Common Stock issuable upon exercise of this Warrant, have been obtained.
12.2 Organization. The Company is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power to own, lease and operate its property and to
carry on its business as now being conducted and as currently proposed to be
conducted.
12.3 Valid Issuance of Stock. The outstanding shares of the capital
-----------------------
stock of the Company are duly and validly issued, fully paid and non-assessable,
and such shares, and all outstanding options and other securities of the
Company, have been issued in full compliance with the registration and
prospectus delivery requirements of the Securities Act and the registration and
qualification requirements of all applicable state securities laws, or in
compliance with applicable exemptions therefrom, and all other provisions of
applicable federal and state securities laws, including without limitation,
anti-fraud provisions.
12.4 Governmental Consents. All consents, approvals, orders,
---------------------
authorizations or registrations, qualifications, declarations or filings with
any federal or state governmental authority on the part of the Company required
in connection with the consummation of the transactions contemplated herein,
including, without limitation, those under the Securities Act and all applicable
state securities laws, shall have been obtained prior to and be effective as of
the Effective Date.
12.5 Listing on Nasdaq or Securities Exchange. The Company shall use its
----------------------------------------
best efforts to list any shares of Common Stock issuable upon exercise of this
Warrant on Nasdaq or such other national securities exchange on which shares of
Common Stock are then listed. The Company will at its expense cause all shares
of Common Stock issued upon exercise of this Warrant to be listed on Nasdaq
and/or such other national securities exchange on which shares of Common Stock
are then listed at the time of such issuance and shall maintain such listing.
12.6 No Impairment. The Company further covenants that it will not, by
-------------
amendment of its Certificate of Incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
the Company.
13. NOTICES. Except as may be otherwise provided herein, all notices,
requests, waivers and other communications made pursuant to this Agreement shall
be in writing and shall be conclusively deemed to have been duly given (a) when
hand delivered to the other party; (b) when received when sent by facsimile at
the address and number set forth below; (c) three business days
8
<PAGE>
after deposit in the U.S. mail with first class or certified mail receipt
requested postage prepaid and addressed to the other party as set forth below;
or (d) the next business day after deposit with a national overnight delivery
service, postage prepaid, addressed to the parties as set forth below with
next-business-day delivery guaranteed, provided that the sending party receives
a confirmation of delivery from the delivery service provider.
<TABLE>
<S> <C>
To Holder: To the Company:
GenStar Capital Partners II, LP BioSource International, Inc.
820 Flynn Road
Camarillo, California 93012
Telephone No.: (805)
Facsimile No.: (805)
Attention: James Chamberlain
President and Chief Executive Officer
With copies to (which shall not With copies to (which shall not
constitute notice): constitute notice):
Latham & Watkins Troop Steuber Pasich Reddick & Tobe
505 Montgomery Street, Suite 1900 2029 Century Park East, 24th Floor y, LLP
San Francisco, CA 94111-2562 Los Angeles, CA 90067
Telephone No.: (415) 391-0600 Telephone No.: (310) 728-3222
Facsimile No.: (415) 395-8095 Facsimile No.: (310) 728-2222
Attention: Scott Haber, Esq. Attention: Scott W. Alderton, Esq.
</TABLE>
Each person making a communication hereunder by facsimile shall promptly confirm
by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 14 by giving the other party written
----------
notice of the new address in the manner set forth above.
14. HEADINGS. The headings in this Warrant are for purposes of convenience
in reference only, and shall not be deemed to constitute a part hereof.
15. LAW GOVERNING. This Warrant shall be construed and enforced in
accordance with, and governed by, the laws of the State of California, with
regard to conflict of law principles of such state.
16. NO IMPAIRMENT. The Company will not, by amendment of its Certificate of
Incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Registered Holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock issuable
upon the exercise of this Warrant above the amount payable therefor upon such
exercise, and (b) will take all such action as may be necessary or appropriate
in order that the
9
<PAGE>
Company may validly and legally issue fully paid and non-assessable shares of
Common Stock upon exercise of this Warrant.
17. NOTICES OF RECORD DATE. In case:
17.1 the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time receivable upon the exercise of this
Warrant), for the purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities or to receive any other right; or
17.2 of any consolidation or merger of the Company with or into another
corporation, any capital reorganization of the Company, any reclassification of
the capital stock of the Company, or any conveyance of all or substantially all
of the assets of the Company to another corporation in which holders of the
Company's stock are to receive stock, securities or property of another
corporation; or
17.3 of any voluntary dissolution, liquidation or winding-up of the
Company; or
17.4 of any redemption or conversion of all outstanding Common Stock;
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation,
winding-up, redemption or conversion is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock or (such stock or
securities as at the time are receivable upon the exercise of this Warrant),
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities), for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. The Company shall use all reasonable
efforts to ensure such notice shall be delivered at least thirty (30) days prior
to the date therein specified.
18. SEVERABILITY. If any term, provision, covenant or restriction of this
Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Warrant shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
19. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Warrant may be executed by the parties hereto and each such
executed counterpart shall be, and shall be deemed to be, an original
instrument.
20. NO INCONSISTENT AGREEMENTS. The Company will not on or after the date
of this Warrant enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders of this Warrant or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to holders of the Company's securities under any other
agreements, except rights that have been waived.
21. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. the next business day.
10
<PAGE>
22. ENTIRE AGREEMENT. This Warrant, the Securities Purchase Agreement dated
as of January 10, 2000 by and among the Company and the Holder, and the Investor
Rights Agreement dated as of February __, 2000 by and among the Company and the
Holder, contain the sole and entire agreement and understanding of the parties
with respect to the entire subject matter of this Warrant, and any and all prior
discussions, negotiations, commitments and understandings, whether oral or
otherwise, related to the subject matter of this Warrant are hereby merged
herein.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
as of the Effective Date.
BIOSOURCE INTERNATIONAL, INC.
- ---------------------------------------
By
Printed Name
Title
11
<PAGE>
EXHIBIT A
---------
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
BioSource International, Inc.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of BioSource International, Inc., as provided for therein, and
(check the applicable box):
[_] tenders herewith payment of the exercise price in full in the form of
cash or a certified or official bank check in same-day funds in the
amount of $____________ for _________ such securities.
[_] Elects the [Net Issue Exercise][Easy Sale Exercise] option pursuant to
Section 2.2 or 2.3 of the Warrant, and accordingly requests delivery of a
net of ______________ of such securities.
Please issue a certificate or certificates for such securities in the name of,
and pay any cash for any fractional share to (please print name, address and
social security number):
Name:
----------------------------------------------------------------
Address:
----------------------------------------------------------------
Signature:
----------------------------------------------------------------
Note: The above signature should correspond exactly with the name on the first
page of this Warrant Certificate or with the name of the assignee appearing in
the assignment form below.
If said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher whole number of shares.
<PAGE>
EXHIBIT B
---------
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, hereby sells, assigns and transfers unto ___________________
____________________________ the within Warrant Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ____________________________ attorney, to transfer said Warrant
Certificate on the books of the within-named Company with respect to the number
of Warrants set forth below, with full power of substitution in the premises:
<TABLE>
<CAPTION>
- --------------------------------------- ------------------------------------- ------------------------------------
Name(s) of Assignee(s) Address # of Warrants
- --------------------------------------- ------------------------------------- ------------------------------------
<S> <C> <C>
- --------------------------------------- ------------------------------------- ------------------------------------
- --------------------------------------- ------------------------------------- ------------------------------------
- --------------------------------------- ------------------------------------- ------------------------------------
- --------------------------------------- ------------------------------------- ------------------------------------
- --------------------------------------- ------------------------------------- ------------------------------------
</TABLE>
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants registered by said
Warrant Certificate.
--------------------------------------------------------------
Dated:
--------------------------------------------------------------
Signature:
--------------------------------------------------------------
Notice: The signature to the foregoing Assignment must correspond to the name as
written upon the face of this security in every particular, without alteration
or any change whatsoever; signature(s) must be guaranteed by an eligible
guarantor institution (banks, stock brokers, savings and loan associations and
credit unions with membership in an approved signature guarantee medallion
program) pursuant to Securities and Exchange Commission Rule 17Ad-15.
<PAGE>
EXHIBIT 4
THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK
ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION
UNDER THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE
SALE OF SUCH SECURITIES IS MADE PURSUANT TO SEC RULE 144.
WARRANT TO PURCHASE COMMON STOCK
OF
BIOSOURCE INTERNATIONAL, INC.
NO. February __, 2000
THIS CERTIFIES THAT, for value received by BioSource International, Inc., a
Delaware corporation (the "Company"), Stargen II LLC, or its permitted
-------
registered assigns ("Holder"), is entitled, subject to the terms and conditions
------
of this Warrant, at any time or from time to time after the issuance date of
this Warrant (the "Effective Date"), and before 5:00 p.m. Pacific Time on the
--------------
fifth (5th) anniversary of the Effective Date (the "Expiration Date"), to
---------------
purchase from the Company 24,458 shares of Common Stock of the Company, at a
price per share of $7.77 (the "Purchase Price"). Both the number of shares of
--------------
Common Stock purchasable upon exercise of this Warrant and the Purchase Price
are subject to adjustment and change as provided herein.
1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall
have the following respective meanings:
1.1 "Fair Market Value" of a share of Common Stock as of a particular
-------------------
date shall mean:
(a) If traded on a securities exchange or the Nasdaq National
Market, the Fair Market Value shall be deemed to be the average of the closing
prices of the Common Stock of the Company on such exchange or market over the
five (5) trading days ending immediately prior to the applicable date of
valuation;
(b) If actively traded over-the-counter, the Fair Market Value
shall be deemed to be the average of the closing bid prices over the thirty
(30)-day period ending immediately prior to the applicable date of valuation;
and
(c) If there is no active public market, the Fair Market Value
shall be the value thereof, as agreed upon by the Company and the Holder;
provided, however, that if the Company and the Holder cannot agree on such
value, such value shall be determined by an independent valuation firm
experienced in valuing businesses such as the Company and jointly selected in
good faith by the Company and the Holder. Fees and expenses of the valuation
firm shall be paid for by the Company.
<PAGE>
1.2 "Registered Holder" shall mean any Holder in whose name this
-----------------
Warrant is registered upon the books and records maintained by the Company.
1.3 "Warrant" as used herein, shall include this Warrant and any
-------
warrant delivered in substitution or exchange therefor as provided herein .
1.4 "Common Stock" shall mean the Common Stock of the Company and any
------------
other securities at any time receivable or issuable upon exercise of this
Warrant.
2. EXERCISE OF WARRANT.
2.1 Payment. Subject to compliance with the terms and conditions of
-------
this Warrant and applicable securities laws, this Warrant may be exercised, in
whole or in part at any time or from time to time, on or before the Expiration
Date by the delivery (including, without limitation, delivery by facsimile) of
the form of Notice of Exercise attached hereto as Exhibit A (the "Notice of
--------- -------
Exercise"), duly executed by the Holder, at the principal office of the Company,
- --------
and as soon as practicable after such date, surrendering
(a) this Warrant at the principal office of the Company, and
(b) payment, (i) in cash (by check) or by wire transfer, (ii) by
cancellation by the Holder of indebtedness of the Company to the Holder; or
(iii) by a combination of (i) and (ii), of an amount equal to the product
obtained by multiplying the number of shares of Common Stock being purchased
upon such exercise by the then effective Purchase Price (the "Exercise Amount").
---------------
2.2 Net Issue Exercise. In lieu of the payment methods set forth in
------------------
Section 2.1(b) above, the Holder may elect to exchange all or some of this
Warrant for shares of Common Stock equal to the value of the amount of the
Warrant being exchanged on the date of exchange. If Holder elects to exchange
this Warrant as provided in this Section 2.2, Holder shall tender to the Company
-----------
the Warrant for the amount being exchanged, along with written notice of
Holder's election to exchange some or all of the Warrant, and the Company shall
issue to Holder the number of shares of the Common Stock computed using the
following formula:
X = Y (A-B)
---------
A
Where: X = the number of shares of Common Stock to be issued to
Holder.
Y = the number of shares of Common Stock purchasable under
the amount of the Warrant being exchanged (as adjusted
to the date of such calculation).
A = the Fair Market Value of one share of the Common Stock.
B = Purchase Price (as adjusted to the date of such
calculation).
2.3 "Easy Sale" Exercise. In lieu of the payment methods set forth in
--------------------
Sections 2.1(b) and 2.2, above, when permitted by law and applicable regulations
- -----------------------
(including Nasdaq and NASD rules), the Holder may pay the Purchase Price through
a "same day sale" commitment from the Holder (and if applicable a broker-dealer
that is a member of the National Association of
2
<PAGE>
Securities Dealers (an "NASD Dealer")), whereby the Holder irrevocably elects to
-----------
exercise this Warrant and to sell a portion of the shares so purchased to pay
the Purchase Price and the Holder (or, if applicable, the NASD Dealer) commits
upon sale (or, in the case of the NASD Dealer, upon receipt) of such shares to
forward the Purchase Price directly to the Company.
2.4 Stock Certificates; Fractional Shares. As soon as practicable on
-------------------------------------
or after the date of any exercise of this Warrant, the Company shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Common Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share equal to such
fraction of the current Fair Market Value of one whole share of Common Stock as
of such date of exercise. No fractional shares or scrip representing fractional
shares shall be issued upon an exercise of this Warrant.
2.5 Partial Exercise; Effective Date of Exercise. In case of any
--------------------------------------------
partial exercise of this Warrant, the Company shall cancel this Warrant upon
surrender hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares of Common Stock purchasable hereunder. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above. The person
entitled to receive the shares of Common Stock issuable upon exercise of this
Warrant shall be treated for all purposes as the holder of record of such shares
as of the close of business on the date the Holder is deemed to have exercised
this Warrant.
2.6 Vesting. This Warrant shall vest fully upon issuance.
-------
3. VALID ISSUANCE: TAXES. All shares of Common Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and non-assessable,
and the Company shall pay all taxes and other governmental charges that may be
imposed in respect of the issue or delivery thereof. The Company shall not be
required to pay any tax or other charge imposed in connection with any transfer
involved in the issuance of any certificate for shares of Common Stock in any
name other than that of the Registered Holder of this Warrant, and in such case
the Company shall not be required to issue or deliver any stock certificate or
security until such tax or other charge has been paid, or it has been
established to the Company's reasonable satisfaction that no tax or other charge
is due.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of shares
of Common Stock issuable upon exercise of this Warrant (or any shares of stock
or other securities or property receivable or issuable upon exercise of this
Warrant) and the Purchase Price are subject to adjustment upon occurrence of the
following events:
4.1 Adjustment for Stock Splits, Stock Subdivisions or Combinations of
------------------------------------------------------------------
Shares. The Purchase Price of this Warrant shall be proportionally decreased and
- ------
the number of shares of Common Stock issuable upon exercise of this Warrant (or
any shares of stock or other securities at the time issuable upon exercise of
this Warrant) shall be proportionally increased to reflect any stock split or
subdivision of the Company's Common Stock. The Purchase Price of this Warrant
shall be proportionally increased and the number of shares of Common Stock
issuable upon exercise of this Warrant (or any shares of stock or other
securities at the time issuable upon exercise of this Warrant) shall be
proportionally decreased to reflect any combination of the Company's Common
Stock.
3
<PAGE>
4.2 Adjustment for Dividends or Distributions of Stock or Other
-----------------------------------------------------------
Securities or Property. In case the Company shall make or issue, or shall fix a
- ----------------------
record date for the determination of eligible holders entitled to receive, a
dividend or other distribution with respect to the Common Stock (or any shares
of stock or other securities at the time issuable upon exercise of the Warrant)
payable in (a) securities of the Company or (b) assets or (c) cash dividends
paid or payable solely out of retained earnings, but only if such cash dividends
are Extraordinary Dividends (as defined below), then, in each such case, the
Holder of this Warrant on exercise hereof at any time after the consummation,
effective date or record date of such dividend or other distribution, shall
receive, in addition to the shares of Common Stock (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities, assets or cash to
which such Holder would have been entitled upon such date if such Holder had
exercised this Warrant on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained such
shares and all such additional securities, assets or cash distributed with
respect to such shares as aforesaid during such period giving effect to all
adjustments called for by this Section 4. "Extraordinary Dividends" shall mean
---------
dividends or distributions declared with respect to the Common Stock that are in
an amount greater than 3% of the aggregate Fair Market Value of the shares of
capital stock receiving such dividends as of the trading day prior to the
declaration of such dividends or distributions.
4.3 Reclassification. If the Company, by reclassification of
----------------
securities or otherwise, shall change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change, and the Purchase Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 4. No adjustment shall be made pursuant to this Section 4.3 upon any
- --------- -----------
conversion or redemption of the Common Stock which is the subject of Section
-------
4.5.
- ---
4.4 Adjustment for Capital Reorganization, Merger or Consolidation. In
--------------------------------------------------------------
case of any capital reorganization of the capital stock of the Company (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), or any merger or consolidation of the Company
with or into another corporation, or the sale of all or substantially all the
assets of the Company then, and in each such case, as a part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Purchase Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 4. The foregoing provisions of this Section 4.4 shall similarly
--------- -----------
apply to successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other corporation that are at
the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors. In all events, appropriate adjustment (as determined in good
faith by the Company's Board of Directors) shall be made in the application of
the provisions of this Warrant with respect
4
<PAGE>
to the rights and interests of the Holder after the transaction, to the end that
the provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
4.5 Conversion of Common Stock. In case all or any portion of the
--------------------------
authorized and outstanding shares of Common Stock of the Company are redeemed or
converted or reclassified into other securities or property pursuant to the
Company's Certificate of Incorporation or otherwise, or the Common Stock
otherwise ceases to exist, then, in such case, the Holder of this Warrant, upon
exercise hereof at any time after the date on which the Common Stock is so
redeemed or converted, reclassified or ceases to exist (the "Termination Date"),
----------------
shall receive, in lieu of the number of shares of Common Stock that would have
been issuable upon such exercise immediately prior to the Termination Date, the
securities or property that would have been received if this Warrant had been
exercised in full and the Common Stock received thereupon had been
simultaneously converted immediately prior to the Termination Date, all subject
to further adjustment as provided in this Warrant. Additionally, the Purchase
Price shall be immediately adjusted to equal the quotient obtained by dividing
(x) the aggregate Purchase Price of the maximum number of shares of Common Stock
for which this Warrant was exercisable immediately prior to the Termination Date
by (y) the number of shares of Common Stock of the Company for which this
Warrant is exercisable immediately after the Termination Date, all subject to
further adjustment as provided herein.
4.6 Issuances Below Market. In case the Company shall issue or sell
----------------------
(a) Common Stock, (b) rights, warrants or options entitling the holders thereof
to subscribe for or purchase shares of Common Stock or (c) any security
convertible into Common Stock, in each case at a price, or having an exercise or
conversion price, per share less than the Purchase Price (excluding any issuance
for which an appropriate and full adjustment has been made pursuant to Section
4.2), the Purchase Price shall be immediately reduced by multiplying the
Purchase Price by a fraction of which (A) the numerator shall be the number of
shares of Common Stock outstanding immediately prior to such issuance or sale
plus the number of shares of Common Stock which the aggregate consideration
received or receivable (I) for the total number of shares of Common Stock,
rights, warrants or options or convertible securities so issued or sold and (II)
upon the exercise or conversion of all such rights, warrants, options or
securities, would purchase at such Purchase Price, and (B) the denominator shall
be the number of shares of Common Stock outstanding immediately prior to such
issuance plus (without duplication) the number of shares of Common Stock subject
to all such rights, warrants, options and convertible securities. The issuance
of any shares of Common Stock or other rights, warrants, options or convertible
securities pursuant to (a) the effectuation of a split or subdivision of the
outstanding shares of Common Stock or a dividend or other distribution payable
in additional shares of Common Stock or other securities or rights convertible
into, or entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock, (b) Common Stock (or securities exercisable
or convertible into Common Stock) issuable or issued to employees, consultants
or directors of the Company after the Purchase Date directly or pursuant to a
stock option plan or restricted stock plan approved by the Board of Directors of
the Company, (c) securities issued pursuant to the conversion or exercise of
convertible or exercisable securities outstanding or deemed outstanding on the
date of this Warrant, and (d) securities issued or issuable in connection with
the acquisition, merger, consolidation, or other business combination by or of
the Company with, by, or of any person, shall not be deemed to constitute an
issuance or sale to which this Section 4.6 applies.
5
<PAGE>
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in
the Purchase Price, or number or type of shares issuable upon exercise of this
Warrant, the Chief Financial Officer or Controller of the Company shall compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
Price. The Company shall promptly send (by facsimile and by either first class
mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.
6. LOSS OR MUTILATION. Upon receipt of evidence reasonably
satisfactory to the Company of the ownership of and the loss, theft, destruction
or mutilation of this Warrant, and of indemnity reasonably satisfactory to it,
and (in the case of mutilation) upon surrender and cancellation of this Warrant,
the Company will execute and deliver in lieu thereof a new Warrant of like tenor
as the lost, stolen, destroyed or mutilated Warrant.
7. RESERVATION OF COMMON STOCK. The Company hereby covenants that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of shares of Common Stock or other shares of capital
stock of the Company as are from time to time issuable upon exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Certificate of Incorporation to provide sufficient reserves of shares of Common
Stock issuable upon exercise of this Warrant, including, without limitation,
engaging in best efforts to obtain the requisite stockholder approval of any
necessary amendment to the Certificate of Incorporation. All such shares shall
be duly authorized, and when issued upon such exercise, shall be validly issued,
fully paid and non-assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and clear of all
preemptive rights, except encumbrances or restrictions arising under federal or
state securities laws. Issuance of this Warrant shall constitute full authority
to the Company's Officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the exercise of this Warrant.
8. TRANSFER AND EXCHANGE. Subject to the terms and conditions of this
Warrant and compliance with all applicable securities laws, this Warrant and all
rights hereunder may be transferred to any Registered Holder's parent,
subsidiary or affiliate, or, if the Registered Holder is a partnership, to any
partner of such Registered Holder, or, if the Registered Holder is a limited
liability company, to any member of such Registered Holder, in whole or in part,
on the books of the Company maintained for such purpose at the principal office
of the Company referred to above, by the Registered Holder hereof in person, or
by duly authorized attorney, upon surrender of this Warrant properly endorsed
and upon payment of any necessary transfer tax or other governmental charge
imposed upon such transfer. Upon any permitted partial transfer, the Company
will issue and deliver to the Registered Holder a new Warrant or Warrants with
respect to the shares of Common Stock not so transferred. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that when
this Warrant shall have been so endorsed, the person in possession of this
Warrant may be treated by the Company, and all other persons dealing with this
Warrant, as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented hereby, any notice to the contrary
notwithstanding; provided, however that until a transfer of this Warrant is duly
registered on the books of the Company, the Company may treat the Registered
Holder hereof as the owner for all purposes.
9. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees
that, absent an effective registration statement filed with the Securities and
Exchange Commission
6
<PAGE>
(the "SEC") under the Securities Act of 1933, as amended (the "Securities Act")
--- --------------
covering the disposition or sale of this Warrant or the Common Stock issued or
issuable upon exercise hereof, as the case may be, and registration or
qualification under applicable state securities laws, such Holder will not sell,
transfer, pledge, or hypothecate any or all of this Warrant or such Common
Stock, as the case may be, unless either (i) the Company has received an opinion
of counsel, in form and substance reasonably satisfactory to the Company, to the
effect that such registration is not required in connection with such
disposition, (ii) the sale of such securities is made pursuant to SEC Rule 144or
(iii) such sale or transfer is to the Holder's parent, subsidiary or affiliate,
or, if the Holder is a partnership, to any partner of such Holder, or, if the
Holder is a limited liability company, to any member of such Holder, pursuant to
an exemption under the Securities Act.
10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant,
the Holder hereby represents, warrants and covenants that any shares of stock
purchased upon exercise of this Warrant shall be acquired for investment only
and not with a view to, or for sale in connection with, any distribution
thereof; that the Holder has had such opportunity as such Holder has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Holder to evaluate the merits and risks of its
investment in the Company; that the Holder is able to bear the economic risk of
holding such shares as may be acquired pursuant to the exercise of this Warrant
for an indefinite period; that the Holder understands that the shares of stock
acquired pursuant to the exercise of this Warrant will not be registered under
the Securities Act (unless otherwise required pursuant to exercise by the Holder
of the registration rights, if any, granted to the Registered Holder) and will
be "restricted securities" within the meaning of Rule 144 under the Securities
Act and that the exemption from registration under Rule 144 will not be
available for at least one (1) year from the date of exercise of this Warrant,
subject to any special treatment by the SEC for exercise of this Warrant
pursuant to Section 2.2, and even then will not be available unless a public
-----------
market then exists for the stock, adequate information concerning the Company is
then available to the public, and other terms and conditions of Rule 144 are
complied with; and that all stock certificates representing shares of stock
issued to the Holder upon exercise of this Warrant or upon conversion of such
shares may have affixed thereto a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT
FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
11. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company. In the
7
<PAGE>
absence of affirmative action by such Holder to purchase Common Stock by
exercise of this Warrant or Common Stock upon conversion thereof, no provisions
of this Warrant, and no enumeration herein of the rights or privileges of the
Holder hereof shall cause such Holder hereof to be a stockholder of the Company
for any purpose.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Holder that:
12.1 Due Authorization; Consents. All corporate action on the
---------------------------
part of the Company, its officers, directors and shareholders necessary for (a)
the authorization, execution and delivery of, and the performance of all
obligations of the Company under, this Warrant, and (b) the authorization,
issuance, reservation for issuance and delivery of all of the Common Stock
issuable upon exercise of this Warrant, has been duly taken. This Warrant
constitutes a valid and binding obligation of the Company enforceable in
accordance with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium, reorganization and similar laws affecting
creditors' rights generally and to general equitable principles. All consents,
approvals and authorizations of, and registrations, qualifications and filings
with, any federal or state governmental agency, authority or body, or any third
party, required in connection with the execution, delivery and performance of
this Warrant and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the issuance and delivery of all of the
Common Stock issuable upon exercise of this Warrant, have been obtained.
12.2 Organization. The Company is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power to own, lease and operate its property and
to carry on its business as now being conducted and as currently proposed to be
conducted.
12.3 Valid Issuance of Stock. The outstanding shares of the
-----------------------
capital stock of the Company are duly and validly issued, fully paid and non-
assessable, and such shares, and all outstanding options and other securities of
the Company, have been issued in full compliance with the registration and
prospectus delivery requirements of the Securities Act and the registration and
qualification requirements of all applicable state securities laws, or in
compliance with applicable exemptions therefrom, and all other provisions of
applicable federal and state securities laws, including without limitation,
anti-fraud provisions.
12.4 Governmental Consents. All consents, approvals, orders,
---------------------
authorizations or registrations, qualifications, declarations or filings with
any federal or state governmental authority on the part of the Company required
in connection with the consummation of the transactions contemplated herein,
including, without limitation, those under the Securities Act and all applicable
state securities laws, shall have been obtained prior to and be effective as of
the Effective Date.
12.5 Listing on Nasdaq or Securities Exchange. The Company shall
----------------------------------------
use its best efforts to list any shares of Common Stock issuable upon exercise
of this Warrant on Nasdaq or such other national securities exchange on which
shares of Common Stock are then listed. The Company will at its expense cause
all shares of Common Stock issued upon exercise of this Warrant to be listed on
Nasdaq and/or such other national securities exchange on which shares of Common
Stock are then listed at the time of such issuance and shall maintain such
listing.
8
<PAGE>
12.6 No Impairment. The Company further covenants that it will
-------------
not, by amendment of its Certificate of Incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
the Company.
13. NOTICES. Except as may be otherwise provided herein, all notices,
requests, waivers and other communications made pursuant to this Agreement shall
be in writing and shall be conclusively deemed to have been duly given (a) when
hand delivered to the other party; (b) when received when sent by facsimile at
the address and number set forth below; (c) three business days after deposit in
the U.S. mail with first class or certified mail receipt requested postage
prepaid and addressed to the other party as set forth below; or (d) the next
business day after deposit with a national overnight delivery service, postage
prepaid, addressed to the parties as set forth below with next-business-day
delivery guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider.
<TABLE>
<CAPTION>
<S> <C> <C>
To Holder: To the Company:
Stargen II LLC BioSource International, Inc.
820 Flynn Road
Camarillo, California 93012
Telephone No.: (805)
Facsimile No.: (805)
Attention: James Chamberlain
President and Chief Executive Officer
With copies to (which shall not With copies to (which shall not
constitute notice): constitute notice):
Latham & Watkins Troop Steuber Pasich Reddic & Tobey,
505 Montgomery Street, Suite 1900 LLP
San Francisco, CA 94111-2562 2029 Century Park East, 24th Floor
Telephone No.: (415) 391-0600 Los Angeles, CA 90067
Facsimile No.: (415) 395-8095 Telephone No.: (310) 728-3222
Attention: Scott Haber, Esq. Facsimile No.: (310) 728-2222
Attention: Scott W. Alderton Esq.
</TABLE>
Each person making a communication hereunder by facsimile shall promptly confirm
by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 14 by giving the other party written
----------
notice of the new address in the manner set forth above.
14. HEADINGS. The headings in this Warrant are for purposes of
convenience in reference only, and shall not be deemed to constitute a part
hereof.
15. LAW GOVERNING. This Warrant shall be construed and enforced in
accordance with, and governed by, the laws of the State of California, with
regard to conflict of law principles of such state.
9
<PAGE>
16. NO IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation or bylaws, or through reorganization,
consolidation, merger, dissolution, issue or sale of securities, sale of assets
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Registered Holder of this Warrant against impairment. Without limiting the
generality of the foregoing, the Company (a) will not increase the par value of
any shares of stock issuable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and (b) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of Common Stock upon exercise of this
Warrant.
17. NOTICES OF RECORD DATE. In case:
17.1 the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the exercise of
this Warrant), for the purpose of entitling them to receive any dividend or
other distribution, or any right to subscribe for or purchase any shares of
stock of any class or any other securities or to receive any other right; or
17.2 of any consolidation or merger of the Company with or into
another corporation, any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any conveyance of all
or substantially all of the assets of the Company to another corporation in
which holders of the Company's stock are to receive stock, securities or
property of another corporation; or
17.3 of any voluntary dissolution, liquidation or winding-up of
the Company; or 17.4 of any redemption or conversion of all outstanding Common
Stock;
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation,
winding-up, redemption or conversion is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock or (such stock or
securities as at the time are receivable upon the exercise of this Warrant),
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities), for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. The Company shall use all reasonable
efforts to ensure such notice shall be delivered at least thirty (30) days prior
to the date therein specified.
18. SEVERABILITY. If any term, provision, covenant or restriction of
this Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Warrant shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
19. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Warrant may be executed by the parties hereto and each such
executed counterpart shall be, and shall be deemed to be, an original
instrument.
10
<PAGE>
20. NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holders of this Warrant or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to holders of the Company's securities under any other
agreements, except rights that have been waived.
21. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. the next business day.
22. ENTIRE AGREEMENT. This Warrant, the Securities Purchase Agreement
dated as of January 10, 2000 by and among the Company and the Holder, and the
Investor Rights Agreement dated as of February __, 2000 by and among the Company
and the Holder, contain the sole and entire agreement and understanding of the
parties with respect to the entire subject matter of this Warrant, and any and
all prior discussions, negotiations, commitments and understandings, whether
oral or otherwise, related to the subject matter of this Warrant are hereby
merged herein.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
as of the Effective Date.
BIOSOURCE INTERNATIONAL, INC.
- -------------------------------------------
By
Printed Name
Title
11
<PAGE>
EXHIBIT A
---------
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
BioSource International, Inc.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of BioSource International, Inc., as provided for therein, and
(check the applicable box):
[ ] tenders herewith payment of the exercise price in full in the form of
cash or a certified or official bank check in same-day funds in the
amount of $____________ for _________ such securities.
[ ] Elects the [Net Issue Exercise][Easy Sale Exercise] option pursuant to
Section 2.2 or 2.3 of the Warrant, and accordingly requests delivery of
a net of ______________ of such securities.
Please issue a certificate or certificates for such securities in the name of,
and pay any cash for any fractional share to (please print name, address and
social security number):
Name: ------------------------------------------------------------------
Address: ------------------------------------------------------------------
Signature: ------------------------------------------------------------------
Note: The above signature should correspond exactly with the name on the first
page of this Warrant Certificate or with the name of the assignee appearing in
the assignment form below.
If said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher whole number of shares.
12
<PAGE>
EXHIBIT B
---------
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, hereby sells, assigns and transfers unto _______________ the
within Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________________
attorney, to transfer said Warrant Certificate on the books of the within-named
Company with respect to the number of Warrants set forth below, with full power
of substitution in the premises:
- --------------------------------------------------------------------------------
Name(s) of Assignee(s) Address # of Warrants
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants registered by said
Warrant Certificate.
------------------------------------------------------------------
Dated: ------------------------------------------------------------------
Signature: ------------------------------------------------------------------
Notice: The signature to the foregoing Assignment must correspond to the name
as written upon the face of this security in every particular, without
alteration or any change whatsoever; signature(s) must be guaranteed by an
eligible guarantor institution (banks, stock brokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Securities and Exchange Commission Rule
17Ad-15.
13
<PAGE>
EXHIBIT 5
INVESTOR RIGHTS AGREEMENT
INVESTOR RIGHTS AGREEMENT (this "Agreement"), dated as of February __,
2000, by and among BIOSOURCE INTERNATIONAL, INC., a corporation organized under
the laws of the State of Delaware (the "Company"), and GENSTAR CAPITAL PARTNERS
II, L.P., Delaware limited partnership, and STARGEN II LLC, a Delaware limited
liability company (each, an "Investor" and collectively, the "Investors").
R E C I T A L S
- - - - - - - -
A. The Company and the Investors have entered into a Securities Purchase
Agreement dated as of January 10, 2000 (the "Purchase Agreement;" capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement). In connection with the Purchase
Agreement, the Company has agreed, upon the terms and subject to the conditions
contained therein, to issue and sell to the Investors an aggregate of 371,300
shares of the Company's Series B Convertible Preferred Stock, par value $0.001
per share (the "Series B Shares") and warrants to purchase an aggregate of
1,287,000 shares of the Company's Common Stock, par value $.001 per share (the
"Warrants").
B. In connection with the transactions contemplated by the Purchase
Agreement, the Company has agreed to provide to the Investors certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), and applicable state securities laws.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investors,
intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
-----------
As used in this Agreement, the following terms shall have the
following meanings:
(a) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
<PAGE>
(b) "Registrable Securities" means the shares of Common Stock of the
Company issued or issuable to the Investors upon conversion of the Series B
Shares or upon exercise of the Warrants and any shares of capital stock issued
or issuable, from time to time (with any adjustments), as a distribution on or
in exchange for or otherwise with respect to the foregoing.
(c) "Registration Statement" means one or more registration statements
of the Company under the Securities Act registering all or a portion of the
Registrable Securities.
2. REGISTRATION.
------------
(a) Requested Registration.
----------------------
(i) Request for Registration. If the Company shall receive from
------------------------
any Investor or Investors holding not less than 50% of the Registrable
Securities then outstanding, at any time, a written request that the Company
effect any registration with respect to all or a part of the Registrable
Securities, the Company will, as soon as reasonably practicable, use its
reasonable best efforts to effect such registration (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act) as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Registrable Securities as
are specified in such request; provided that the Company shall not be obligated
--------
to effect, or take any action to effect, any such registration pursuant to this
Section 2(a):
A. after the Company has effected three (3) such
registrations pursuant to this Section 2(a) requested by the Investors, and, in
each case, such registrations have been declared or ordered effective and have
remained effective for ninety (90) days; provided, however, that the limitation
set forth in this Section 2(a)(i)A is not applicable if, at the time of the
request for registration, the Company qualifies to register the resale of the
Registrable Securities in accordance with the request on a Form S-3;
B. if at the time of any request to register Registrable
Securities, the Company is engaged or intends to engage in an acquisition,
financing or other material transaction which, in the good faith determination
of the Board of Directors of the Company, would be adversely affected by the
requested registration to the material detriment of the Company, or the Board of
Directors of the Company determines in good faith that the registration would
require the disclosure of material information that the Company has a bona fide
business purpose for preserving as confidential, and that the Company is not
otherwise required by applicable securities laws or regulations to disclose, in
which event, the Company may, at its option, direct that such request be delayed
for a period not in excess of 120 days from the date of the determination by the
Board of Directors, as the case may be; provided, however, that the Company may
not exercise this deferral right more than once in any 12-
-2-
<PAGE>
month period.
Subject to Section 2(a)(ii), a Registration Statement filed pursuant
to this Section 2(a)(i) may include other securities, other than Registrable
Securities, of the Company which are held by the other stockholders ("Other
Stockholders") of the Company. The Company shall prepare and file with the SEC,
as soon as practicable, the applicable Registration Statement required by
Section 2(a) and shall use reasonable best efforts to cause such Registration
Statement to become effective as soon as practicable after such filing. The
Company shall keep such Registration Statement effective pursuant to Rule 415
until the earliest of (i) one hundred and eighty (180) days from the date the
applicable Registration Statement is declared effective by the SEC, (ii) the
date at which all Registrable Securities included in such Registration Statement
have been sold by the Investors or (iii) the date on which all of the
Registrable Securities may (in the reasonable opinion of counsel to the Company)
be immediately sold to the public without registration or restriction pursuant
to Rule 144(k) under the Securities Act (the "Registration Period").
(ii) Underwriting. If the Investors intend to distribute the
------------
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section 2(i)(a). If securities held by Other Stockholders are requested by such
Other Stockholders to be included in any registration pursuant to this Section
2, the Company shall condition such inclusion on their acceptance of the further
applicable provisions of this Section 2. The Investors and the Company shall
(together with all Other Stockholders proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
such underwriting by the Company and reasonably acceptable to such Investor;
provided, however, that an Investor shall not be required to make any
representations, warranties or indemnities except as they relate to such
Investor's ownership of securities and authority to enter into the underwriting
agreement and to such Investor's intended method of distribution, and the
liability of such Investor shall be limited to an amount equal to the net
proceeds from the offering received by such Investor. Notwithstanding any other
provision of this Section 2(a), if the representative advises the Investors in
writing that marketing factors (including, without limitation, pricing
considerations) require a limitation on the number of shares to be underwritten,
the securities of the Company held by Other Stockholders shall be excluded from
such registration to the extent so required by such limitation. If, after the
exclusion of such shares, further reductions are still required, the securities
proposed to be sold by the Company shall be excluded from such registration to
the extent so required by such limitation. If, after the exclusion of such
shares, further reductions are still required, the Registrable Securities
proposed to be sold by the Investors shall be excluded from such registration to
the extent so required by such limitation, provided, however, that the number of
Registrable Securities to be included in the offering by the Investors shall not
be reduced unless all other securities are excluded entirely from the offering.
No Registrable Securities or any other securities excluded from the
-3-
<PAGE>
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. If any Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the underwriter and the Investors. The securities so withdrawn
shall also be withdrawn from registration.
(iii) Shares; Warrants. The Investors may elect to sell the
----------------
Series B Shares or Warrants to the underwriters and have the underwriters
convert the Series B Shares into the Conversion Shares and sell such Conversion
Shares or exercise the Warrants for the Warrant Shares and sell such Warrant
Shares.
(b) Company Registration.
--------------------
(i) If the Company shall determine to register any of its
equity securities either for its own account or any Other Stockholders (a
"Company Registration"), other than a registration relating solely to employee
benefit plans, or a registration relating solely to a SEC Rule 145 transaction,
or a registration on any registration form which does not permit secondary sales
or does not include substantially the same information as would be required to
be included in a registration statement covering the sale of Registrable
Securities, the Company will:
(A) deliver to the Investors written notice thereof at
least thirty (30) days prior to the filing of the registration statement
relating to such Company Registration; and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made by Investor within ten (10) days after receipt of the written
notice from the Company described in clause (A) above, except as set forth in
Section 2(b)(ii) below. The Company may terminate, in its sole and absolute
discretion, any registration described in this Section 2(b) at any time prior to
the effectiveness of the applicable registration statement. Upon such
termination, the Company's obligations under this Section 2(b) with respect to
such terminated registration shall terminate.
(ii) Underwriting. If the Company Registration of which the
------------
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Investors as a part of the written
notice given pursuant to Section 2(b)(i)(A). In such event, the right of the
Investors to registration pursuant to this Section 2(b) shall be conditioned
upon the Investors' participation in such underwriting and the inclusion of the
Investors' Registrable Securities in the underwriting to the extent provided
herein. The Investors shall (together with the Company and the Other
Stockholders distributing their securities through such underwriting) enter into
an underwriting agreement in customary form
-4-
<PAGE>
with the representative of the underwriter or underwriters selected for
underwriting by the Company; provided, however, that an Investor shall not be
required to make any representations, warranties or indemnities except as they
relate to such Investor's ownership of securities and authority to enter into
the underwriting agreement and to such Investor's intended method of
distribution, and the liability of such Investor shall be limited to an amount
equal to the net proceeds from the offering received by such Investor.
Notwithstanding any other provision of this Section 2(b), if the representative
determines that marketing factors require a limitation on the number of shares
to be underwritten, the representative may limit or eliminate the number of
Registrable Securities to be included in the registration and underwriting to
the extent so required by such limitation; provided, however, that the number of
Registrable Securities to be included in the offering by the Investors shall not
be reduced unless all securities to be included in the offering by Other
Stockholders are also reduced, in which instance the number of Registrable
Securities to be included in the offering by the Investors and the number of
securities to be included in the offering by Other Stockholders shall be
allocated among the Investors and the Other Stockholders in proportion (or as
nearly as practicable) to the amount of securities sought to be included in the
offering by each Investor and each Other Stockholder, as the case may be.
(iii) Number and Transferability. Each Investor shall be
--------------------------
entitled to have its Registrable Securities included in an unlimited number of
registrations pursuant to this Section 2(b).
(iv) Shares; Warrants. The Investors may elect to sell
----------------
the Series B Shares or Warrants to the underwriters and have the underwriters
convert the Series B Shares into the Conversion Shares and sell such Conversion
Shares or exercise the Warrants for the Warrant Shares and sell such Warrant
Shares.
(c) Form S-3 Registration. In case the Company shall receive
---------------------
from any Investor or Investors holding not less than fifty percent (50%) of the
Registrable Securities then outstanding a written request or requests that the
Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Investor or Investors, the Company will:
(i) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Investors; and
(ii) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Investor's or Investors' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any
other Investor or Investors joining in such request as are specified in a
written request given within 15 days after receipt of such written notice from
the Company; provided,
-5-
<PAGE>
however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 2(c): (i) if
Form S-3 is not available for such offering by the Investors; (ii) if the
Company shall furnish to the Investors a certificate signed by the President of
Company stating that in the good faith judgment of the Board of Directors of the
Company that the registration would require the disclosure of material
information that the Company has a bona fide business purpose for preserving as
confidential, and that the Company is not otherwise required by applicable
securities laws or regulations to disclose, in which event the Company shall
have the right to defer the filing of the Form S-3 registration statement for a
period of not more than 120 days after receipt of the request of the Investor or
Investors under this Section 2(c); provided, however, that the Company shall not
utilize this right more than once in any twelve month period; (iii) if the
Company has, within the twelve (12) month period preceding the date of such
request, already effected two registrations on Form S-3 for the Investors
pursuant to this Section 2(c); (iv) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance; or (v) during the period ending one hundred eighty (180) days after
the effective date of a registration statement subject to Section 2(b).
(iii) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Investors. Registrations effected pursuant to this Section 2(c) shall not be
counted as demands for registration or registrations effected pursuant to
Sections 2(a).
3. OBLIGATIONS OF THE COMPANY.
--------------------------
In connection with each registration of the Registrable Securities, the
Company shall have the following obligations:
(a) Each Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein and all documents
incorporated by reference therein) filed pursuant to this Agreement (i) shall
comply in all material respects with the requirements of the Securities Act and
the rules and regulations of the SEC promulgated thereunder and (ii) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading. The financial statements of the Company included in the
Registration Statement or incorporated by reference therein shall comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC applicable with respect thereto.
Such financial statements shall be prepared in accordance with U.S. generally
accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may not
-6-
<PAGE>
include footnotes or may be condensed or summary statements) and shall fairly
present in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to immaterial year-end
adjustments).
(b) The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration Statement
as may be necessary to keep the Registration Statement effective at all times
during the Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the Investor as set
forth in the Registration Statement. Notwithstanding the foregoing, the
Company's obligations hereunder to file a Registration Statement and to keep a
Registration Statement in effect under the Securities Act shall be suspended if
the Company is engaged or intends to engage in an acquisition, financing or
other material transaction which, in the good faith determination of the Board
of Directors of the Company, would be adversely affected by the requested
registration to the material detriment of the Company, or the Board of Directors
of the Company determines in good faith that the registration would require the
disclosure of material information that the Company has a bona fide business
purpose for preserving as confidential, and that the Company is not otherwise
required by applicable securities laws or regulations to disclose, in which
event, the Company may, at its option, direct that such request be delayed for a
period not in excess of 120 days from the date of the determination by the Board
of Directors, as the case may be; provided, however, that the Company may not
exercise this deferral right more than once in any 12-month period..
(c) The Company shall furnish to the Investor (i) promptly after the
same is prepared and publicly distributed, filed with the SEC, or received by
the Company, such reasonable number of copies of the Registration Statement and
any amendment thereto, each preliminary prospectus and prospectus and each
amendment or supplement thereto as the Investors may reasonably request. In the
case of the Registration Statement referred to in Section 2(a), the Company
shall furnish to the Investors a copy of each letter written by or on behalf of
the Company to the SEC or the staff of the SEC (including, without limitation,
any request to accelerate the effectiveness of any Registration Statement or
amendment thereto), and each item of correspondence from the SEC or the staff of
the SEC, in each case relating to such Registration Statement (other than any
portion, if any, thereof which contains information for which the Company has
sought confidential treatment), (ii) on the date of effectiveness of the
Registration Statement or any amendment thereto, a notice stating that the
Registration Statement or amendment has been declared effective, and (iii) such
number of copies of a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents as such Investor may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
-7-
<PAGE>
(d) The Company shall use all commercially reasonable efforts to (i)
register and qualify the Registrable Securities covered by the Registration
Statement under such other securities or "blue sky" laws of such jurisdictions
in the United States as such Investor reasonably requests (ii) prepare and file
in those jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (b) subject itself
to general taxation in any such jurisdiction, (c) file a general consent to
service of process in any such jurisdiction, (d) provide any undertakings that
cause the Company undue expense or burden, or (e) make any change in its
certificate of incorporation or bylaws, which in each case the Board of
Directors of the Company determines in good faith to be contrary to the best
interests of the Company and its stockholders.
(e) As promptly as practicable after becoming aware of such event, the
Company shall notify the Investors by telephone or facsimile of the happening of
any event, of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and use reasonable best efforts promptly to prepare a supplement or
amendment to the Registration Statement to correct such untrue statement or
omission and deliver such number of copies of such supplement or amendment to
the Investors as the Investors may reasonably request.
(f) The Company shall use reasonable best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest practicable date (including in each
case by amending or supplementing such Registration Statement) and to notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance of such
order and the resolution thereof (and if such Registration Statement is
supplemented or amended, deliver such number of copies of such supplement or
amendment to such Investor as the Investor may reasonably request).
(g) The Company shall permit a single firm of counsel designated by
the Investors to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing with the
SEC.
(h) The Company shall make available for inspection by (i) any
underwriter participating in any disposition pursuant to a Registration
Statement and (ii) one firm of attorneys
-8-
<PAGE>
retained by all such underwriters (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence.
(i) The Company shall use reasonable best efforts to promptly either
(i) secure the designation and quotation, of all the Registrable Securities
covered by a Registration Statement on the Nasdaq National Market or the Nasdaq
Small Cap Market, or (ii) cause all the Registrable Securities covered by the
Registration Statement to be listed on the NYSE or the AMEX or another national
securities exchange and on each additional national securities exchange on which
securities of the same class or series issued by the Company are then listed, if
any, if the listing of such Registrable Securities is then permitted under the
rules of such exchange.
(j) The Company shall provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
(k) The Company shall hold in confidence and not make any disclosure
of information provided to the Company concerning the Investors unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement, or (v) the Investors
consent to the form and content of any such disclosure. The Company agrees that
it shall, upon learning that disclosure of such information concerning the
Investors is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Investors prior
to making such disclosure, and allow the Investors, at their expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
(l) The Company shall cooperate with the Investors and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing
Registrable Securities to be offered pursuant to the Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the managing underwriter or underwriters, if any, or the Investors may
reasonably request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request, and, within three (3)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable
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<PAGE>
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) (1) an opinion of counsel for the
Company, dated the effective date of the Registration Statement, and (2)
"comfort" letters signed by the Company's independent public accountants who
have examined and reported on the Company's financial statements included in the
Registration Statement, to the extent permitted by the standards of the AICPA or
other relevant authorities, covering substantially the same matters with respect
to the registration statement (and the prospectus included therein) and (in the
case of the accountants' "comfort" letters, with respect to events subsequent to
the date of the financial statements), in each case as are customarily covered
in opinions of issuers' counsel and in accountants' "comfort" letters delivered
to the underwriters in underwritten public offerings of securities.
(m) The Company shall comply with applicable federal securities laws
and regulations related to a Registration Statement and offering and sale of
securities.
(n) The Company shall use its commercially reasonable efforts to
qualify for registration on Form S-3 or any comparable or successor form or
forms and remain so qualified following the Closing Date.
(o) The Company shall take all such other actions as any Investor or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities.
4. OBLIGATIONS OF THE INVESTOR.
---------------------------
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete any registration pursuant to this Agreement with respect to
the Registrable Securities that each Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request. At least five (5) business days prior to the
first anticipated filing date of the Registration Statement, the Company shall
notify the Investors of any information the Company requires from them.
(b) Each Investor agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder.
(c) If the Investors determine to engage the services of an
underwriter, the
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<PAGE>
Investors agree to enter into and perform its obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the underwriter(s) of such
offering and the Company and take such other actions as are reasonably required
in order to expedite or facilitate the disposition of the Registrable
Securities, provided, however, that an Investor shall not be required to make
any representations, warranties or indemnities except as they relate to such
Investor's ownership of securities and authority to enter into the underwriting
agreement and to such Investor's intended method of distribution, and the
liability of such Investor shall be limited to an amount equal to the net
proceeds from the offering received by such Investor.
(d) The Investors will not participate in any underwritten
distribution hereunder unless they (i) agree to sell such the Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, provided, however, that an Investor
shall not be required to make any representations, warranties or indemnities
except as they relate to such Investor's ownership of securities and authority
to enter into the underwriting agreement and to such Investor's intended method
of distribution, and the liability of such Investor shall be limited to an
amount equal to the net proceeds from the offering received by such Investor,
(ii) complete and execute all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements, provided, however, that an Investor shall not
be required to make any representations, warranties or indemnities except as
they relate to the Investor's ownership of securities and authority to enter
into the underwriting agreement and to such Investor's intended method of
distribution, and the liability of such Investor shall be limited to an amount
equal to the net proceeds from the offering received by such Investor, and (iii)
agree to pay all brokers fees, underwriting discounts and commissions and other
selling expenses applicable to the Registrable Securities.
5. EXPENSES OF REGISTRATION.
------------------------
All expenses incurred by the Company in connection with registrations,
filings or qualifications pursuant to Sections 2 and 3 above, including, without
limitation, all registration, listing and qualifications fees, printers and
accounting fees and the fees and disbursements of counsel for the Company, and
the reasonable fees and disbursements of one counsel for the selling Investors
selected by them, shall be borne by the Company. All brokers' fees,
underwriting discounts and commissions and similar selling expenses applicable
to the Registrable Securities shall be borne by the Investors.
6. INDEMNIFICATION.
---------------
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify, hold
harmless
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<PAGE>
and defend (i) each Investor, and (ii) the directors, officers, partners,
members, employees and agents of each Investor and each person who controls such
Investor within the meaning of Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), if any
(each, an "Indemnified Person"), against any joint or several losses, claims,
damages, liabilities or expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened, in respect thereof, "Claims") to which any of
them may become subject insofar as such Claims arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement, including any preliminary prospectus or final prospectus
contained therein and any amendments or supplements thereto or the omission or
alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to the restrictions
set forth in Section 6(c) with respect to the number of legal counsel, the
Company shall reimburse each Investor and each other Indemnified Person,
promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a): (i) shall not apply to a Claim arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person
expressly for use in the Registration Statement or any such amendment thereof or
supplement thereto; (ii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld; and (iii) with
respect to any preliminary prospectus, shall not inure to the benefit of any
Indemnified Person if the untrue statement or omission of material fact
contained in such preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, if such corrected prospectus was
timely made available by the Company pursuant to Section 3(c) hereof, and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.
(b) In connection with any Registration Statement in which an Investor
is participating, to the extent permitted by law, each selling Investor agrees
to indemnify, hold harmless and defend, to the same extent and in the same
manner set forth in Section 6(a), the
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<PAGE>
Company, each of its directors, each of its officers who signs the Registration
Statement, its employees, agents and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any person who
controls such stockholder or underwriter within the meaning of the Securities
Act or the Exchange Act (each, an "Indemnified Party"), against any Claim to
which any of them may become subject, under the Securities Act, the Exchange Act
or otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by the Investor expressly for use in connection with
such Registration Statement; and subject to Section 6(c) the Investor will
reimburse any legal or other expenses (promptly as such expenses are incurred
and are due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Investor, and provided further, that the obligations of an
Investor hereunder shall be limited to an amount equal to the net proceeds to
such Investor from the Registrable Securities sold under such Registration
Statement, prospectus, offering circular or other document contemplated herein.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall survive
any transfer of the Registrable Securities by the Investor pursuant to Section
9. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact by the Investor contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented, and the Indemnified Party failed to utilize
such corrected prospectus.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to
assume control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that such indemnifying party shall not be
entitled to assume such defense and an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the reasonable fees and
expenses to be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such counsel
of the Indemnified Person or Indemnified Party and the indemnifying party would
be inappropriate due to actual or potential conflicts of interest between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding or the actual or potential defendants in, or targets
of, any such action include both the Indemnified Person or the Indemnified Party
and the indemnifying party and any such Indemnified Person or Indemnified Party
reasonably determines that there may be legal defenses available to such
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<PAGE>
Indemnified Person or Indemnified Party which are in conflict with those
available to such indemnifying party. The indemnifying party shall pay for only
one separate legal counsel for the Indemnified Persons or the Indemnified
Parties, as applicable, and such legal counsel shall be selected by the
Investor, if the Investor is entitled to indemnification hereunder, or by the
Company, if the Company is entitled to indemnification hereunder, as applicable.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
actually prejudiced in its ability to defend such action. The indemnification
required by this Section 6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.
7. CONTRIBUTION.
------------
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that (i) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6, (ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
seller of Registrable Securities who was not guilty of such fraudulent
misrepresentation, and (iii) contribution (together with any indemnification or
other obligations under this Agreement) by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS UNDER THE EXCHANGE ACT.
------------------------------
With a view to making available to the Investor the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
(a) file with the SEC in a timely manner and make and keep available
all reports and other documents required of the Company under the Securities Act
and the Exchange Act so long as the Company remains subject to such
requirements and the filing and availability of such reports and other
documents as is required for the applicable provisions of Rule 144; and
(b) furnish to any Investor so long as such Investor owns Registrable
Securities, promptly upon written request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act and that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the
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<PAGE>
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
---------------------------------
The rights of the Investors hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
assignable, by any Investor to any transferee of all or any portion of the
Registrable Securities if: (i) such Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company after such assignment, (ii) the Company is furnished
with written notice of (a) the name and address of such transferee or assignee
and (b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment, the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (iv)
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained herein, and (v) such transfer shall have been made
in accordance with the applicable requirements of the Purchase Agreement, and
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained therein.
10. BOARD REPRESENTATION.
--------------------
So long as the Investors beneficially own (as defined in Rule 13d-3 under
the Exchange Act) (A) not less than 750,000 shares of Common Stock, the
Investors shall be entitled to designate two (2) persons reasonably acceptable
to the Company to serve on the Board of Directors of the Company, and (B) not
less than 495,000 shares of Common Stock, the Investors shall be entitled to
designate one (1) person reasonably acceptable to the Company to serve on the
Board of Directors of the Company (the "Designated Directors"), and the Company
shall use its best efforts (including the inclusion of such persons in the
Company's proxy statement as director nominees) to cause the Designated
Directors to be elected as directors of the Company. The Company shall
immediately expand the size of its Board of Directors to seven (7) members and
appoint the Designated Directors to fill the vacancies created thereby. For so
long as the Investors are entitled to designate directors pursuant to this
Section 10, the Company shall procure and maintain directors' and officers'
indemnification insurance covering the Designated Directors in such amounts and
with such deductibles and covering such risks as are customary for similarly
situated businesses. The Company shall indemnify each Designated Director to
the same extent that it indemnifies its other directors pursuant to its
organizational documents and applicable law. The Company shall reimburse each
Designated Director for all reasonable costs and expenses incurred in connection
with such Directors' attendance at meetings of the Board of Directors or any
committee upon which they, or any of them, may serve.
11. RIGHT OF FIRST NEGOTIATION FOR ADDITIONAL SECURITIES.
----------------------------------------------------
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<PAGE>
So long as the Investors hold not less than 50% of the aggregate Series B
Shares and Warrants they purchased pursuant to the Purchase Agreement (or an
equivalent amount of Common Stock issued upon conversion or exercise thereof),
each time the Company proposes to offer any shares of, or securities convertible
into or exercisable for any shares of, any class of its capital stock
("Additional Securities"), the Company will make an offering of such Additional
Securities to the Investors in accordance with the following provisions:
(a) The Company shall deliver a written notice (a "First Negotiation
Notice") to the Investors, which notice shall set forth all material terms and
conditions, including, without limitation, the number of shares and the purchase
price, on which the Company desires to sell the Additional Securities.
(b) The Investors shall, for a period of thirty (30) days following
the receipt of the First Negotiation Notice by the Investors (the "First
Negotiation Period"), have the exclusive right to negotiate with the Company
with respect to the purchase and sale of the Additional Securities. All
negotiations between the Company and any Investor shall be conducted in good
faith.
(c) If, during the First Negotiation Period, the Company and one or
more of the Investors agree to enter into an agreement for the purchase and sale
of the Additional Securities, then the Company may not offer the Additional
Securities to any other Person and the purchase and sale of the Additional
Securities shall occur on the terms and conditions on which the Company and the
Investors agree. If more than one Investor agrees to purchase the Additional
Securities on the terms set forth in the First Negotiation Notice, each Investor
so electing shall be entitled to purchase its pro rata share of the Additional
Securities.
(d) If the Company and one or more of the Investors do not agree to
enter into an agreement for the purchase and sale of the Additional Securities
on or before the expiration of the First Negotiation Period, then the Company
may attempt to sell the Additional Securities to any other person or entity for
a period of one hundred and twenty (120) days following the expiration of the
First Negotiation Period.
(e) Additional Securities shall not include any securities: (i)
subject to a Company Registration (as defined in Section 2(b)(i), above), (ii)
relating to a SEC Rule 145 transaction, (iii) issued in connection with the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or a dividend or other distribution payable in additional shares of Common Stock
or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly, additional shares of Common Stock, (iv)
issued or issueable to employees, consultants or directors of the Company
directly or pursuant to a stock option plan or restricted stock plan approved by
the Board of Directors of the Company, (v) issued pursuant to the conversion or
exercise of convertible or exercisable securities outstanding or deemed
outstanding on the date
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<PAGE>
hereof, or (vi) issued or issuable in connection with the acquisition, merger,
consolidation, or other business combination by or of the Company with, by, or
of any person.
12. PRE-EMPTIVE RIGHTS TO ACQUIRE ADDITIONAL SECURITIES
---------------------------------------------------
So long as the Investors hold not less than 50% of the aggregate Series B
Shares and Warrants they purchased pursuant to the Purchase Agreement (or an
equivalent amount of Common Stock issued upon conversion or exercise thereof),
each time the Company proposes to offer any Additional Securities, the Company
will, in addition to the right of first negotiation required under Section 11,
----------
above, make an offering of such Additional Securities to the Investors in
accordance with the following provisions:
(a) At least thirty (30) days prior to consummating the offer of
Additional Securities, the Company shall deliver a notice (the "Transfer
Notice") to the Investors at the addresses set forth in the Purchase Agreement
stating: (i) its bona fide intention to offer such Additional Securities, (ii)
the amount of such Additional Securities to be offered, (iii) the price and
terms, if any, upon which it proposes to offer such Additional Securities, and
(iv) an offer to the Investors to purchase the Additional Securities on the same
terms and conditions as contained in the Transfer Notice.
(b) The Investor may accept the offer to purchase such Additional
Securities by giving written notice of acceptance to the Company within fifteen
(15) days of receipt of the Transfer Notice, and the transfer of the Additional
Securities shall thereafter be effected between the Company and the Investors
upon all of the applicable terms and conditions set forth in the Transfer
Notice, or such other or additional terms as the Company and the Investors shall
agree. In the event that the Investors do not accept the offer to purchase such
Additional Securities by giving written notice of acceptance to the Company
within fifteen (15) days of receipt of the Transfer Notice, and/or consummate
the sale of the Additional Securities within sixty (60) days of its acceptance
of the offer contained in the Transfer Notice, the Company shall be free to sell
such Additional Securities on substantially the same terms as those set forth in
the Transfer Notice.
13 AMENDMENT OF REGISTRATION RIGHTS.
--------------------------------
Provisions of this Agreement may be amended and the observance thereof may
be waived solely upon the written consent of the Company and the Investors
holding a majority of the Shares and Warrants (or an equivalent amount of Common
Stock issued upon conversion or exercise thereof).
14. MISCELLANEOUS.
-------------
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the
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<PAGE>
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
(b) Any notices required or permitted to be given under the terms of
this Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier or by confirmed telecopy, and
shall be effective five (5) days after being placed in the mail, if mailed, or
upon receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be as set forth in the Purchase Agreement.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to contracts made and to be
performed in the State of California. Each of the Company and the Investors
irrevocably consents to the jurisdiction of the United States federal courts and
state courts located in the State of California in any suit or proceeding based
on or arising under this Agreement and irrevocably agrees that all claims in
respect of such suit or proceeding may be determined in such courts. Each of
the Company and the Investors irrevocably waives the defense of an inconvenient
forum to the maintenance of such suit or proceeding. Each of the Company and
the Investors further agrees that service of process upon the Company mailed by
first class mail to the address set forth in the Purchase Agreement shall be
deemed in every respect effective service of process upon the Company in any
such suit or proceeding. Nothing herein shall affect either the Company's or
any Investor's right to serve process in any other manner permitted by law.
(e) This Agreement and the Purchase Agreement (including all schedules
and exhibits thereto) constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement and the Purchase Agreement
supersede all prior agreements and understandings among the parties hereto and
thereto with respect to the subject matter hereof and thereof.
(f) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
(g) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This
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<PAGE>
Agreement, once executed by a party, may be delivered to the other party hereto
by facsimile transmission of a copy of this Agreement bearing the signature of
the party so delivering this Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) For purposes of this Agreement, the term "business day" means any
day other than a Saturday or Sunday or a day on which banking institutions in
the State of California are authorized or obligated by law, regulation or
executive order to close.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
BIOSOURCE INTERNATIONAL, INC.
a Delaware corporation
By:_________________________________
James H. Chamberlain
President and Chief Executive Officer
GENSTAR CAPITAL PARTNERS II, L.P.
By: Genstar Capital LLC
Its General Partner
By: ___________________________
Name:
Title:
STARGEN LLC II
By:______________________________
Its:
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<PAGE>
EXHIBIT 6
CERTIFICATE OF DESIGNATION OF
PREFERENCES, RIGHTS AND LIMITATIONS OF
SERIES B PREFERRED STOCK OF
BIOSOURCE INTERNATIONAL, INC.
_____________________________
(Pursuant to Section 151 of the
General Corporation Law
of the State of Delaware)
BIOSOURCE INTERNATIONAL, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
in accordance with the provisions of Section 151(g) thereof:
HEREBY CERTIFIES:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, the Board of Directors
on January 8, 2000 adopted the following resolution creating a series of 500,000
of preferred stock designated as Series B Preferred Stock:
RESOLVED, that there is hereby designated a series of Preferred Stock
to be known as Series B Preferred Stock, $.001 par value per share, having the
following rights and preferences:
1. Designation of Shares. The designation of this initial series of preferred
---------------------
shares is "Series B Preferred Stock, par value $.001 per share."
2. Number of Shares. The number of shares constituting the Series B
----------------
Preferred Stock shall be 500,000 (each referred to as a "Series B Share"
and collectively as the "Series B Shares").
3. Dividend Rights. Commencing on the date of issuance, the holder of record
---------------
of each Series B Share of the Corporation (a "Holder") shall be entitled to
be credited with a non-cash dividend (a "Dividend") on January 1 of each
year (a "Dividend Payment Date"), in additional Series B Shares at the
Dividend Rate (as defined below) for each Annual Payment Period that such
Series B Share is outstanding. An "Annual Payment Period" shall mean each
of the twelve-month periods ending on December 31 of each year (or such
shorter period commencing on the date of issuance and ending on December
31). The first Dividend Payment Date shall be January 1, 2001. The
"Dividend Rate" shall mean eight percent (8%) of the Original Issuance
Price (as defined below) plus all Dividends paid in any prior Annual
Payment Period. Dividends shall accrue (whether or not paid) during each
Annual Payment Period from
<PAGE>
the date on which such Annual Payment Period commences to the last day of
such Annual Payment Period, or if any Conversion or Liquidation occurs
prior thereto, pro rata through the date of Conversion or Liquidation. For
purposes of this Certificate of Designation, "Original Issuance Price"
shall mean the price per share at which the Series B Shares are first
issued to any Holder. Unless all dividends on the outstanding Series B
Shares that shall have accrued and become payable as of any date shall have
been paid, or declared and funds set apart for payment thereof, no dividend
or other distribution (payable other than in Common Stock or other
securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock of the
Corporation), shall be paid to the holders of Common Stock.
4. Liquidation.
-----------
4.1. Preference. In the event of the liquidation, dissolution or winding-
----------
up, whether voluntary or involuntary, of the Corporation
("Liquidation"), but not upon the conversion of Series B Shares:
4.1.1. First, the Holder of a Series B Share shall be entitled to
receive with respect to each Series B Share, after the
satisfaction of all distributions to holders of other series
of preferred stock, if any, which are required (at the
direction of the holder thereof or otherwise) to be redeemed
prior to or in connection with the consummation of such
Liquidation or which are expressly senior in liquidation
preference to the Series B Shares including, without
limitation, any series of preferred stock which is
mandatorily redeemable (collectively, the "Senior Payments")
but before any distribution is made to or set aside for the
holders of Common Stock or any other series of preferred
stock of the Corporation, if any, which are not then required
to be redeemed or which are junior in liquidation preference
to the Series B Shares, cash or any other assets of the
Corporation in an amount (or having a fair market value)
equal to the Original Issuance Price (as adjusted for any
stock dividends, combinations or splits with respect to such
shares) ("Liquidation Preference") plus all accrued but
unpaid Dividends which have been added to the Liquidation
Preference of such shares pursuant to Section 3 up to the
---------
date of the final distribution in Liquidation. If, after the
satisfaction of all Senior Payments, the assets of the
Corporation available for distribution to the Holders of
Series B Shares shall be insufficient to permit the payment
in full of the amount due to the Holders of Series B Shares
pursuant to this Section 4, the entire assets of the
---------
Corporation available for distribution to such Holders after
the satisfaction of all Senior Payments shall be distributed
ratably among the Holders of the Series B Shares and the
holders of other series of preferred stock which are not
junior in liquidation
2
<PAGE>
preferences to the Series B Shares, if any, in accordance
with their respective liquidation preferences. The fair
market value of any assets of the Corporation and the
proportion of cash and other assets distributed by the
Corporation to the Holders of the Series B Shares shall be
reasonably determined in good faith by the Board of
Directors.
4.1.2. Then, if assets or surplus funds remain, all or an
appropriate portion of such remaining assets and surplus
funds shall be distributed to the holders of any other class
or series of preferred stock of the Corporation having a
liquidation preference over the Common Stock to the extent
of, and in accordance with, such preference.
4.1.3. Then, if assets or surplus funds remain, all of such
remaining assets and surplus funds shall be distributed to
the holders of the Common Stock.
4.2. Merger; Sale. The sale of all or substantially all of the assets of
------------
the Corporation, or the acquisition of the Corporation by another
entity by means of merger, consolidation, share exchange,
reorganization or otherwise pursuant to which shares of capital stock
of the Corporation are converted into cash, securities or other
property of the acquiring entity or any of its affiliates shall be
regarded as a liquidation within the meaning of this Section
(excluding any merger effected exclusively for the purpose of
changing the domicile of the Corporation); provided, however, that
each Holder of a Series B Share shall have the right to elect the
conversion benefits of the provisions of Section 5 or other
---------
applicable conversion provisions in lieu of receiving payment in
liquidation, dissolution or winding up of the Corporation pursuant to
this Section; provided, further, that this provision shall not apply
if the holders of voting securities of the Corporation immediately
prior to such merger, consolidation, share exchange, reorganization
or sale of assets, beneficially own, directly or indirectly, a
majority of the combined voting power of the surviving entity
resulting from such merger, consolidation, share exchange,
reorganization or sale of assets; provided, however, that shares of
the surviving entity held by holders of the capital stock of the
Corporation acquired by means other than the exchange or conversion
of the capital stock of the Corporation for shares of the surviving
entity shall not be used in determining if the stockholders of the
Corporation own a majority of the voting power of the surviving
entity (or its parent), but shall be used for determining the total
outstanding voting power of such entity.
5. Conversion Rights. The Holders of Series B Shares shall have conversion
-----------------
rights as follows (the "Conversion Rights"):
5.1. Right to Convert. Each Series B Share shall be convertible, at the
----------------
option of the Holder, at any time after the date of issuance of such
share, at the office of the Corporation or any transfer agent for
such stock, into such number of fully
3
<PAGE>
paid and nonassessable shares of Common Stock as is determined by:
(A) dividing the Original Issuance Price plus all accrued but unpaid
Dividends which have been added to the Original Issuance Price of
such shares pursuant to Section 3 up to the date of such conversion
---------
by a conversion price (such amount is referred to as the "Conversion
Price"), determined as hereafter provided, in effect on the date the
certificate is surrendered for conversion (B) multiplied by four (4)
(such product of (A) and (B) is referred to as the "Conversion
Rate"). The initial Conversion Price per share for the Series B
Shares shall be the Original Issuance Price; provided, however, that
the Conversion Price shall be subject to adjustment as set forth in
Section 5.4.
-----------
5.2. Automatic Conversion. Each Series B Share shall automatically be
--------------------
converted into shares of Common Stock at the Conversion Rate at the
time in effect immediately upon (i) consummation of the Corporation's
sale of its Common Stock in a firm commitment underwritten public
offering registered under the Securities Act of 1933, as amended, in
which the public offering price is not less than $15.00 per share (as
adjusted for stock splits, stock dividends and similar transactions)
and which results in proceeds to the Corporation of at least
$40,000,000 in the aggregate before deduction of commissions,
discounts and expenses (a "Qualified Offering") or, (ii) the date
specified by written notice from the Corporation to the Holders of
the then outstanding Series B Shares if the Market Price of a Common
Share receivable upon such conversion shall exceed $20.00, or (iii)
if not sooner converted, each Series B Share shall automatically be
converted into shares of Common Stock at the Conversion Rate at the
time in effect immediately upon the date specified by written consent
or agreement of the Holders of more than fifty percent (50%) of the
then outstanding Series B Shares. Market Price for the purpose of
this Section 5.2 shall mean the last reported sale price regular way
-----------
for 20 consecutive trading days within 30 days of the date of the
notice of conversion on the principal national securities exchange or
quotation system on which the Common Stock is traded (including for
purposes hereof, the Nasdaq National Market System).
5.3. Mechanics of Conversion. Before any Holder of Series B Shares shall
-----------------------
be entitled to convert the same into shares of Common Stock (other
than by an automatic conversion pursuant to Section 5.2), the Holder
-----------
shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent
for the Series B Shares, and shall give written notice to the
Corporation at its principal corporate office, of the election to
convert the same and shall state therein the name or names in which
the certificate or certificates for shares of Common Stock are to be
issued. The Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such Holder of Series B Shares,
or to the nominee or nominees of such Holder, a certificate or
certificates for the number of shares of Common Stock to which such
Holder shall be entitled as aforesaid. Such conversion shall be
4
<PAGE>
deemed to have been made immediately prior to the close of business
on the date of such surrender of the Series B Shares to be converted,
and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock as of
such date. If the conversion is in connection with an event specified
in Section 5.2, the conversion may, at the option of any Holder
-----------
tendering Series B Shares for conversion, be conditioned upon the
closing of the event specified therein, in which event the persons
entitled to receive the Common Stock upon conversion of the Series B
Shares shall not be deemed to have converted such Series B Shares
until immediately prior to the closing of such transaction.
5.4. Conversion Price Adjustments for Certain Dilutive Issuances, Splits
-------------------------------------------------------------------
and Combinations. The Conversion Price of the Series B Shares shall
----------------
be subject to adjustment from time to time as follows:
5.4.1. Adjustment with respect to Additional Stock Issuances
-----------------------------------------------------
5.4.1.1. If the Corporation shall issue any Additional Stock
(as defined below) for no consideration or for a
consideration per share less than the Conversion
Price in effect immediately prior to the issuance of
such Additional Stock divided by four (4), the
Conversion Price in effect immediately prior to each
such issuance shall forthwith (except as otherwise
provided in this Section 5.4.1) be adjusted to a
-------------
price determined by multiplying such Conversion
Price by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding
immediately prior to such issuance (including shares
of Common Stock deemed to be issued pursuant to
Section 5.4.1.5.1 or 5.4.1.5.2) plus the number of
------------------------------
shares of Common Stock that the aggregate
consideration received by the Corporation for such
issuance would purchase at such Conversion Price
divided by four (4); and the denominator of which
shall be the number of shares of Common Stock
outstanding immediately prior to such issuance
(including shares of Common Stock deemed to be
issued pursuant to Section 5.4.1.5.1 or 5.4.1.5.2)
----------------- ---------
plus the number of shares of such Additional Stock.
5.4.1.2. No adjustment of the Conversion Price for the Series
B Shares shall be made in an amount less than one
cent per share, provided that any adjustments that
are not required to be made by reason of this
sentence shall be carried forward and shall be
either taken into account in any subsequent
adjustment made
5
<PAGE>
prior to three (3) years from the date of the event
giving rise to the adjustment being carried forward,
or shall be made at the end of three (3) years from
the date of the event giving rise to the adjustment
being carried forward. Except to the limited extent
provided for in Sections 5.4.4 and 5.5, no
-------------- ---
adjustment of such Conversion Price pursuant to this
Section 5.4.1 shall have the effect of increasing
------------
the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment.
5.4.1.3. In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the
amount of cash paid therefor before deducting any
reasonable discounts, commissions or other expenses
allowed, paid or incurred by the Corporation for any
underwriting or otherwise in connection with the
issuance and sale thereof.
5.4.1.4. In the case of the issuance of the 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 value thereof as determined in good
faith by the Board of Directors; provided, however,
that if the consideration consists of securities,
the fair market value of such securities shall be
valued as follows:
5.4.1.4.1. If traded on a securities exchange or
through the Nasdaq National Market, the
value shall be deemed to be the average
of the closing prices of the securities
on such exchange or system over the
thirty (30) day period ending three (3)
days prior to the closing;
5.4.1.4.2. If actively traded over-the-counter, the
value shall be deemed to be the average
of the closing bid or sale prices
(whichever is applicable) over the
thirty (30) day period ending three (3)
days prior to the closing; and
5.4.1.4.3. If there is no active public market, the
value shall be the fair market value
thereof, as determined in good faith by
the Board of Directors of the
Corporation.
5.4.1.5. In the case of the issuance (whether before, on or
after the applicable Purchase Date (as defined
below)) of options to
6
<PAGE>
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, the following provisions
shall apply for all purposes of this Section 5.4.1
-------------
and Section 5.4.2:
-------------
5.4.1.5.1. The aggregate maximum number of shares
of Common Stock deliverable upon
exercise (assuming the satisfaction of
any conditions to the right to exercise,
including, without limitation, the
passage of time, but without taking into
account potential antidilution
adjustments) 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 Sections 5.4.1.3 and
----------------
5.4.1.4), if any, received by the
-------
Corporation upon the issuance of such
options or rights plus the minimum
exercise price provided in such options
or rights (without taking into account
potential antidilution adjustments) for
the Common Stock covered thereby.
5.4.1.5.2. The aggregate maximum number of shares
of Common Stock deliverable upon
conversion of or in exchange (assuming
the satisfaction of any conditions to
convertibility or exchangeability,
including, without limitation, the
passage of time, but without taking into
account potential antidilution
adjustments) 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 conversion or exchange
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, if any, received by
the Corporation for any such securities
and related options or rights (excluding
any cash received on account of accrued
interest or accrued dividends), plus the
minimum additional consideration, if
any, to be received by
7
<PAGE>
the Corporation (without taking into
account potential antidilution
adjustments) 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 Sections 5.4.1.3 and 5.4.1.4).
---------------- -------
5.4.1.5.3. In the event of any change in the number
of shares of Common Stock deliverable or
in the consideration payable to the
Corporation upon exercise of such
options or rights or upon conversion of
or in exchange for such convertible or
exchangeable securities, including, but
not limited to, a change resulting from
the antidilution provisions thereof
(unless such options or rights or
convertible or exchangeable securities
were merely deemed to be included in the
numerator and denominator for purposes
of determining the number of shares of
Common Stock outstanding for purposes of
Section 5.4.1.1), the Conversion Price
---------------
of the Series B Shares, to the extent in
any way affected by or computed using
such options, rights or securities,
shall be recomputed to reflect such
change, but no further adjustment shall
be made for the actual issuance of
Common Stock or any payment of such
consideration upon the exercise of any
such options or rights or the conversion
or exchange of such securities.
5.4.1.5.4. Upon the 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 of the Series B Shares, to the
extent in any way affected by or
computed using such options, rights or
securities or options or rights related
to such securities (unless such options
or rights were merely deemed to be
included in the numerator and
denominator for purposes of determining
the number of shares of Common Stock
outstanding for purposes of Section
-------
5.4.1.1), shall be recomputed to reflect
-------
the issuance of only the number of
shares of Common Stock (and convertible
or exchangeable securities that
8
<PAGE>
remain in effect) actually issued upon
the exercise of such options or rights,
upon the conversion or exchange of such
securities or upon the exercise of the
options or rights related to such
securities.
5.4.1.5.5. The number of shares of Common Stock
deemed issued and the consideration
deemed paid therefor pursuant to
Sections 5.4.1.5.1 and 5.4.1.5.2 shall
------------------ ---------
be appropriately adjusted to reflect any
change, termination or expiration of the
type described in either Section
-------
5.4.1.5.3 or 5.4.1.5.4.
--------- ---------
5.4.2. "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to Section
-------
5.4.1.5) by the Corporation after the date of the first
-------
issuance of Series B Preferred Stock (the "Purchase Date")
other than:
5.4.2.1. Common Stock issued pursuant to a transaction
described in Section 5.4.3 or 5.5 hereof;
------------- ---
5.4.2.2. Common Stock (or securities exercisable or
convertible into Common Stock) issuable or issued
to employees, consultants or directors of the
Corporation after the Purchase Date directly or
pursuant to a stock option plan or restricted
stock plan approved by the Board of Directors of
the Corporation;
5.4.2.3. securities issued pursuant to the conversion or
exercise of convertible or exercisable securities
outstanding or deemed outstanding on the Purchase
Date; and
5.4.2.4. securities issued or issuable in connection with
the acquisition, merger, consolidation, or other
business combination by or of the Corporation
with, by, or of any person.
5.4.3. In the event the Corporation should at any time or from time
to time fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in additional shares
of Common Stock or other securities or rights convertible
into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of
any consideration by such holder for the additional shares of
Common Stock or the Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion or
exercise thereof),
9
<PAGE>
then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is
fixed), the Conversion Price of the Series B Shares shall be
appropriately decreased so that the number of shares of
Common Stock issuable on conversion of each Series B Share
shall be increased in proportion to such increase of the
aggregate of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents.
5.4.4. If the number of shares of Common Stock outstanding at any
time after the Purchase Date is decreased by a combination of
the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for the
Series B Shares shall be appropriately increased so that the
number of shares of Common Stock issuable on conversion of
each Series B Share shall be decreased in proportion to such
decrease in outstanding shares.
5.5. Recapitalizations. If at any time or from time to time there shall be
-----------------
a recapitalization of the Common Stock (other than a subdivision or
combination provided for elsewhere in this Section 5) provision shall
---------
be made so that the Holders of the Series B Shares shall thereafter be
entitled to receive upon conversion of such Series B Shares the number
of shares of stock or other securities or property of the Corporation
or otherwise, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization. In any
such case, appropriate adjustment shall be made in the application of
the provisions of this Section 5 with respect to the rights of the
---------
Holders of the Series B Shares after the recapitalization to the end
that the provisions of this Section 5 (including adjustment of the
---------
Conversion Price then in effect and the number of shares purchasable
upon conversion of the Series B Shares) shall be applicable after that
event as nearly equivalent as may be practicable.
5.6. No Impairment. The Corporation will not, by amendment of its
-------------
Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation,
but will at all times in good faith assist in the carrying out of all
the provisions of this Section 5 and in the taking of all such
---------
action as may be necessary or appropriate in order to protect the
Conversion Rights of the Holders of the Series B Shares against
impairment.
5.7. No Fractional Shares and Certificate as to Adjustments.
------------------------------------------------------
10
<PAGE>
5.7.1. No fractional shares shall be issued upon the conversion of
any Series B Share, and the number of shares of Common Stock
to be issued shall be rounded to the nearest whole share.
Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total
number of Series B Shares the Holder is at the time
converting into Common Stock and the number of shares of
Common Stock issuable upon such aggregate conversion.
5.7.2. Upon the occurrence of each adjustment or readjustment of the
Conversion Price of the Series B Shares pursuant to this
Section 5, the Corporation, at its expense, shall promptly
---------
compute such adjustment or readjustment in accordance with
the terms hereof and prepare and furnish to each Holder of
Series B Shares a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based.
5.8. Reservation of Stock Issuable Upon Conversion. The Corporation shall
---------------------------------------------
at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting
the conversion of the shares of the Series B Shares, such number of
its shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding Series B Shares; and if
at any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion of all then
outstanding Series B Shares, in addition to such other remedies as
shall be available to the Holders of Series B Shares, the Corporation
will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares
of Common Stock to such number of shares as shall be sufficient for
such purposes, including, without limitation, engaging in best
efforts to obtain the requisite stockholder approval of any necessary
amendment to the Certificate of Incorporation.
5.9. Notices. Any notice required by the provisions of this Section 5 to
------- ---------
be given to the Holders of shares of Series B Shares shall be deemed
given if deposited in the United States first class mail, postage
prepaid, and addressed to each holder of record at such holder's
address appearing on the books of the Corporation. Each such notice
or other communication shall be treated as effective or having been
given when delivered, if delivered personally, or, if sent by
facsimile, upon the sender's receipt of confirmation, or, if sent by
mail, at the earlier of its receipt or five (5) days after the same
has been deposited in a regularly maintained receptacle for the
deposit of the United States mail, addressed and postage prepaid as
aforesaid.
5.10. Payment of Taxes. The Corporation will pay all issue or other taxes
----------------
(other than taxes based upon income) and other governmental charges
that may be
11
<PAGE>
imposed with respect to the issue or delivery of shares of Common
Stock upon conversion of shares of Series B Preferred Stock,
excluding any tax or other charge imposed in connection with any
transfer involved in the issue and delivery of shares of Common Stock
in a name other than that in which the shares of Series B Preferred
Stock so converted were registered.
5.11. Notices of Record Date. In the event of any taking by the Corporation
----------------------
of a record of the holders of any class of securities for the purpose
of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any
right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to receive
any other right, the Corporation shall mail to each holder of Series
B Shares, at least twenty (20) days prior to the date specified
therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, and
the amount and character of such dividend, distribution or right.
5.12. Registrations and Approvals. If any shares of Common Stock which
---------------------------
would be issuable upon conversion of the Series B Shares hereunder
require registration with or approval of any governmental authority
before such shares may be issued upon conversion, the Corporation
will in good faith and as expeditiously as possible cause such
shares to be duly registered or approved, as the case may be. The
Corporation will use commercially reasonable efforts to list the
shares of (or depository shares representing fractional interests
in) Common Stock required to be delivered upon conversion of such
Series B Shares prior to such delivery upon the principal national
securities exchange or quotation system upon which the outstanding
Common Stock is listed or eligible for trading at the time of such
delivery, if any.
6. Voting Rights. Subject to the rights of series of Preferred Stock that may
-------------
from time to time come into existence, the Holders of outstanding Series B
Shares shall have the right to vote, together with the holders of all the
outstanding shares of Common Stock and not by classes, except as otherwise
provided herein or as required by the General Corporation Law of the State
of Delaware, on all matters on which the holders of outstanding shares of
Common Stock shall have the right to vote. Subject to the foregoing, for
each one issued and outstanding Series B Share held of record by a Holder,
such Holder shall have the right to vote the number of shares of Common
Stock into which a Series B Share is then convertible. Fractional votes
shall not, however, be permitted and any fractional voting rights available
on an as-converted basis (after aggregating all shares into which Series B
Shares held by each Holder could be converted) shall be rounded to the
nearest whole number (with one-half being rounded upward).
7. Redemption Rights.
-----------------
12
<PAGE>
7.1.1 Redemption Generally. Subject to Section 7.1.2, at any time after
--------------------
the date (the "Redemption Anniversary Date") which is four (4) years
from the first issuance of Series B Shares, at the written request
(the "Redemption Request") of any Holder of Series B Shares executed
and delivered to the Corporation, the Corporation shall, on the date
which is forty-five (45) days following its receipt of such
Redemption Request (or, if such date is not a business day, on the
next succeeding business day) (the "Redemption Date"), be obligated
to redeem at a price per share equal to the Series B Redemption
Price (as defined below) of such shares, all of the Holder's Series
B Shares which are outstanding on such Redemption Date. The
redemption of each Series B Share shall be made at a price equal to
the Original Issue Price for such share plus all accrued but unpaid
Dividends on such share up to and including the Redemption Date (the
"Series B Redemption Price"). The period from the date of issuance
through the Redemption Anniversary Date is referred to herein as the
"Redemption Period."
7.1.2 Change in Redemption Period; Average Market Price. If the Average
--------------------------- --------------------
Market Price (as defined below) of a share of Common Stock during
any Test Period (as defined below) is less than the Conversion Price
then in effect divided by four, then the Redemption Period shall be
reduced by one (1) year; provided that if the date on which the
Average Market Price is determined is less than one (1) year prior
to the Redemption Anniversary Date, then the Redemption Period shall
be reduced such that the Redemption Anniversary Date shall be the
date of such determination; and provided further once the Redemption
Anniversary Date has occurred, no adjustment shall be made in the
Redemption Period. "Test Period" shall mean the first six months of
a calendar year or the last six months of a calendar year; provided
that the first Test Period shall be the date of issuance through the
next succeeding June 30 or December 31, whichever occurs first. For
example, if the original issue date is prior to June 30, 2000 and at
any time during the period from July 1, 2000 through and including
December 31, 2000, the Average Market Price of a share of Common
Stock shall be less than the Conversion Price then in effect divided
by four, then the Redemption Period would be reduced to three (3)
years. "Average Market Price" for the purpose of this Section 7.1.2
-------------
shall mean the average of the last reported sale prices regular way
for 30 consecutive trading days on the principal national securities
exchange or quotation system on which the Common Stock is traded
(including for purposes hereof, the Nasdaq National Market System).
7.2 Redemption of Less than all Series B Shares. If the funds of the
-------------------------------------------
Corporation legally available to be paid for redemption of the Series
B Shares on any Redemption Date are insufficient to redeem the total
number of Series B Shares to be redeemed on such date, those funds
which are legally available will be used to redeem the maximum
possible number of such shares ratably among the Holders of Series B
Shares to be redeemed as provided below. Amounts available for such
redemption
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shall be allocated ratably among the Holders of Series B Shares to be
redeemed based upon the number of shares held. The Series B Shares not
redeemed shall remain outstanding and continue to be entitled to all
of the rights and preferences provided in this Certificate of
Designation. At any time thereafter when additional funds of the
Corporation are legally available to be paid for the redemption of
Series B Shares, such funds shall be immediately used to redeem the
balance of the Series B Shares that the Corporation is obligated to
redeem on any Redemption Date, ratably among the Holders of the Series
B Shares to be redeemed based upon the number of Series B Shares held
of record by such Holder; provided, however, that the Corporation
shall have the right and power to make such allocations of the Series
B Shares to be redeemed among the Holders to avoid the redemption of
fractional shares.
7.3 Redemption Notice. At least fifteen (15) but not more than thirty
-----------------
(30) days prior to any Redemption Date, the Corporation shall mail
written notice (the "Redemption Notice"), postage pre-paid, to each
Holder of the Series B Shares to be redeemed, at the Holders' post
office address last shown on the records of the Corporation. The
Redemption Notice shall state:
7.3.1 The total number of Series B Shares being redeemed;
7.3.2 The number of Series B Shares held by the Holder which the
Corporation intends to redeem;
7.3.3 The applicable Redemption Date; and
7.3.4 The time and manner in which, and place at which, the Holder
is to surrender to the Corporation its certificate or
certificates representing the Series B Shares to be redeemed.
The Corporation's delivery of a Redemption Notice hereunder
shall not affect the Holders' rights to convert Series B
Shares owned by them pursuant to Section 5.
---------
7.4 Surrender of Stock. On or before each Redemption Date, each
------------------
Holder of Series B Shares to be redeemed, unless the Holder has given
notice of its intent to exercise its right to convert the shares as
provided in Section 5, shall surrender the certificate
---------
or certificates representing such shares to the Corporation, and
thereupon the Redemption Price for such shares shall be payable to the
order of the person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered certificate
shall be canceled and retired. In the event less than all of the
shares represented by such certificate are redeemed, a new certificate
representing the unredeemed shares shall be issued to the Holder of
such shares.
7.5 Termination of Rights. If the Redemption Notice is duly given,
---------------------
and if on the Redemption Date the applicable Redemption Price is paid
to the Holder or set
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aside for that purpose, then, notwithstanding that any certificates
evidencing Series B Shares so called for redemption have not been
surrendered, any dividends with respect to such shares shall cease to
accrue after the Redemption Date and all rights with respect to such
shares shall forthwith at the Redemption Date cease and terminate.
7.6 Waiver of Redemption. Any of the Corporation's redemption
--------------------
obligations under this Section 7 may be waived or deferred, in
---------
whole or in part, by and in accordance with the terms of a written
consent executed by Holders of greater than two-thirds of the total
number of Series B Shares then outstanding.
8 Protective Provisions. So long as any of the Series B Shares shall be
---------------------
outstanding, without first obtaining the written consent, authorization or
waiver of the Holders of greater than two-thirds of the total number of
outstanding Series B Shares, voting as a separate class, and any other
capital stock that, by its terms, has the power to approve any of the
following matters with the Holders of the Series B Shares, which approval
may be obtained without the necessity of formal stockholder action or of
notice to the holders of any shares of capital stock not expressly
empowered with such right to consent, authorize or waive, the Corporation
shall not after the date hereof:
8.1 create any new class or series of stock ranking senior to or on parity
with the Series B Preferred Stock as to dividend rights, redemption
rights, conversion rights or liquidation preferences;
8.2 sell, convey or otherwise dispose of all or substantially all of its
assets, property or business or dissolve, liquidate or wind up the
Corporation;
8.3 amend its Certificate of Incorporation or Bylaws in any manner that
adversely affects the preferences, privileges, restrictions or other
rights of the Holders of Series B Shares;
8.4 increase or decrease the number of authorized shares of Series B
Preferred Stock;
8.5 increase or decrease the number of authorized seats on the
Corporation's Board of Directors;
8.6 declare, pay or set aside for payment any dividend or other
distribution in respect of the Corporation's capital stock;
8.7 call for redemption, redeem, purchase or otherwise acquire for any
consideration any of the Corporation's capital stock (other than the
repurchase by the Corporation of any Common Stock from employees,
directors, consultants or other persons performing services for the
Corporation pursuant to agreements under which the Corporation has the
option to repurchase such
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shares upon the occurrence of certain events, such as termination of
employment) or Series B Preferred Stock; or
8.8 merge or consolidate the Corporation (other than where the holders of
voting securities of the Corporation immediately prior to such merger
or consolidation beneficially own, directly or indirectly, a majority
of the combined voting power of the surviving entity resulting from
such merger or consolidation).
9 Exclusion of Other Rights and Privileges. Except as may otherwise be
----------------------------------------
required by law, the Series B Shares shall not have any preferences or
relative, participating, optional or other special rights, other than those
specifically set forth in this resolution (as such resolution may be
amended from time to time pursuant to Section 8 hereof), and the
---------
Certificate of Incorporation of the Corporation, as amended pursuant to
Section 8 hereof.
---------
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate in
the name and on behalf of BioSource International, Inc. on the ___/TH/ day of
February, 2000, and the statements contained herein are affirmed as true under
penalty of perjury.
BIOSOURCE INTERNATIONAL, INC.
By: _______________________
James H. Chamberlain,
President and Chief Executive Officer
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EXHIBIT 7
POWER OF ATTORNEY
-----------------
Know all men by these presents that Richard F. Hoskins and Richard D.
Paterson do hereby make, constitute and appoint Jean-Pierre L. Conte as a true
and lawful attorney-in-fact of the undersigned with full powers of substitution
and revocation, for and in the name, place and stead of the undersigned, (both
in the undersigned's individual capacity and as a member of any limited
liability company or partner of any partnership for which the undersigned is
otherwise authorized to sign), to execute and deliver such forms as may be
required to be filed from time to time with the Securities and Exchange
Commission with respect to any investments of Genstar Capital LLC, Genstar
Capital Partners II, L.P. and Stargen II LLC (including any amendments or
supplements to any reports from schedules previously filed by such persons or
entities) including any joint filing agreements or joint filer information
statements in connection therewith with respect to BioSource International,
Inc.: (i) pursuant to Sections 13(d) and 16(a) of the Securities Exchange Act of
1934, as amended, including without limitation, Schedules 13D and 13G,
statements on Form 3, Form 4 and Form 5 and (ii) in connection with any
applications for EDGAR access codes, including without limitation the Form ID.
/s/ Richard F. Hoskins
-------------------------------
Name: Richard F. Hoskins
/s/ Richard D. Paterson
-------------------------------
Name: Richard D. Paterson
Dated: January 20, 2000
