<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Mark
One
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1998
-----------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-24128
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BIO-PLEXUS, INC.
(Exact name of Registrant as specified in its Charter)
Connecticut 06-1211921
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
129 Reservoir Road, Vernon Connecticut 06066
(Address of principal executive offices including zip code)
(860) 870-6112
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding
Class of Common Stock as of November 13, 1998
-------------------------- -----------------------
Common Stock, no par value 12,279,165
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BIO-PLEXUS, INC.
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets at September 30, 1998 and
December 31, 1997 1
Condensed Statements of Operations for the three months
ended September 30, 1998 and 1997 2
Condensed Statements of Operations for the nine months
ended September 30, 1998 and 1997 3
Condensed Statements of Cash Flows for the nine months
ended September 30, 1998 and 1997 4
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 2. Changes in Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
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BIO-PLEXUS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 443,000 $ 1,502,000
Accounts receivable 707,000 395,000
Inventories:
Raw materials 1,054,000 985,000
Work-in-process 505,000 625,000
Finished goods 647,000 297,000
------------ ------------
2,206,000 1,907,000
------------ ------------
Note receivable (Note 4) 600,000 152,000
------------ ------------
Other current assets 172,000 168,000
------------ ------------
Total current assets 4,128,000 4,124,000
------------ ------------
Fixed assets, net 6,059,000 7,087,000
Deferred debt financing expenses 12,000 73,000
Patents, net of amortization 257,000 152,000
Other assets 258,000 252,000
------------ ------------
$ 10,714,000 $ 11,688,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,847,000 $ 2,219,000
Note payable (Note 4) 250,000 --
Accounts payable and accrued expenses 616,000 619,000
Accrued interest payable 41,000 26,000
Accrued vacation 195,000 248,000
Other accrued employee costs 110,000 204,000
Deferred revenue (Note 3) 1,960,000 841,000
------------ ------------
Total current liabilities 5,019,000 4,157,000
------------ ------------
Other long-term debt, net 2,402,000 3,204,000
Redeemable Class A common stock -- 20,000
Redeemable common stock warrants 149,000 149,000
Commitments and contingencies (Note 5) -- --
Shareholders' equity:
Convertible preferred stock, no par value, 3,000,000
authorized, no shares issued and outstanding -- --
Common stock, no par value, 18,000,000 authorized,
12,279,165 and 12,137,787 shares issued and outstanding 64,343,000 64,070,000
Accumulated deficit (61,199,000) (59,912,000)
------------ ------------
Total shareholders' equity 3,144,000 4,158,000
------------ ------------
$ 10,714,000 $ 11,688,000
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
1
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BIO-PLEXUS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1998 1997
------------ ------------
<S> <C> <C>
Revenue:
Product $ 1,723,000 $ 770,000
Services 1,265,000 --
------------ ------------
Total revenue 2,988,000 770,000
------------ ------------
Operating costs and expenses:
Research and development 157,000 364,000
Other operating and engineering costs 1,570,000 1,227,000
Selling, general and administrative 1,049,000 1,557,000
------------ ------------
Total operating costs and expenses 2,776,000 3,148,000
------------ ------------
Financing expenses:
Amortization of deferred debt financing 20,000 182,000
Other financing expenses 150,000 239,000
Less: Interest income (20,000) (25,000)
------------ ------------
Total financing expenses 150,000 396,000
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Net profit (loss) $ 62,000 $ (2,774,000)
Less: Imputed dividend on preferred stock -- (500,000)
Net profit (loss) applicable to common stock $ 62,000 $ (3,274,000)
------------ ------------
Per share of common stock:
Basic and diluted $ 0.01 $ (0.33)
============ ============
Weighted average common shares outstanding:
Basic 12,181,826 9,985,246
Diluted 12,195,740 --
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
2
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BIO-PLEXUS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1998 1997
------------ ------------
<S> <C> <C>
Revenue:
Product $ 3,873,000 $ 2,836,000
Services 2,996,000 --
Licensing fees (Note 3) -- 1,500,000
------------ ------------
Total revenue 6,869,000 4,336,000
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Operating costs and expenses:
Research and development 376,000 1,022,000
Other operating and engineering costs 4,060,000 4,455,000
Selling, general and administrative 3,266,000 5,101,000
------------ ------------
Total operating costs and expenses 7,702,000 10,578,000
------------ ------------
Financing expenses:
Amortization of deferred debt financing 61,000 361,000
Other financing expenses 493,000 3,299,000
Less: Interest income (100,000) (114,000)
------------ ------------
Total financing expenses 454,000 3,546,000
------------ ------------
Net loss $ (1,287,000) $ (9,788,000)
Less: Imputed dividend on preferred stock -- (500,000)
Net loss applicable to common stock $ (1,287,000) $(10,288,000)
------------ ------------
Per share of common stock:
Basic and diluted $ (0.11) $ (1.22)
============ ============
Weighted average common shares
outstanding (Note 2) 12,160,987 8,427,644
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
3
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BIO-PLEXUS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1998 1997
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,287,000) $(10,288,000)
Adjustments to reconcile net loss to
cash used by operating activities:
Depreciation and amortization 752,000 1,029,000
Inducement expense on conversion -- 640,000
Imputed dividend -- 500,000
Writedown of equipment to net
realizable value 113,000 --
Amortization of deferred debt financing
expenses 61,000 361,000
Amortization of debt discount 45,000 1,781,000
Decrease (increase) in assets:
Accounts receivable (312,000) 26,000
Inventories (299,000) 96,000
Notes receivable 152,000 --
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (3,000) (858,000)
Accrued interest payable 15,000 43,000
Accrued vacation and other employee costs (147,000) (28,000)
Increase in deferred revenue (Note 3) 1,119,000 1,137,000
Other 183,000 82,000
---------- ----------
Net cash provided by (used in) operating
activities 392,000 (5,479,000)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases and construction of fixed assets (21,000) (706,000)
Issuance of note receivable (Note 4) (600,000) --
Cost of patents (115,000) (64,000)
---------- ----------
Net cash used in investing activities (736,000) (770,000)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of convertible preferred stock -- 4,897,000
Proceeds from Sale of common stock (Note 4) 250,000 280,000
Proceeds from exercise of common stock warrants -- 282,000
Proceeds from exercise of common stock options 23,000 50,000
Redemption of common stock (20,000) --
Proceeds from long-term debt -- 4,700,000
Increase in notes payable (Note 4) 250,000 --
Proceeds from sale and leaseback 109,000 369,000
Repayments of long-term debt (1,327,000) (3,661,000)
---------- ----------
Net cash provided by (used in) financing
activities (715,000) 6,917,000
---------- ----------
Net (decrease) increase in cash and cash
equivalents (1,059,000) 668,000
Cash and cash equivalents, beginning of
period 1,502,000 1,322,000
---------- ----------
Cash and cash equivalents, end of period $ 443,000 $1,990,000
========== ==========
Supplemental cash flow disclosures:
Cash payments of interest $ 433,000 $ 836,000
Cash payments of income taxes 4,000 9,000
Surrender of debt upon warrant exercise -- 8,053,000
</TABLE>
The accompanying notes are an integral part of
these condensed financial statements.
4
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BIO-PLEXUS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The interim condensed financial statements included herein are
unaudited. In the opinion of management, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations and cash flows for the periods presented
have been included. The results of operations for the interim period is not
necessarily indicative of the results of operations to be expected for the full
year. These financial statements should be read in conjunction with the
financial statements and the notes included in the 1997 Annual Report to
Shareholders of Bio-Plexus, Inc.
Certain reclassifications have been made to the 1997 financial
statements to conform with the 1998 presentation.
NOTE 2 - LOSS PER SHARE
In February, 1997, the FASB issued Statement of Financial Accounting
Standards No. 128 ("SFAS 128"), "Earnings per Share", which establishes new
standards for the computation and disclosure of earnings per share ("EPS"). The
new statement requires dual presentation of "basic" EPS and "diluted" EPS. Basic
EPS is based on the weighted average number of common shares outstanding for the
period, excluding any dilutive common share equivalents. Diluted EPS reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted. The Company adopted SFAS 128 for
the periods presented. In determining net loss per common share, common stock
equivalents are excluded from the computation as their effect is anti-dilutive.
The following table sets forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1998
NET PROFIT SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
<S> <C> <C> <C>
Net Profit $ 62,000
BASIC EPS
Income available to common stockholders 62,000 12,181,826 $ .01
EFFECT OF DILUTIVE SECURITIES
Warrants 2,974
Options 10,940
--------- ------------ ------
DILUTED EPS
Income available to common stockholders
plus assumed conversions $ 62,000 12,195,740 $ .01
========= ============= ======
</TABLE>
5
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Warrants to purchase 1,064,136 shares of common stock at prices ranging from
$5.35 to $12.00 and options to purchase 471,400 shares of common stock at prices
ranging from $3.00 to $11.75 were outstanding at September 30, 1998 but were not
included in the computation of diluted earnings per share because the options'
exercise prices were greater than the average market price of the common shares.
NOTE 3 - LICENSING AGREEMENTS
On January 28, 1997 the Company entered into a Development and License
Agreement and a Supply Agreement with Johnson & Johnson Medical, Inc. ("JJMI")
of Arlington, Texas. Under the terms of the agreements, Bio-Plexus, Inc. would
develop and manufacture safety needle assemblies for JJMI utilizing its
self-blunting technology, which would be used by JJMI, under an exclusive
worldwide license granted by the Company, to manufacture and sell a new safety
I.V. catheter. The Company received $2,900,000 in licensing fees and funding to
complete the development of the safety needle assemblies and for the development
of the manufacturing equipment and tooling. JJMI agreed to acquire initial
production equipment and tooling which is expected to be completed in 1998.
During the first quarter of 1997, $1,500,000 in licensing fee revenue was
recognized and at September 30, 1998, $631,000 in development funding was
recognized. The remaining balance of $210,000 has been deferred and will be
recognized over the remaining term of the development project in 1998.
On April 9, 1998, the Company amended the original Development and
License Agreement and canceled its Supply Agreement with JJMI. The amended terms
include certain changes in the licensing and royalty agreements as well as the
transfer of manufacturing of the safety needle assemblies to JJMI, in exchange
for an initial milestone payment of $3,500,000, with an additional $500,000
payable upon the completion of certain milestones. The revised agreement also
provides for an additional $300,000 payable to the Company for initial capital
equipment purchases during 1998.
On October 23, 1998 the Company entered into an exclusive License
Agreement and Design, Development and Sales Agreement for a PICC Introducer
Catheter with TFX Medical, a division of Teleflex Incorporated, the industry's
dominant supplier of PICC Introducers. The License Agreement includes certain
minimum annual volume requirements and ongoing royalties on the sale of PICC
Introducer Catheters featuring Punctur-Guard(R) technology. Under the Design,
Development and Sales Agreement, the Company will design and develop safety
needle assemblies to be used with the TFX Peelable Catheter, and will modify
existing manufacturing equipment to be transferred to TFX pursuant to the terms
and conditions of the agreement.
NOTE 4 - OTHER SIGNIFICANT CAPITAL TRANSACTIONS
During 1992, 10,000 shares each of Class A Common Stock was awarded to
two principal officers of the Company, entitling them to 500 votes for each
share of Class A Common Stock held on any matter submitted to the shareholders
of the Company for action. The Class A Common Stock was mandatorily redeemable
by the Company on January 1, 1998. Such redemption occurred on January 1, 1998,
and cash payments in the amounts of $10,000 were made to each of the two
individuals during the second quarter of 1998.
On July 20, 1998, at the Annual Meeting of Shareholders, the Company
increased the authorized number of common shares from 15,000,000 to 18,000,000.
Additionally, the Company
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amended its Certification of Incorporation to include the elimination of the
Class A Common Stock and the elimination of the Series A Preferred Stock.
On September 3, 1998, the Company loaned $600,000 to Jordan
Pharmaceuticals, Inc. in exchange for a one-year installment note. The note
bears interest at a rate of 12% per year and is payable monthly, over a
thirteen-month period beginning on October 2, 1998. The final payment shall
include the full principal amount and the final monthly interest payment.
Collateral on the note receivable is a first priority perfected security
interest in certain assets held by Jordan Pharmaceuticals. As of October 2,
1998, Jordan was in default of the loan made by the Company due to nonpayment of
interest. However, on November 5, 1998, the Company waived the default. The
intent of the Company is to convert the principal balance to an equity
investment in Jordan Pharmaceuticals, Inc. during the fourth quarter of 1998.
On September 8, 1998, the Company received $250,000 from an officer of
the Company in exchange for a one-year promissory term note with warrants. The
term note bears interest at 8% per annum and is payable quarterly in arrears
commencing on December 8, 1998. If not sooner paid, the principal amount of this
note shall be paid on September 8, 1999. With the note, there were 30,000 common
stock warrants issued with a three-year life and an exercise price of $2.09.
On September 11, 1998 the Company received $250,000 from a director and
shareholder in exchange for 124,378 shares of common stock issued at $2.01 per
share.
In November 1998, the Company initiated a convertible secured term note
financing bearing interest at 8% per year for a minimum of $2.5 million. The
notes have a maturity of five years with interest payments only in the first
year and a balloon payment in year five. As an inducement to participate in the
financing, the noteholders will receive 15% warrant coverage to purchase common
stock at any time in the next three years at an exercise price of 110% of the
market price on the date of the investment. The notes have an optional
conversion feature allowing the holder to convert beginning one year from the
date of the investment at 85% of the 30 day average market price at the time of
notice of conversion. As of November 13, 1998, subscriptions totalling
$2,000,000 were received by the Company.
NOTE 5 - COMMITMENTS
As of September 30, 1998, the Company had capital expenditure purchase
commitments outstanding of approximately $606,000, primarily to be financed
through the JJMI development and license agreement (See Note 3).
NOTE 6 - SUBSEQUENT EVENTS
On October 6, 1998 the Company entered into a non-exclusive supply and
distribution agreement for the United States and Canada with Graphic Controls
Corporation, a major supplier of sharps' containers in the United States. The
agreement allows Graphic Controls to purchase and distribute Bio-Plexus
Drop-It(TM) Needle Disposal Containers and Drop-It(TM) Quick Release Needle
Holders. The agreement has an initial term of three years, and shall be
automatically renewed for an additional year, unless either party notifies the
other of its intent not to renew.
7
<PAGE> 10
On October 23, 1998 the Company entered into an exclusive License,
Development and Sales Agreement for a PICC Introducer Catheter with TFX Medical,
a division of Teleflex Incorporated, the industry's dominant supplier of PICC
Introducers. (See Note 3).
In October 1998, the Company entered into a distribution agreement with
Fisher HealthCare of Houston, Texas, the second largest operating unit of Fisher
Scientific. Fisher Scientific is one of the world leaders in serving science,
providing more than 245,000 products and services to research, health care,
industrial, educational and government customers in 145 countries. The
distribution agreement allows Fisher Healthcare to purchase and distribute all
of the Bio-Plexus Blood Collection products.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The discussions set forth in this Management's Discussion and Analysis
of the Results of Operations and Financial Condition and elsewhere herein
contain certain statements which are not historical facts and are considered
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking statements can be identified by the use of such
forward-looking terminology as "believes," "expects," "may," "will," "should,"
or "anticipates" or negative thereof or other derivations thereon or comparable
terminology, or discussions of strategy that involves risks and uncertainties.
The Company's actual results could differ materially from those projected in the
forward-looking statements as a result of, among other factors, the Company's
expectation regarding gross profit and operating income, general economic
conditions and growth in the safety medical products industry, competitive
factors and pricing pressures, changes in product mix, product demand, risk of
dependence on third party suppliers, ability to obtain financing, and other risk
factors and uncertainties detailed in this report, described from time to time
in the Company's other Securities and Exchange Commission filings, or discussed
in the Company's press releases. All forward-looking statements included in this
document are based on information available to the Company on the date hereof,
and the Company assumes no obligation to update any such forward-looking
statements.
OVERVIEW
Since its inception in September 1987 through September 30, 1998,
Bio-Plexus incurred cumulative ongoing losses totaling $61,199,000. During the
same period, the Company's principal focus has been the design, development,
testing and evaluation of its blood collection safety needle and the design and
development of the molds, needle assembly machines and production processes
needed for manufacturing the blood collection safety needle as well as the
design and development of new products.
In 1996 the Company completed the addition of the blood collection
needle assembly and packaging system. With that system, the Company believes it
has sufficient capacity to meet its production needs for blood collection
needles during 1998. The Company has continued to review its cost of operations
in order to reduce costs where possible. For the Company to achieve
profitability, further reductions in manufacturing costs and increases in sales
are necessary.
In January 1997, the Company entered into a Development and License
Agreement and a Supply Agreement with Johnson & Johnson Medical, Inc. ("JJMI").
Pursuant to the original agreements, Bio-Plexus would develop and manufacture
safety needle assemblies for JJMI, to become
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part of a new safety I.V. catheter to be manufactured and sold by JJMI,
utilizing the Company's patented self-blunting needle design.
In April 1998, the Company amended the original Development and License
Agreement and canceled its supply agreement with JJMI. The amended terms include
certain changes in the licensing and royalty agreements as well as the transfer
of manufacturing of the safety needle assemblies to JJMI, in exchange for an
initial milestone payment of $3,500,000, with an additional $500,000 payable
upon the completion of certain milestones. The revised agreement also provides
for an additional $300,000 payable to the Company for initial capital equipment
purchases during 1998.
On October 6, 1998 the Company entered into a non-exclusive supply and
distribution agreement for the United States and Canada with Graphic Controls
Corporation, a major supplier of sharps containers in the United States. The
agreement allows Graphic Controls to purchase and distribute Bio-Plexus
Drop-It(TM) Needle Disposal Containers and Drop-It(TM) Quick Release Needle
Holders. The agreement has an initial term of three years, and shall be
automatically renewed for an additional year, unless either party notifies the
other of its intent not to renew.
On October 23, 1998 the Company entered into an exclusive License,
Development and Sales Agreement for a PICC Introducer Catheter with TFX Medical,
a division of Teleflex Incorporated, the industry's dominant supplier of PICC
Introducers. The License Agreement includes certain minimum annual volume
requirements and ongoing royalties on the sale of PICC Introducer Catheters
featuring Punctur-Guard(R) technology. Under the Design, Development and Sales
Agreement, the Company will design and develop safety needle assemblies to be
used with the TFX Peelable Catheter, and will modify existing manufacturing
equipment to be transferred to TFX pursuant to the terms and conditions of the
agreement.
In October 1998, the Company entered into a distribution agreement with
Fisher HealthCare of Houston, Texas, the second largest operating unit of Fisher
Scientific. Fisher Scientific is one of the world leaders in serving science,
providing more than 245,000 products and services to research, health care,
industrial, educational and government customers in 145 countries. The
distribution agreement allows Fisher Healthcare to purchase and distribute all
of the Bio-Plexus Blood Collection products.
The Company believes that similar arrangements may be possible with one or
more major health care companies for its blood collection needle line, the
winged intravenous set and other products, and intends to continue to pursue
this strategy during 1998 and into 1999. Such arrangements could assist the
Company in raising additional capital and help fund research and development of
new products, as well as accelerate the rate of sales growth. However, such
arrangements could also decrease the revenue per unit for the Company, as a
result of sharing revenue with strategic partners. The Company believes the
overall benefits and potential for greater market share outweigh the
disadvantages that may result from such arrangements.
THE YEAR 2000 ISSUE
The "Year 2000 Issue" is the result of computer systems recognizing two
digits rather than four to define the applicable year. Any of the Company's
computer applications, computer hardware, or other systems that have
date-sensitive capabilities may recognize a date using "00" as the year 1900
rather than the year 2000. The Company is in the process of addressing the Year
2000 Issue, but has not yet completed its assessment. The Company plans to work
with specialists as needed to reprogram its current software and/or correct any
hardware issues related to any of its systems in order to become
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fully compliant. At the present time, no determination has been made as to
whether the Company has material Year 2000 Issues, and no estimate has been made
as to the costs to remediate such issues.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1997
The Company had revenues from product sales of $1,723,000 for the three
months ended September 30, 1998 compared to $770,000 for the same period a year
ago. The increase was attributable to the expansion of its domestic account base
and better pricing on its products as well as sales of equipment to JJMI on the
I.V. catheter project.
The Company had revenues from services of $1,265,000 for the three
months ended September 30, 1998 resulting from progress payments by JJMI on the
capital equipment project and the recognition of deferred revenue for the I.V.
catheter.
Research and development expenses were $157,000 for the three months
ended September 30, 1998, compared to $364,000 for the same period a year ago.
The decrease in these costs in 1998 resulted primarily from the recognition of
$210,000 of deferred revenue related to the development of the I.V. catheter for
JJMI.
Other operating and engineering costs were $1,570,000 for the three
months ended September 30, 1998 compared to $1,227,000 for the same period a
year ago. The increase is primarily attributable to higher cost of goods sold
resulting from the JJMI I.V. catheter project, partially offset by lower
manufacturing costs associated with the blood collection needle line and its
other products.
Selling, general and administrative expenses were $1,049,000 for the
three months ended September 30, 1998 compared to $1,557,000 for the same period
a year ago. The decrease is primarily attributable to the Company's further
reductions in its work force during 1998, as well as other administrative cost
reductions.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1997
The Company had revenues from product sales of $3,873,000 for the nine
months ended September 30, 1998 compared to $2,836,000 for the same period a
year ago. The increase was attributable to equipment sales to JJMI on the I.V.
catheter project, partially offset by a reduction in the use of distributors in
Europe based on a number of factors including pricing considerations and their
ability to meet sales quotas.
The Company had revenues from services of $2,996,000 for the nine
months ended September 30, 1998 resulting from progress payments by JJMI on the
capital equipment project and the recognition of deferred revenue for the I.V.
catheter.
Research and development expenses were $376,000 for the nine months
ended September 30, 1998, compared to $1,022,000 for the same period a year ago.
The decrease in these costs in 1998 resulted primarily from the recognition of
$631,000 of deferred revenue related to the development of the I.V. catheter for
JJMI.
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<PAGE> 13
Other operating and engineering costs were $4,060,000 for the nine
months ended September 30, 1998 compared to $4,455,000 for the same period a
year ago. The decrease is primarily attributable to the Company's efficiency in
lowering manufacturing costs associated with the blood collection line and its
other products, partially offset by higher cost of goods sold related to the
JJMI I.V. catheter project.
Selling, general and administrative expenses were $3,266,000 for the
nine months ended September 30, 1998 compared to $5,101,000 for the same period
a year ago. The decrease is primarily attributable to the Company's reduction in
its work force during 1998, as well as other administrative cost reductions.
LIQUIDITY AND CAPITAL RESOURCES
The Company's need for additional funds has continued from period to
period, as a result of its ongoing losses from operations, and its continued
efforts to develop new products. To date, the Company has financed its
operations primarily through borrowings and the sale of equity securities.
Through September 30, 1998, the Company has received net proceeds of
approximately $29,209,000 through borrowings and the sale of debt securities and
$48,196,000 through the sale of equity securities. Of the net equity proceeds,
$17,575,000 was received from its 1995 public offering, $14,191,000 was received
from the Company's initial public offering and the balance of $16,430,000 was
received through the private placement of equity securities.
The Company's primary cash requirement for the remainder of 1998 will
be for working capital to sustain ongoing operations including debt service,
and, to a lesser extent, further research and development on its winged
intravenous set and other new products. The Company is considering the
development of a strategic partnership with one or more major companies to
assist with the development and expansion of its product line, in addition to
the agreements it already has in place with JJMI on the I.V. catheter, and TFX
on the PICC Introducer. Its overall strategy is to minimize expenditures on new
product research and development, as well as production capacity for new
products until such time as it determines that additional strategic partnerships
are feasible. In addition to considering strategic partnerships, the Company is
reviewing alternative financing strategies to raise additional working capital
in 1998. The Company believes that the proceeds from these financings and other
anticipated sources of funds, such as milestone payments from the I.V. catheter
agreement with JJMI, together with funds generated from sales of its products,
will be sufficient to fund its cash requirements for 1998. These estimated cash
requirements do not include significant expenditures in new product areas and
amounts needed could vary based on the actual growth of sales and other factors.
The Company is also continuing to review opportunities to further reduce
operating costs and other expenses. Failure to raise needed capital would have
an adverse effect on the Company's operations, development plans and cash flows.
To date the Company has not been adversely impacted by inflation.
11
<PAGE> 14
PART II. OTHER INFORMATION
Item 2 Changes in Securities
At the Company's 1998 Annual Meeting of Shareholders held on July 20,
1998, the Shareholders approved an amendment to the Company's Certificate of
Incorporation which, among other things, eliminated the Class A Common Stock and
the Series A Preferred Stock. (See Item 4). The effect of eliminating the Class
A Common Stock was to terminate a class of stock which had special voting
rights. Each share of Class A Common Stock entitled the holder to five hundred
(500) votes in any shareholder's vote and the holders of the class as a whole
were entitled to ten (10) million votes. This gave such holders effective voting
control of the Company on such matters as the election of directors. All shares
of the Class A Common Stock had been redeemed as of January 1, 1998 and the
actions taken at the Annual Meeting completed the elimination of such class.
At the time of the Annual Meeting there were no outstanding shares of
Series A Preferred Stock. The shares that were issued were cancelled and cannot
be reissued. Termination of the Series A Preferred Stock eliminated the only
outstanding series of Preferred Stock of the Company. The remaining authorized
shares of Preferred Stock may be issued by the Board of Directors on terms and
conditions fixed by the Board prior to issuance.
On September 8, 1998 the Company issued a warrant exercisable for
30,000 shares of common stock to Carl R. Sahi. The warrant is exercisable until
September 8, 2001 and has an exercise price of $2.09 per share. The warrant was
issued in conjunction with a loan of $250,000 by Mr. Sahi to the Company. (See
Note 4 to the Condensed Financial Statements). On September 11, 1998 the Company
sold 124,378 shares of common stock to David Himick. The shares were issued at
$2.01 per share for a total purchase of $250,000. The loan and stock purchase
were undertaken to provide additional capital to the Company. Both Mr. Himick
and Mr. Sahi are directors of the Company. The securities were issued pursuant
to an
12
<PAGE> 15
exemption under Section 4(2) and/or Section 4(6) of the Securities Act and
Regulation D promulgated under the Securities Act.
Item 4 Submission of Matters to a Vote of Security Holders
The Company held its 1998 Annual Meeting of Shareholders on July 20,
1998. Matters that were acted upon included: the election of the Board of
Directors; an amendment to the Company's Certificate of Incorporation; an
amendment to the Company's 1995 Non-Employee Directors' Plan; and ratification
of the selection of Mahoney Sabol & Company, LLP as independent public
accountants for the current fiscal year.
Six (6) persons were elected as members of the Board of Directors. They
included: Larry C. Krampert, David Himick, Stanley E. Jacke, Richard D.
Ribakove, Carl R. Sahi and Richard L. Higgins.
The votes cast were as follows:
<TABLE>
<CAPTION>
VOTES FOR VOTES WITHHELD
--------- --------------
<S> <C> <C>
Larry C. Krampert 9,685,233 140,352
David Himick 9,601,761 223,824
Stanley E. Jacke 9,667,701 157,884
Richard D. Ribakove 9,671,926 153,659
Carl R. Sahi 9,684,373 141,212
Richard L. Higgins 9,685,308 140,277
</TABLE>
The shareholders approved an amendment to the Company's Certificate of
Incorporation which (a) increased the number of shares of Common Stock; (b)
eliminated the Class A Common Stock; and (c) eliminated the Series A Preferred
Stock. The authorized
13
<PAGE> 16
Common Stock was increased to eighteen (18) million shares. The amendment
required a vote of holders of a majority of the issued and outstanding shares of
common stock entitled to vote on the amendment present in person or represented
by proxy at the Annual Meeting when a quorum is present. The amendment was
approved by the following vote: for: 4,176,272; against: 823,910; abstain:
80,155. There were 4,745,248, broker non-votes.
The shareholders also approved an amendment to the Company's 1998
Non-Employee Directors' Plan. The amendment provided for the acceleration of the
vesting of options granted under the Plan in the event of an acquisition or
significant change in ownership of the Company. The amendment was approved by
the following vote: for: 8,879,861; against: 835,680; abstain: 110,044. There
were no broker non-votes.
Finally, the shareholders ratified the selection of Mahoney Sabol &
Company, LLP as the independent accountants to examine the accounts of the
Company for the current fiscal year and to report on the Company's financial
statements for that period. The ratification was made by the following vote:
for: 9,629,275; against: 110,586; abstain: 85,724. There were no broker
non-votes.
14
<PAGE> 17
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
No. Description Method of Filing
3.1 Certificate of Incorporation of the
Company, as amended Filed with this Report
10.18 Development and License Agreement
dated January 28, 1997 by and between
the Company and Johnson & Johnson
Medical, Inc. Filed with this Report
10.19 Supply Agreement dated January 28, 1997
by and between the Company and Johnson
& Johnson Medical, Inc. Filed with this Report
10.20 Term Promissory Note issued to
Carl R. Sahi Filed with this Report
10.21 Warrant for shares of common stock
issued to Carl R. Sahi Filed with this Report
27 Financial Data Schedule Filed with this Report
(b) Reports on Form 8-K
No reports were filed on Form 8-K.
15
<PAGE> 18
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Bio-Plexus, Inc.
(Registrant)
November 16, 1998 /s/ Richard L. Higgins
--------------------- -------------------------
(Date) Richard L. Higgins
President and Chief Executive Officer
November 16, 1998 /s/ Kimberley A. Cady
--------------------- -------------------------
(Date) Kimberley A. Cady
Vice President of Finance and Chief
Financial Officer
16
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE AMENDING AND RESTATING
THE CERTIFICATE OF INCORPORATION
OF
BIO-PLEXUS, INC.
It is hereby certified that:
FIRST: The name of the Corporation is BIO-PLEXUS, INC.
SECOND: The Certificate of Incorporation of BIO-PLEXUS, INC. is restated
and superseded pursuant to Section 33-362(d) of the Connecticut General Statutes
by the following resolution:
RESOLVED, That the Certificate of Incorporation of the Corporation be, and
hereby is, amended and restated to read as follows:
ARTICLE I
NAME
The name of the Corporation is BIO-PLEXUS, INC.
ARTICLE II
PURPOSES
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be formed under the Stock Corporation Act of the
State of Connecticut, as the same may be amended from time to time.
ARTICLE III
CAPITALIZATION
The aggregate number of shares which the Corporation shall have authority
to issue is One Million Twenty Thousand (1,020,000), which are divided into
three classes: (i) One Hundred Fifty Thousand (150,000) shares of Preferred
Stock, without par value, (the "Preferred Stock"); (ii) Eight Hundred Fifty
Thousand (850,000) shares of Common Stock, without par value (the "Common
Stock"); and (iii) Twenty Thousand (20,000) shares of Class A Common Stock,
without par value (the "Class A Common Stock").
<PAGE> 2
ARTICLE IV
RELATIVE RIGHTS AND PREFERENCES
The relative rights, preferences and limitations of the shares of Common
Stock, Class A Common Stock, and Preferred Stock (to the extent fixed by this
Certificate of Incorporation) are as follows:
A. Common Stock.
Each issued and outstanding share of Common Stock shall entitle the
holder thereof to one vote on any matter submitted to the
shareholders of the Corporation for action.
B. Class A Common Stock
1. Liquidation -- Holders of shares of Class A Common Stock shall
not be entitled to participate in any distribution of the net
assets of the Corporation upon a liquidation, dissolution or
winding up of the affairs of the Corporation, whether such
liquidation, dissolution or winding up is voluntary or
involuntary.
2. Voting Rights -- Each issued and outstanding share of Class A
Common Stock shall entitle the holder thereof to one hundred
(100) votes on any matter submitted to the shareholders of the
Corporation for action. If at any time the Corporation shall
pay a stock dividend or distribution on its Common Stock or
Preferred Stock, or split, subdivide, or combine the
outstanding shares of its Common Stock or Preferred Stock, the
number of votes which a share of Class A Common Stock shall
entitle the holder thereof to exercise shall be
proportionately adjusted as of the date after the record date
for such dividend, distribution, split, subdivision or
combination so as to maintain the relative voting power of the
Class A Common Stock which existed prior to the occurrence of
such event.
3. Dividends -- Holders of shares of Class A Common Stock shall
not be entitled to receive dividends on such shares.
4. Redemption -- On January 1, 2003 and at any time thereafter,
the Corporation may call for redemption, and redeem, all of
the issued and outstanding shares of Class A Common Stock at a
redemption price of One Dollar ($1.00) per share.
- 2 -
<PAGE> 3
Notice of redemption shall be sent by first class mail,
postage pre-paid, to each holder of record of the shares of
Class A Common Stock not less than ten (10) nor more than
twenty (20) days prior to the date of redemption. In the event
that such notice is given, the Corporation shall be obligated
to redeem such shares on the date specified in the notice and
for the redemption price specified herein. All shares of Class
A Common Stock must be redeemed at one time. Upon redemption
and payment as provided herein, the holders of shares of Class
A Common Stock shall have no further right or interest in such
shares.
If on or before the redemption date, the funds necessary for
such redemption have been set aside by the Corporation and
deposited with a bank or trust company, in trust for the pro
rata benefit of the holders of the shares of Class A Common
Stock, then, notwithstanding that any certificates for shares
that have been called for redemption have not been
surrendered, the shares represented thereby shall no longer be
deemed outstanding from and after the redemption date, and all
rights of holders in such shares shall forthwith, after the
redemption date, cease and terminate except for the right to
receive the redemption funds to which they are entitled, but
without interest. Any interest accrued on funds deposited and
unclaimed, shall be paid to the Corporation from time to time.
In case the holders of shares of Class A Common Stock which
have been called for redemption have not, within six years
after the redemption date, claimed the amounts so deposited
for such redemption, any such bank or trust company shall,
upon demand, pay over to the Corporation such unclaimed
amounts and thereupon such bank or trust company shall be
relieved of all responsibility in respect thereof to such
holder and such holder shall look only to the Corporation for
payment thereof.
C. Preferred Stock.
1. Liquidation -- In the event of any liquidation, dissolution,
or winding up of the affairs of the Corporation, whether
voluntary or involuntary, each issued and outstanding share of
Preferred Stock shall entitle the holder of record thereof to
payment at the rate of $20.00 per share (subject to adjustment
as provided herein), or at a rate otherwise established by the
Board of
- 3 -
<PAGE> 4
Directors of the Corporation, before any payment or
distribution of the net assets of the Corporation shall
be made to or set apart for the holders of record of the
issued and outstanding shares of Common Stock in respect
of said shares of Common Stock. The preferential amount
set forth herein shall be appropriately adjusted for
stock splits and stock dividends, stock combinations,
recapitalizations, and other changes to the capital
structure of the Corporation. After setting apart or
paying in full the preferential amounts aforesaid to the
respective holders of record of the issued and
outstanding shares of Preferred Stock, the remaining
net assets, if any, shall be distributed exclusively to
the holders of record of the issued and outstanding
shares of Common Stock, each issued and outstanding
share of Common stock entitling the holder of record
thereof to receive an equal proportion of said remaining
net assets. If the net assets of the Corporation shall
be insufficient to pay in full the preferential amounts
to which the holders of record of all the outstanding
shares of Preferred Stock are respectively entitled as
aforesaid, the entire net assets of the Corporation
shall be distributed ratably to the holders of all the
outstanding shares of Preferred Stock in proportion to
the full amounts to which they are respectively
entitled, and the holders of shares of Common Stock
shall in no event be entitled to participate in the
distribution of said net assets in respect of their
shares of Common Stock. Without excluding any other
proceeding which does not in fact effect a liquidation,
dissolution, or winding up of the Corporation, a merger
or consolidation of the Corporation into or with any
other corporation, a merger of any other corporation
into the Corporation, or a sale, lease, mortgage,
pledge, exchange, transfer or other disposition by the
Corporation of all or substantially all of its assets
shall not be deemed, for the purposes of this paragraph,
to be a liquidation, dissolution, or winding up of the
Corporation.
2. Voting Rights - Each issued and outstanding share of
Preferred Stock shall entitle the holder thereof to one
vote on any matter submitted to the shareholders of the
Corporation for action.
- 4 -
<PAGE> 5
3. Conversion.
(a) Optional Conversion. Subject to the terms and conditions herein
contained, any or all of the shares of Preferred Stock shall be convertible at
any time and from time to time, at the option of each holder of record thereof,
into fully paid and nonassessable shares of Common Stock upon surrender to the
Corporation or its designee of the certificate or certificates representing the
shares of Preferred Stock to be converted, together with at least ten (10) days
prior written notice of the election to convert; and, upon receipt by the
Corporation or its designee of such surrendered certificate or certificates,
such holder shall be entitled to receive a certificate or certificates
representing the share(s) of Common Stock into which such share(s) of
Preferred Stock are convertible, and such holder shall be deemed to be a
holder of record of said shares of Common Stock as of the expiration of ten
(10) days from the time of said receipt by the Corporation or its designee.
(b) Mandatory Conversion. All of the shares of Preferred Stock shall
be automatically converted, immediately and without further action of the
holder, into fully paid and non-assessable shares of Common Stock, upon the
Board of Directors of the Corporation voting to authorize any of the following
actions:
(i) a merger or consolidation of the Corporation into, or
with, another corporation;
(ii) the sale of all or substantially all of the assets of
the Corporation;
(iii) the sale of shares of Common Stock or Preferred Stock
pursuant to a registered public offering; and
(iv) the amendment of this Certificate of Incorporation to
effect a financing for the Corporation.
Promptly upon written notice by the Corporation to the holder of record
of shares of Preferred Stock notifying such holder of the automatic
conversion of such shares, the holder thereof shall surrender to the
Corporation or its designee, the
-5-
<PAGE> 6
certificate or certificates representing such shares and upon receipt by
the Corporation or its designee of such surrendered certificate or
certificates, such holder shall be entitled to receive a certificate or
certificates representing share(s) of Common Stock into which such
shares of Preferred Stock have been converted.
(c) Adjustment. The number of shares of Common Stock into which a
share of Preferred Stock may be converted shall be adjusted upon the
Corporation (1) declaring a dividend payable in shares of Common Stock; (2)
sub-dividing the outstanding shares of Common Stock; (3) combining the
outstanding shares of Common Stock; or (4) issuing any securities by
recapitalization or reclassification of the shares of Common Stock. The
conversion rate in effect immediately before the happening of that one of the
foregoing events which shall have happened shall be proportionately increased
or decreased, as the case may require. Such adjustment shall be effective
immediately after the opening of business on the day next following the record
date for determination of holders of Common Stock entitled to receive such
dividend or the day upon which each subdivision, combination or
reclassification shall become effective.
(d) Conversion Rate, Cancellation, Reservation of Shares. The basis
for conversion of shares of Preferred Stock to Shares of Common Stock shall be
one (1) share of Common Stock for each share of Preferred Stock which is
converted, subject to adjustment as provided above. Any shares of Preferred
Stock which have been converted shall be cancelled. Except as such requirement
may otherwise be dispensed with by law, the Board of Directors of the
Corporation shall at all times reserve a sufficient number of authorized but
unissued, shares of Common Stock, which shall be issued only in satisfaction
of the conversion rights and privileges aforesaid.
ARTICLE V
PREEMPTIVE RIGHTS
The shareholders shall have no preemptive rights, as such rights are
described in Section 33-343 of the Connecticut Stock Corporation Act, in any
shares, warrant, right, convertible security, or other security however
described, issued by the Corporation.
- 6 -
<PAGE> 7
ARTICLE VI
PERSONAL LIABILITY
The personal liability of a director to the Corporation or its
shareholders for monetary damages for breach of duty as a director shall be
limited to an amount that is equal to the compensation received by the
director for serving the Corporation during the year of the violation if such
breach did not: (a) involve a knowing and culpable violation of law by the
director; (b) enable the director or an associate, as defined in subdivision
(3) Section 33-374d of the Connecticut General Statutes, to receive an improper
personal economic gain; (c) show a lack of good faith and a conscious disregard
for the duty of the director to the Corporation under circumstances in which
the director was aware that his conduct or omission created an unjustifiable
risk of serious injury to the Corporation; (d) constitute a sustained and
unexcused pattern of inattention that amounted to an abdication of the
director's duty to the Corporation; or (e) create liability under Section
33-321 of the Connecticut General Statutes.
ARTICLE VII
STATED CAPITAL
The minimum amount of stated capital with which the Corporation shall
commence business is One Thousand Dollars ($1,000.00).
THIRD: This Restated Certificate of Incorporation shall give effect to
the new amendments set forth herein and purports to restate all those
provisions now in effect not being amended by such new amendments.
FOURTH: This Restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision of the
Certificate of Incorporation as in effect before such vote and supersedes such
Certificate of Incorporation.
FIFTH: The manner of adopting the resolution was by the board of
directors and shareholders pursuant to Section 33-360 of the Connecticut
General Statutes. No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required For Adoption: 207,970
Vote Favoring Adoption: 305,513
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true.
-7-
<PAGE> 8
Dated at Tolland, Connecticut, this 12th day of October, 1992.
/s/ Carl R. Sahi /s/ Susan B. Pellerin
- - --------------------------------- ------------------------------------
Carl R. Sahi, Susan B. Pellerin,
President Assistant Secretary
-8-
<PAGE> 9
CERTIFICATE AMENDING THE
CERTIFICATE OF INCORPORATION
OF
BIO-PLEXUS, INC.
It is hereby certified that:
FIRST: The name of the Corporation is BIO-PLEXUS, INC.
SECOND: The Certificate of Incorporation of the Corporation is amended
pursuant to Connecticut General Statute Section 33-360 by the following
resolution:
RESOLVED, that the Certificate of Incorporation of Bio-Plexus, Inc. be,
and hereby is, amended as follows:
1. Article III Capitalization is amended to read as follows:
ARTICLE III
CAPITALIZATION
The aggregate number of shares which the Corporation shall have
authority to issue is Ten Million Twenty Thousand (10,020,000),
which are divided into two classes: (i) Ten Million (10,000,000)
shares of Common Stock, without par value (the "Common Stock");
and (ii) Twenty Thousand (20,000) shares of Class A Common
Stock, without par value (the "Class A Common Stock").
2. Article IV Relative Rights and Preferences, the introductory
language is amended to read as follows:
The relative rights, preferences and limitations of the
shares of Common Stock and Class A Common Stock are as follows:
3. Article IV, Section B.2, Class A Common Stock, Voting Rights is
amended to read as follows:
2. Voting Rights -- Each issued and outstanding share of
Class A Common Stock shall entitle the holder thereof to
one hundred (100) votes on any matter submitted to the
shareholders of the Corporation for action. If at any
time the Corporation shall pay a stock dividend or
distribution on its Common Stock or split, subdivide, or
combine the outstanding shares of its Common Stock, the
number of votes which a share of Class A Common Stock
shall entitle the holder thereof to exercise shall be
proportionately adjusted as of the date after the record
date for such dividend, distribution, split, subdivision
or
<PAGE> 10
combination so as to maintain the relative voting power
of the Class A Common Stock which existed prior to the
occurrence of such event.
4. Article IV, Section B.4, Class A Common Stock, Redemption, the
first full paragraph is amended to read as follows:
4. Redemption -- The Corporation shall call for redemption
and redeem on January 1, 1998 all shares of Class A
Common Stock which remain outstanding on that date at a
redemption price of One Dollar ($1.00) per share. Notice
of redemption shall be sent by first class mail, postage
pre-paid, to each holder of record of the shares of
Class A Common Stock not less than ten (10) nor more
than twenty (20) days prior to the date of redemption.
Such notice shall direct such holder to surrender the
certificate representing the shares of Class A Common
Stock in exchange for payment of the redemption price.
Upon redemption and payment as provided herein, the
holders of shares of Class A Common Stock shall have no
further right or interest in such shares.
5. Article IV, Section C, Preferred Stock is deleted and
conforming changes made to the balance of the Certificate of
Incorporation reflecting the elimination of the class of
Preferred Stock.
THIRD: The foregoing resolutions were adopted pursuant to Connecticut
General Statute Section 33-360 by the Board of Directors and shareholders of
the Corporation.
FOURTH: The aggregate number of shares issued and outstanding is
492,178. The issued and outstanding shares are divided into: 472,178 shares of
Class Common Stock and 20,000 shares of Class A Common Stock. Holders of Class
Common Stock and Class A Common Stock have the right to vote separately as a
class. Each share is entitled to one vote in each class vote. Holders of Class A
Common Stock have 100 votes for each share of Class A Common Stock in each vote
of the shareholders voting as a single class. The shareholders vote on the
amendment was as follows:
* Common Shareholders
Vote required for adoption: 236,090
Vote favoring adoption: 308,649
* Class A Common Shareholders
Vote required for adoption: 10,001
Vote favoring adoption: 20,000
* All Shareholders
Vote required for adoption: 1,236,090
Vote favoring adoption: 2,308,649
<PAGE> 11
FIFTH: The Corporation has as at least one hundred recordholders as
defined in subsection a of Section 33-311a of the Connecticut General Statutes.
We hereby declare under penalties of false statement that the
statements made in the foregoing Certificate are true.
Signed in Tolland, Connecticut, this 22nd day of October, 1993.
/s/ Carl R. Sahi /s/ Susan B. Pellerin
- - ------------------------------ ------------------------------
Carl R. Sahi Susan B. Pellerin
President Assistant Secretary
F I L E D
DATE OF CONNECTICUT
OCT 27, 1993
/s/ [illegible]
- - ---------------------------
SECRETARY OF THE STATE
A.M.
[illegible] Time 2 P.M.
- - ----------- ---
- 3 -
<PAGE> 12
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
61-38 Rev. 9/90
Stock Corporation
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
- - -------------------------------------------------------------------------------
1. Name of Corporation (Please enter name within lines)
Bio-Plexus, Inc.
- - -------------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check one)
[X] A. Amended only, pursuant to Conn. Gen. Stat. Section 33-360.
[ ] B. Amended only, to cancel authorized shares (state number of shares
to be cancelled, the class, the series, if any, and the par value,
P.A. 90-107.)
[ ] C. Restated only, pursuant to Conn. Gen. Stat. Section 33-362(a).
[ ] D. Amended and restated, pursuant to Conn. Gen. Stat. Section
33-362(c).
[ ] E. Restated and superseded pursuant to Conn. Gen. Stat. Section
33-362(d).
Set forth here the resolution of amendment and/or restatement. Use an
8 1/2 X 11 attached sheet if more space is needed. Conn. Gen. Stat.
Section 1-9.
RESOLVED, that Article III, Capitalization of the Certificate of
Incorporation of the Company be, and hereby is, amended to increase from Ten
Million (10,000,000) to Twelve Million (12,000,000) the number of shares of
Common Stock, without par value, which the Company shall have authority to
issue.
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate. If 2C or
2D is checked, complete 3A or 3B. If 2E is checked, complete 4.)
3. (Check one) N/A
[ ] A. This certificate purports merely to restate but not to change the
provisions of the original Certificate of Incorporation as supplemented
and amended to date, and there is no discrepancy between the provisions
of the original Certificate of Incorporation as supplemented and
amended to date, and the provisions of this Restated Certificate of
Incorporation. (If 3A is checked, go to 5 & 6 to complete this
certificate.).
[ ] B. This Restated Certificate of Incorporation shall give effect to
the amendment(s) and purports to restate all those provisions now in
effect not being amended by such new amendment(s). (If 3B is checked,
check 4, if true, and go to 5 & 6 to complete this Certificate.)
4. (Check, if true) N/A
[ ] This restated Certificate of Incorporation was adopted by the greatest
vote which would have been required to amend any provision of the
Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
<PAGE> 13
The manner of adopting the resolution was as follows: (Check one A, or B, or C)
[X] A. By the board of directors and shareholders, pursuant to Conn.
Gen. Stat. Section 33-360. Vote of Shareholders: (Check (i) or
(ii), and check (iii) if applicable.)
(i) [ ] No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption ______________________________
Vote Favoring Adoption __________________________________
(ii) [X] There are shares of more than one class entitled to
vote as a class. The designation of each class required for
adoption of the resolution and the vote of each class in favor
of adoption were as follows:
(Use an 8 1/2 x 11 attached sheet if more space is needed.
Conn. Gen. Stat. Sections 1-9.)
See Exhibit 1.
(iii) [X] Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat. Section
33-311a(a).
[ ] B. By the board of directors acting along, pursuant to Conn. Gen.
Stat. Sections 33-360)b)(2) or 33-362(a).
The number of affirmative votes required to adopt such
resolution is: _________________________
The number of directors' votes in favor of the resolution
was: _____________________________
We hereby declare, under the penalties of false statement, that the statements
made in the foregoing certificate are true:
<TABLE>
(Print or Type) Signature (Print or Type) Signature
<S> <C> <C>
- - -------------------------------------------------------------------------------------------------------
Name of Pres. Name of Sec.
Carl R. Sahi /s/ Carl R. Sahi Nancy S. Lautenbach /s/ Nancy S. Lautenbach
- - -------------------------------------------------------------------------------------------------------
</TABLE>
[ ] C. The corporation does not have any shareholders. The resolution
was adopted by vote of at least two-thirds of the incorporators
before the organization meeting of the corporation, and approved
in writing by all subscribers for shares of the corporation. If
there are no subscribers, state NONE below.
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
- - -------------------------------------------------------------------------------
Signed Incorporator Signed Incorporator Signed Incorporator
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
Signed Subscriber Signed Subscriber Signed Subscriber
- - -------------------------------------------------------------------------------
(Use an 8 1/2 x 11 attached sheet if more space is needed.
Conn. Gen. Stat. Sections 1-9)
6. Dated at Vernon, CT this 30th day of July, 1996.
Rec, CC, GS: (Type or Print)
-----------------------------------------------
Pepe & Hazard Attn: A.C. Brown
Goodwin Square
Hartford, CT 06102-4302
Please provide filer's name and complete
address for mailing receipt.
<PAGE> 14
Exhibit 1
A vote of holders of not less than a majority of the voting power of the issued
and outstanding shares of capital stock of the Corporation was required to
adopt the foregoing resolution. Each holder of shares of Common Stock was
entitled to one vote for each share and each holder of shares of Class A Common
Stock was entitled to five hundred votes for each share. 8,446,318 votes
represent a majority of the voting power of the issued and outstanding shares
of capital stock. 15,921,489 votes were cast to adopt the resolution.
The vote of holders of not less than a majority of the voting power of
the issued and outstanding shares of Common Stock was required to adopt the
foregoing resolution. Each holder of shares of Common Stock was entitled to one
vote for each share in such class vote. 3,446,318 votes represent a majority of
the voting power of the issued and outstanding shares of Common Stock.
5,921,489 votes were cast to adopt the resolution.
The vote of holders of not less than a majority of the voting power of
the issued and outstanding shares of Class A Common Stock was required to adopt
the foregoing resolution. Each holder of shares of Class A Common Stock was
entitled to one vote for each share in such class vote. 10,001 votes represent
a majority of the voting power of the issued and outstanding shares of Class A
Common Stock. 20,000 votes were cast to adopt the resolution.
Page 1 of 1
<PAGE> 15
CERTIFICATE OF CORRECTION OF
CERTIFICATE OF AMENDMENT
OF
BIO-PLEXUS, INC.
1. This Certificate of Correction of Bio-Plexus, Inc. (the "Corporation")
corrects the Certificate of Amendment of the Corporation filed with and
recorded by the Secretary of the State of Connecticut on the 2nd day of
August, 1996, (the "Certificate").
2. On July 11, 1996, the Shareholders of the Corporation adopted two
resolutions amending the Corporation's Certificate of Incorporation.
One resolution increased the number of authorized shares of Common
Stock under Article II and the second resolution added a new Article
VIII.
3. The Certificate contained an incorrect statement by including the first
resolution and related vote but inadvertently failing to include the
second resolution and related vote. To correct the certificate, the
missing resolution and vote information for the omitted resolution are
set forth below:
RESOLVED, that the Certificate of Incorporation of the
Corporation be and hereby is amended by adding the following
new Article VIII:
ARTICLE VIII
COMMITTEES
The Board of Directors shall have the authority to create one
or more committees of the Board of Directors and to delegate
to such committees all or such portion of the power and
authority of the Board of Directors as the Board shall
determine, such determination being conclusively evidenced by
the passage of a resolution or resolutions of the Board
establishing one or more committees and delegating such power
and authority.
A vote of holders of not less than a majority of the voting power of
the issued and outstanding shares of capital stock of the Corporation was
required to adopt the foregoing resolution. Each holder of shares of Common
Stock was entitled to one vote for each share and each holder of shares of Class
A Common Stock was entitled to five hundred votes for each share. 8,446,318
votes represent a majority of the voting power of the issued and outstanding
shares of capital stock. 15,991,063 votes were cast to adopt the foregoing
resolution.
Dated this 27th day of June, 1997.
/s/ Ronald A. Haverl
-------------------------------------
Ronald A. Haverl
Chairman of the Board of Directors
<PAGE> 16
CERTIFICATE OF AMENDMENT
OF
BIO-PLEXUS, INC.
1. The name of the corporation is Bio-Plexus, Inc. (the "Corporation")
2. The Certificate of Incorporation of the Corporation is amended as
follows:
FIRST: Article III, Capitalization, is amended and restated to read as
follows:
ARTICLE III
CAPITALIZATION
The aggregate number of shares which the Corporation shall
have authority to issue is Eighteen Million Twenty Thousand
(18,020,000), which are divided into three classes: (i) Three Million
(3,000,000) shares of Preferred Stock, without par value (the
"Preferred Stock"); (ii) Fifteen Million (15,000,000) shares of Common
Stock, without par (the "Common Stock"); and (iii) Twenty Thousand
(20,000) shares of Class A Common Stock, without par value (the "Class
A Common Stock").
SECOND: Article IV, Relative Rights and Preferences, the introductory
language is amended and restated to read as follows:
The relative rights, preferences and limitations of the shares
of Common Stock, Class A Common Stock, and Preferred Stock (to the
extent fixed by this Certificate of Incorporation) are as follows:
THIRD: Article IV, Section B.2, Class A Common Stock, Voting Rights, is
amended and restated to read as follows:
Each issued and outstanding share of Class A Common Stock
shall entitle the holder thereof to five hundred (500) votes on any
matter submitted to the shareholders of the Corporation for action. If
at any time the Corporation shall pay a stock dividend or distribution
on its Common Stock or Preferred Stock, or split, subdivide, or combine
the outstanding shares of its Common Stock or Preferred Stock, the
number of votes which a share of Class A Common Stock shall entitle the
holder thereof to exercise shall be proportionately adjusted as of the
date after the record date for such dividend, distribution, split,
subdivision or combination so as to maintain the relative voting power
of the Class A Common Stock which existed prior to the occurrence of
such event.
<PAGE> 17
FOURTH: A new Section C, Preferred Stock, is added to Article IV. Such
Section shall read as follows:
The Board of Directors may establish one or more series of
Preferred Stock and shall determine the preferences, limitations and
relative rights of the class of Preferred Stock and any series of the
class.
3. The resolution was approved by the shareholders at the Corporation's
Annual Meeting on June 25, 1997. As of the record date (May 19, 1997)
the Corporation had two classes of capital stock: Common Stock and
Class A Common Stock. On the record date there were 7,809,427 shares of
Common Stock and 20,000 shares of Class A Common Stock issued and
outstanding and entitled to vote at the meeting. In the vote on the
amendment by the shareholders as a single voting group each share of
Common Stock was entitled to one vote and each share of Class A Common
Stock was entitled to five hundred (500) votes. Each class was also
entitled to vote separately as a class on the amendment. The number of
votes indisputably represented at the meeting were: (i) 7,288,342
Common Stock votes, voting separately as a class, and voting together
with the Class A Common; and (ii) 20,000 Class A Common votes, voting
separately as a class, and 10,000,000 Class A Common votes, voting
together with the Common Stock. Included in the 7,288,342 Common Stock
votes represented at the meeting were 2,828,387 broker non-votes. The
vote on the amendment was as follows:
Class A and Common voting together
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<C> <C> <C>
14,032,178 387,692 40,085
</TABLE>
Class A and Common voting as separate voting groups
Class A
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<C> <C> <C>
20,000 --- ---
</TABLE>
Common
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<C> <C> <C>
4,032,178 387,692 40,085
</TABLE>
-2-
<PAGE> 18
The number of votes cast for the amendment by each class was
sufficient for approval by such class and the votes cast for
the amendment by all shareholders voting together as a single
group was sufficient for approval by all shareholders.
4. Dated this 27th day of June, 1997.
/s/ Ronald A. Haverl
------------------------------------
Ronald A. Haverl, Chairman of the
Board of Directors
-3-
<PAGE> 19
CERTIFICATE OF AMENDMENT
OF
BIO-PLEXUS, INC.
FIRST The name of the corporation is Bio-Plexus, Inc. (the
"Corporation").
SECOND The Board of Directors adopted the following resolution on
July 24, 1997 amending the Certificate of Incorporation, in
part, to increase the number of shares designated as Series A
Preferred Stock and thereby decrease the number of shares
designated as Preferred Stock.
RESOLVED, that the Certificate of Incorporation of Bio-Plexus, Inc.
(the "Corporation") be and hereby is amended as follows to amend and restate the
preferences, limitations and relative rights of the Series A Preferred Stock:
1. Designation and Amount
There is hereby established a series of Preferred Stock which
is designated as the Series A Preferred Stock (the "Series A Preferred Stock").
The authorized number of shares of Series A Preferred Stock shall be 1,250,000
shares. The issuance price of the Series A Preferred Stock (the "Issuance
Price") shall be four dollars ($4.00) per share.
2. Dividends
a. General
The holders of the Series A Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors, out of
funds legally available therefor, cumulative cash dividends, at the rate of 5%
of the Issuance Price per annum per share from the date of issuance. Such
cumulative dividends shall be payable quarterly, in arrears, on the thirtieth
day of each October, January, April and July commencing October 30, 1997.
b. Dividends cumulative
Dividends on the Series A Preferred Stock shall
accrue and be cumulative from the date of issuance, whether or not there are
funds of the Corporation legally available for the payment of such dividends in
any dividend period.
c. Restrictions on Dividend Payments
So long as any shares of Series A Preferred Stock
shall be outstanding, no dividend shall be declared or paid or set apart for
payment on the Common Stock until all accrued and unpaid dividends on the Series
A Preferred Stock have been paid in full, or declared and
sufficient funds set aside for payment thereof.
<PAGE> 20
3. Liquidation Preference
In the event of any liquidation, dissolution, or winding up of
the affairs of the Corporation, whether voluntary or involuntary, each issued
and outstanding share of Series A Preferred Stock shall entitle the holder of
record thereof to payment at a rate per share equal to the Issuance Price
(subject to adjustment as provided herein) plus accrued and unpaid dividends
thereon, before any payment or distribution of the net assets of the Corporation
shall be made to or set apart for the holders of record of the issued and
outstanding shares of Common Stock in respect of said shares of Common Stock.
The preferential amounts set forth herein shall be appropriately adjusted for
stock splits and stock dividends, stock combinations, recapitalization, and
other changes to the capital structure of the Corporation. After setting apart
or paying in full the preferential amounts aforesaid to the respective holders
of record of the issued and outstanding shares of Series A Preferred Stock, the
remaining net assets, if any, shall be distributed exclusively to the holders of
record of the issued and outstanding shares of Common Stock, each issued and
outstanding share of Common Stock entitling the holder of record thereof to
receive an equal proportion of said remaining net assets. If the net assets of
the Corporation shall be insufficient to pay in full the preferential amounts to
which the holders of record of all the outstanding shares of Series A Preferred
Stock are respectively entitled as aforesaid, the entire net assets of the
Corporation shall be distributed ratably to the holders of all the outstanding
shares of Series A Preferred Stock in proportion to the full amounts to which
they are respectively entitled, and the holders of shares of Common Stock shall
in no event be entitled to participate in the distribution of said net assets in
respect of their shares of Common Stock.
4. Voting Rights
Each issued and outstanding share of Series A Preferred Stock
shall entitle the holder thereof to one vote on any matter submitted to the
shareholders of the Corporation for action.
5. Conversion
a. General
Shares of Series A Preferred Stock may be converted,
at the option of the holder thereof, into fully paid and nonassessable shares of
Common Stock of the Corporation. The shares of Series A Preferred Stock will be
converted into shares of Common Stock at a price (the "Conversion Price") equal
to the greater of (i) two dollars and fifty cents ($2.50) per share (the
"Minimum Conversion Price"); and (ii) 85% of the Market Price of the shares of
Common Stock on the date notice of conversion is filed by the holder with the
Corporation. As used herein, the term "Market Price" shall mean the average
closing bid price of the Common Stock (as reported by Bloomberg, L.P.) over the
ten (10) consecutive trading days ending on the trading day prior to the date
that notice of conversion is filed by the holder with the Corporation. If the
closing bid price of the Common Stock is not reported by Bloomberg L.P., the
Market Price shall be determined in good faith by the Corporation's Board of
Directors. The number of shares of Common Stock to be issued for each share of
Series A Preferred Stock being converted shall be
-2-
<PAGE> 21
an amount determined by dividing: (i) the Issuance Price plus the value of
accrued and unpaid dividends on such share of Series A Preferred Stock by (ii)
the Conversion Price.
b. Adjustments
i. The Issuance Price, Minimum Conversion Price
and the kind and amount of securities and
property for which the shares of Series A
Preferred Stock may be converted, shall be
subject to adjustment from time to time as
set forth herein. If, at any time after the
issuance of the Series A Preferred Stock,
the Corporation shall (A) declare or pay a
dividend or make a distribution to all
holders of the Common Stock in shares of
Common Stock, (B) subdivide its outstanding
shares of Common Stock into a greater number
of shares or (C) combine its outstanding
shares of Common Stock into a smaller number
of shares, then the Issuance Price and
Minimum Conversion Price, in effect
immediately prior to such action shall be
appropriately adjusted to reflect such
dividend, subdivision or stock combination.
Such adjustment shall be effective
immediately after the opening of business on
the day next following the record date for
determination of holders of Common Stock
entered to receive such dividend, or the day
upon which such subdivision, combination or
reclassification shall become effective. If
the adjustment occurs during the period that
the Conversion Price is being calculated,
appropriate adjustment shall also be made to
that value.
ii. No adjustment shall be made hereunder unless
such adjustment would result in an increase
or decrease of at least one percent (1%) of
the Issuance Price or Minimum Conversion
Price. Any change that would require an
adjustment but for this provision shall be
carried forward and taken into account in
determining whether a subsequent adjustment
should be made.
iii. If any event, shall occur during the period
that the Conversion Price is being
calculated which would cause an adjustment
to the Conversion Price and such event is
not otherwise addressed herein, the Board of
Directors shall in good faith adjust the
Conversion Price to reflect the occurrence
of such event.
iv. Upon any adjustment under this Section 5(b),
then and in each such case the Corporation
shall give written notice thereof, by first
class mail, postage prepaid, addressed to
each holder of Series A Preferred Stock, at
the address of such holder as shown on the
books of the Corporation, which notice shall
state the adjustments being made and shall
state in reasonable detail the method of
calculation and the facts upon which the
calculation is based.
-3-
<PAGE> 22
c. Reorganization, Reclassification, Consolidation, Merger or
Sale
If any capital reorganization or reclassification of
the capital stock of the Corporation, or any consolidation or merger of the
Corporation with another corporation, or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way (including,
without limitation, by way of consolidation or merger) that holders of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provisions
shall be made whereby each holder of a share or shares of Series A Preferred
Stock shall thereafter have the right to receive, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
of the Corporation immediately theretofore receivable upon the conversion of
such shares, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of Common Stock into which such
shares of Series A Preferred Stock, were convertible immediately before such
reorganization, reclassification, consolidation, merger or sale, and in any such
case appropriate provision shall be made with respect to the rights and
interests of such holder to the end that the provisions hereof shall thereafter
be applicable, as nearly as practicable, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise of such conversion
rights. The Corporation will not effect any consolidation or merger unless prior
to the consummation thereof the successor corporation (if other than the
Corporation) resulting from such consolidation or merger shall assume by written
instrument, executed and mailed or delivered to each holder of shares of Series
A Preferred Stock at the last address of such holder appearing on the books of
the Corporation, the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to receive.
d. Notices
If, at any time while shares of Series A Preferred
Stock are outstanding, the Corporation shall (i) declare a dividend (or any
other distribution) on its Common Stock, other than in cash, or (ii) reclassify
its Common Stock (other than through a subdivision or combination thereof or a
change in par value) or become a party to any consolidation or merger or sale or
transfer of all or substantially all of the assets of the Corporation, for which
approval of the holders of its capital stock is required, then the Corporation
shall cause to be mailed to registered holders of Series A Preferred Stock, at
their last addresses as they shall appear on the books of the Corporation, at
least thirty (30) days prior to the applicable record date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend or distribution, or, if a record is not to be
taken, the date as of which holders of Common Stock of record who shall be
entitled to such dividend or distribution are to be determined, or (y) the date
on which any such reclassification, consolidation, merger, sale or transfer is
expected to become effective, and the date as of which it is expected that
holders of record of Common Stock shall be entitled to exchange their Common
Stock for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, sale or transfer. Failure to give or
receive the notice required by this Paragraph (d) or any defect therein shall
not affect the legality or validity of any
-4-
<PAGE> 23
such dividend, distribution, reclassification, consolidation, merger, sale,
transfer or other action.
e. Exercise of Conversion Rights
The holder of any shares of Series A Preferred Stock
may exercise such holder's option to convert such shares into shares of Common
Stock only by surrendering for such purpose to the Corporation the certificates
representing the shares to be converted, accompanied or preceded by written
notice (which may be transmitted by telecopier) that such holder elects to
convert such shares in accordance with the provisions of this Section 5. Said
notice shall also state the name or names (with addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued. Each certificate or certificates surrendered
for conversion shall, unless the shares issuable on conversion are to be issued
in the same name as that in which such certificate or certificates are
registered, be accompanied by instruments of transfer, in form satisfactory to
the Corporation, duly executed by the holder or his duly authorized attorney.
Each conversion shall be deemed to have been effected on the date on which such
notice shall have been received by the Corporation, provided that the
certificates to which such notice relates are received by the Corporation no
later than the tenth business day following the date of receipt of such notice,
and the person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become on said date the holder or holders of record of the shares
represented thereby notwithstanding that the transfer books of the Corporation
may then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to such person. Within ten business days
after receipt of the certificates representing the shares to be converted and
the notice of conversion, the Corporation shall issue and deliver to the person
or person entitled to receive the same a certificate or certificates
representing the number of shares of Common Stock issuable upon such conversion.
f. Fractional Shares
No fractional shares of Common Stock shall be issued
in connection with the conversion of shares of Series A Preferred Stock into
Common Stock. Instead of any factional share of Common Stock which would
otherwise be issuable on conversion, the Corporation shall pay a cash adjustment
with respect to such fractional share computed on the basis of the then current
Market Price.
g. Stock to be Reserved
The Corporation will at all times reserve and keep
available out of its authorized Common Stock or its treasury shares, solely for
the purpose of issuance upon the conversion of the shares of Series A Preferred
Stock , such number of shares of Common Stock as shall then be issuable upon the
conversion of all outstanding shares of Series A Preferred Stock. The
Corporation covenants that all shares of Common Stock which shall be so issued
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof.
-5-
<PAGE> 24
h. No Reissuance of Shares
Shares of Series A Preferred Stock which are
converted into shares of Common Stock as provided herein shall not be reissued.
i. Issue Tax
The issuance of certificates for shares of Common
Stock upon conversion of shares of Series A Preferred Stock shall be made
without charge to the holders thereof for any issuance tax in respect thereof,
provided that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the shares of Series A
Preferred Stock, which are being converted.
j. Closing of Books
The Corporation will at no time close its transfer
books against the transfer of any shares of Series A Preferred Stock or of any
shares of Common Stock issued or issuable upon the conversion of any shares of
Series A Preferred Stock in any manner which interferes with the timely
conversion of the Series A Preferred Stock.
THIRD The amendment was adopted by the Board of Directors without
shareholder action. No shareholder vote was required for
adoption.
FOURTH Dated this 25th day of July, 1997.
/s/ Ronald A. Haverl
-----------------------------------
Ronald A. Haverl, Chairman of the
Board of Directors
-6-
<PAGE> 25
Exhibit 3.1
CERTIFICATE OF AMENDMENT
STOCK CORPORATION
OFFICE OF THE SECRETARY OF THE STATE
30 Trinity Street/P.O. Box 150470/Hartford, CT 06115-0470/new/1-97
- - -------------------------------------------------------------------------------
Space for Office Use Only
===============================================================================
1. NAME OF CORPORATION:
BIO-PLEXUS, INC.
- - -------------------------------------------------------------------------------
2. THE CERTIFICATE OF INCORPORATION IS (check A.,B., or C.):
X A. AMENDED.
- - ----
B. AMENDED AND RESTATED.
- - ----
C. RESTATED.
- - ----
- - --------------------------------------------------------------------------------
3. TEXT OF EACH AMENDMENT/RESTATEMENT:
See attached.
(Please reference an 8 1/2 X 11 attachment if additional space is needed)
- - -------------------------------------------------------------------------------
<PAGE> 26
- - -------------------------------------------------------------------------------
Space For Office Use Only
- - -------------------------------------------------------------------------------
VOTE INFORMATION (check A., B. or C.)
X A. The resolution was approved by shareholders as follows:
(set forth all voting information required by Conn. Gen. Stat. section 33-800
as amended in the space provided below)
The number of shares outstanding and eligible to vote was
12,154,851. The number of votes represented at the meeting were
9,825,585. The total number of votes cast were:
For 4,176,272
Against 823,910
The number of votes cast for the amendment was sufficient for
approval.
- - --------------------------------------------------------------------------------
B. The amendment was adopted by the board of directors without shareholder
- - --- action. No shareholder vote was required for adoption.
C. The amendment was adopted by the incorporators without shareholder
- - --- action. No shareholder vote was required for adoption.
- - --------------------------------------------------------------------------------
5. EXECUTION
- - --------------------------------------------------------------------------------
Dated this 7th day of August, 1998
- - --------------------------------------------------------------------------------
Richard L. Higgins President /s/ Richard L. Higgins
- - --------------------------------------------------------------------------------
Print or type name of signatory Capacity of signatory Signature
<PAGE> 27
The Certificate of Incorporation of Bio-Plexus, Inc. is amended as follows:
1. Article III, Capitalization, is amended to increase the number of
authorized shares of Common Stock of the Corporation by three million
(3,000,000) shares from fifteen million (15,000,000) shares to eighteen
million (18,000,000) shares and to eliminate the Class A Common Stock.
Article III shall read as follows:
"ARTICLE III
CAPITALIZATION
The aggregate number of shares which the Corporation shall have authority
to issue is twenty-one million (21,000,000) shares, which are divided into
two classes: (i) three million (3,000,000) shares of Preferred Stock,
without par value (the "Preferred Stock"); and (ii) eighteen million
(18,000,000) shares of Common Stock, without par value (the "Common
Stock")."
2. Article IV, Relative Rights and Preferences is amended to eliminate the
reference to Class A Common Stock in the introduction. The introductory
language shall read as follows:
"The relative rights, preferences and limitations of the shares of Common
Stock and Preferred Stock (to the extent fixed by this Certificate of
Incorporation) are as follows:"
3. Article IV, Section B, Class A Common Stock is deleted in its entirety to
effect the elimination of the Class A Common Stock.
4. Article IV, Section C, Preferred Stock shall become Article IV, Section B,
Preferred Stock.
5. The Series A Preferred Stock and its associated relative rights,
preferences and limitations are eliminated.
6. In all other respects the Certificate Amending and Restating The
Certificate of Incorporation of Bio-Plexus, Inc., filed October 22, 1992,
as amended by Certificate Amending The Certificate of Incorporation of
Bio-Plexus, Inc., filed October 27, 1993, as amended by Certificate
Amending Certificate of Incorporation of Bio-Plexus, Inc., filed August 2,
1996, as amended by Certificate of Correction of Certificate of Amendment
of Bio-Plexus, Inc., filed June 30, 1997, as amended by Certificate of
Amendment of Bio-Plexus, Inc., filed June 30, 1997, as amended by
Certificate of Amendment of Bio-Plexus, Inc., filed June 30, 1997, as
amended by Certificate of Amendment of Bio-Plexus, Inc., filed July 30,
1997 is hereby ratified and confirmed.
<PAGE> 1
Exhibit 4.7
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
IT HAS BEEN REGISTERED UNDER SUCH ACT AND LAWS OR AN EXEMPTION FROM REGISTRATION
IS AVAILABLE.
BIO-PLEXUS, INC.
TERM PROMISSORY NOTE
$250,000.00 Vernon, Connecticut
September 8, 1998
FOR VALUE RECEIVED the undersigned, BIO-PLEXUS, INC., a Connecticut
corporation with its principal place of business in Vernon, Connecticut (the
"Maker") hereby promises to pay to the order of CARL R. SAHI, an individual
residing at 398 High Street, Coventry, Connecticut ("Holder") the principal sum
of Two Hundred Fifty Thousand Dollars ($250,000.00), together with interest
thereon at the rate set forth below from the date of this Note. Principal and
interest shall be paid as set forth below. Payment of principal and interest
shall be made in lawful money of the United States of America at the address of
Holder as referenced herein or at such other place as Holder shall have
designated to the Maker in writing.
This Note shall have the following additional terms and provisions:
1. Principal Payment. If not sooner paid, the principal amount of this
Note shall be paid on September 8, 1999 (the "Maturity Date").
2. Interest. Interest on this Note shall be payable quarterly in arrears
commencing on December 8, 1998, and thereafter on March 8, 1999, June 8, 1999,
and the final payment due September 8, 1999, at the place heretofore designated
for the payment of principal, in like money, at the rate of eight percent (8.0%)
per annum. Interest on this Note shall be computed on a 365/365 simple interest
basis, that is, by applying the ratio of the annual interest rate divided by the
number of days in the year times the outstanding principal balance times the
actual number of days the principal balance is outstanding.
3. Payment; Prepayment. This Note may be prepaid in whole or in part at
any time without prior notice or penalty. Early payments will not relieve Maker
of its obligation to make payments in accordance with the payment schedule,
except upon agreement by Holder, but will be applied to reduce the unpaid
principal balance and may result in reduction or elimination of one or more
scheduled payments.
4. Events of Default; Acceleration. The following shall constitute "Events
of Default" under this Note:
<PAGE> 2
(i) A default by the Maker in the payment of any part of the principal
amount or interest of this Note within ten (10) days after the same shall become
due and payable, whether at the Maturity Date or at any other date fixed for
payment.
(ii) The entry of a decree or order for relief by a court having
jurisdiction in respect of the Maker in an involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law, or the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Maker or for any substantial part of the Maker's
property, or the issuance of an order for the winding-up or liquidation of the
affairs of the Maker and the continuance of such decree or order unstayed and in
effect for a period of sixty (60) consecutive days; or the commencement by the
Maker of a voluntary case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, or the consent by the Maker to the appointment of, or taking
possession by, a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Maker or for any substantial
part of the property of the Maker, or the making by the Maker of an assignment
for the benefit of creditors, or the taking by the Maker of any corporate action
in furtherance of any of the foregoing.
(iii) The dissolution and winding up of the affairs of the Maker.
If any of the foregoing Events of Default shall occur, Holder may, at his
option, by written notice to the Maker, accelerate the Maker's obligations
hereunder and declare the entire unpaid principal amount, together with accrued
and unpaid interest thereon, to be immediately due and payable. In addition, in
such event, at Holder's election, the interest rate payable hereunder shall
increase to twelve percent (12%) per annum.
5. Remedies on Default. In case one or more Events of Default shall occur
and be continuing, and this Note shall be due and payable as set forth in
Section 5 hereof and, subject to the terms hereof, Holder may proceed to protect
and enforce Holder's rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein, or for an injunction against a violation of any of the terms
hereof, or in aid of the exercise of any power granted hereby or by law. In the
event of default, the Maker agrees to pay to Holder such further amount as shall
be sufficient to cover the reasonable cost and expenses of collection, and all
reasonable costs related to Holder's enforcement of Holder's rights under this
Note, including, without limitation, reasonable attorneys' fees and expenses
whether or not a formal action is commenced. No right, power or remedy conferred
hereby upon Holder shall be exclusive of any other right, power or remedy
referred to herein nor now or hereafter available at law, in equity, by statute
or otherwise. No course of dealing and no delay on the part of Holder in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice Holder's rights, powers and remedies.
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<PAGE> 3
6. Exchange of Note. At the request of Holder and subject to the terms
hereof, upon surrender of this Note to the Maker at its principal office, the
Maker at its expense will issue in exchange hereof a new Note or Notes, in such
denomination or denominations and payable to the order of such payee or payees
as may be requested. Such new Note or Notes shall be in the form of this Note
and shall be in an aggregate principal amount equal to the principal amount of
this Note then outstanding.
7. Replacement of Note. Upon receipt of evidence reasonably satisfactory
to the Maker of the loss, theft, destruction or mutilation of this Note and, in
the case of any such loss, theft or destruction, upon delivery of an
indemnification agreement by Holder in a form reasonably acceptable to the
Maker, or, in the case of any such mutilation, upon surrender and cancellation
of this Note, the Maker at its expense will execute and deliver, in lieu hereof,
a new Note of like tenor.
8. Transfer of Note. Transfer of this Note is subject to restrictions
imposed by federal and state securities laws.
9. Maximum Rate of Interest. Notwithstanding any provisions of this Note,
it is the understanding and agreement of the Maker and Holder that the maximum
rate of interest to be paid by the Maker to Holder shall not exceed the highest
rate of interest permissible to be charged by Holder under applicable law. Any
amount paid in excess of such rate shall be considered to have been a payment in
reduction of principal.
10. Notices. Any notice, request or instruction to be given hereunder
shall be in writing, shall be hand-delivered, sent by facsimile transmission,
mailed by certified mail, return receipt requested, postage prepaid and
addressed as follows, if to the Maker, at 129 Reservoir Road, Vernon,
Connecticut 06066; and if to Holder, addressed to Holder's address as shown on
the records of the Maker. Either of the addresses specified above may be changed
by notice given as herein provided. All communications will be deemed effective
upon receipt.
11. General. This Note shall be governed by and construed and enforced in
accordance with the laws of the State of Connecticut without giving effect to
its choice of law provisions. The paragraph headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of the terms of this Note. This Note shall be binding upon the
Maker and its successors and assigns and shall inure to the benefit of and be
enforceable by Holder and Holder's successors and assigns. This Note may not be
modified or altered in any manner except by a signed writing. The failure of
Holder at any time or times to require performance of any provision hereof shall
in no manner affect the right at a later time to enforce the same. No waiver by
Holder of any condition of this Note or the breach of any provision hereof,
whether by conduct or otherwise, in any one or more instances shall be deemed to
be construed as a further or continuing waiver of any such condition or breach.
By accepting this Note, Holder agrees to be bound by the terms and conditions
hereof.
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<PAGE> 4
12. COMMERCIAL TRANSACTION. THE MAKER ACKNOWLEDGES THAT THE DELIVERY OF
THIS NOTE IS PART OF A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION AND
WAIVES ANY RIGHT TO A NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, AS AMENDED, OR OTHER STATUTE OR STATUTES AFFECTING PREJUDGMENT
REMEDIES AND AUTHORIZES HOLDER'S ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT
REMEDY WITHOUT COURT ORDER, PROVIDED THE COMPLAINT SHALL SET FORTH A COPY OF
THIS WAIVER. FURTHER, TO THE EXTENT ALLOWED UNDER APPLICABLE LAW, MAKER HEREBY
WAIVES DEMAND, PRESENTMENT FOR PAYMENT, PROTEST, NOTICE OF PROTEST, NOTICE OF
DISHONOR, DILIGENCE IN COLLECTION, NOTICE OF NONPAYMENT OF THIS NOTE AND ANY AND
ALL NOTICES OF A LIKE NATURE.
BIO-PLEXUS, INC.
By /s/ Richard L. Higgins
-------------------------------------
Richard L. Higgins
President and CEO
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<PAGE> 1
Exhibit 4.8
NEITHER THIS WARRANT, NOR THE SHARES OF COMMON STOCK TO BE ISSUED UPON EXERCISE
HEREOF, HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
QUALIFIED OR REGISTERED UNDER ANY STATE SECURITIES LAWS, AND THIS WARRANT HAS
BEEN, AND THE COMMON STOCK TO BE ISSUED UPON EXERCISE HEREOF WILL BE, ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF. NO SALE OF THIS WARRANT, OR OF THE COMMON STOCK TO BE
ISSUED UPON EXERCISE HEREOF, OR OTHER DISPOSITION MAY BE MADE WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND COMPLIANCE WITH SUCH LAWS,
OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE ISSUER AND ITS COUNSEL,
THAT SAID REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND THAT SUCH LAWS HAVE
BEEN COMPLIED WITH.
VOID AFTER 5:00 P.M. HARTFORD, CONNECTICUT TIME
ON SEPTEMBER 8, 2001
BIO-PLEXUS, INC.
30,000 Shares Issued As Of September 8, 1998
Common Stock Warrant
THIS CERTIFIES THAT for value received CARL R. SAHI, or other legal
holder ("Holder") is entitled to purchase at any time on or before 5:00 p.m.,
Hartford, Connecticut time on September 8, 2001 ("Exercise Period"), Thirty
Thousand (30,000) fully paid and non-assessable shares of the common stock,
without par value (the "Common Stock"), of BIO-PLEXUS, INC., a Connecticut
corporation (the "Company"), at the purchase price of $2.09 per share (the
"Exercise Price").
1. Cash Exercise. The purchase rights represented by this Warrant may only be
exercised by the surrender, during the Exercise Period and at the principal
office of the Company, of this Warrant accompanied by either full payment of the
Exercise Price (or a portion thereof in the event of partial exercise) in the
form of a certified, cashier's or other check acceptable to the Company.
2. Net Issue Exercise. In lieu of exercising this Warrant pursuant to Section 1,
Holder may elect to receive shares of Common Stock equal to the value of this
Warrant by surrender of this Warrant during the Exercise Period at the principal
office of the Company together with notice of such election, in which event the
Company shall issue to Holder a number of shares of the Company's Common Stock
computed using the following formula:
<PAGE> 2
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 the Company's Common Stock
purchasable upon exercise of this Warrant.
A = the fair market value of one share of the Company's
common stock (at the date of such calculation).
B = the Exercise Price per share of the Company's Common
Stock.
3. Fair Market Value. For purposes of Section 2, "Fair Market Value" shall mean
the closing price of the Company's common stock quoted on the Nasdaq Stock
Market or any exchange on which the common stock is listed or the average of the
closing bid and asked prices of the Company's common stock quoted in the
Over-The-Counter Market Summary (if not on the Nasdaq system), whichever is
applicable, for the five (5) trading days prior to the date of determination of
fair market value; or if the Company's common stock is not traded on an exchange
or over-the-counter, the per share fair market value of the common stock shall
be as determined in good faith by the Company's Board of Directors.
4. No Fractional Shares. No fractional shares of Common Stock will be issued
upon the exercise of this Warrant, but in lieu thereof a cash payment will be
made.
5. Certain Adjustments of Shares Purchasable and Per-Share Exercise Price. The
number of shares which may be purchased upon exercise hereof as set forth above,
and the Exercise Price, are such number and Exercise Price as of the date set
forth above, based on the shares of Common Stock of the Company as constituted
at such date.
The Exercise Price and the number and kind of shares which may be
purchased upon the exercise of this Warrant are, upon the happening of certain
events, subject to modification and adjustment as follows:
(i). If the Company shall at any time pay a stock dividend or
distribution on its Common Stock, or if the Company shall at any time either
split, subdivide or combine the outstanding shares of its Common Stock, the
Exercise Price shall be proportionately adjusted as of the day after the record
date for the dividend, distribution, split, subdivision or combination.
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<PAGE> 3
(ii). In the event of any capital reorganization or any
reclassification of the Company's Common Stock or of the consolidation or merger
of the Company into another corporation, this Warrant shall thereafter be
exercisable for the number of shares of stock or other securities or property
(including, without limitation, cash) to which a holder of the number of shares
of Common Stock of the Company deliverable upon exercise of this Warrant
immediately prior to such reorganization, classification, consolidation or
merger would have been entitled upon such event and, in any such case,
appropriate adjustment (as determined by the Board of Directors of the Company)
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests thereafter of the Holder, to the end that the
provisions of this Warrant (including provisions of the Exercise Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the exercise of
this Warrant.
(iii). In the event the Company shall make a stock dividend or
distribution on its Common Stock, consisting of shares of any class of its
capital stock other than the Common Stock or of any evidence of its indebtedness
or assets (excluding cash) or shall issue rights and warrants generally to
holders of Common Stock, then the applicable Exercise Price shall be
appropriately adjusted, effective immediately after the record date for the
determination of shareholders entitled to receive such stock dividend,
distribution, right or warrant, to reflect the fair market value as of such
date, as determined by the Company's Board of Directors, of the stock,
indebtedness, assets, rights or warrants to be distributed on one share of the
Company's Common Stock, provided that in no event will the Exercise Price be
increased pursuant to this paragraph (iii).
Whenever the Exercise Price of this Warrant is adjusted pursuant to
paragraphs (i) through (iii) above, the number of shares of Common Stock or
other securities deliverable on the exercise hereof shall be appropriately
adjusted.
As soon as practical after any adjustment is made hereunder, the
Company shall give written notice thereof to Holder, which notice shall state
the new content of this Warrant resulting from such adjustment and shall set
forth in reasonable detail the method of calculation and the facts upon which
such adjustment is premised.
6. New Warrants. This Warrant, upon surrender at the principal office of the
Company, may be exchanged for another Warrant or Warrants of like tenor and date
entitling Holder to purchase a like aggregate number of shares of Common Stock
or other securities as this Warrant entitled Holder to purchase. If this Warrant
shall be exercised in part, Holder shall be entitled to receive upon surrender
hereof, another Warrant or Warrants for that portion of this Warrant not
exercised.
7. No Rights as Shareholder. No Holder of this Warrant shall be entitled to vote
or receive dividends or be deemed the holder of shares of Common Stock or any
other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, or be entitled
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<PAGE> 4
to the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any change in the capitalization of the Company or its consolidation,
merger or sale, or otherwise), to receive notice of meetings, or to receive
dividends or subscription rights or otherwise, until this Warrant shall have
been exercised and the Common Stock purchasable upon the exercise hereof shall
have become deliverable.
8. Securities Laws. Neither this Warrant nor the shares of Common Stock issuable
upon the exercise hereof have been registered under the Securities Act of 1933,
as amended, or any state securities laws, and may not be offered for sale, sold,
pledged, hypothecated or otherwise transferred or disposed of in the absence of
an effective registration statement as to this Warrant or such shares under said
Act and applicable state laws, or an opinion of counsel for the Company that
registration under said Act and laws is not required because an exemption under
said Act and laws is then available. The Company may legend the certificates
representing the shares issued on exercise hereof, to the foregoing effect.
Subject to the foregoing, this Warrant and the shares of Common Stock issued
upon exercise hereof are transferable in whole or in part at the principal
office of the Company.
9. Default, Amendment and Waivers. This Warrant may be amended upon the written
consent of the Company and Holder. The waiver by a party of any breach hereof
for default in payment of any amount due hereunder or default in the performance
hereof shall not be deemed to constitute a waiver of any other default or any
succeeding breach or default.
10. No Waiver. Any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
11. Binding Upon Successors and Assigns. Subject to, and unless otherwise
provided in, this Warrant, each and all of the covenants, terms provisions, and
agreements contained herein shall be binding upon, and inure to the benefit of
the permitted successors, executors, heirs, representatives, administrators and
assigns of the parties hereto.
12. Severability. If any one or more provisions of this Warrant, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Warrant and the application of such
provisions to other persons or circumstances shall be interpreted so as best to
reasonably effect the intent of the parties hereto. The parties further agree to
replace any such void or unenforceable provisions of this Warrant with valid and
enforceable provisions which will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provisions.
13. Notices. Except as otherwise provided herein, notice or other communications
permitted or required hereunder shall be sufficiently given and shall be deemed
effective upon receipt if personally delivered or sent by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
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<PAGE> 5
To The Company: Bio-Plexus, Inc.
129 Reservoir Road
Vernon, CT 06084
To Holder: At Holder's address as it appears
on the records of the Company
or to such other persons and such addresses as shall be designated by the
Company or Holder pursuant to notice given as set forth above.
14. Governing Law. This Warrant is being delivered in the State of Connecticut
and shall be construed and enforced in accordance with and governed by the laws
of such State (irrespective of its choice of law principles).
15. No Public Distribution. Holder, by his acceptance and delivery of shares of
Common Stock or other securities upon exercise of this Warrant shall be deemed
to have represented and warranted that such shares of Common Stock or other
securities will be taken for his own account for investment and not with a view
to resale or distribution, except in compliance with applicable law.
IN WITNESS WHEREOF, BIO-PLEXUS, INC. has caused the signature of its
President and Secretary to be affixed hereon and its corporate seal to be
affixed hereon.
BIO-PLEXUS, INC.
By /s/ Richard L. Higgins
--------------------------------------
Richard L. Higgins
President
Attest:
/s/ Nancy Lautenbach
- - ---------------------------------
Nancy Lautenbach
Its Secretary
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<PAGE> 1
EXHIBIT 10.18
DEVELOPMENT AND LICENSE AGREEMENT
THIS AGREEMENT, is effective as of the 28th day of January, 1997, by
and between JOHNSON & JOHNSON MEDICAL, INC., a New Jersey corporation having an
office at 2500 Arbrook Boulevard, Arlington, Texas 76004-3130 (hereinafter
"JJMI") and BIO-PLEXUS, INC., a corporation of the State of Connecticut having
an office at 384 Merrow Road, Tolland, Connecticut 06084 (hereinafter
"BIO-PLEXUS").
W I T N E S S E T H:
WHEREAS, BIO-PLEXUS is the owner of certain patent rights and know-how
related to safety needles, and in particular, to developments described in U.S.
Patents listed on Exhibit A, certain other patent applications and continuing
development activities relating to safety devices for needles and sharpened
cannulae;
WHEREAS, JJMI wishes to fund and desires that BIO-PLEXUS undertake a
development project concerning such safety devices; and
WHEREAS, BIO-PLEXUS desires that such developments and inventions be
made available to the commercial markets, and in particular, to the Field (as
defined below); and
WHEREAS, JJMI desires to develop and bring to market products which
utilize such inventions related to the Field and to obtain an exclusive,
worldwide license to such inventions, patents and pending patent applications
for the Field;
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1 - DEFINITIONS
Where used in this Agreement, the following terms shall have the
meanings attributed to them herein:
1.1 The term "Affiliate" shall mean any company or other legal entity,
other than JJMI, in whatever country organized, controlling, controlled by, or
under common control with JJMI. The term "control" means the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of an entity, whether through the ownership of voting securities, by
contract, or otherwise, and the term "entity" includes an individual,
corporation or other entity.
1.2 The term "Field" shall mean short peripheral intravenous catheters,
(three inches or less in length) including sideport peripheral catheters. Items
intended to be sold as blood collection needles, syringe needles, winged
infusion needles (butterflies), midline catheters, central and radial arterial
catheters, and Peripherally Inserted Central Catheter (PICC) introducers are
excluded from the Field.
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<PAGE> 3
1.3 The term "Technical Information" shall mean patents, patent
applications, inventions, know-how, and other proprietary rights within the
Field or resulting from the performance of the Development Program and owned,
licensed by or controlled wholly or partially by BIO-PLEXUS.
1.4 The term "Licensed Patent Rights" shall mean
(i) that portion of Technical Information which comprises all
patents and applications for patents filed in any country
containing one or more claims to any invention within the
Field including, but not limited to, those patents listed on
Exhibit A; and
(ii) all patent applications filed in any country which claim the
benefit of the filing date of any of the patents or
applications listed on Exhibit A including all continuing,
divisional, and renewal applications thereof, all parent
applications, all patents which may be granted thereon, and
all reissues, re-examinations and extensions thereof.
1.5 The term "Licensed Products" shall mean any product within the
Field which would, but for the licenses granted herein,
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<PAGE> 4
infringe any Valid Claim of an issued patent included in Licensed Patent Rights.
1.6 The term "Valid Claim" shall mean a claim of an issued patent which
has not lapsed or become abandoned and which claim has not been declared invalid
or unenforceable by an unappealed or unappealable decision or judgment of a
court of competent jurisdiction.
ARTICLE 2 - RESEARCH AND DEVELOPMENT
2.1 During the term of this Agreement, BIO-PLEXUS shall use its best
efforts to develop intravenous catheter Safety Needle Assemblies ("SNAs") to
JJMI specifications (attached in Exhibit B) for marketing by JJMI within the
Field ("Development Program"). BIO-PLEXUS shall develop such SNAs according to
the development plan attached hereto as Exhibit B. During the Development
Program the JJMI specifications may be modified by mutual written consent.
2.2 BIO-PLEXUS shall develop SNAs for two (2) IV catheter hub
configurations. The first SNAs developed shall be compatible with a hub
configuration for a straight plastic hub. A second configuration SNAs may
optionally be required by JJMI for a winged, metal hubbed or side port catheter.
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<PAGE> 5
2.2.1 JJMI may request additional SNAs for peripheral IV catheter
(3 inches or less) in the future. Development costs to be determined by mutual
consent. Unit volume generated by such future developments shall be included
under the licenses granted in this Agreement at the same royalty rates and
aggregated with volumes under this Agreement for royalty determination under
Exhibit C.
2.3 Each hub configuration shall be represented by approximately ten
(10) product codes which will be dependent upon gauge size and needle length.
2.4 BIO-PLEXUS shall be responsible for delivery of SNAs complying with
specifications supplied by JJMI for use in providing clinical data necessary for
submission for relevant regulatory approval. JJMI shall be responsible for
obtaining all regulatory approvals necessary for the free marketing of the
Licensed Products sold by JJMI. BIO-PLEXUS shall, at JJMI expense, assist and
cooperate with JJMI in all regulatory submissions and activities as requested by
JJMI. This includes preparation of all applications to the United States Food
and Drug Administration, whether by application for premarket approval or 510K
notification, or otherwise. BIO-PLEXUS shall have the right to apply for
regulatory approval in its own name, at its sole expense.
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<PAGE> 6
ARTICLE 3 - FUNDING OF DEVELOPMENT
3.1 Payment - JJMI shall pay BIO-PLEXUS a total of Two Million Nine
Hundred Thousand Dollars ($2,900,000) upon execution of this Agreement, for
consideration of the following:
a) One Million Five Hundred Thousand Dollars ($1,500,000) in
consideration of the exclusive patent license granted herein
and the SNA research and development efforts completed by
BIO-PLEXUS through the date of this Agreement;
b) One Million Four Hundred Thousand Dollars ($1,400,000) for
complete consideration for the obligation of BIO-PLEXUS to
carry out and complete the Development Program. BIO-PLEXUS
shall continue work to complete the Development Program beyond
such payment above, at its sole cost and expense.
3.2 JJMI will separately fund expenditures on Initial Capital Equipment
related to development of intravenous catheter SNAs pursuant to this Agreement.
("Initial Capital Equipment" shall mean equipment sufficient to produce at a
capacity of twelve million (12,000,000) units of SNAs per year). JJMI will own
the Initial Capital Equipment (product machinery, molds, fixtures, etc.)
regardless of the physical location of the equipment. It is also contemplated
that BIO-PLEXUS may retrofit certain capital equipment, already owned by
BIO-PLEXUS, as part of the Development
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<PAGE> 7
Program. Title to such equipment shall be transferred to JJMI at an agreed
amount not to exceed BIO-PLEXUS' book value for the equipment as determined
using generally accepted accounting principles consistently applied (i.e., full
depreciation). Expenditures for Initial Capital Equipment relating to the SNAs
shall not exceed $1.8 million. It is contemplated by the parties that the entire
Development Program will be completed within one (1) year of execution. Delays
due to FDA review times are not included in this one (1) year duration
expectation.
ARTICLE 4 - RESEARCH REPORTS AND OVERSIGHT
4.1 BIO-PLEXUS shall furnish to JJMI written monthly informal reports
on the progress of the Development Program.
4.2 Key Contact - The parties shall each name a key contact through
which day-to-day contact and decision-making may be made and to facilitate
communication between the parties. JJMI will make reasonable effort to timely
respond to all questions and requests from BIO-PLEXUS. The JJMI key contact
shall have access to the researchers and laboratories performing the Development
Program with reasonable notice to and consent of BIO-PLEXUS.
ARTICLE 5 - PROPRIETARY INFORMATION
All proprietary information of any party to this Agreement disclosed to
another party in connection with the Development
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<PAGE> 8
Program and identified in writing and marked by the disclosing party as
confidential will be treated by the receiving party and its employees as
confidential throughout the term of this Agreement and for an additional five
(5) years. The above-mentioned obligation of confidentiality shall not apply to
information which:
(i) at the time of the disclosure was known to the receiving party
as evidenced by written records and was not previously subject
to any obligation of confidentiality; or
(ii) was generally available to the public or was otherwise part of
the public domain at the time of its disclosure; or
(iii) becomes generally available to the public or otherwise part of
the public domain after its disclosure other than through an
act of omission or commission of the receiving party in breach
of this Agreement; or
(iv) becomes known to the receiving party by disclosure of a third
party under no obligation of confidentiality to the disclosing
party.
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<PAGE> 9
ARTICLE 6 - OWNERSHIP OF TECHNICAL INFORMATION
6.1 Each party shall own title to all technical information created
solely by it, its employees and/or contractors after the Effective Date of this
Agreement, except as provided in Paragraph 6.2 below. BIO-PLEXUS warrants that
it and its employees have entered into agreements wherein its employees have
agreed to assign their rights in and to all inventions, as well as all patents
and patent applications directed to such inventions, resulting from their
employment with BIO-PLEXUS to BIO-PLEXUS. Furthermore, BIO-PLEXUS warrants that
it has caused or will cause all additional BIO-PLEXUS employees, or personnel
performing work pursuant to the Development Program to execute similar
agreements with respect to the rights in and to all inventions, as well as all
patents and patent applications directed to such inventions, resulting from
their association with BIO-PLEXUS and warrants that it will enforce such
agreements to ensure that BIO-PLEXUS has perfected its title to the Technical
Information.
6.2 JJMI and BIO-PLEXUS will jointly own title to any and all technical
information first conceived jointly or discovered jointly by JJMI's employees
and BIO-PLEXUS's employees or personnel during the performance of the
Development Program.
6.3 Anything to the contrary notwithstanding, JJMI or its authorized
designees shall own the full right, title and interest
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<PAGE> 10
in and to any government approvals, associated government files or licenses
related to making, using and selling Licensed Products within the Field to the
full extent possible under the law of each appropriate country. BIO-PLEXUS may,
at its sole expense and discretion, obtain regulatory approvals for Licensed
Products in its own name.
6.4 BIO-PLEXUS warrants that it is the owner of all patents and patent
applications included in Licensed Patent Rights.
ARTICLE 7 - LICENSE
7.1 BIO-PLEXUS agrees to grant and hereby does grant to JJMI, and any
Affiliate designated in writing by JJMI, an exclusive, worldwide license, with
the right to sublicense others, under the Technical Information within the Field
to make, have made, use and sell Licensed Products within the Field. JJMI may
grant sublicenses to unaffiliated third parties only after receiving the
approval of BIO-PLEXUS such approval not to be unreasonably withheld, and if
given, not delayed more than fifteen (15) days.
7.2 JJMI shall pay BIO-PLEXUS a royalty on Unit Sales of JJMI, its
Affiliates, and sublicensees, according to "Exhibit C" attached hereto. A "Unit
Sale" shall mean the sale of a Licensed Product to an unaffiliated third party.
To the extent the royalties due do not exceed the minimum royalties set forth in
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<PAGE> 11
Exhibit C, JJMI shall pay the difference between the royalties due and the
minimum royalties as described below.
7.3 No royalty shall be payable on sales of any Licensed Product
between JJMI and any Affiliate or sublicensee, and only one (1) royalty shall be
payable hereunder with respect to the sale of any one (l) Licensed Product.
7.4 JJMI's obligation to pay royalties with respect to sale of Licensed
Product shall terminate upon expiration of the last to expire issued patent
included in Licensed Patent Rights covering such Licensed Product. Thereafter,
JJMI, its Affiliates and sublicensees shall have a paid-up, non-exclusive,
royalty-free license to make, have made, use and sell such Licensed Product.
7.5 JJMI shall keep accurate books and records of sales of Licensed
Products and of all payments due BIO-PLEXUS hereunder. JJMI shall deliver to
BIO-PLEXUS written reports of Unit Sales of Licensed Products during the
preceding calendar quarter, on or before the thirtieth (30th) day following the
end of each calendar quarter. Such reports shall include a calculation of the
royalties due and be accompanied by payment of the monies due. For avoidance of
doubt calendar quarter means each of the three calendar month periods ending on
March 31, June 30, September 30 and December 31 respectively. If JJMI is
reasonably unable to determine the actual
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<PAGE> 12
royalties due by the thirtieth (30th) day following a calendar quarter, then it
may make a good faith estimated payment by the thirtieth (30th) day, followed by
an actual report with any necessary additional payment by the sixtieth (60th)
day. If the estimated payment exceeds the actual amount due then the difference
between the estimated payment and the actual amount due shall be a credit
against the next payment due from JJMI to BIO-PLEXUS. If the minimum royalty
called for in Section 7.2 is due, then the payment for the fourth quarter shall
include an amount sufficient to bring total royalties for the calendar year to
the minimum royalty amount.
7.6 The parties hereto have contemplated entering into an associated
Supply Agreement. In order to maintain its exclusivity under the present
Development & License Agreement, JJMI will purchase minimum quantities as
outlined in the associated Supply Agreement. If JJMI does not purchase the
amounts indicated as minimum amounts in the associated Supply Agreement, and if
JJMI is not otherwise relieved of its respective purchase obligation pursuant to
the associated Supply Agreement, then JJMI may elect to either i) purchase the
indicated minimum unit requirements (and pay the associated royalty) or ii) pay
to BIO-PLEXUS the royalty required by this Agreement and manufacturing profit on
the difference of actual units ordered and the minimum purchase requirements.
For purposes of this section, the royalty payable on
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the difference between the actual units ordered and the minimum purchase
requirements shall be ten cents ($0.10) per unit as determined by Exhibit "D".
If, JJMI is, for any reason relieved from its minimum purchase requirements
under the associated Supply Agreement, then the minimum royalties due from JJMI
in order to maintain exclusivity under the present Development & License
Agreement shall be determined by applying the royalty rate of Exhibit "D" to the
minimum purchase requirements that would have applied under the associated
Supply Agreement had JJMI not been relieved of its minimum purchase requirement.
If, for any given calendar year, JJMI does not elect to purchase the minimum
requirements and does not elect to pay the associated royalties and
manufacturing profits on the difference of actual units ordered and the minimum
purchase requirements, then the license may, at BIO-PLEXUS' discretion, be
cancelled upon sixty (60) days notice.
7.7 If the associated Supply Agreement referred to in 7.6 is terminated
or BIO-PLEXUS is unwilling or unable to supply the quantities required by JJMI
under the Supply Agreement then JJMI may manufacture for itself or have product
manufactured by others under this License Agreement. If JJMI elects to
manufacture SNAs for itself or have others manufacture SNAs for it then JJMI may
maintain the exclusivity under the present Development and License Agreement by
paying at least a minimum royalty equivalent to the royalty required under this
agreement payable on the indicated
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<PAGE> 14
minimum unit requirements in the associated Supply Agreement if the actual
royalties do not meet or exceed such minimum royalty amount. Such minimum
royalties shall be payable at the end of the calendar year and actual royalties
paid for Unit Sales occurring during the year shall be fully credited against
such minimum royalties. If the minimum royalties exceed the amount of actual
royalties paid on Unit Sales of the calendar year then JJMI shall pay an
additional amount equal to the difference between the minimum royalties due and
the actual royalties paid for the given calendar year. If the royalties for a
given calendar year exceed the minimum royalties required for that calendar year
then no additional payment shall be made. If for any given calendar year, in
which JJMI is manufacturing for itself, the royalties due do not equal or exceed
the minimum royalties and JJMI elects not to make the additional payment to
bring the royalty payments made up to the amount of the minimum royalties then
the license may, at BIO-PLEXUS' discretion, be cancelled upon sixty (60) days
notice.
7.8 BIO-PLEXUS agrees that the initial payment set forth in Section 3.1
above, and the royalties due under this Agreement on the minimum purchase
requirements in the associated Supply Agreement provided in 7.6 and 7.7 above
are full consideration for the exclusive licenses granted herein. Therefore,
JJMI makes no representation or warranty that it will market the Licensed
Products covered by this Agreement, or, if JJMI does market any of
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<PAGE> 15
the Licensed Products, that such Licensed Products shall be the exclusive means
by which JJMI will participate in this Field. Furthermore, all business
decisions including, without limitation, the design, manufacture, sale, price
and promotion of Licensed Products after the Development Program covered by this
Agreement and the decision whether to sell a particular product within the
Licensed Products shall be within the sole discretion of JJMI. BIO-PLEXUS and
JJMI further agree that such one time payments and royalties payments are in
lieu of any obligation of best efforts or any level or standard of efforts to be
used by JJMI in the marketing of Licensed Products. JJMI will provide, during
the first three (3) years after commercial launch (as defined in Exhibit 2 to
the associated Supply Agreement) marketing plans for Licensed Products.
Marketing plans will indicate scheduled promotional activities related to the
Licensed Products.
7.9 BIO-PLEXUS shall have the right to nominate an independent
accountant acceptable to and approved by JJMI who shall have access to JJMI and
its Affiliates' records during reasonable business hours, upon executing an
appropriate confidentiality agreement, for the purpose of verifying the royalty
payable as provided for in this Agreement for the two (2) preceding years, but
this right may not be exercised more than once in any year, and the accountant
shall disclose to BIO-PLEXUS only information relating
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<PAGE> 16
solely to the accuracy of the royalty report and the royalty payments made in
accordance with this Agreement.
7.10 Royalty payments under this Agreement shall be made in United
States dollars.
7.11 Any sum required under United States tax laws, or the tax laws of
any other country, to be withheld by JJMI from payments shall be promptly paid
by JJMI to the appropriate tax authorities, and JJMI shall furnish BIO-PLEXUS
with official tax receipts or other appropriate evidence issued by the
appropriate tax authorities sufficient to enable BIO-PLEXUS to support a claim
for income tax credit in respect of any sum so withheld.
7.12 The parties recognize that JJMI desires the opportunity to have
the Field expanded to include all OTN ("Over-the-Needle") venous/arterial access
devices. BIO-PLEXUS agrees that prior to entering into any agreement licensing,
transferring or otherwise encumbering Technical Information for any
venous/arterial access devices including, but not limited to, midline catheters
with OTN introducers and OTN introducers for Peripherally Inserted Central
Catheters ("PICCs"), BIO-PLEXUS shall first negotiate with JJMI for a period of
ninety (90) days from BIO-PLEXUS' first documented written offer to JJMI. If the
parties do not enter into an agreement within such ninety (90) day period then
BIO-PLEXUS shall
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be free to enter into an agreement i) within one (1) year on only as broad terms
and on terms no more favorable to a third party than those contained in a final
offer to JJMI and ii) on any terms thereafter.
7.13 JJMI agrees to grant and hereby does grant to BIO-PLEXUS, a one
(l) year, nonexclusive, royalty-free, worldwide license to all patents, patent
applications, inventions, know-how, and other proprietary rights relating solely
to improvements to SNAs. This license shall begin upon the early termination of
this Agreement and extend for a time limited to one (1) year thereafter. After
such one (1) year term, BIO-PLEXUS' license hereunder shall terminate and cease
to exist.
7.14 The license granted by BIO-PLEXUS to JJMI hereunder, shall
immediately terminate and be of no further force or effect upon the early
termination of this Agreement.
ARTICLE 8 - PATENT FILINGS
8.1 BIO-PLEXUS shall promptly disclose to JJMI all Technical
Information. BIO-PLEXUS may elect to file and prosecute patent applications
directed to any Licensed Patent Right described in such written disclosures.
Such applications shall be filed and prosecuted utilizing patent counsel
selected by BIO-PLEXUS. Should BIO-PLEXUS elect not to file such patent
application or
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applications, JJMI may elect to file and prosecute such patent application or
applications in JJMI's name at JJMI's expense utilizing patent counsel selected
by JJMI.
8.2 With respect to all patent applications referred to above, and to
the extent the parties are able to do so, the parties shall provide each other
with reasonable opportunity to advise the other and shall cooperate with each
other in the prosecution of all patent applications.
ARTICLE 9 - INFRINGEMENT
9.1 In the event that there is infringement within the Field by a third
party of any patent licensed to JJMI hereunder, JJMI shall notify BIO-PLEXUS in
writing to that effect, including with such written notice, evidence
establishing a prima facie case of infringement by such third party. If, prior
to the expiration of one hundred twenty (120) days from the date of such notice,
BIO-PLEXUS overcomes the prima facie case of infringement, obtains a
discontinuance of such infringement or brings suit against the third party
infringer, then the obligation of JJMI to pay royalties under such Licensed
Patent shall continue unabated. BIO-PLEXUS shall bear the expenses of any suit
brought by it, shall retain all damages or other monies awarded or received in
settlement of such suit. JJMI will cooperate with BIO-PLEXUS in any such suit
and
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shall have the right to consult with BIO-PLEXUS and be represented by its own
counsel at its own expense.
If, after the expiration of said one hundred twenty (120) days from the
date of such notice, BIO-PLEXUS has not overcome the prima facie case of
infringement, obtained a discontinuance of infringement, or brought suit against
a third party infringer, then JJMI shall be relieved of all obligation to make
payment of further royalties under the patent being infringed until such time as
either the third party infringement has ceased or suit for infringement has been
filed by BIO-PLEXUS. In addition, JJMI shall have the right after such one
hundred twenty (120) day notice period, but not the obligation, to bring suit
against such infringer and join BIO-PLEXUS as a party plaintiff provided that
JJMI shall bear all expenses of such suit. BIO-PLEXUS will cooperate with JJMI
in any suit for infringement of the Licensed Patent brought by JJMI against a
third party and shall have the right to consult with JJMI and to participate in
and be represented by independent counsel in such litigation at its own expense.
JJMI shall incur no liability to BIO-PLEXUS as a consequence of such litigation
or any unfavorable decision resulting therefrom, including any decision holding
BIO-PLEXUS' patent invalid or unenforceable. Damages awarded or received in
settlement shall be paid to JJMI in satisfaction of all expenses of such suit;
any remainder shall be shared fifty percent (50%) to JJMI and fifty percent
(50%) to BIO-PLEXUS.
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<PAGE> 20
9.2 BIO-PLEXUS warrants that it is presently aware of no patents or
patent applications owned by a third party which would present any issue of
infringement by reason of the manufacture, use or sale of the SNAs portion of
the Licensed Product. In the event JJMI is charged with such infringement by a
third party, JJMI shall have the right to defend against such charge of
infringement, and during the period in which such litigation is pending, JJMI
shall have the right to apply Fifty Percent (50%) of the royalties due
BIO-PLEXUS on sales of the allegedly infringing Licensed Product against its
litigation expenses. If, as a result of judgment in the litigation or settlement
with a third party, JJMI is required to pay royalties or other monies to such
third party, JJMI may thereafter deduct from the amount of royalties due
BIO-PLEXUS on Unit Sales of the Licensed Product charged to infringe, an amount
which is the lesser of all sums paid by JJMI to such third party, or Fifty
Percent (50%) of all royalty payments otherwise payable to BIO-PLEXUS on the
Unit Sales of such Licensed Product.
ARTICLE 10 - TERMINATION
10.1 The term of this Agreement shall extend from the above-effective
date until the expiration of the last to expire of all patents included in or
issuing from Licensed Patent Rights.
10.2 Upon any breach of or default under this Agreement by a party, the
other may terminate this Agreement by sixty (60) days'
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written notice to the party. Said notice shall become effective at the end of
such period unless during such period the party shall cure such breach or
default.
10.3 JJMI shall have the right to terminate this Agreement at any time
upon three hundred sixty-five (365) days' written notice to BIO-PLEXUS.
10.4 Failure to terminate this Agreement following breach or failure to
comply with this Agreement shall not constitute a waiver of the party's
defenses, rights or causes of action arising from such or any future breach or
noncompliance.
10.5 The provisions hereof relating to ownership of Technical
Information and confidentiality shall survive the termination of this Agreement.
ARTICLE 11 - NOTICE
11.1 Any notices given under this Agreement shall be in writing and
shall be deemed delivered when sent by First Class mail, postage prepaid,
addressed to the parties as follows (or at such other addresses as the parties
may notify each other in writing:
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To JJMI
Johnson & Johnson Medical, Inc.
2500 Arbrook Boulevard
Arlington, Texas 76004-3130
Attention: President
With a copy to:
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933
Attention: Chief Patent Counsel
To BIO-PLEXUS
Bio-Plexus, Inc.
384 Merrow Road
Tolland, Connecticut 06084
ARTICLE 12 - GENERAL
12.1 Use of Name - No party to this Agreement shall employ or use the
name of the other party in any promotional materials or advertising without the
prior express written permission of such other party.
12.2 BIO-PLEXUS, for all purposes related to this Agreement, shall be
deemed-an independent contractor of JJMI, and nothing in this Agreement shall be
deemed to create a relationship of employment or agency, or to constitute
BIO-PLEXUS and JJMI as partners or joint venturers.
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<PAGE> 23
12.3 Representations and Warranties - Each party hereto acknowledges
and agrees:
(i) that no representation or promise not
expressly contained in this Agreement has
been made by the other party hereto or by
any of its agents, employees,
representatives or attorneys concerning the
subject matter of this Agreement;
(ii) that this Agreement is not being entered
into on the basis of or in reliance on, any
promise or representation, express or
implied, covering the subject matter hereof
other than those which are set forth
expressly in this Agreement; and
(iii) that each party has had the opportunity to
be represented by counsel of its own choice
in this matter, including during the
negotiations which preceded the execution of
this Agreement.
12.4 Each party warrants and represents that to the best of its
knowledge it has the full right and power to make the promises and grant the
licenses set forth in this Agreement, and that there
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<PAGE> 24
are no outstanding agreements, assignments or encumbrances in existence
inconsistent with the provisions of this Agreement.
12.5 Force Majeure - No party shall be liable for any failure to
perform as required by this Agreement, to the extent such failure to perform is
caused by any reason beyond the party's control, or by reason of any of the
following: labor disturbances or disputes of any kind, accidents, failure of any
required governmental approval, civil disorders, acts of aggression, acts of
God, energy or other conservation measures, failure of utilities, mechanical
breakdowns, material shortages, disease, or similar occurrences.
12.6 Assignment - No party hereto shall assign this Agreement to any
other person without the prior written consent of the other party, and any
purported assignment without such consent shall be void, except that JJMI may
assign this Agreement to an Affiliate or to a legal entity acquiring all or
substantially all of JJMI's assets to which this Agreement relates, on the
condition that any successor to-or assignee of JJMI is and shall be bound by all
the terms, conditions and allegations under this Agreement, and that this
Agreement is and shall be incorporated into such assignment.
12.7 Severability - In the event that a court of competent jurisdiction
holds any provision of this Agreement to be invalid,
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<PAGE> 25
such holding shall have no effect on the remaining provisions of this Agreement,
and they shall continue in full force and effect.
12.8 This Agreement contains the entire Agreement between the parties.
No amendments or modifications to this Agreement shall be effective unless made
in writing and signed by an authorized representative of both parties.
12.9 Governing Law - This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey.
12.10 No party, except as required by law, shall originate any
publicity, news release, public disclosure or public announcement, written or
oral, whether to the public or press, stockholders or otherwise, relating to
this Agreement, including its existence, the subject matter to which it relates,
or any of its terms, to any amendment hereto or performances hereunder without
the express written permission of the other party, which permission will not be
unreasonably withheld. If a party intends to make an announcement concerning
this Agreement, it will give the other party thirty (30) days' (unless law
requires a shorter period) advance written notice of the text of the proposed
announcement so that the other party may have an opportunity to comment upon the
announcement.
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12.11 Any and all disputes between the parties relating in any way to
the entering into this Agreement and/or the validity, construction, meaning,
enforceability, or performance of this Agreement or any of its provisions, or
the intent of the parties in entering into this Agreement, or any of its
provisions, or any dispute relating to patent validity or infringement arising
under this Agreement shall be settled by arbitration. Such arbitration shall be
conducted at New York, New York in accordance with the rules then pertaining to
the American Arbitration Association with a sole arbitrator who shall be an
attorney experienced in patent licensing matters. Reasonable discovery as
determined by the arbitrator shall apply to the arbitration proceeding. The law
of the State of New Jersey shall apply to the arbitration proceedings. Judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
12.12 Limitation of Damages - Neither party shall be responsible for
any indirect, speculative or consequential damages under this Agreement,
provided that product recall expenses required due to the fault of a party
hereto shall not be excluded damages.
12.13 Markings - Licensed Product sold by JJMI will make reference to
license from Bio-Plexus, Inc. and shall note the PUNCTUR-GUARD brand name to the
extent such is owned by BIO-PLEXUS.
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<PAGE> 27
Such reference will be made on shelf packaging or related package insert. This
requirement does not apply to individual product put-ups.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers or representatives.
BIO-PLEXUS, INC. JOHNSON & JOHNSON MEDICAL, INC.
By: /s/ Ronald A. Haverl By: /s/ Jan Egberts, M.D.
Title: Chairman / Treasurer Title: VP Market & Business Development
Worldwide
Date: 1/29/97 Date: 1-28-97
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EXHIBIT 10.19
SUPPLY AGREEMENT
This Agreement dated as of January 28, 1997 between Bio-Plexus, Inc., a
Connecticut corporation, (sometimes referred to as "Supplier" or "Bio-Plexus"),
and Johnson & Johnson Medical, Inc., a New Jersey corporation (sometimes
referred to as "Purchaser" or "JJMI"), sets forth the terms and conditions on
which the parties agree to have Supplier supply Purchaser with the catheter
safety needle assembly, (sometimes referred to as the "SNA", "SNAs" or
"Product") and to perform the following additional services (sometimes referred
to as the "Contract Services"), all as specified below.
1) Supply, Specifications and Contract Services. During the term of
this Agreement, Supplier shall supply Purchaser with those quantities of the
SNAs as ordered by Purchaser pursuant to this Agreement. The SNAs shall comply
with the specifications (sometimes referred to as the "Specifications") as
outlined on Exhibit 1 hereto, or as such Specifications may be modified in
writing by the parties. In manufacturing the SNAs for Purchaser, Supplier shall
not deviate from the Specifications without obtaining the prior written consent
of Purchaser. The price for the SNAs shall be as described in Section 3 hereto.
<PAGE> 2
At the request of Purchaser, Supplier shall also perform the Contract
Services as specified in Exhibit 1A hereto. The charges for the Contract
Services shall be as set forth in Exhibit 1A, and shall remain in effect for the
period specified in Exhibit 1A. The mechanism (if any) for adjusting the price
for the Contract Services is also specified in Exhibit 1A. Supplier shall not
deviate from the agreed-upon Contract Services specified herein without the
prior written approval of Purchaser. If the parties agree to add any
additional/alternative Contract Services hereunder, this must be documented in
writing by the parties.
During the term of this Agreement, unless Purchaser otherwise agrees in
writing, Supplier shall not make or sell any SNAs (or any products which would
reasonably be expected to compete with such SNAs), to the extent such items are
for use in the Field as described in the Development and License Agreement dated
as of January 28, 1997 between Supplier and Purchaser (the "Development/License
Agreement").
2) Forecasts and Orders. Once during each calendar quarter during the
term of this Agreement, Purchaser shall provide Supplier with a non-binding
written forecast of Purchaser's expected needs for the SNAs during the following
four calendar quarters. Purchaser shall place any of its orders for the SNAs by
written purchase order to Supplier, which shall be placed at least 90 days prior
to the desired date of delivery, unless the parties otherwise
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<PAGE> 3
agree in writing with respect to any specific orders. However, unless Supplier
otherwise agrees in writing, Supplier shall not be obligated to supply more than
12,000,000 SNAs annually during the first two 12 month periods following
commercial launch as referenced in Exhibit 2 hereto and not more than 18,000,000
SNAs annually during each subsequent 12 month period following commercial
launch, unless Purchaser provides Supplier at least 12 months prior written
notice with respect to such excess purchase amounts.
During each respective 12 month period in the term of this Agreement,
Purchaser shall purchase the respective minimum units of SNAs from Supplier as
specified in Exhibit 2 hereto. Such minimums in an applicable 12 month period
shall be appropriately reduced to the extent of any failure to supply by
Supplier under this Agreement. In the event that Purchaser fails to purchase the
applicable minimums for a respective 12 month period and is not otherwise
relieved of such obligation pursuant to the terms of this Agreement, Supplier's
exclusive remedies shall be as set forth in Exhibit 2 hereto.
3) Purchase Price. The initial price for the SNAs shall be as set forth
in Exhibit 3 hereto, and shall remain in effect for the period specified in
Exhibit 3. The mechanism (if any) for adjusting the price for the SNAs is also
specified in Exhibit 3.
The price charged by Supplier to Purchaser hereunder shall be F.O.B.
Supplier's facility in Vernon Connecticut; but the risk of
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<PAGE> 4
loss with respect to the SNAs shall remain with Supplier until the SNAs are
delivered to Purchaser in accordance with this Agreement. Purchaser shall pay
for each respective order of SNAs which it places pursuant to this Agreement
within 30 days of receipt of such ordered SNAs (and applicable invoice therefor)
provided that such SNAs comply with the terms of this Agreement. Unless
otherwise directed by Purchaser, Supplier shall ship each order of SNAs to
Purchaser at ____________, following shipping instructions provided by
Purchaser.
4) Replacement of Non-Conforming SNAs. Supplier agrees to promptly
replace (at no additional charge to Purchaser) any SNAs supplied to Purchaser
hereunder which do not fully comply with the terms of this Agreement. Purchaser
agrees to give notice to Supplier of any defects in any such SNAs shipped to
Purchaser hereunder as soon as reasonably possible after such defects are
discovered by Purchaser.
5) Manufacture in Accordance with Applicable Rules and Regulations.
Supplier represents and warrants that all SNAs supplied in connection with this
Agreement shall be manufactured by Supplier and all Contract Services from
Supplier shall be performed in full compliance with all applicable laws and
regulations and otherwise in compliance with this Agreement; and without
limiting the foregoing, Supplier represents and warrants that it shall supply
the SNAs in full compliance with all rules and regulations
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<PAGE> 5
with respect to United States Good Manufacturing Practices ("GMP Requirements")
as such may be determined by the United States Food and Drug Administration
("FDA"). Purchaser has the right (upon reasonable notice to Supplier) to audit
the facilities being used by Supplier for production of the SNAs to assure
compliance with applicable rules and regulations, and Supplier shall promptly
remedy any bona fide deficiencies which may be noted in any such audit. Supplier
acknowledges that the preceding sentence granting Purchaser certain audit rights
in no way relieves Supplier of any of its obligations under this Agreement, nor
shall such provision require Purchaser to conduct any such audits.
6) Certain Representations of Supplier. Supplier represents and
warrants that its supplying of the SNAs to Purchaser under this Agreement does
not conflict with any other agreement to which Supplier is a party, or with any
rights of any other party.
7) Responsibility for Damages Each party hereto ("Indemnifying Party")
shall be responsible for and shall indemnify the other party hereto
("Indemnified Party") against all losses, costs, and expenses, including without
limitation reasonable attorneys' fees ("Damages") to the extent any such Damages
result directly from the failure of the Indemnifying Party to fully perform its
obligations under this Agreement, or otherwise directly from the negligence or
other fault of the Indemnifying Party, its agents or employees. Neither party
shall be responsible for any
5
<PAGE> 6
indirect, speculative or consequential damages under this Agreement, provided
that product recall expenses required due to the fault of a party hereto shall
not be excluded Damages. To the extent an Indemnified Party makes claim for
indemnification hereunder, the Indemnified Party shall give written notice to
the Indemnifying Party reasonably setting forth the facts and circumstances in
connection with the claim for indemnification.
8) Term and Termination. This Agreement shall remain in effect for a
period of 12 years (sometimes referred to as the "Initial Term") from the
effective date hereof, unless sooner terminated as provided below. If the
parties agree to extend the Agreement beyond the Initial Term, such agreement
must be in writing signed by the parties.
This Agreement may be terminated by one party at the end of a period
of 60 days written notice to the other party if such other party is in material
breach of any of its obligations under this Agreement, and if the defaulting
party fails to remedy such breach by the end of such 60 day period (or be in the
process of remedying such breach if the remedy in good faith cannot be completed
within the 60 day notice period). In case of a termination under the provisions
of the previous sentence, the non-defaulting party may pursue any remedy
available in law or in equity under applicable law with respect to such breach.
Any termination of this Agreement will not affect rights and obligations of the
parties which have accrued prior to the date of termination.
6
<PAGE> 7
Purchaser has the right, upon at least 100 days prior written notice to
Supplier, to terminate any of the Contract Services available from Supplier
under this Agreement. In the event of such termination, Supplier shall be paid
for any such Contract Services being terminated by Purchaser which are performed
by Supplier in accordance with this Agreement up through the date of such
termination.
Purchaser has the right to terminate this Agreement along with the
Development/License Agreement upon one year's prior written notice to Supplier.
If Purchaser effects such termination within the first 3 years following
commercial launch (as defined in Exhibit 2 hereto) for any reason other than
breach by Supplier, then Purchaser shall, as Supplier's exclusive remedies: a)
pay Supplier for the applicable minimum payments for the 12 month notice period
as calculated under this Agreement and the Development/License Agreement; and b)
forfeit (on an "as is" basis) the Purchaser's Tooling provided to Supplier under
Section 18 of this Agreement. If Purchaser effects such termination after the
first 3 years following commercial launch (as defined in Exhibit 2 hereto) for
any reason other than breach by Supplier, then Purchaser shall, as Supplier's
exclusive remedies: a) pay Supplier for the applicable minimum payments for the
12 month notice period as calculated under this Agreement and the
Development/License Agreement; and b) provide Supplier the opportunity to
purchase (on an "as is" basis) the Purchaser's Tooling provided to Supplier
under Section 18 of this Agreement. Such purchase if elected by
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<PAGE> 8
Supplier, must be effected with Supplier and Purchaser within 60 days following
the termination and shall be for a price equal to Purchaser's net book value for
such Purchaser's Tooling.
9) Force Majeure. If either party is prevented from performing any of
its obligations hereunder (other than any obligation to pay money) due to any
cause which is beyond the non-performing party's control, including without
limitation fire, explosion, flood, or other acts of God ("Force Majeure Event"),
such non-performing party shall not be liable for breach of this Agreement with
respect to such non-performance, provided that the non-performing party gives
immediate written notice to the other party of the Force Majeure Event and
exercises all reasonable efforts to eliminate the Force Majeure Event and to
resume performance of its affected obligations as soon as practicable.
10) Confidential Information. All written information designated as
confidential and exchanged between Supplier and Purchaser while this Agreement
is in effect shall be treated as confidential information and neither party
shall for 5 years (or such longer period as may be specified in writing) after
such exchange, disclose such confidential information of the other party to any
third party or otherwise use such confidential information (except in the
performance of this Agreement) without the prior written approval of the other
party, unless such information has become public knowledge through no fault of
the party receiving
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<PAGE> 9
such information, or comes to such party from a third party under no obligation
of confidentiality with respect to such information, or was in the possession of
such party prior to the date of disclosure.
11) Notices. Any notice given by one party to the other hereunder shall
be sent in writing or delivered personally as follows:
if to Purchaser:
Johnson & Johnson Medical, Inc.
2500 Arbrook Boulevard
P.O. Box 90130
Arlington, Texas 76004-3130
Attention: Dr. Jan H. Egberts
if to Supplier:
Bio-Plexus, Inc.
129 Reservoir Road
Vernon, Connecticut 06066
Attention: Mr. Carl Sahi;
or to such other address as the respective party shall designate by appropriate
notice hereunder to the other party.
12) Section Headings. The Section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13) Governing Law. This Agreement shall be construed pursuant to the
internal laws of the State of New Jersey.
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<PAGE> 10
14) Assignment. This Agreement and the rights and obligations hereunder
shall be binding upon and inure to the benefit of the parties hereto, their
respective successors and assigns, but except as provided below, this Agreement
shall not be assignable by either party without the prior written consent of the
other party. Purchaser may assign this Agreement to any other subsidiary of
Johnson & Johnson (the corporate parent of Purchaser) upon written notification
to Supplier, provided that such assignment shall not relieve Purchaser of its
obligations hereunder.
15) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall be deemed to constitute only one Agreement.
16) Entire Agreement. It is the desire and intent of the parties to
provide certainty as to their future rights and remedies against each other by
defining the extent of their undertakings herein. The parties have, in this
Agreement incorporated all representations, warranties, covenants, commitments
and understandings on which they have relied in entering into this Agreement,
and, except as provided for herein, neither party makes any covenant or other
commitment to the other concerning its future action. Accordingly, this
Agreement (i) constitutes the entire agreement and understanding between the
parties and there are no promises, representations, conditions, provisions or
terms related
10
<PAGE> 11
thereto other than those set forth in this Agreement and (ii) supersedes all
previous understandings, agreements and representations between the parties,
written or oral with respect to the subject matter hereof. Any amendment to this
Agreement must be in writing signed by the parties. The foregoing does not
affect the Development/License Agreement which remains in effect between the
parties and contains the terms as set forth therein.
17. Arbitration of Disputes. Any unresolved controversy or claim
arising out of or relating to this Agreement, or the parties' decision to enter
into this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrators) may be
entered in any court having jurisdiction thereof. The arbitration shall be held
in New York, New York and the arbitrators shall apply the substantive law
governing this Agreement as provided herein, except that the interpretation and
enforcement of this arbitration provision shall be governed by the Federal
Arbitration Act. The arbitrators shall not award either party punitive damages
and the parties shall be deemed to have waived any right to such damages.
18. Purchaser's Tooling. Purchaser shall supply Supplier with the items
of tooling (sometimes referred to as Purchaser's Tooling) as listed on Exhibit 4
hereto, for use by Supplier in connection with this Agreement. Purchaser's
Tooling shall be used by Supplier only for Purchaser's benefit in
11
<PAGE> 12
connection with this Agreement. Such Purchaser's Tooling shall remain the
property of Purchaser, and shall be promptly surrendered to Purchaser upon
termination of this Agreement, except as otherwise provided in this Agreement,
or except as otherwise agreed in writing by the parties. Supplier agrees to
maintain on the Purchaser's Tooling any labels or other identifying signs as
requested by Purchaser to confirm Purchaser's ownership of the Purchaser's
Tooling. Supplier shall be responsible for any damages to the Purchaser's
Tooling while in Supplier's facility, except to the extent such damages are due
to the fault of Purchaser. Supplier agrees to maintain the Purchaser's Tooling
during the term of this Agreement in accordance with Supplier's reasonable
customary standards as applicable to similar tooling owned or otherwise used by
Supplier. Supplier shall allow Purchaser access to Purchaser's Tooling during
Supplier's normal business hours, or as otherwise reasonably necessary, as
requested by Purchaser.
19. Government Inspections Supplier shall advise Purchaser on the same
day if an authorized agent of the FDA or other governmental agency visits
Supplier's manufacturing facility and requests or requires information or
changes which directly pertain to the SNAs. Purchaser will be provided copies of
any FDA or governmental agency correspondence or inquiries within 24 hours
including inspections, receipt of Form 483's, notice of adverse findings and
regulatory letters pertaining to the SNAs.
20. Liability Insurance. Within 10 days after the effective date of
this Agreement, Supplier shall furnish to Purchaser written
12
<PAGE> 13
evidence of products and contractual liability insurance covering Supplier (with
Purchaser named as an additional insured) with respect to Supplier's obligations
under this Agreement, which insurance coverage shall be maintained at all times
during this Agreement. Such coverage shall afford at least $10,000,000 each
occurrence combined single limit bodily injury/property damage and $10,000,000
annual aggregate liability limits. Such evidence of insurance coverage may be
either a copy of the effective policy or a reasonably acceptable certificate of
insurance from the insurer. The referenced insurance coverage shall not be
changed or canceled without the insurer providing Purchaser at least 30 days
prior written notice.
21. Failure to Supply. In the event that any failure by Supplier to
supply SNAs under this Agreement lasts longer than 120 days, Purchaser shall
have (among its other remedies) the right to utilize an alternate supplier for
the SNAs. If Purchaser elects to utilize such alternate supplier, Supplier shall
provide all reasonable technical assistance and know-how (at no charge) to allow
the alternate supplier to produce the SNAs for Purchaser during the period when
Supplier fails to supply and for a period of 90 days thereafter.
22. Public Announcements. Except as otherwise required by applicable
law, neither party will originate any publicity, news release, or other public
announcements written or oral whether to the public, press, stockholders, or
otherwise relating to this Agreement or to performance hereunder without the
prior written
13
<PAGE> 14
consent of the other party hereto (which consent shall not be unreasonably
withheld).
In Witness Whereof, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
Johnson & Johnson Medical, Inc.
By /s/ Jan Egberts, M.D.
----------------------------
Bio-Plexus, Inc.
By /s/ Ronald A. Haverl
----------------------------
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 443,000
<SECURITIES> 0
<RECEIVABLES> 707,000
<ALLOWANCES> 0
<INVENTORY> 2,206,000
<CURRENT-ASSETS> 4,128,000
<PP&E> 6,059,000<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,714,000
<CURRENT-LIABILITIES> 5,019,000
<BONDS> 2,402,000
0
0
<COMMON> 64,343,000
<OTHER-SE> 149,000<F2>
<TOTAL-LIABILITY-AND-EQUITY> 10,714,000
<SALES> 6,869,000
<TOTAL-REVENUES> 6,869,000
<CGS> 0
<TOTAL-COSTS> 7,702,000
<OTHER-EXPENSES> 6,000<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 448,000<F4>
<INCOME-PRETAX> (1,287,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,287,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,287,000)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
<FN>
<F1>This value is net of depreciation.
<F2>Value represents redeemable common stock warrants.
<F3>Amount includes $100,000 of interest income.
<F4>Amount is included in "Other-Expenses."
</FN>
</TABLE>
