SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
BRADLEY PHARMACEUTICALS, INC.
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
10457 6 10 3
(CUSIP Number)
Berlex Laboratories, Inc.
110 East Hanover Avenue
Cedar Knolls, New Jersey 07929
ATTENTION: Frank Curtis, Esq.
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
- with a copy to -
Frederic M. Tudor, Esq.
Sills Cummis Zuckerman Radin Tischman Epstein & Gross, P.A.
One Riverfront Plaza
Newark, New Jersey 07102
(201) 643-7000
DECEMBER 23, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-(b)(3) or (4), check the following
box <square>.
Check the following box if a fee is being paid with this statement
<square>.
The Exhibit Index is located on page ____ of this filing.
<TABLE>
<CAPTION>
CUSIP No. 10457 6 10 3 13D Page 2 of 20 Pages
<S> <C> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BERLEX LABORATORIES, INC.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) <square>
(b) <square>
3 SEC USE ONLY
4 SOURCE OF FUNDS*
SC/OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS <square>
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,000,000
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
1,000,000
10 SHARED DISPOSITIVE POWER
0
</TABLE>
<TABLE>
<S> <C> <C>
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,000,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* <square>
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13%
14 TYPE OF REPORTING PERSON*
CO
</TABLE>
SEC 1746(6-60) *SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<TABLE>
<CAPTION>
CUSIP No. 10457 6 10 3 13D Page 3 of 20 Pages
<S> <C> <C>
15 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SCHERING BERLIN INC.
16 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) <square>
(b) <square>
17 SEC USE ONLY
18 SOURCE OF FUNDS*
SC/OO
19 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) <square>
20 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
NUMBER OF 21 SOLE VOTING POWER
SHARES 1,000,000
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
22 SHARED VOTING POWER
0
23 SOLE DISPOSITIVE POWER
1,000,000
24 SHARED DISPOSITIVE POWER
0
</TABLE>
<TABLE>
<S> <C> <C>
25 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,000,000
26 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* <square>
27 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13%
28 TYPE OF REPORTING PERSON*
CO
</TABLE>
SEC 1746(6-60) *SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
This Schedule 13D is filed on behalf of Berlex Laboratories, Inc., a
Delaware corporation, and its affiliate.
ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement on Schedule 13D
relates is the Class A Common Stock (the "Class A Common Stock") of Bradley
Pharmaceuticals, Inc. (the "Issuer"), with principal executive offices
located at 383 Route 46 West, Fairfield, N.J. 07004.
ITEM 2. IDENTITY AND BACKGROUND
Berlex Laboratories, Inc., a Delaware corporation ("Berlex"), has its
principal offices at 110 East Hanover Avenue, Cedar Knolls, N.J. 07929.
Berlex is engaged in the research, manufacture and marketing of
pharmaceutical products in the fields of cardiovascular medicine,
endocrinology and fertility control, diagnostic imaging, oncology and
central nervous system disorders.
Berlex is a wholly-owned subsidiary of Schering Berlin Inc., a
Delaware corporation ("Schering Berlin" and, together with Berlex, the
"Reporting Persons"), with its principal offices at 110 East Hanover Avenue,
Cedar Knolls, N.J. 07929. Schering Berlin is a wholly-owned subsidiary of
Schering AG, Germany, a company of the Federal Republic of Germany.
Schering Berlin and Schering AG, Germany are engaged in the discovery,
development, manufacture and marketing of pharmaceutical and health care
products.
To the best knowledge of the Reporting Persons, during the last five
years, neither Reporting Person has been (a) convicted in a criminal
proceeding, or (b) 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
violations of, or prohibiting or mandating activities subject to federal or
state securities laws or finding any violation with respect to such laws.
Information regarding the directors and executive officers of each
Reporting Person is set forth on Schedule 1 attached hereto, which Schedule
is incorporated herein by reference. During the last five years, to the
best knowledge of the Reporting Persons, no person named on Schedule 1 has
been (a) convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors), or (b) 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 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 a Purchase Agreement dated as of November 10, 1993, as
amended (the "Purchase Agreement"), Berlex sold certain intellectual
property rights and other assets relating to certain cough and cold
products to the Issuer. The purchase price for these assets was to be paid
by the Issuer in installments over time.
On December 20, 1996, Berlex and the Issuer entered into Amendment No.
5 to Purchase Agreement ("Amendment No. 5"). Pursuant to Amendment No. 5,
(a) Berlex agreed, among other things, to reduce the total payments and to
restructure the remaining payments due under the Purchase Agreement, and
(b) the Issuer agreed, among other things, to issue 1,000,000 shares of
Class A Common Stock to Berlex. The effectiveness of Amendment No. 5 was
subject to the satisfaction of certain conditions precedent. These
conditions precedent were satisfied on December 23, 1996 and 1,000,000
shares of Class A Common Stock were issued to Berlex on that date.
ITEM 4. PURPOSE OF TRANSACTION
Berlex acquired the Class A Common Stock for investment purposes in
connection with Amendment No. 5 (as described in Item 3). Berlex intends
continuously to review its investment in the Issuer. In reaching any
decision with respect to such investment, Berlex will take into
consideration various factors, such as the Issuer's business prospects and
financial position, other developments concerning the Issuer, the price
level of the Class A Common Stock, available opportunities to acquire or
dispose of the Class A Common Stock or realize trading profits, conditions
in the securities markets, and general economic and industry conditions.
Depending upon the results of its review of any or all of the
aforementioned factors, Berlex may decide to purchase additional Common
Stock in the open market, through privately negotiated transactions with
third parties or otherwise, or to sell at any time, in the open market,
through privately negotiated transactions with third parties or otherwise,
all or a portion of the Class A Common Stock now owned or hereafter
acquired by Berlex, including sales in the open market by Berlex upon the
effectiveness (subject to the Issuer's right of first offer as described in
Item 6) of a registration statement relating to Berlex's Class A Common
Stock, which registration statement is to be filed by the Issuer pursuant
to Amendment No. 5 (as described in Item 6).
Other than as described above, neither Reporting Person has any
present plans or proposals which relate to or would result in any
transaction, change or event specified in clauses (a) through (j) of Item 4
of the Schedule 13D.
<PAGE>
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY
(a) The Reporting Persons are the beneficial owners of 1,000,000 shares of
Class A Common Stock representing approximately 13% of the total
issued and outstanding Class A Common Stock of the Issuer as of
December 19, 1996. The calculation of the foregoing percentage is
based upon the number of shares of Class A Common Stock of the Issuer
as of December 19, 1996, as represented by the Issuer.
(b) Berlex possesses the sole power to vote and the sole power to dispose
of all 1,000,000 shares of Class A Common Stock.
(c) To the best knowledge of the Reporting Persons, except as described
herein, there have been no transactions by any Reporting Person or by
any other person named on Schedule 1 attached hereto in securities of
the Issuer during the past 60 days.
(d) Berlex has the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the shares of Class
A Common Stock owned by it.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE COMPANY
Pursuant to Section 4 of Amendment No. 5, Berlex has agreed that prior
to selling, transferring or assigning any of its shares of Class A Common
Stock (other than a sale in accordance with Rule 144), it shall provide the
Issuer the opportunity to purchase the shares it proposes to sell at the
Sales Price described below. The Issuer's right to purchase any offered
shares is subject to, and must be exercised in accordance with, the
provisions of Section 4 of Amendment No. 5. The Issuer shall not have
the right to purchase any offered shares if the Issuer's Class A Common
Stock is not listed on NASDAQ or a national securities exchange.
In addition, Berlex has been granted certain registration rights
pursuant to Section 5 of Amendment No. 5. The Issuer has agreed to file a
registration statement relating to Berlex's shares of Class A Common Stock
not later than April 30, 1997, and to use its best efforts to cause such
registration statement to be declared effective as soon thereafter as
reasonably practicable. The Issuer will be responsible for the
registration expenses in connection with such registration. Berlex will
also have the right to participate in all registrations of Class A Common
Stock by the Issuer on behalf of itself or another shareholder of the
Issuer.
The foregoing are summaries of the pertinent provisions of Amendment
No. 5, which pertinent provisions are filed as Exhibit A attached hereto
and are incorporated herein by reference. The foregoing summaries are
qualified in their entireties by reference to such Exhibit.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following is filed as an Exhibit to this Amendment:
Exhibit A -Sections 4 and 5 of Amendment No. 5 to Purchase Agreement,
dated as of December 20, 1996 between Bradley
Pharmaceuticals, Inc. and Berlex Laboratories, Inc.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: December 31, 1996 BERLEX LABORATORIES, INC.
By:/s/ JOHN NICHOLSON
----------------------------
Name: John Nicholson
Title: Treasurer
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: December 31, 1996 SCHERING BERLIN INC.
By:/s/ JOHN NICHOLSON
-----------------------------
Name: John Nicholson
Title: Treasurer
<PAGE>
SCHEDULE 1
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<CAPTION>
A. EXECUTIVE OFFICERS AND DIRECTORS OF BERLEX LABORATORIES, INC.
The name, business address,
citizenship and present principal
occupation or employment (in addition
to any set forth in Section B of this
Schedule 1) of each executive officer
and director of Berlex Laboratories,
Inc. is set forth below.
<S> <C> <C>
Lutz Lingnau Germany Chairman of the Board of
Schering Berlin Inc. Directors, President, Chief
110 East Hanover Avenue Executive Officer and,
Cedar Knolls, NJ 07927 Member of Executive
Committee
Robert A. Chabora USA Director, Member of
Schering Berlin Inc. Executive Committee, Vice
110 East Hanover Avenue President and Secretary
Cedar Knolls, NJ 07927
Jorge Engel Germany Director, Member of
Berlex Laboratories, Inc. Executive Committee and
110 East Hanover Avenue Vice President
Cedar Knolls, NJ 07927
Wolfgand Kunze USA Director, Member of
Schering Berlin Inc. Executive Committee and
110 East Hanover Avenue Vice President
Cedar Knolls, NJ 07927
Elise Klein USA Member of Executive
Berlex Laboratories, Inc. Committee and Vice
110 East Hanover Avenue President
Cedar Knolls, NJ 07927
Dr. Jeff Latts USA Member of Executive
Berlex Laboratories, Inc. Committee
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Robert Milos USA Member of Executive
Schering Berlin Inc. Committee and Vice
110 East Hanover Avenue President
Cedar Knolls, NJ 07927
Dr. Joseph Reiser USA Member of Executive
Berlex Laboratories, Inc. Committee
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Howard Robin USA Member of Executive
Berlex Laboratories, Inc. Committee and Vice
110 East Hanover Avenue President
Cedar Knolls, NJ 07927
Dr. Dale Stringfellow USA Member of Executive
Berlex Laboratories, Inc. Committee
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Tony Zook USA Member of Executive
Berlex Laboratories, Inc. Committee
110 East Hanover Avenue
Cedar Knolls, NJ 07927
John Nicholson USA Treasurer
Schering Berlin Inc.
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Dr. Allan Rudzik Canada Vice President
Schering Berlin Inc.
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Lutz Lingnau Germany President, Chief Executive Officer
Schering Berlin Inc. and Director
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Robert A. Chabora USA Vice-President; Secretary and
Schering Berlin Inc. General Counsel
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Wolfgang Kunze USA Vice-President and Director
Schering Berlin Inc.
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Robert C. Milos USA Vice-President
Schering Berlin Inc.
110 East Hanover Avenue
Cedar Knolls, NJ 07927
John Nicholson USA Treasurer
Schering Berlin Inc.
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Dr. Hubertus Erlen Germany Chairman of the Board of Directors;
Schering AG, Germany Executive Director of Schering AG,
Millerstrasse 178 Germany
D-13350 Berlin
Germany
Dr. Ulrich Koestlin Germany Director; Executive Director of
Schering AG, Germany Schering AG, Germany
Millerstrasse 178
D-13350 Berlin
Germany
George Montgomery, Jr. USA Director; Senior Vice-President of
Hambracht & Quist Hambrecht & Quist
1 Bush Street
San Francisco, CA
Prof. Klaus Pohle Germany Director; Vice-Chairman of the Board
Schering AG, Germany of Executive Directors of Schering
Millerstrasse 178 AG, Germany
D-13350 Berlin
Germany
Dr. Allan Rudzik Canada Director
Schering Berlin Inc.
110 East Hanover Avenue
Cedar Knolls, NJ 07927
Dr. Guenter Stock Germany Director; Executive Director of
Schering AG, Germany Schering AG, Germany
Millerstrasse 178
D-13350 Berlin
Germany
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
A - Sections 4 and 5 of Amendment No. 5 to [__]
Purchase Agreement, dated as of December 20,
1996 between Bradley Pharmaceuticals, Inc.
and Berlex Laboratories, Inc.
<PAGE>
EXHIBIT A
For purposes of this Exhibit A, the following terms have the following
meanings given them in Amendment No. 5:
"Business Day" means any day other than a Saturday or Sunday or a day
on which banks in the City of New York are neither permitted nor required
to close by law.
"Purchaser" means Bradley Pharmaceuticals, Inc.
"Seller" means Berlex Laboratories, Inc.
"Shares" means one million (1,000,000) shares of the Class A Common
Capital Stock of Purchaser to be issued by Purchaser to Seller pursuant to
Amendment No. 5.
A. SECTION 4 OF AMENDMENT NO. 5.
4. RESTRICTIONS ON TRANSFER OF SHARES. Seller acknowledges that the
Shares cannot be sold or transferred except pursuant to an effective
registration statement under the Act as defined in Section 5 of this Amendment
or a valid exemption from such registration. Seller agrees that prior to
Seller offering for sale, transfer or assignment some or all of the Shares in a
private sale (which shall be deemed to exclude sales pursuant to Rule 144)
either through a sale on NASDAQ or on a national securities exchange (an "Open
Market Sale") or a sale at which the price per share is determined or to be
determined by an agreement, written or otherwise, between Seller and the
prospective buyer of such shares, not on NASDAQ or on a national securities
exchange (an "Agreed Upon Sale"), (Shares to be offered for sale by Seller are
herein referred to as the "Offered Shares"), Seller shall provide Purchaser
with the opportunity to purchase the Offered Shares at the Sales Price (herein
defined). Purchaser shall exercise such opportunity by making payment of cash
to Seller within five Business Days from Purchaser's receipt of the Sales
Notice (herein defined) provided that Purchaser shall, at Seller's request,
provide prior to such payment evidence reasonably satisfactory to Seller that
(A) the purchase of such Offered Shares by Purchaser will not constitute a
purchase in violation of applicable corporate or other applicable law and (B)
there will not occur within ninety-one (91) days after the date of such payment
any of the events described in Section 11.01(iv) or (v) hereof. In the event
Seller makes such a request, such five (5) Business Day period shall be
extended by such time as is reasonably required for Purchaser to comply with
(A) and (B) above (but in no event more than two (2) additional Business Days).
If Purchaser fails to pay for the Offered Shares within five (5) Business Days
(as the same may be extended) of Purchaser's receipt of the Sales Notice,
Seller may sell such Offered Shares during the next thirty (30) days, in the
case of an Agreed Upon Sale, or ninety (90) days in the case of an Open Market
Sale, free of any right whatsoever of Purchaser to purchase the Offered Shares;
provided however, that the sale of the Offered Shares shall, on an Open Market
Sale, be made on NASDAQ or on a national securities exchange and in the event
of an Agreed Upon Sale be made at a price not less than the Offered Price (as
defined below). In the event Seller does not sell the Offered Shares within
such thirty (30) (or ninety (90)) day period, the rights contained in this
Section 4 shall continue to apply to any proposed private sale by Seller of the
Shares as if no Sales Notice had been given. "Sales Price" means (i) in the
case of an Open Market Sale, the price per share which is equal to the average
of the bid and asked price published in the Wall Street Journal on the Business
Day before the Sales Notice is sent by Seller to Purchaser (or if there is no
bid and asked price on such last Business Day, on the most recent day on which
a bid and asked price had been published in the Wall Street Journal) or (ii) in
the case of an Agreed Upon Sale, the price per share at which Seller proposes
to sell the Offered Shares (the "Offered Price"). The Sales Notice shall be a
written notice entitling Purchaser to purchase the Offered Shares within such
five Business Day period and may be sent to Purchaser by fax, overnight mail
(by federal express, DHL or some other similar service), personal delivery
and/or certified mail, return receipt requested and, in the case of an Agreed
Upon Sale, contain the price per share at which Seller proposes to sell the
Offered Shares. Purchaser's right to buy the Offered Shares shall not apply if
the Purchaser's common stock is not listed on NASDAQ or any national securities
exchange. The only restrictive legend to be included on the Shares shall be
the following legend: "The shares of Class A Common Stock represented by the
Certificate have not been registered under the Securities Act of 1933, and
cannot be sold or transferred unless and until they are so registered, or
unless an exemption is then available." Upon the request of Seller, after the
effectiveness of the Registration Statement, such restrictive legend shall be
removed from the Certificates then owned by Seller. No buyer of any of the
Shares shall have any obligation to determine whether Seller has complied with
the provisions of Section 4 hereof and no claim can be asserted against any
such buyer in connection therewith, provided that the preceding part of this
sentence shall not in any manner excuse any breach by Seller of its obligations
to comply with Section 4 hereof. Once the Shares are sold to a third party,
Purchaser shall have no rights under this Section 4 hereof with respect to such
transferred Shares.
B. SECTION 5 OF AMENDMENT NO. 5.
5. REGISTRATION RIGHTS.
5.1 DEFINED TERMS. As used in this Section 5 the following terms
shall have the following respective meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations thereunder, all as
the same shall be in effect from time to time;
(b) "Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the
securities laws;
(c) "Prospectus" shall mean any preliminary Prospectus and
final Prospectus (as such may be amended or supplemented) which constitutes
Part I of a Registration Statement filed with the Commission;
(d) "Registration Expenses" shall mean all expenses arising out
of or related to the preparation, filing, amendment(s) and supplementing(s) of
a Registration Statement, provided, however, that Registration Expenses shall
not include underwriting commissions, fees and discounts, if any, attributable
solely to the inclusion of Seller's Shares in such Registration Statement, and
any legal fees and disbursements for counsel to Seller;
(e) "Registration Statement" shall mean a registration
statement filed by the Purchaser with the Commission for a public offering and
sale of securities of the Purchaser.
5.1 PURCHASER'S REGISTRATION. (a) Purchaser agrees that at
Purchaser's sole expense, (i) Purchaser shall, no later than April 30, 1997,
file on its behalf and on behalf of Seller with respect to the Shares a
registration statement in accordance with the Act; and (ii) Purchaser shall use
its best efforts to cause such Registration Statement to be declared effective
by the Commission as soon thereafter as reasonably practicable.
(b) In addition, whenever Purchaser proposes to register any of
its Class A Common Stock (or securities convertible into or exercisable for its
Class A Common Stock) under the Act for its own account or the account of any
stockholder of Purchaser (a "Piggyback Registration"), Purchaser shall give
prompt notice to Seller of its intention to effect such a registration and,
subject to the remainder of this subsection (b), shall include in such
registration all Shares with respect to which Purchaser has received a written
request from Seller (which request shall specify the number of Shares for
inclusion therein) within thirty (30) days after receipt by Seller of
Purchaser's notice. If a Piggyback Registration involves an underwritten
offering and if the managing underwriter in good faith advises Purchaser (in
writing) that in its opinion the number of securities requested to be included
in such Piggyback Registration exceeds the number that can be sold in such
offering without materially adversely affecting the marketability of such
offering or the price at which such securities can be sold, then Purchaser
shall be required to include in such Piggyback Registration the maximum number
of shares that such underwriter advises can be included, allocated PRO RATA on
the basis on the number of shares each stockholder (including Seller) and
Purchaser requests be included in such registration.
5.3 REGISTRATION PROCEDURES. With respect to Purchaser's
obligations under this Section 5, if the Purchaser is required to use its best
efforts to effect and/or continue the registration of the Shares under the Act
(whether in connection with a Piggyback Registration or otherwise), the
Purchaser shall:
(a) File with the Commission a Registration Statement with
respect to such Shares and subject to Section 5.4(b) below, use its best
efforts to cause that Registration Statement to become and remain effective;
(b) As expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective for a period of not less than twelve (12)
months plus any delay described in Section 5.4(b), or through January 15, 1999,
whichever date is later and in either case plus a period equal to the Delay
Period (as herein defined);
(c) As expeditiously as possible furnish to Seller such
reasonable numbers of copies of the Prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and such other
documents as the Seller may reasonably request in order to facilitate the sale
or other disposition of the Shares owned by the Seller;
(d) As expeditiously as possible use its best efforts to
register or qualify the Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states or jurisdictions as the Seller or
the managing underwriter (or sole underwriter, as appropriate) deems
appropriate, and do any and all other acts and things that may be necessary or
desirable to enable the Seller to consummate the public sale or other
disposition in such jurisdictions of the Shares owned by the Seller (including,
without limitation, causing all Shares to be listed on NASDAQ or on each
securities exchange on which similar securities issued by Purchaser are then
listed); provided, however, that the Purchaser shall not be required in
connection with this Subsection 5.3(d) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction; and
(e) Enter into an underwriting agreement with the underwriters
designated pursuant to Section 5.4 hereof containing customary terms including
representations, covenants, indemnifications and contribution provisions.
If the Purchaser has delivered Prospectuses to the Seller and after having
done so the Prospectus must be amended or supplemented to comply with the
requirements of the Act, the Purchaser shall promptly notify the Seller, Seller
agrees to cease making offers of Shares immediately upon such request and to
return all prospectuses to the Purchaser. The Purchaser shall promptly provide
the Seller with revised prospectuses and, following receipt of the revised
prospectuses, the Seller shall be free to resume making offers of the Shares.
Prior to the filing of any documents with the Commission from time to time
pursuant to this Section 5 that names Seller, Seller shall have the right to
review and comment on those sections of the Registration Statement, Prospectus
and other documents in which Seller is named. Except as provided in the next
preceding sentence and except with respect to any written information furnished
to Purchaser by Seller, or its underwriter or its controlling person
specifically for use in preparation thereof, Purchaser shall cause the
Registration Statement, any Prospectuses, all other documents filed with the
Commission relating thereto to or otherwise in connection therewith, and all
amendments and/or supplements to any of the foregoing to comply with the Act
and all other applicable laws.
5.4 CONDITIONS TO REGISTRATION. The following provisions shall also
apply to the registration of Seller's Shares:
(a) The Purchaser shall, in its sole discretion, select the
underwriter or underwriters, if any, who are to undertake the sale and
distribution of the Shares to be included in a Registration Statement filed in
connection with a Piggyback Registration under the provisions of this Section
5. Purchaser shall have no obligation, in connection with any Piggyback
Registration, to use an underwriter or underwriters in connection with the
registration rights provided to Seller herein;
(b) The Purchaser, in connection with a Piggyback Registration,
shall have the right to require, if the offering is to be underwritten and
includes securities being offered for the account of the Purchaser, that Seller
delay any offering of the Shares to be included on their behalf for a
reasonable period of time not to exceed ninety (90) days (the "Delay Period")
after the effective date of such Registration Statement (upon the Purchaser
first having delivered to Seller the written opinion of its managing or
principal underwriter to the effect that the inclusion of such securities in
the Registration Statement will have a material adverse effect on the marketing
of such offering); provided, however, that all officers, directors and five
percent (5%) or greater shareholders also delay offering securities to be sold
on their behalf for such reasonable period of time;
(c) Purchaser shall be required to keep the Registration
Statement effective (for which purpose the Purchaser shall be required to
prepare and file such amendments and supplements to the Registration Statement
and Prospectus used in connection therewith as may be necessary to keep the
Registration Statement effective) for the period set forth in Subsection
5.3(b), pursuant to which Seller is entitled to sell Shares and that Seller
shall have the right, subject to the approval of the Purchaser, which approval
shall not be unreasonably withheld or delayed, to select the underwriter or
underwriters, if Seller desires any, who are to undertake the sale and
distribution of the Shares to be offered for sale pursuant to such post-
effective amendment to the Registration Statement, and that, without limiting
the generality of Section 5.4 (but subject to Section 5.5 below), any
additional expenses incurred by reason of the delayed registration of such
securities (such as the necessity to file a post-effective amendment) shall be
borne solely by the Purchaser;
(d) In connection with any request for registration, Seller
shall be required to furnish the Purchaser with all relevant information
concerning the proposed method of sale or other disposition of the Shares, the
identity and compensation to be paid to any proposed underwriters, if any, to
be employed at the election of Seller in connection therewith, and such other
information as may be reasonably required by the Purchaser properly to prepare
and file such Registration Statement in accordance with applicable provisions
of the Act (which includes the rules and regulations thereunder). Upon request
of the Purchaser, such information shall be furnished by Seller in writing.
5.5 EXPENSES. In connection with or otherwise relating to
registrations on behalf of Seller of any Shares under the Act pursuant to this
Section 5, the Purchaser shall pay all Registration Expenses; provided,
however, that the Seller shall be required to bear that portion of the
underwriting commissions, fees and discounts, if any, attributable solely to
the inclusion of Seller's shares in such Registration Statement and the
inclusion of Seller's shares in the related filings under securities or Blue
Sky laws of the several states; and further provided that the Seller shall pay
the legal fees and disbursements of counsel to Seller.
5.6 INDEMNIFICATION.
(a) In connection with or otherwise relating to the
registration of any Shares under the Act pursuant to the provisions of this
Amendment, the Purchaser agrees to indemnify and hold harmless and defend the
Seller, each underwriter, if any, of such Shares, each other person, if any,
who controls Seller or any such underwriter within the meaning of the Act, and
Seller's officers, directors and counsel from and against any and all losses,
claims, damages, liabilities, joint or several, to which such Seller,
underwriter or controlling person or Seller's officers, directors and counsel
may become subject under the Act or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under which such Shares
were registered under the Act or any Prospectus contained therein or related
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse such Seller,
underwriter, controlling person or Seller's officers, directors and counsel for
any legal or any other fees or expenses reasonably incurred by such Seller,
underwriter, controlling person or Seller's officers, directors and counsel in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Purchaser will not be liable
in any such case to the extent that any such loss, claim, damage, or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Registration Statement or such
Prospectus in reliance upon and in conformity with written information
furnished to the Purchaser by the party seeking indemnification.
(b) In connection with or otherwise relating to the registration of
any Shares under the Act pursuant to the provisions hereof, Seller agrees to
indemnify and hold harmless the Purchaser, each person who controls the
Purchaser within the meaning of the Act, and each officer and director of the
Purchaser from and against any losses, claims, damages or liabilities, joint or
several, to which the Purchaser, such controlling person or any such officer or
director or counsel may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged true statement
of any material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Act or any Prospectus contained
therein, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, which untrue statement or alleged
untrue statement or omission or alleged omission was made therein in reliance
upon and in conformity with written information furnished to the Purchaser by
Seller or controlling person or Seller's officers, directors and counsel
specifically for use in connection with the preparation thereof; and will
reimburse the Purchaser, each such controlling person and each such officer or
director for any legal or any other fees and expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action.
(c) Each person entitled to indemnification hereunder (an
"Indemnitee") agrees, as soon as is reasonably practicable after the receipt of
notice of any claim or action against it, to notify the party from whom
indemnity may be sought hereunder ("Indemnitor") in writing provided that any
such failure to promptly provide such notice shall not excuse the Indemnitor
from its obligations hereunder except to the extent the Indemnitor is actually
prejudiced thereby, and then Indemnitor shall assume the defense of any such
claim or action (and the cost thereof) by counsel of the Indemnitor's own
choosing, who shall be reasonably satisfactory to such Indemnitee. Each
Indemnitee shall have the right to employ separate counsel in connection with
any such claim or action and to participate in the handling or defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnitee unless the employment of such counsel has been specifically
authorized by the Indemnitor or the Indemnitor shall not have employed counsel
to have charge of the defense of such action or claim or such Indemnitee shall
have reasonably concluded that there may be defenses available to the
Indemnitee (in which case the Indemnitor shall not have the right to direct the
defense of such action on behalf of such Indemnitee), in any of which events
such fees and expenses shall be borne by the Indemnitor. The Indemnitor shall
be free to settle any claims or action in respect to which indemnity may be
sought against it pursuant to this Subsection (c); provided, however, that the
Indemnitor shall not settle any such claim or action if such settlement would
result in the imposition against Indemnitee of a judgment, decree or order in
the nature of equitable relief or otherwise require an acknowledgment of
wrongdoing unless the Indemnitor has obtained the prior written consent of such
Indemnitee (which consent shall not be unreasonably withheld).
5.7 COMPLIANCE WITH RULE 144. The Purchaser shall take such actions
pursuant to or otherwise in connection with Rule 144 of the Commission under
the Act as is necessary to enable the Seller to make sales of Registrable
Shares pursuant to that Rule.
5.8 ASSIGNMENT. Seller's rights under this Section 5 may be
assigned by Seller to a transferee or assignee of any of the Shares, provided
that Purchaser is given written notice of such assignment at the time of or
within a reasonable time after the assignment, stating the name and address of
the transferee or assignee and identifying the number of Shares with respect to
which such rights of Seller are being assigned.
