<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 28, 1997
MATRITECH, INC.
------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE
------------------------------------------------------------
(State or other jurisdiction of incorporation)
1-12128 04-2985132
- -------------------------- ----------------------------------
(Commission File Number) (IRS Employer Identification No.)
330 NEVADA STREET, NEWTON, MA 02160
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 928-0820
--------------
<PAGE>
ITEM 5. OTHER EVENTS.
------------
Private Placement. On May 30, 1997, the Registrant completed a private
-----------------
placement of 2,200,000 shares of Common Stock, at a purchase price equal to
$5.00 per share. The Registrant received net proceeds of approximately $10.9
million after deducting the estimated expenses of the transaction. The
placement agent elected to receive all of its commission and expenses (less
$25,000) in the form of 257,608 shares of restricted Common Stock and five year
warrants for the purchase of an additional 245,761 shares of Common Stock
exercisable at $5 per share.
These securities were offered and sold only to "qualified institutional
buyers" (as defined in Rule 144A) and to "accredited investors" (as defined in
Regulation D).
In connection with this transaction, the Registrant agreed to file, within
30 days after the final closing on May 30, 1997, a registration statement with
the Securities and Exchange Commission covering the resale from time to time of
the shares of Common Stock issued in connection with this private placement and
underlying the placement agent's warrants, and to use its best efforts to cause
the Registration Statement to become effective.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
---------------------------------
(a) Financial Statements.
---------------------
The effects of the private placement financing described in Item 5 are
reflected in the following actual and pro forma unaudited balance sheet
information of the Registrant as of March 31, 1997:
<TABLE>
<CAPTION>
Pro Forma
---------
March 31, 1997 March 31, 1997/(1)/
-------------- -------------------
<S> <C> <C>
Cash and cash equivalents 5,797,136 16,712,136
Current assets 6,694,537 17,609,537
Total assets 7,297,284 18,212,284
Current liabilities 1,006,144 1,006,144
Stockholders' equity 6,291,140 17,206,140
Current liabilities and
stockholders' equity 7,297,284 18,212,284
Working capital $5,688,393 $16,603,393
</TABLE>
- -------------------------------------------
(1) This pro forma balance sheet information should be read in conjunction with
the Registrant's unaudited financial statements and notes thereto contained
in its Quarterly Report on Form 10-Q for the three-month period ended March
31, 1997. This pro forma unaudited balance sheet information reflects the
following transactions described in Item 5:
(a) The sale of 2,200,000 shares of the Registrant's Common Stock at $5.00
per share after $25,000 in commissions and $60,000 of estimated
offering expenses.
(b) The issuance of 257,608 shares of the Registrant's Common Stock to the
private placement agent in lieu of cash commissions
(c) The issuance of a warrant to purchase 245,761 shares of the
Registrant's Common Stock at an exercise price of $5.00 per share.
This pro forma unaudited balance sheet information is not necessarily
indicative of what the Registrant's financial position would have been had
such transactions in fact occurred on March 31, 1997.
<PAGE>
(c) Exhibits
4.1 Placement Manager Agreement dated May 28, 1997 between the Registrant
and Sunrise Securities Corp.
4.2 Form of Warrant Agreement and Certificate between the Registrant and
certain designees of Sunrise Securities Corp.
4.3 Form of Subscription Agreement between the Registrant and the several
purchasers.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this current report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized, in the City of Newton,
Commonwealth of Massachusetts, on this 3rd day of June, 1997.
MATRITECH, INC.
BY: /s/ Stephen D. Chubb
---------------------
Stephen D. Chubb
Chairman and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4.1 Placement Manager Agreement dated May 28, 1997
between the Registrant and Sunrise Securities Corp.
4.2 Form of Warrant Agreement and Certificate between
the Registrant and certain designees of Sunrise
Securities Corp.
4.3 Form of Subscription Agreement between the
Registrant and the several purchasers.
<PAGE>
Exhibit 4.1
-----------
MATRITECH, INC.
330 Nevada Street
Newton, Massachusetts 02160
PLACEMENT MANAGER AGREEMENT
May 28, 1997
Sunrise Securities Corp.
135 East 57th Street, 11th Floor
New York, New York 10022
Gentlemen:
Matritech, Inc., a Delaware corporation (the "Company"), hereby confirms
its agreement with you (the "Placement Manager" and together with the Company,
the "Parties") as follows:
1. Description of Transaction. The Company will make an offer in the
--------------------------
United States (the "Offering") to sell up to 2,200,000 shares of the Company's
common stock, par value $.01 per share (the "Common Stock", and the shares of
Common Stock to be offered or sold pursuant to the Offering, the "Shares") at a
price of $5.00 (U.S.) per Share (the "Sales Price"). The Offering will be for a
minimum of 1,000,000 Shares, subject to reduction by mutual agreement between
the Company and the Placement Manager (the "Minimum Offering"), and a maximum of
2,200,000 Shares (the "Maximum Offering"). The Offering is described in the
Private Placement Memorandum of the Company dated May 21, 1996, as amended by
Supplement No. 1 dated May 23, 1997 and Supplement No. 2 dated May 28, 1997,
and the appendices annexed hereto (collectively, the "Memorandum"). Terms which
are capitalized but not defined herein shall have the meanings given them in the
Memorandum.
2. Appointment of the Placement Manager. The Company hereby appoints the
------------------------------------
Placement Manager as its exclusive agent to offer and sell the Shares on a "best
efforts" basis. The Placement Manager, on the basis of the representations,
warranties, covenants and agreements of the Company herein, and subject to the
completion of the Placement Manager's due diligence examination of the documents
and records of the Company, and further subject to the conditions herein,
accepts such appointment and agrees that it will endeavor to sell the Shares on
a best efforts basis.
3. Purchase, Sale and Delivery of Shares. Subject to the terms and
-------------------------------------
conditions set forth herein, the Company and the Placement Manager agree as
follows:
(a) Regulation D Offering. Neither the Offering nor the sale
---------------------
thereunder of the Shares has been or will be registered with the United
States Securities and Exchange Commission (the "Commission") under the
United States Securities Act of 1933, as amended (the "Securities Act").
The Shares will be offered and sold in the United States
<PAGE>
-2-
only, in reliance upon and in compliance with the exemptions from
registration provided by Sections 3(b), 4(2) and 4(6) of the Securities Act
and Rule 506 of Regulation D thereunder ("Reg D"), and will only be sold to
Qualified Institutional Buyers ("QIB's") or "accredited investors" as such
terms are defined in Rule 144A promulgated under the Securities Act and Reg
D, respectively. The Shares will be offered for sale only in those states
of the United States in which they will have full compliance with
applicable state Blue Sky laws. The Company will provide the Placement
Manager, for delivery to all offerees and purchasers and their
representatives, any information, documents and instruments which the
Placement Manager deems necessary to comply with the statutes, rules,
regulations and judicial and administrative interpretations applicable to
the Offering.
(b) Subscription for Shares promulgated under the Securities Act.
------------------------------------------------------------
Purchases of Shares shall occur by execution and delivery by a subscriber
(the "Subscriber") of two copies of a Subscription Agreement in the form
annexed to the Memorandum (the "Subscription Agreement"), together with
payment for such Shares and such other documents and instruments as the
Company or the Placement Manager shall deem appropriate.
(c) Segregation of Funds. Each Subscriber shall tender a check or
--------------------
money order payable to "Sunrise Securities Corp., as Placement Manager for
Matritech, Inc.", or wire transfer funds, in payment of the full purchase
price of the Shares subscribed for, which funds shall be held in a non-
interest-bearing special bank account (the "Special Account") at the United
States Trust Company of New York (the "Bank"). All fees charged by the
Bank in connection with its performance of the functions specified in this
Section 3(c), if any, shall be paid by the Company.
(d) Closing; Termination of Offering. The Offering will terminate on
--------------------------------
August 14, 1997, unless it is extended by mutual agreement of the Company
and the Placement Manager. Any closing of the sale of Shares under the
Offering is hereinafter referred to as a "Closing". The initial Closing of
the Offering (the "Initial Closing") shall occur as soon as practicable
after the Placement Manager has received and accepted Subscription
Agreements for the Minimum Offering. After the Initial Closing, the
Offering may continue until the Placement Manager has received and accepted
Subscription Agreements for the Maximum Offering or until August 14, 1997
or until the offering is terminated by mutual consent of the parties
hereto. The date on which the Initial Closing occurs is hereinafter called
the "Initial Closing Date", the date on which a subsequent Closing occurs
is hereinafter called an "Additional Closing Date", and the date on which
the last Closing occurs shall be referred to herein as the "Final Closing
Date". Each of the Initial Closing Date and each Additional Closing Date
is sometimes hereinafter referred to generally as a "Closing Date". The
Company shall deliver to the Placement Manager within five business days of
each Closing Date, on behalf of the appropriate Subscribers, the
certificates representing the Shares being purchased by such Subscribers
against payment therefor out of the Special Account. If on or before
August 14, 1997, the Placement Manager has not received and accepted
Subscription Agreements for the Minimum Offering, the Offering shall be
terminated and all amounts contained in the Special Account
<PAGE>
-3-
will be returned to the Subscribers without interest thereon or deduction
therefrom. In the event of such termination of the Offering, all terms of
this Agreement shall be automatically terminated and neither Party shall
have any further obligation to the other Party under this Agreement other
than the Company's obligation to pay expenses as set forth herein.
4. Compensation of Placement Manager. As compensation for its services
---------------------------------
rendered as Placement Manager under this Agreement, the Placement Manager or its
designees shall receive the following:
(a) A sales commission (the "Sales Commission"), which may be
payable, at the option of the Placement Manager, in whole or in part, in
cash or shares of Common Stock valued at the Sales Price equal to 8% of the
Gross Proceeds (as hereinafter defined) of the Offering. The Sales
Commission shall be payable in cash by deducting the Sales Commission from
the Gross Proceeds received for the Shares closing on the Initial Closing
Date and the Additional Closing Date(s) as the case may be and the Bank
shall be directed to pay the Sales Commission to the Placement Manager
directly out of the Special Account. "Gross Proceeds" is defined as the
total price paid by the Subscribers for the Shares. If the Placement
Manager shall exercise his option pursuant to the terms of this Section
4(a) to have the Sales Commission paid in shares of Common Stock, such
shares of Common Stock (the "Commission Shares") shall be issued within
five business days of each Closing to the extent then earned and the Gross
Proceeds payable to the Company shall not be reduced by the amount of the
---
Sales Commission paid in Commission Shares. The Placement Manager
acknowledges that the Commission Shares will be "restricted securities"
within the meaning of Rule 144 under the Securities Act and agrees that
certificates evidencing such shares of Common Stock may bear an appropriate
restrictive legend until such shares of Common Stock are sold pursuant to
an effective registration statement under the Securities Act, or until they
may be resold without registration under Rule 144(k), or until the
Placement Manager or holder shall deliver to the Company an opinion of
counsel (which shall be reasonably acceptable to the Company both as to
form and counsel) that the appropriate Commission Shares may be resold
under the Securities Act in reliance upon a specified exemption other than
Rule 144(k).
(b) Warrants (the "Commission Warrants") for a price of $.001 per
Warrant, which shall entitle the Placement Manager to purchase, at an
initial exercise price per share of Common Stock equal to the Sales Price
($5.00), a number of shares of Common Stock (the "Warrant Shares") equal to
10% of the number of Shares sold in the Offering and the number of
Commission Shares transferred in accordance with the provisions of Section
4(a). The Commission Warrants shall be issued at each Closing to the
extent then earned, pursuant to a Placement Manager (and the Placement
Manager Designees) Warrant Agreement dated May 28, 1997 (the "Placement
Manager Warrant Agreement") being executed simultaneously herewith.
(c) A non-accountable expense allowance equal to three 3% of the
aggregate Gross Proceeds, payable by deducting the non-accountable expense
allowance from the Gross Proceeds. Such non-accountable expense allowance
may be paid, at the option of the
<PAGE>
-4-
Placement Manager, in whole or in part, in Commission Shares in accordance
with the terms of Section 4(a).
(d) On the date of the execution by the Company and the Placement
Manager of a letter of intent dated May 14, 1997, $25,000 as an advance for
the Placement Manager's expenses in connection with the Offering. Such
allowance will be refunded to the Company on the Final Closing Date to the
extent that it exceeds the expenses actually incurred by the Placement
Manager in connection with the Offering, and the remaining balance of such
allowance will be deducted from the Gross Proceeds used to calculate the
selling commission in paragraph (a) of this Section 4.
(e) The Subscribers, the Placement Manager and its designees shall
have registration rights under the Securities Act, with respect to the
Shares and the Commission Shares, as provided in Section 9 of this
Agreement. The Placement Manager's (or its Designees') registration rights
with respect to the Warrant Shares issuable upon exercise of the Commission
Warrants are described in the Placement Manager Warrant Agreement.
5. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to the Placement Manager as follows:
(a) Placement Memorandum. As of the date of this Agreement, the
--------------------
Memorandum, including all supplements and appendices thereto, does not, and
at all times subsequent to such date up to and including the Final Closing
Date will not, contain any untrue statement of a material fact, or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were
made, not misleading.
(b) Organization and Existence. The Company is a corporation duly
--------------------------
organized and validly existing under the laws of Delaware, with full power
and authority, corporate and other, to own or lease and operate its
properties and to conduct its business as currently conducted and described
in the Memorandum. The Company is duly qualified to do business as a
foreign corporation in Massachusetts and in each other jurisdiction in
which the nature of the Company's business would require such qualification
except where the failure so to qualify would not have a material adverse
effect on the financial condition, results of operations, business,
properties or prospects of the Company. The Company has no subsidiaries.
(c) Governmental Authority. Except for such approvals as may be
----------------------
required under applicable state securities laws in the United States ("Blue
Sky laws"), no authorization, approval, consent, order, registration,
license or permit of any court or governmental agency or body is required
for the valid authorization, issuance, sale and delivery of the Shares, the
Commission Shares, the Commission Warrants and the Warrant Shares
(collectively, the "Securities"), and the consummation by the Company of
all the transactions contemplated by this Agreement, the Escrow Agreement
among the Company,
<PAGE>
-5-
the Placement Manager and the Bank dated May 28, 1997, the Subscription
Agreements and the Placement Manager Warrant Agreement (collectively, the
"Agreements").
(d) Corporate Authorization. The Company has full power and
-----------------------
authority, corporate and other, to execute, deliver and perform the
Agreements and to consummate the transactions contemplated thereby. The
execution, delivery and performance of the Agreements by the Company, the
consummation by the Company of the transactions therein contemplated, and
the compliance by the Company with the terms of the Agreements have been
duly authorized by all necessary corporate action on the part of the
Company. The Agreements will be duly executed and delivered by the Company
and, assuming that they have been or will be duly authorized, executed and
delivered by the parties thereto other than the Company, the Agreements are
valid and binding obligations of the Company enforceable against it in
accordance with their respective terms, except insofar as enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the rights of creditors generally and by the
discretion of courts in granting equitable remedies, and except that
enforce ability of the indemnification provisions and the contribution
provisions set forth herein may be limited by the federal securities laws
of the United States or state securities laws or the public policy
underlying such laws. The execution, delivery and performance of the
Agreements by the Company, the consummation by the Company of the
transactions therein contemplated, and the compliance by the Company with
the terms of the Agreements do not, and will not, with or without the
giving of notice or the lapse of time, or both, (i) result in any violation
of the Amended and Restated Certificate of Incorporation and Amended and
Restated By-Laws of the Company, (ii) result in a breach of or conflict
with any of the terms or provisions of, or constitute a default under, or
result in the modification or termination of, or result in the creation or
imposition of any material lien, security interest, charge or encumbrance
upon any of the properties or assets of the Company pursuant to, any
indenture, mortgage, note, contract, commitment or other agreement or
instrument to which the Company is a party or by which the Company or any
of its properties or assets are or may be bound or affected; (iii) violate
any existing applicable law, rule, regulation, judgment, order or decree of
any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or any of its properties or its business; or (iv) have any
material adverse effect on any permit, certification, registration,
approval, consent, license or franchise necessary for the Company to own or
lease and operate any of its properties and to conduct its business or the
ability of the Company to make use thereof.
(e) Capitalization. All the outstanding shares of Common Stock have
--------------
been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in the Memorandum, there are, and until
the Final Closing Date there will be, no outstanding securities convertible
into Common Stock ("Convertible Securities") or any options, warrants or
other rights to purchase any shares of Common Stock or Convertible
Securities (collectively, the "Options") except as will be issued pursuant
to the Stock Plans as such term is herein defined. All such outstanding
Options constitute the valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except insofar as enforcement may be limited by applicable bankruptcy,
<PAGE>
-6-
insolvency, reorganization, moratorium or other laws affecting the rights
of creditors generally, and by the discretion of courts in granting
equitable remedies. None of the outstanding shares of Common Stock or
Options have been issued in violation of the preemptive rights of any
securityholder of the Company, and none of the holders of the outstanding
shares of Common Stock or Options is subject to personal liability solely
by reason of being such a holder. The offers and sales of the outstanding
Shares and Options were at all relevant times either registered under the
Securities Act and the applicable Blue Sky laws or exempt from such
registration requirements, and were in full compliance with the laws of
Delaware. Except as described in Exhibit 5(e) hereto, or as provided in the
Placement Manager Warrant Agreement, no holder of any of the Company's
issued securities has any rights ("demand," "piggyback" or otherwise) to
have such securities registered under the Securities Act.
(f) Authorization of Securities. The issuance and sale of the
---------------------------
Securities have been duly authorized, and when they are issued and paid for
as contemplated by the Agreements, will be validly issued, and all of the
shares of Common Stock which are among the Securities will be fully paid
and nonassessable, and the holders thereof will not be subject to personal
liability solely by reason of being such holders. The Securities will not
be subject to preemptive rights of any securityholder of the Company.
(g) No Anti-Dilution Adjustment. The issuance of the Securities will
---------------------------
not result in any adjustment in the number of shares of Common Stock, or
the exercise price or conversion ratio per share, under any of the
Company's outstanding Options.
(h) Violations and Defaults. The Company is not in violation of, or
-----------------------
in default under, any term or provision of (i) its Amended and Restated
Certificate of Incorporation and By-Laws, (ii) any indenture, mortgage,
contract, commitment or other agreement or instrument to which it is a
party or by which it or any of its properties or business is or may be
bound or subject, except for such defaults, if any, that would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company, or (iii)
any existing applicable law, rule, regulation, judgment, order or decree of
any governmental agency or court, having jurisdiction over the Company or
of any of its respective properties or businesses. The Company owns,
possesses or has obtained all governmental and other licenses, permits,
certifications, registrations, approvals or consents and other
authorizations necessary to own or lease, as the case may be, and to
operate its properties and to conduct its business as currently conducted
and described in the Memorandum, and all such licenses, permits,
certifications, registrations, approvals, consents and other authorizations
are outstanding and in good standing. There are no proceedings pending or,
to the best of the Company's knowledge, threatened, nor is there any basis
therefor, seeking to cancel, terminate or limit such licenses, permits,
certifications, registrations, approvals or consents or authorizations.
(i) Litigation. Except as set forth in the Memorandum, there are no
----------
claims, actions, suits, proceedings, arbitrations, investigations or
inquiries before any governmental agency, court or tribunal, or before any
private arbitration tribunal, pending or, to the best
<PAGE>
-7-
of the Company's knowledge, threatened against the Company or involving the
properties or business of the Company which, if determined adversely to the
Company, would, individually or in the aggregate, result in any material
adverse change in the financial position, shareholders' equity, results of
operations, properties, business, management or prospects of the Company,
or which relate in any way to the validity of the capital stock of the
Company or the validity of the Agreements, or of any action taken or to be
taken by the Company pursuant to, or in connection with, the Agreements
nor, to the best of the Company's knowledge, is there any basis for any
such claim, action, suit, proceeding, arbitration, investigation or
inquiry. There are no outstanding orders, judgments or decrees of any
court, governmental agency or other tribunal specifically naming the
Company and enjoining the Company from taking, or requiring the Company to
take, any action, or to which the Company or its properties or business is
bound or subject.
(j) Additional Information. The Company has filed in a timely manner
----------------------
all documents that the Company was required to file under the Securities
Exchange Act of 1934 (the "Exchange Act") during the 12 months preceding
the date of this Agreement. The following documents complied in all
material respects with the requirements of the Exchange Act as of their
respective filing dates, and the information contained therein was true and
correct in all material respects as of the date of such documents, and each
of the following documents as of the date thereof did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which thy were made, not misleading:
(i) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, its Quarterly Report on Form 10-Q for the
quarter year ended March 31, 1997 and its Proxy Statement for the
Annual Meeting of Stockholders to be held on June 13, 1997; and
(ii) all other documents, if any, filed by the Company with the
Commission since the filing of the Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1997, pursuant to the reporting
requirements of the Exchange Act.
(k) Financial Statements. Arthur Andersen LLP, the accountants who
--------------------
have rendered an audited report with respect to certain of the audited
financial statements included in the Memorandum, are independent public
accountants within the meaning of the Securities Act and regulations
promulgated under the Securities Act (the "Regulations"). The financial
statements and notes thereto included in the Memorandum are complete and
correct and present fairly the financial position of the Company as of the
dates thereof, and the results of operations and changes in financial
position of the Company for the periods indicated therein, all in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(l) Liabilities. Except as and to the extent reflected or reserved
-----------
against in the financial statements of the Company included in the
Memorandum, the Company as at
<PAGE>
-8-
March 31, 1997, has no material liabilities, debts, obligations or claims
asserted against it, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, including, but not limited to,
liabilities on account of taxes, other governmental charges or lawsuits
brought subsequent to such date.
(m) Taxes. The Company has filed all tax returns required to be
-----
filed with the appropriate taxing authorities, including all federal,
state, municipal and other local authorities (whether relating to income,
sales, franchise, withholding or real or personal property taxes, or other
types of taxes) or has duly obtained extensions of time for the filing
thereof, and has paid in full all taxes which have become due pursuant to
such returns or claimed to be due by any such taxing authority or otherwise
due and owing; and the provisions for income taxes payable, if any, shown
on the consolidated financial statements contained in the Memorandum are
sufficient for all accrued and unpaid taxes, whether or not disputed, and
for all periods to and including the dates of such consolidated financial
statements. Each of the tax returns heretofore filed by the Company
correctly and accurately reflects the amount of its tax liability
thereunder. The Company has withheld, collected and paid all other levies,
assessments, license fees and taxes to the extent required and, with
respect to payments, to the extent that the same have become due and
payable. Except as disclosed in writing to the Placement Manager, the
Company has not executed or filed with any taxing authority, any agreement
extending the period for assessment or collection of any income taxes and
is not a party to any pending action or proceeding by any foreign or
domestic governmental agency for assessment or collection of taxes, and no
claims for assessment or collection of taxes have been asserted against the
Company.
(n) Conduct of Business. Since the respective dates as of which
-------------------
information is given in the Memorandum, the Company has not (i) canceled,
without payment in full, any notes, loans or other obligations receivable
or other debts or claims held by it other than in the ordinary course of
business; (ii) sold, assigned, transferred, abandoned, mortgaged, pledged
or subjected to lien any of its properties, tangible or intangible, or
rights under any contract, permit, license, franchise or other agreement
other than sales or other dispositions of goods or services in the ordinary
course of business at customary terms and prices; (iii) increased the
compensation payable to any of its officers, directors or other employees
(including salaries, fringe benefits, pensions, profit participation and
payments or benefits of any kind whatsoever); (iv) entered into any line of
business other than that conducted by it on such date or entered into any
transaction not in the ordinary course of its business; (v) conducted any
line of business in any manner except by transactions customary in the
operation of its business as conducted on such date; or (vi) declared, made
or paid or set aside for payment any cash or non-cash distribution on any
shares of its capital stock.
(o) Properties. The Company has good and marketable title in fee
----------
simple to all real property, and good title to all personal property
(tangible and intangible), owned by it, free and clear of all security
interests, charges, mortgages, liens, encumbrances and defects, except such
as are described in the Memorandum or such as do not materially affect the
value or transferability of such property and do not interfere with the use
of such property made or proposed to be made by the Company. The leases,
licenses or other contracts or
<PAGE>
-9-
instruments under which the Company leases, holds or is entitled to use any
property, real or personal, are valid, subsisting and enforceable only with
such exceptions as are not material and do not interfere with the use of
such property made, or proposed to be made, by the Company, and all
rentals, royalties or other payments accruing thereunder which became due
prior to the date of this Agreement have been duly paid, and neither the
Company nor, to the best of the Company's knowledge, any other party is in
default thereunder and, to the best of the Company's knowledge, no event
has occurred which, with the passage of time or the giving of notice, or
both, would constitute a default thereunder. The Company has not received
notice of any violation of any applicable law, ordinance, regulation, order
or requirement relating to its owned or leased properties.
(p) Insurance. The Company has adequately insured its properties
---------
against loss or damage by fire or other casualty and maintains, in adequate
amounts, such other insurance, including but not limited to, liability
insurance, as is usually maintained by companies engaged in the businesses
similar to the Company's businesses.
(q) Contracts. Except as described in the Memorandum (i) each
---------
contract or other instrument (however characterized or described) to which
the Company is a party, or to which its properties or businesses are or may
be subject, has been duly and validly executed, is in full force and effect
in all material respects and is enforceable against the parties thereto in
accordance with its terms, and none of such contracts or instruments has
been assigned by the Company; (ii) to the best of the Company's knowledge,
no party to any such contract or instrument other than the Company is in
default thereunder; and (iii) to the best of the Company's knowledge, no
event has occurred which, with the lapse of time or the giving of notice,
or both, would constitute such a default thereunder. None of the material
provisions of such contracts or instruments violates any existing
applicable law, rule, regulation, judgment/order or decree of any
governmental agency or court having jurisdiction over the Company or any of
its assets or businesses.
(r) Employment Agreements. The confidentiality and non-competition
---------------------
agreements between the Company and its officers are valid and binding
agreements enforceable against the Company and the applicable officers in
accordance with their respective terms, except insofar as such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws or arrangements affecting creditors'
rights generally and subject to principles of equity.
(s) Benefit Plans. Except for the Company's 1988 Stock Plan, 1992
-------------
Stock Plan, Amended and Restated 1992 Non-Employee Director Stock Option
Plan, 1992 Employee Stock Purchase Plan, each as amended, (the "Stock
Plans") and the Company's 401(k) plan and various employee health, life and
disability insurance plans as disclosed in the Memorandum, the Company has
no employee benefit plans (including, without limitation, profit sharing
and welfare benefit plans) or deferred compensation arrangements.
(t) Contributions. The Company has not, directly or indirectly, at
-------------
any time made any contributions to any candidate for political office in
the United States, or failed to
<PAGE>
-10-
disclose fully any such contribution in violation of law. The Company's
internal accounting controls and procedures are sufficient to comply in all
material respects with Section 13(b)(2) of the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(u) Reg D Qualification. Subject to the warranties and covenants of
-------------------
the Placement Manager in Sections 7(a) and (b) of this Agreement, the offer
and sale of the Shares by the Company have satisfied, and on each Closing
Date will have satisfied, all of the requirements of Rule 506 of Reg D, and
the Company is not disqualified from any exemption under Reg D by virtue of
Rule 507.
(v) Finder's Fee. As disclosed in the Memorandum, the Company has
------------
not incurred any liability for, and is unaware of any claim for, any
finder's or broker's fees or similar payments in connection with the
Offering.
(w) Intangibles. The Company owns or possesses adequate and
-----------
enforceable rights to use all patents, patent applications, trademarks,
service marks, copyrights, rights, trade secrets, confidential information,
processes and formulations used or proposed to be used in the conduct of
its business as currently conducted and described in the Memorandum
(collectively, the "Intangibles"). To the best of the Company's knowledge,
the Company has not infringed upon, and is not infringing upon, the rights
of others with respect to the Intangibles, and the Company has not received
(i) any notice that it has or may have infringed or is infringing upon the
rights of others with respect to the Intangibles, or (ii) any notice of
conflict with the asserted rights of others with respect to the Intangibles
which could, singly or in the aggregate, materially and adversely affect
its business as presently conducted or its prospects, financial condition
or results of operations, and the Company does not know of any basis
therefor. To the best of the Company's knowledge, no others have infringed
upon the Intangibles.
(x) Labor Relations. No labor problem exists with the Company's
---------------
employees or, to its knowledge, is imminent.
(y) No Adverse Change. Since March 31, 1997, except as otherwise
-----------------
stated in the Memorandum, the Company has not (i) incurred any material
liability or obligation, direct or contingent, or entered into any material
transaction, whether or not in the ordinary course of business, or
sustained any material loss or interference with its business from fire,
storm, explosion, flood or other casualty, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, and (ii) there have not been, and prior to the Final Closing
Date there will not be, any changes in the capital stock or any material
increases in the long-term debt of the Company or any material adverse
change in or affecting the general affairs, management, financial
condition, shareholders' equity, results of operations or prospects of the
Company, otherwise than as set forth or contemplated in the Memorandum.
<PAGE>
-11-
(z) Listing. The Company shall use its best efforts to comply with
-------
all requirements of the National Association of Securities Dealers, Inc.
(the "NASD") and the Boston Stock Exchange (the "BSE") with respect to the
issuance of the Shares and the listing of the Shares on the Nasdaq Small-
Cap Market and the BSE.
(aa) Registration Rights. The registration rights provided in
-------------------
Section 9 of this Agreement are not inconsistent with, and will in no way
be limited by, registration rights previously granted by the Company to its
securityholders.
In addition, any certificate signed by an officer of the Company and
delivered to the Placement Manager, or to counsel for the Placement Manager,
shall be deemed to be a representation and warranty by the Company to the
Placement Manager as to the matters covered thereby.
6. Covenants of the Company.
------------------------
(a) Placement Memorandum. The Company will furnish the Placement
--------------------
Manager, without charge, during the Offering with as many copies of the
Memorandum as the Placement Manager may reasonably request. If during the
Offering period any event occurs as the result of which the Memorandum, as
then amended or supplemented, would include an untrue statement of a
material fact, or omit to state a material fact necessary in order to make
the statements made, in light of the circumstances in which they were made,
not misleading, or if it shall be necessary to amend or supplement the
Memorandum to comply with applicable law, the Company will forthwith notify
the Placement Manager thereof and furnish to the Placement Manager, in such
quantities as the Placement Manager may reasonably request, an amended or
supplemental Memorandum which corrects such statements or omissions or
causes the Memorandum to comply with applicable law. Without the prior
written consent of the Placement Manager, no copies of the Memorandum or
any other material prepared by the Company in connection with the Offering
will be given by the Company or its counsel, or by any employee, director
or agent of the Company, to any person not a party to this Agreement,
unless such person is a director, employee or principal shareholder of the
Company.
(b) Additional Information. The Company has provided and shall
----------------------
provide the Placement Manager with such other information, documents and
instruments as may be required for an offer made solely to accredited
investors or QIB's under Sections 3(b), 4(2) or 4(6) of the Securities Act
and Rule 144A and Reg D thereunder.
(c) State Securities Qualification. The Company will provide its
------------------------------
counsel with all information which such counsel determines to be necessary
and otherwise cooperate with such counsel, to permit such counsel to take
all necessary or appropriate action under the Blue Sky laws of the states
of the United States in which the Placement Manager determines, in
consultation with Company management, that offers or sales will be made.
The Company will promptly advise the Placement Manager:
<PAGE>
-12-
(A) Of any order, request or suggestion by a securities
regulator of any state for any amendment to the Memorandum or any
other filed materials, or for additional information; and
(B) Of any action by a securities regulator of any state
suspending the registration or qualification of the Securities for
offer or sale in such state or denying an exemption from such
registration or qualification, or of the initiation or threat of any
proceeding for such purpose, and the Company will use its best efforts
to prevent such action, or if such action shall be taken, to obtain
the withdrawal thereof at the earliest practicable date.
The Company will provide the Placement Manager any additional information,
documents and instruments necessary to comply with the rules, regulations
and judicial and administrative interpretations in those states and
jurisdictions where the Shares are to be offered for sale or sold. The
Company will file all post-Offering forms, documents or materials and take
all other post-Offering actions required by the Blue Sky laws of the states
in which the Shares have been offered or sold.
(d) Use of Proceeds. The Company will use the net proceeds of the
---------------
Offering as set forth in the Memorandum under the caption "Use of
Proceeds."
(e) Restriction on Issuance of Securities. During the period
-------------------------------------
commencing on the date here of and terminating on the Final Closing Date or
(if no Closing occurs) on the termination date of the Offering, the Company
will not, without the prior written consent of the Placement Manager, issue
shares of equity securities which are not Securities, or issue or grant
Options other than shares of Common Stock issuable pursuant to currently
outstanding convertible securities, its Stock Plans or the Commission
Warrants, and, further, the Company shall not, for a period of nine months
--- -------
following the Final Closing Date, or, if no Closing occurs, the termination
date of the Offering, without the consent of the Placement Manager, sell
shares of Common Stock (other than pursuant to options, warrants or other
rights, outstanding as of the date of this Agreement) at a price per share
less than the lesser of (i) the Sales Price, or (ii) the 30-day average
closing price on the date proceeding such sale as quoted by Nasdaq.
(f) Investment Banking Activity. Until August 14, 1997, the Company
---------------------------
will not seek, accept or consider any offer or proposal, other than from
the Placement Manager, relating to any corporate finance or investment
banking activity.
(g) Registration Rights. The Company will register the Shares and
-------------------
the Commission Shares under the Securities Act for the public resale
thereof in the United States in accordance with, and will be bound by the
provisions of, Section 9 of this Agreement.
7. Representations, Warranties and Covenants of the Placement Manager.
------------------------------------------------------------------
The Placement Manager represents, warrants and covenants that (a) it will comply
in all respects with
<PAGE>
-13-
the terms and conditions of Rule 506 of Reg D and applicable Blue Sky laws with
respect to the offering and the sale of the Shares only to "accredited
investors" or "QIB's" as set forth in the Memorandum, and (b) it will not make
offers or sales of the Shares in any other jurisdiction in which the Shares have
not been qualified or registered for offer and sale, or are not exempt from such
qualification or registration.
8(a). Conditions to Placement Manager's Obligations. The sale of Shares
---------------------------------------------
and the other obligations of the Placement Manager hereunder on any Closing Date
will be subject to the accuracy of the representations and warranties of the
Company contained herein as of the date hereof and as of such Closing Date, to
the performance by the Company of all its obligations hereunder and to the
following additional conditions:
(i) Absence of Government Action. No order suspending the
offer or sale of the Securities will have been issued by the
Commission or any other governmental authority, and no proceeding
for that purpose will have been initiated or threatened;
(ii) No Material Misstatements. The Placement Manager will
not have notified the Company that any Blue Sky law filing, the
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which in the Placement Manager's opinion is
material, or omits to state a fact which in its opinion is material
and is required to be stated therein or is necessary to make the
statements therein not misleading;
(iii) President Certificate. The Company will have
delivered to the Placement Manager a certificate of the Company's
CEO or President, dated as of such Closing Date, to the effect that
all the representations and warranties of the Company set forth in
Section 5 of this Agreement remain true and in full force and effect
as of such Closing Date;
(iv) Opinion of Counsel. The Placement Manager will have
received from Testa, Hurwitz & Thibeault, LLP, counsel to the
Company, a signed opinion, dated as of such Closing Date,
substantially in the form agreed to by the parties hereto;
(v) Compliance with Agreement. The Company will have
complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the
Closing Date;
(vi) Corporate Action. The Company will have taken all
necessary corporate action, including, without limitation obtaining
the approval of the Company's board of directors for the execution
and delivery of this Agreement, the performance by the Company of
its obligations hereunder and the commencement of the offering
contemplated hereby;
<PAGE>
-14-
(vii) Comfort Letter. The Placement Manager will have
received from Arthur Anderson LLP, independent certified public
accounts for the Company, containing statements and information of the
type customarily included in accountants' "comfort letters" to
underwriters with respect to certain financial information contained
in the Memorandum.
(b) Conditions of the Company's Obligations. The obligations of the
---------------------------------------
Company hereunder on any Closing Date will be subject to the accuracy of
the representations and warranties of the Placement Manager contained
herein as of the date hereof and as of such Closing Date, to the
performance by the Placement Manager of its obligations hereunder and to
the following additional conditions:
(i) Absence of Government Action. No order suspending the
----------------------------
offer or sale of the Securities will have been issued by the
Commission or any other governmental authority, and no proceeding for
that purpose will have been initiated or threatened; and
(ii) No Material Misstatements. The Company will not have
notified the Placement Manager that any Blue Sky law filing, the
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which in the Company's opinion is material, or
omits to state a fact which in its opinion is material and is required
to be stated therein or is necessary to make the statements therein
not misleading, in each case only with respect to information
contained therein concerning the Placement Manager.
9. Registration of Shares: Compliance with the Securities Act. The
----------------------------------------------------------
Company shall:
(a) prepare and file with the SEC a registration statement the
("Registration Statement") covering the resale of the Shares and the
Commission Shares by the Subscribers and the Placement Manager from time to
time on the Nasdaq Small-Cap Market, on the BSE or on such securities
market or system on which the Company's Shares shall then be publicly
traded, or in privately negotiated transactions, no later than 30 days
following the Final Closing Date;
(b) use its best efforts, subject to receipt of necessary information
from the Subscribers and the Placement Manager, to cause the Registration
Statement to become effective as soon as possible thereafter;
(c) prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection therewith
as may be necessary to comply with the provisions of the Securities Act
until the later of such time as all of the Shares have been sold pursuant
thereto, or by reason of Rule 144(k) under the Securities Act or any other
rule of similar effect, such shares are no longer required to be registered
for the unrestricted sale thereof by the Subscribers;
<PAGE>
-15-
(d) furnish to the Subscribers such number of copies of prospectuses
and preliminary prospectuses in conformity with the requirements of the
Securities Act and such other documents as the Subscribers may reasonably
request, in order to facilitate the public sale or other disposition of all
or any of the Shares held by the Subscribers, provided, however, that the
-------- -------
obligations of the Company to deliver copies of prospectuses or preliminary
prospectuses to the Subscribers shall be subject to receipt by the Company
of reasonable assurances from the Subscribers that the Subscribers will
comply with the applicable provisions of the Securities Act and of such
other securities or Blue Sky laws as may be applicable in connection with
any use of such prospectuses or preliminary prospectuses;
(e) bear all expenses in connection with the procedures in paragraphs
(a) through (c) of this Section 9, other than brokerage commissions or
Placement Manager fees and fees and expenses, if any, of counsel or other
advisers to the Subscribers with respect to the registration and resale of
the Shares, and
(f) prepare and file additional listing applications for the Shares
on the Nasdaq Small-Cap Market and the BSE.
(g) (i) in the event that any Registration Statement is filed
pursuant to Section 9(a) hereof, the Company will indemnify and hold
harmless the Placement Manager and each Subscriber (the "Holder")
identified as a selling securityholder therein, and each person, if
any, who controls such Holder within the meaning of the Securities
Act, against any and all losses, claims, damages or liabilities, joint
or several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted),
to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material
fact contained in any such Registration Statement, or any related
preliminary prospectus, final prospectus, or amendment thereof or
supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided that the Company shall not be liable under this Section 9(g)
in any such case to the extent that any such losses, claims, damages
or liabilities arise solely out of or are based upon an untrue
statement of a material fact contained in, or any omission of a
material fact from, such Registration Statement, preliminary
prospectus, final prospectus or amendment thereof or supplement
thereto in reliance upon, and in conformity with, information
furnished in writing to the Company by such Holder specifically for
use therein. This indemnity will be in addition to any liability which
the Company may otherwise have.
<PAGE>
-16-
(ii) Each Holder who is identified as a selling securityholder
in a filed Registration Statement will severally, and not jointly,
indemnify and hold harmless the Company, each other person referred to
in subparts (1), (2) and (3) of Section 11(a) of the Securities Act in
respect of such Registration Statement, and each person, if any, who
controls the Company or any such person within the meaning of Section
15 of the Securities Act, against any and all losses, claims, damages
or liabilities (including any reasonable investigation, legal and
other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted)
to which they, or any of them, may become subject under the Securities
Act, the Exchange Act or other federal or state law or regulation, at
common law, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement, or any related
preliminary prospectus, final prospectus or amendment thereof or
supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or omission was made in such Registration Statement,
preliminary prospectus, final prospectus or amendment thereof or
supplement thereto in reliance upon, and in conformity with,
information furnished in writing to the Company by such Holder
specifically for use therein. This indemnity will be in addition to
any liability which a Holder may otherwise have to the Company.
(iii) Any party that proposes to assert the right to be
indemnified under this Section 9(g) shall, promptly after receipt of
notice of the commencement of any action, suit or proceeding against
such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 9(g), notify each
such indemnifying party of the commencement thereof, enclosing a copy
of all papers served. No indemnification provided for in Section 9(g)
shall be available to any party who shall fail to give notice as
provided herein if the party to whom notice was not given was unaware
of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the
omission so to notify such indemnifying party of any such action, suit
or proceeding shall not relieve it from any liability that it may have
to any indemnified party otherwise than under this Sections 9(g) or
9(i) below. In case any such action, suit or proceeding is brought
against any indemnified party and it notifies the indemnifying party
of the commencement thereof, such indemnifying party will be entitled
to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified
party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
the approval by the indemnified party of such counsel (which approval
shall not be unreasonably withheld), the indemnifying party shall not
be liable to
<PAGE>
-17-
such indemnified party for any legal or other expenses, except as
provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ
its own counsel in any such action, suit or proceeding but the fees
and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded
that there may be differing or additional defenses available to it and
not to one or more of the indemnifying parties in such action, suit or
proceeding so that it would be inappropriate for counsel to represent
both the indemnified party and the indemnifying party in view of
actual or potential conflicts of interest (in which case the
indemnifying parties shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such indemnified party);
or (iii) the indemnifying parties shall not have employed counsel to
assume the defense of such action within a reasonable time after
notice of the commencement thereof, in each of which cases the fees
and expenses of the indemnified party's counsel shall be at the
expense of the indemnifying parties; however, the indemnifying party
shall not, in connection with any one such action, suit or proceeding
or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for the Holders
and their controlling persons, which firm shall be designated in
writing by a majority in interest of such Holders (based upon the
value of the Shares included in the Registration Statement). An
indemnifying party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written
consent.
(h) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 9(g) is
due in accordance with its terms but for any reason is held to be
unavailable or insufficient to hold harmless an indemnified party, the
Company (including for this purpose any controlling person of the Company,
any director of the Company and any officer of the Company who signed the
Registration Statement) on the one hand, and the Holders (including for
this purpose any controlling persons thereof) on the other hand, shall, in
lieu of indemnifying such indemnified party, contribute to the aggregate
losses, claims, damages or liabilities referred to in Section 9(g) above
(including any investigation, legal and other expenses reasonably incurred
in connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claims asserted, but after deducting any contribution
received by or payable to the Company from persons other than the Holders,
such as other selling securityholders, persons who control the Company
within the meaning of the Securities Act, officers of the Company who
signed the Registration Statement, and directors of the Company), (a) in
such proportions as is appropriate to reflect the relative benefits
received by the Company and the Holders from the offering or offering
covered by the Registration Statement, or (b) if the allocation provided by
clause (a) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (a)
<PAGE>
-18-
but also the relative fault of the Company and the Holders in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and any Holder on the other hand shall be deemed to be in the same
proportion as (x) the total proceeds (if any) received by the Company from
the offering or offerings covered by the Registration Statement (net of
underwriting discounts but before deducting expenses, if applicable), plus
all cash proceeds received by the Company from the Shares of such Holder
included in the Registration Statement, bear to (y) the total proceeds
received by such Holder from the sale of the Shares included in the
Registration Statement. The relative fault of the Company, and any Holder
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or omission related to
information supplied by the Company or such Holder, and their relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Holders agree that
it would not be just and equitable if contribution pursuant to this Section
9(h) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to above. (Notwithstanding the provisions of this Section 9(h), in
no case shall (except as may be provided by agreement among them) shall
such Holder be liable or responsible for any amount in excess of the
proceeds received by such Holder from the sale of the Shares included in
the Registration Statement, provided that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 9, each
person, if any, who controls a Holder within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as such Holder, and each person, if any, who
controls the Company within the meaning of the Section 15 of the Securities
Act or Section 20(a) of the Exchange Act, each director of the Company and
each officer of the Company who shall have signed the Registration
Statement, shall have the same rights to contribution as the Company,
subject in each case to the immediately preceding sentence of this Section
9(h). Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another
party or parties under this Section 9(h), notify such party or parties from
whom contribution may be sought, and the omission so to notify such party
or parties from whom contribution may be sought shall relieve the party or
parties from whom contribution may be sought (if such party was unaware of
such action suit, proceeding and was materially prejudiced by such
omission) from any liability under this Section 9(h), but not from any
other obligation it or they may have hereunder or other than under this
Section 9(h). No party shall be liable for contribution with respect to any
settlement of an action, suit, proceeding or claim effected without its
written consent. The obligations of the Holders to contribute pursuant to
this Section 9(h) are several in proportion to their respective number of
Shares included in the Registration Statement, and not joint.
The Company understands that the Subscriber disclaims being an underwriter, but
the Subscriber being deemed an underwriter shall not relieve the Company of any
obligations it has hereunder.
<PAGE>
-19-
10. Expenses of Sale. In addition to those items referred to in Sections
----------------
4 and 9 hereof, the Company will pay or cause to be paid all costs and expenses
incident to the Offering, whether or not it is consummated, including, without
limitation, all taxes, if any, payable as a result of the issuance of the
Securities and the fees, disbursements and expenses of (a) the Company's counsel
and accountants, (b) the preparation, printing or other reproduction and the
mailing of the Memorandum and other documents (all in such quantities as the
Placement Manager may require), and (c) all required Blue Sky law filings as
provided in Section 6(c), including, but not limited to, the fees, expenses and
disbursements, if any, of the Placement Manager's counsel in connection with
such filings.
11. Indemnification and Contribution.
--------------------------------
(a) Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless the Placement Manager and each person, if any, who
controls the Placement Manager within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several
(including any reasonable investigation, legal or other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claim asserted) to which the Placement Manager or any
such controlling person may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in
the Memorandum and SEC Filings, or (B) in any Blue Sky law filing to the
extent such statement was based on information furnished by the Company, or
(ii) the omission or alleged omission to state in the Memorandum, the SEC
Filings or in any Blue Sky law filing a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and will
reimburse the Placement Manager and each such controlling person for any
legal or other expenses reasonably incurred by the Placement Manager or
such controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided that the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in the Memorandum in reliance upon and in conformity with written
information furnished to the Company by the Placement Manager specifically
for use in the Memorandum.
(b) Indemnification by the Placement Manager. The Placement Manager
----------------------------------------
agrees to indemnify and hold harmless the Company and each person, if any,
who controls the Company within the meaning of the Securities Act against
any losses, claims, damages or liabilities, joint or several, to which the
Company or such controlling person may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
(A) in the Memorandum, or (B) in any Blue Sky filing to the extent such
statement relates solely to the Placement Manager, or (ii) the omission or
alleged omission to state a material fact required to be
<PAGE>
-20-
stated in the Memorandum or (to the extent such omission was of a material
fact relating solely to the Placement Manager) in any Blue Sky law filing,
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Placement Manager will be liable in any such case based on the Memorandum
only to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission in the Memorandum was made in reliance upon
and in conformity with written information furnished to the Company by the
Placement Manager specifically for use in the Memorandum.
(c) Procedure. Promptly after receipt by an indemnified party under
---------
this Section 11 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 11, notify in writing the
indemnifying party of the commencement thereof; and the omission so to
notify the indemnifying party will relieve it from any liability under this
Section 11 as to the particular item for which indemnification is then
being sought, but not from any other liability which it may have to any
indemnified party. In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may wish, jointly with any
other indemnifying party, similarly notified, to assume the defense
thereof, with counsel who shall be to the reasonable satisfaction of such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 11 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided that if, in the reasonable
judgment of the indemnified party, it is advisable for the indemnified
party to be represented by separate counsel, the indemnified party shall
have the right to employ a single counsel in each jurisdiction to represent
the indemnified parties who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the indemnified
parties thereof against the indemnifying party, in which event the fees and
expenses of such separate counsel shall be borne by the indemnifying party.
Any such indemnifying party shall not be liable to any such indemnified
party on account of any settlement of any claim or action effected without
the consent of such indemnifying party, which consent shall not be
unreasonably withheld.
(d) Contribution. If the indemnification provided for in this
------------
Section 11 is unavailable to any indemnified party in respect to any
losses, claims, damages, liabilities or expenses referred to therein, then
the indemnifying party, in lieu of indemnifying such indemnified party,
will contribute to the amount paid or payable by such indemnified party, as
a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand, and the Placement Manager on the other
hand, from the Offering, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand, and
of the Placement Manager on the other hand, in connection with the
statements or omissions which resulted in such losses, claims,
<PAGE>
-21-
damages, liabilities or expenses as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand, and the Placement Manager on the other hand, shall be deemed to be in
the same proportion as the total proceeds from the Offering (before
deducting expenses) received by the Company, bear to the initial value of
the Sales Commission, Commission Shares and Commission Warrants as
established pursuant to paragraphs 4(a) and 4(b) of this Agreement. The
relative fault of the Company on the one hand, and the Placement Manager on
the other hand, will be determined with reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company, and its relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount
payable by a party as a result of the losses, claims, damages, liabilities
or expenses referred to above will be deemed to include any reasonable
legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The Company
and the Placement Manager agree that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in this paragraph 11(d).
12. Representations and Covenants to Survive Delivery. All
-------------------------------------------------
representations, warranties and covenants of the Company and of the Placement
Manager herein will survive the delivery and execution hereof and shall remain
operative and in full force and effect until after the Final Closing, regardless
of any investigation made by or on behalf of the Placement Manager or any person
who controls the Placement Manager within the meaning of the Securities Act, or
by the Company or any person who controls the Company within the meaning of the
Securities Act.
13. Termination by Placement Manager. The Placement Manager will have the
--------------------------------
right to terminate this Agreement by giving written notice as herein specified,
at any time:
(a) If the Company shall have failed, refused, or been unable to
perform any of its obligations hereunder;
(b) If any other condition of the Placement Manager's obligations
hereunder is not fulfilled; or
(c) If there has occurred an event materially or adversely affecting
the value of the Shares.
If the Placement Manager elects to terminate this Agreement pursuant to
this Section 13, the Company will be notified promptly in accordance with
Section 14 hereof. If this Agreement is terminated prior to a Final Closing,
the Company will reimburse the Placement Manager for all reasonable out-of-
pocket disbursements (including fees and disbursements of the Placement
Manager's counsel) actually incurred by the Placement Manager in connection with
the Offering, to the extent that such disbursements exceed the non-accountable
expense allowance referred to in
<PAGE>
-22-
paragraph 4(d). In the event of termination pursuant to this Section 13, Section
6(e) shall be null and void.
Notwithstanding the foregoing, nothing contained in this Section 13 shall
imply that the Placement Manager has undertaken any commitment to sell the
Shares other than to use its best efforts.
14. Termination by the Company. The Company may, at any time during the
--------------------------
Offering, terminate this Agreement, provided, however, that if the Company
-------- -------
terminates the Offering prior to its termination by the Placement Manager in
accordance with the terms of Section 13 of this Agreement and prior to August
14, 1997, and, within six months of termination by the Company in accordance
with the terms of this Section 14, the Company sells, offers for sale or enters
into an agreement with a third party for the sale or offer for sale of any
equity securities of the Company (the "Actions"), the Company shall pay the
Placement Manager (i) 10% of the Gross Proceeds of the sale resulting from the
Actions and (ii) warrants, exercisable until the fifth anniversary date of the
Termination Date, to purchase, at the price such equity securities of the
Company are sold or offered for sale in accordance with the Actions, a number of
shares of Common Stock equal to 10% of the number of such equity securities of
the Company sold or transferred (including any Commission Shares) as a result of
the Actions. Notwithstanding the foregoing, the restrictions of this Section 14
shall not apply to any issuances of equity securities of the Company in
connection with any joint venture, strategic corporate alliance or similar
arrangement that the Company may undertake, or to any issuances of equity
securities by the Company in connection with any Stock Plans or outstanding
warrants.
15. Notices. Any notice hereunder shall be in writing and shall be
-------
effective when delivered in person or by facsimile transmission, or seven
business days after being mailed by certified or registered mail, postage
prepaid, return receipt requested, to the appropriate party or parties, at the
following addresses: if to the Placement Manager, to Sunrise Securities Corp.,
135 East 57th Street, 11th Floor, New York, New York 10022 (facsimile 212-421-
5924), Attention: Mr. Nathan Low, President, with a copy to Carter, Ledyard &
Milburn, 2 Wall Street, New York, New York 10005, Attention: Steven J. Glusband,
Esq. (facsimile 212-732-3232); if to the Company, to Matritech, Inc., 330 Nevada
Street, Newton, Massachusetts 02160, Attention: Stephen D. Chubb (facsimile 617-
928-0821), with a copy to Testa, Hurwitz & Thibeault, LLP, High Street Tower,
125 High Street, Boston, Massachusetts 02110, (facsimile 617-248-7100)
Attention: Rufus C. King; or, in each case, to such other address as the parties
may hereinafter designate by like notice.
16. Parties. This Agreement will inure to the benefit of and be binding
-------
upon the Placement Manager, the Company and their respective successors and
assigns. This Agreement is intended to be, and is for the sole and exclusive
benefit of the Parties hereto and the other indemnified parties described in
subsections 11(a) and 11(b) hereof, and their respective successors and assigns,
and for the benefit of no other person, and no other person will have any legal
or equitable right, remedy or claim under, or in respect of this Agreement. No
purchaser of any of the Shares will be construed as successor or assign merely
by reason of such purchase.
<PAGE>
-23-
17. Amendment and/or Modification. Neither this Agreement, nor any term
-----------------------------
or provision hereof, may be changed, waived, discharged, amended, modified or
terminated or in any manner other than by an instrument in writing signed by
each of the Parties hereto.
18. Further Assurances. Each Party to this Agreement will perform any and
------------------
all acts and execute any and all documents as may be necessary and proper under
the circumstances in order to accomplish the intent and purposes of this
Agreement and to carry out its provisions.
19. Validity. In case any term of this Agreement will be held invalid,
--------
illegal or unenforceable, in whole or in part, the validity of any of the other
terms of this Agreement will not in any way be affected thereby.
20. Waiver of Breach. The failure of any Party hereto to insist upon
----------------
strict performance of any of the covenants and agreements herein contained, or
to exercise any option or right herein conferred in any one or more instances,
will not be construed to be a waiver or relinquishment of any such option or
right, or of any other covenants or agreements, and the same will be and remain
in full force and effect.
21. Entire Agreement. This Agreement contains the entire agreement and
----------------
understanding of the Parties with respect to the entire subject matter hereof,
and there are no representations, inducements, promises or agreements, oral or
otherwise, not embodied herein. Any and all prior discussions, negotiations,
commitments and understanding relating thereto, including without limitation,
that certain letter of intent dated May 14, 1997, between the Company and the
Placement Manager, are superseded hereby. There are no conditions precedent to
the effectiveness of this Agreement other than as stated herein, and there are
no related collateral agreements existing between the Parties that are not
referred to herein.
22. Counterparts. This Agreement may be executed in counterparts and each
------------
of such counterparts will for all purposes be deemed to be an original, and such
counterparts will together constitute one and the same instrument.
22. Law. This Agreement will be deemed to have been made and delivered in
---
New York City and will be governed as to validity, interpretation, construction,
effect and in all other respects by the internal laws of the State of New York.
The Company (a) agrees that any legal suit, action or proceeding arising out of
or relating to this letter will be instituted exclusively in the Supreme Court
of the State of New York, County of New York, or in the United States District
Court for the Southern District of New York, (b) waives any objection which the
Company may have now or hereafter to the venue of any such suit, action or
proceeding, and (c) irrevocably consents to the jurisdiction of the Supreme
Court of the State of New York, County of New York, and the United States
District Court for the Southern District of New York in any such suit, action or
proceeding.
<PAGE>
-24-
If the foregoing correctly sets forth our understanding, please so indicate
in the space provided below for that purpose, whereupon this letter will
constitute a binding agreement between us.
MATRITECH, INC.
By:___________________________
Name:
Title:
CONFIRMED AND ACCEPTED:
SUNRISE SECURITIES CORP.
By:___________________________
Name:
Title:
<PAGE>
-25-
Exhibit 5(e)
Registration Rights
The following documents include registration rights provisions:
. Second Amended and Restated Registration Rights Agreement dated May 4, 1990
in connection with the Company's Series C financing.
. Bridge Warrants issued in May 1992 and February 1992, incorporated into the
above referenced Registration Rights Agreement.
. Underwriter's Warrants issued to Hanifen, Imhoff Inc. in July 1992 and
August 1992 in connection with the Company's initial public offering and
second closing.
. Underwriter's Warrants issued to Thomas James Associates in August 1993 in
connection with an underwritten public offering.
. Securities Purchase Agreements with investors in the Company's September
1994 private placement, and Selling Agent Warrant Agreement and Warrant
issued to Jesup & Lamont Securities Corporation in connection with such
financing.
. Securities Purchase Agreements with investors in the Company's September
1995 private placement.
. Warrant to be issued to Sunrise Financial Group, Inc. for public relations
services pursuant to a letter agreement dated April 18, 1997.
<PAGE>
Exhibit 4.2
-----------
________________________________________________________________________________
MATRITECH, INC.
and
[PLACEMENT MANAGER DESIGNEE]
WARRANT AGREEMENT
Dated: May 28, 1997
________________________________________________________________________________
<PAGE>
THIS WARRANT AGREEMENT (this "Agreement") dated May 28, 1997 is made and
entered into by and between Matritech, Inc., a corporation organized under the
laws of the State of Delaware (the "Company"), and __________________(the
"Manager Designee").
Subject to the terms and conditions hereof, the Company agrees to issue to
the Manager and its designees, pursuant to paragraph 4(b) of the Placement
Manager Agreement dated __________, 1997 (the "Placement Agreement") between the
Company and Sunrise Securities Corp. (the "Manager"), warrants as hereinafter
described (the "Warrants") at a price of $.001 per Warrant to purchase up to an
aggregate of _____ shares of the common stock, par value $.0l per share (the
"Common Stock"), of the Company. As used herein, the terms "Share" or "Shares"
shall mean collectively the Common Stock issuable upon exercise of the Warrants
together with any other securities issuable upon such exercise as provided in
Section 8 of this Agreement. Terms which are capitalized but not defined herein
shall have the same meanings as in the Placement Agreement. The issuance of the
Warrants shall occur on each Closing Date, as provided in the Placement
Agreement upon receipt of payment therefor. Except where otherwise specified,
the terms of this Agreement shall apply to all registered holders of Warrants
(together with the Manager Designee, a "Warrantholder" or a "Holder").
For the purpose of defining the terms and provisions of the Warrants and
the respective rights and obligations thereunder, the Company and the Manager
Designee, for value received, hereby agree as follows:
Section 1. TRANSFERABILITY AND FORM OF WARRANTS.
1.1. REGISTRATION. The Warrants shall be numbered and shall be registered
on the books of the Company when issued, in accordance with Delaware corporate
practice.
1.2. TRANSFER. The Warrants shall be transferable only on the books of the
Company maintained at its principal office in Newton, Massachusetts, or wherever
its principal office may then be located, upon delivery thereof duly endorsed by
the Warrantholder seeking such transfer or by its duly authorized attorney or
representative, accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
execute and deliver new Warrants to the person entitled thereto.
1.3. LIMITATIONS ON TRANSFER OF THE WARRANTS. Subject to the provisions of
Section 11 of this Agreement, the Warrants shall not be sold, assigned,
hypothecated or otherwise transferred by any Warrantholder until a date one year
after the date of their issuance, except to: (i) one or more persons, each of
whom on the date of transfer is an officer of the Manager; (ii) a general
partnership or general partnerships, all the general partners in which are the
Manager or controlling persons of the Manager and one or more persons, each of
whom on the date of transfer is an officer of the Manager; (iii) a successor to
the Manager by merger or consolidation; (iv) a purchaser of all or substantially
all of the Manager's assets; or (v) any person acquiring the Warrants upon the
death of a Warrantholder by will or the laws of descent and distribution. The
term "Warrants" shall include any and all warrants outstanding pursuant to this
Agreement,
<PAGE>
including those evidenced by a certificate or certificates issued upon division,
exchange, substitution or transfer pursuant to this Agreement.
1.4. FORM OF WARRANTS. The form of certificate evidencing the Warrants
shall be substantially as set forth in Exhibit A attached hereto. Certificates
evidencing the Warrants shall be executed on behalf of the Company by its
Chairman, President or by any Vice President, shall be attested to by its
Secretary or any Assistant Secretary, and shall be dated as of the date of
execution thereof.
1.5. LEGEND ON COMMON STOCK. The Warrants, and the Shares have not been
registered under the Securities Act of 1933, as amended (the "Act"). Each
certificate for Shares shall bear the following legend unless, at the time of
exercise, such Shares are the subject of a currently effective registration
statement under the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED,
EXCHANGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN ANY MANNER EXCEPT IN
COMPLIANCE WITH SECTION 11 OF THE PLACEMENT MANAGER'S WARRANT AGREEMENT BY AND
BETWEEN THE ISSUER AND SUNRISE SECURITIES CORP. DATED MAY 28, 1997."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the Act of
the securities represented thereby) shall also bear the above legend unless, in
the opinion of the Company's counsel, the securities represented thereby need no
longer be subject to such restrictions.
Section 2. EXCHANGE OF WARRANT CERTIFICATE. Any Warrant certificate may be
exchanged for another certificate or certificates entitling a Warrantholder to
purchase a like aggregate number of Shares as the certificate or certificates
surrendered then entitles such Warrantholder to purchase. Any Warrantholder
desiring to exchange a Warrant certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, the
certificate evidencing the Warrant to be so exchanged. Thereupon, the Company
shall execute and deliver to the person entitled thereto a new Warrant
certificate as so requested.
Section 3. TERM OF WARRANTS; EXERCISE OF WARRANTS
(a) Subject to the terms of this Agreement, each Warrantholder shall have
the right, at any time during the period commencing at 9:00 a.m., Eastern Time,
on May 28, 1997 (the "Commencement Date") and ending at 5:00 p.m., Eastern Time,
on May 28, 2002 (the "Termination Date"), to purchase from the Company up to the
------
number of fully paid and nonassessable Shares which such Warrantholder may at
the lime be entitled to purchase pursuant to this Agreement, upon surrender to
the Company at its principal office of the certificates evidencing the Warrants
to be exercised, with the purchase form on the reverse thereof duly
<PAGE>
completed and signed, and upon payment to the Company of the Warrant Price (as
defined in and determined in accordance with the provisions of this Section 3
and Sections 7 and 8 hereof) for the number of Shares in respect of which such
Warrants are then exercised, but in no event for fewer than 100 Shares (unless
fewer than an aggregate of 100 Shares are then purchasable under all outstanding
Warrants held of record by a Warrantholder). Payment of the aggregate Warrant
Price shall be made in cash or by certified or cashier's check, in next day
funds, or any combination thereof.
(b) In lieu of exercising the Warrants as provided in Section 3(a) above, a
Warrantholder may elect to receive, without any cash payment, a number of Shares
equal to the value (as determined below) of any or all of the Warrants held of
record by such Warrantholder, upon surrender to Company at its principal office
of the certificates evidencing such Warrants, with the cashless exercise form on
the reverse side thereof duly completed and signed, in which event the Company
shall issue to the holder a number of Shares computed using the following
formula:
X = Y(A-B)
------
A
where X = the number of Shares to be issued pursuant to this Section 3(b).
Y = the number of Shares issuable upon exercise of the surrendered
Warrants.
A = the Market Price, as defined in Section 9 of this Agreement, on the
date when the certificates evidencing the surrendered Warrants are
received by the Company at its principal office.
B = the Warrant Price on such date.
(c) Upon surrender of Warrant certificates and (in the case of exercise
pursuant to Section 3(a)) payment of the Warrant Price, the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of a Warrantholder, and (subject to Section 11 hereof) in such name or
names as such Warrantholder may designate, a certificate or certificates for the
number of full Shares so acquired upon the exercise of the Warrant, together
with cash, as provided in Section 9 hereof, in respect of any fractional Shares
otherwise issuable upon such surrender. Such certificate or certificates shall
be deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such Shares as of the date
of surrender of the Warrants being exercised and (in the case of exercise
pursuant to Section 3(a)) payment of the Warrant Price notwithstanding that the
certificate or certificates representing such securities shall not actually have
been delivered or that the stock transfer books of the Company shall then be
closed. The Warrants shall be exercisable at the election of a Warrantholder
either in full or from time to time in part and, in the event that a certificate
evidencing Warrants is exercised in respect of fewer than all of the Shares
specified
<PAGE>
PAGE>
therein at any time prior to the Termination Date, a new certificate evidencing
the remaining portion of the Warrants shall be issued by the Company.
Section 4. PAYMENT OF TAXES. The Company will pay all taxes and fees, if
any, attributable to the initial issuance of the Warrants or the issuance of
Shares upon exercise of the Warrants; provided that the Company shall not be
required to pay any tax or fee which may be payable in respect of any secondary
transfer of the Warrants or such Shares.
Section 5. MUTILATED OR MISSING WARRANTS. In case the certificate or
certificates evidencing any Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the affected Warrantholder,
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated certificate or certificates, or in lieu of and substitution for the
certificate or certificates lost, stolen or destroyed, a new Warrant certificate
or certificates of like tenor and representing an equivalent right or interest,
but only upon receipt of evidence satisfactory to the Company of the loss, theft
or destruction of such Warrant and, if requested, at the cost and expense of the
Warrantholder, a bond of indemnity in form and amount satisfactory to the
Company. Applicants for such substitute Warrants certificate shall also comply
with such other reasonable regulations as the Company may prescribe.
Section 6. RESERVATION OF COMMON STOCK. There has been reserved, and the
Company shall at all times keep reserved so long as any Warrants remain
outstanding, out of its authorized share capital, such number of Common Stock as
shall be subject to purchase under all outstanding Warrants. Every transfer
agent for the Common Stock and other securities of the Company issuable upon the
exercise of Warrants will be irrevocably authorized and directed at all times
to reserve such number of authorized shares of Common Stock and other securities
as shall be requisite for such purpose. The Company will keep a copy of this
Agreement on file with every transfer agent for the Common Stock -and other
securities of the Company issuable upon the exercise of the Warrants. The
Company will supply every such transfer agent with duly executed stock and other
certificates, as appropriate, for such purpose and will provide or otherwise
make available any cash which may be payable as provided in Section 9 hereof.
Section 7. WARRANT PRICE. "Warrant Price" shall mean the price per Share
at which Shares shall at any time be purchasable upon the exercise of the
Warrants. The initial Warrant Price shall be $5.00, subject to adjustment
pursuant to Section 8 hereof.
Section 8. ADJUSTMENT OF NUMBER AND KIND OF SECURITIES. The number and
kind of securities purchasable upon the exercise of the Warrants and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
8.1. ADJUSTMENTS.
(a) In case the Company shall (i) pay a dividend in Common Stock or
make a distribution in Common Stock, (ii) subdivide its outstanding Common
Stock, (iii) combine its outstanding Common Stock into a smaller number of
shares of Common Stock, or (iv) issue, by reclassification of its Common
Stock, other securities of the Company, the
<PAGE>
number of Shares or other securities purchasable upon exercise of the
Warrants immediately prior thereto shall be adjusted so that each
Warrantholder shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company which it would have owned
or would have been entitled to receive immediately after the happening of
any of the events described above, had the Warrants been exercised
immediately prior to the happening of such event or any record date with
respect thereto. Any adjustment made pursuant to this subsection 8.l(a)
shall become effective immediately on the effective date of such event
retroactive to the record date, if any, for such event.
(b) In case the Company shall issue rights, options, warrants or
convertible securities to all or substantially all holders of its Common
Stock without any charge to such holders, entitling them to subscribe for
or purchase shares of Common Stock at a price per share which, at the
record date mentioned below, is lower than the then effective Warrant Price
(calculated pursuant to this Section 8), the number of Shares thereafter
purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of Shares theretofore purchasable upon exercise of
the Warrant by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding immediately prior to the issuance of
such rights, options, warrants or convertible securities plus the number of
additional Common Stock offered for subscription or purchase, and of which
the denominator shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such rights, options, warrants or
convertible securities plus the number of shares which the aggregate
offering price of the total number of shares offered would purchase at such
then effective Warrant Price. Such adjustment shall be made whenever such
rights, options, warrants or convertible securities are issued, and shall
become effective immediately and retroactive to the record date for the
determination of shareholders entitled to receive such rights, options,
warrants or convertible securities, provided no such adjustment shall be
made for rights issued in connection with what is customarily referred to
as a "poison pill" or "shareholder rights plan."
(c) In case the Company shall distribute to all or substantially all
holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions out of earnings) or rights,
options, warrants or convertible securities containing the right to
subscribe for or purchase Shares (excluding those referred to in subsection
8.1(b) above and rights in connection with a shareholder rights plan), then
in each case the number of Shares thereafter purchasable upon the exercise
of the Warrants shall be determined by multiplying the number of Shares
theretofore purchasable upon exercise of the Warrants by a fraction, of
which the numerator shall be the then effective Warrant Price as of the
date of such distribution calculated pursuant to this Section 8, and of
which the denominator shall be such then effective Warrant Price on such
date minus the then fair value (determined as provided in subparagraph (f)
below) of the portion of the assets or evidences of indebtedness so
distributed or of such subscription rights, options, warrants or
convertible securities applicable to one share. Such adjustment shall be
made whenever any such distribution is made and shall become effective on
the date of
<PAGE>
distribution retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
(d) No adjustment in the number of Shares purchasable pursuant to the
Warrants shall be required unless such adjustment would require an increase
or decrease of at least one percent in the number of Shares then
purchasable upon the exercise of the Warrants or, if the Warrants are not
then exercisable, the number of Shares purchasable upon the exercise of the
Warrants on the first date thereafter that the Warrants become exercisable;
provided that any adjustments which by reason of this subsection 8.1(d)
are not required to be made immediately shall be carried forward and taken
into account in any subsequent adjustment.
(e) Whenever the number of Shares purchasable upon the exercise of a
Warrant is adjusted, as herein provided, the Warrant Price payable upon
exercise of such Warrant shall be adjusted by multiplying such Warrant
Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Shares purchasable upon the exercise of
the Warrant immediately prior to such adjustment, and of which the
denominator shall be the number of Shares so purchasable upon the exercise
of the Warrant immediately thereafter.
(f) Whenever the number of Shares purchasable upon the exercise of
Warrants is adjusted as herein provided, the Company shall cause to be
promptly mailed to the Warrantholders by first class mail, postage prepaid,
notice of such adjustment and a certificate of the chief financial officer
of the Company setting forth the number of Shares purchasable upon the
exercise of the Warrants after such adjustment, a brief statement of the
facts requiring such adjustment and the computation by which such
adjustment was made.
(g) For the purpose of this subsection 8.1, the term Common Stock
shall mean (i) the class of Common Stock designated as the Common Stock of
the Company at the date of this Agreement, or (ii) any other class of
shares resulting from successive changes or reclassification of such Common
Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. In the event that at any
time, as a result of an adjustment made pursuant to this Section 8, a
Warrantholder shall become entitled to purchase any securities of the
Company other than Common Stock, (i) if the Warrantholders' right to
purchase is on any other basis than that available to all holders of the
Common Stock, the Company shall obtain an opinion of an independent
investment banking firm valuing such other securities and (ii) thereafter
the number of such other securities so purchasable upon exercise of the
Warrants shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect
to the Common Stock contained in this Section 8.
(h) Upon the expiration of any rights, options, warrants or conversion
privileges, if such shall not have been exercised, the number of Shares
purchasable upon exercise of the Warrants, to the extent the Warrants have
not then been exercised, shall,
<PAGE>
upon such expiration, be readjusted and shall thereafter be such as they
would have been had they been originally adjusted (or had the original
adjustment not been required, as the case may be) on the basis of (A) the
fact that the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversion privileges, and (B) the fact that
such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for the issuance,
sale or grant of all such rights, options, warrants or conversion
privileges whether or not exercised; provided, however, that no such
readjustment shall have the effect of decreasing the number of Shares
purchasable upon exercise of the Warrants by an amount in excess of the
amount of the adjustment initially made in respect of the issuance, sale or
grant of such rights, options, warrants or conversion privileges.
8.2. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in subsection 8.1,
no adjustment to the Warrants or any provision or condition thereof in respect
of any dividends or distributions out of earnings shall be made during the term
of the Warrants or upon the exercise of Warrants.
8.3. NO ADJUSTMENT IN CERTAIN CASES. No adjustments to the Warrants or any
provision or condition thereof shall be made pursuant to Section 3 or Section 8
hereof in connection with (i) the issuance of any Securities sold as part of the
Offering pursuant to the Placement Agreement, or the issuance of Common Stock
upon exercise of the Warrants, or (ii) the grant or exercise of the options to
purchase Common Stock under the Company's Stock Plans or any future option plan
for the sole benefit of the Company's employees and directors.
8.4. PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the Company
into another entity or in case of any sale or conveyance to another entity of
the property, assets or business of the Company as an entirety or substantially
as an entirety, the Company or such successor or purchasing entity, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter, upon exercise of the Warrants
and payment of the Warrant Price in effect immediately prior to such
consolidation, merger or sale, to purchase the kind and amount of shares and
other securities and property which it would have been entitled to receive after
the happening of such consolidation, merger, sale or conveyance had the Warrants
been exercised immediately prior thereto. In the event of a merger described in
Section 368(a)(2)(E) of the Internal Revenue Code of 1986 (or any successor
provision), in which the Company is the surviving corporation, the right to
purchase Shares under the Warrants shall terminate on the date of such merger
and thereupon the Warrants shall become null and void, but only if the
controlling corporation (after such event) shall agree to substitute for the
Warrants its warrants entitling the holder thereof to purchase the kind and
amount of shares and other securities and property which it would have been
entitled to receive had the Warrants been exercised immediately prior to such
merger. Any such agreements referred to in this subsection 8.4 shall provide
for adjustments, which shall be as nearly equivalent as may be practicable to
the adjustments provided for in Section 8 hereof, and shall contain
substantially the same terms, conditions and provisions as are contained herein
immediately prior to such event. The provisions
<PAGE>
of this subsection 8.4 shall similarly apply to successive consolidations,
mergers, sales or conveyances.
8.5. NOMINAL VALUE OF COMMON STOCK. Before taking any action which would
cause an adjustment effectively reducing the portion of the Warrant Price
allocable to each Share below the then nominal value per Share issuable upon
exercise of the Warrants, the Company will take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Shares upon exercise of
the Warrants.
8.6. INDEPENDENT PUBLIC ACCOUNTANTS. The Company may retain a firm of
independent public accountants of recognized national standing in the United
States (which may be any such firm regularly employed by the Company) to make
any computation required under this Section 8, and a certificate signed by such
firm shall be evidence of the correctness of any computation made under this
Section 8.
8.7. STATEMENT ON WARRANT CERTIFICATES. Irrespective of any adjustments in
the number of securities issuable upon exercise of Warrants, Warrant
certificates theretofore or thereafter issued may continue to express the same
number of securities as are stated in the similar Warrant certificates initially
issuable pursuant to this Agreement. However, the Company may, at any time in
its reasonable discretion, make any change in the form of Warrant certificate
that it may deem appropriate and that does not affect the substance thereof; and
any Warrant certificate hereafter issued, whether upon registration of transfer
of, or in exchange or substitution for, an outstanding Warrant certificate, may
be in the form so changed.
Section 9. FRACTIONAL INTERESTS; MARKET PRICE. The Company shall not be
required to issue fractional Shares upon the exercise of any Warrant. If any
fraction of a Share would, except for the provisions of this Section 9, be
issuable on the exercise of any Warrant (or specified portion thereof), the
Company shall pay an amount in cash equal to the Market Price multiplied by such
fraction. For all purposes of this Agreement, the term Market Price as of any
specified date shall mean (i) if the Common Stock is traded in the United States
over-the-counter market and not on the Nasdaq System or on any United States
national securities exchange, the average of the mean between the bid and asked
prices of the Common Stock on each of the five consecutive trading days
immediately preceding the date in question, as reported by the National
Quotation Bureau Incorporated or an equivalent generally accepted reporting
service, or (ii) if the Common Stock is traded on the Nasdaq System or on one or
more United States national securities exchanges, the average, for the five
consecutive trading days immediately preceding the date in question, of the
daily closing price of the Common Stock on the Nasdaq System or the daily
closing price for consolidated transactions on the principal United States
national securities exchange on which the Common Stock is listed, or (iii) if
the Common Stock is not traded in the United States over-the-counter market, the
Nasdaq System or any United States national securities exchange, the average,
for the five consecutive trading days immediately preceding the date in
question, of the daily closing price of the Common Stock on the principal non-
United States exchange on which the Common Stock is listed. The daily closing
price referred to in
<PAGE>
clauses (ii) and (iii) above shall be the last reported sale price on the day in
question or, if no reported sale takes place on such day, the average of the
reported closing bid and asked prices.
Section 10. NO RIGHTS AS SHAREHOLDER; NOTICES TO WARRANTHOLDERS. Nothing
contained in this Agreement or in the Warrants shall be construed as conferring
upon the Warrantholder or any transferee of a Warrant any rights as a
shareholder of the Company, including (without limitation) the right to vote,
receive dividends, consent or receive notices as a shareholder in respect of any
meeting of shareholders for the election of directors of the Company or any
other matter. If, however, at any time prior to the expiration of the Warrants
and prior to their exercise in full, any one or more of the following events
shall occur:
(a) any action which would require an adjustment pursuant to Section 8.1 or
8.4; or
(b) a dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation, merger or sale of its property, assets and
business as an entirety or substantially as an entirety) shall be proposed;
then the Company shall give notice in writing of such event to each of the
Warrantholders, as provided in Section 14 hereof, at least 20 days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to any relevant dividend,
distribution, subscription rights or other rights or for the determination of
shareholders entitled to vote on such proposed dissolution, liquidation or
winding up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to mail or receive such notice
or any defect therein shall not affect the validity of any action taken with
respect thereto.
Section 11. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
(a) The Manager agrees and undertakes that if any Warrantholder proposes to
sell or otherwise transfer any Warrants or Shares other than to persons or
entities identified in clauses (i) through (v), inclusive, of Section 1. 3, and
if such Warrants or Shares are not then registered for resale pursuant to an
effective registration statement under the Act, the Warrantholder proposing to
make such transfer shall give written notice to the Company describing briefly
the manner in which any such proposed transfer is to be made; and no such
transfer shall be made unless the Company shall notify such Warrantholder that
in the opinion counsel reasonably satisfactory to such Warrantholder,
registration under the Act is not required with respect to such transfer.
(b) If at any time during the period prior to the Termination Date the
Shares are not subject to an effective registration statement under the Act (a
"Registration Statement"), the Company shall be obligated to the Warrantholders
and the registered holders of the Shares issued upon exercise of the Warrants
(collectively with the Warrantholders, the "Holders"), as follows:
(i) Whenever during the five-year period beginning on the
Commencement Date and ending on the Termination Date, the Company
proposes to file with the Securities and Exchange Commission (the
"Commission") a
<PAGE>
Registration Statement (other than a registration statement on Form S-
8 (or other form) relating solely to securities issued pursuant to an
employee benefit plan, or a registration statement on Form F-4 or S-4
or any successor form thereto), the Company shall, at least 30 days
prior to each such proposed filing, give written notice thereof to the
Holders at their respective addresses appearing on the records of the
Company, and shall offer to include and shall include in such filing
any Shares as to which written requests for such inclusion are
received by the Company from Holders not more than 20 days after such
Company's notice is mailed to the Holders. The Shares which are the
subject of valid requests from Holders are hereinafter referred to as
the "Piggyback Shares." If such registration statement relates in
whole or in part to an underwritten public offering of the Common
Stock by the Company, the right of any Holder to registration pursuant
to this Section 11(b) shall be conditioned upon such Holder's
participation in any underwriting of the Company's public offering.
All Holders proposing to distribute their Piggyback Shares through
such underwriting shall (together with the Company and other holders
of Common Stock participating in such underwriting) enter into an
underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. In
addition, if, after the number of Piggyback Shares is determined, the
managing underwriter of such offering determines that marketing
factors require a limitation on the number of shares of Common Stock
to be underwritten other than those to be offered by the Company for
its own account, the managing underwriter may exclude any or all of
the Piggyback Shares from such registration statement and
underwriting, but only to the extent that the Company excludes Common
Stock which other shareholders of the Company have requested the
Company to include in such registration statement and underwriting
pursuant to "piggyback rights" similar to those granted in this
Section 11(b) (such other Common Stock which is the subject of such
requests are hereinafter referred to as "Other Piggyback Shares"). In
the event that any Piggyback Shares are so excluded, the number of
Piggyback Shares and Other Piggyback Shares that shall be included in
such registration statement and underwriting shall be allocated
equally among all Holders and the holders of Other Piggyback Shares in
proportion, as nearly as practicable, to the total number of Piggyback
Shares and Other Piggyback Shares. If any Piggyback Shares are
excluded from registration pursuant to the foregoing, then the
percentage set forth in Sections 11(b)(ii) and (iii) shall thereafter
be reduced from 50% to 25%, and the Company's obligation to file a
Registration Statement under Section 11(b)(ii) shall be increased to
two Registration Statements.
(ii) In addition to any Registration Statement pursuant to
subparagraph (i) above, during the five-year period beginning on the
Commencement Date and ending on the Termination Date, the Company
shall, as promptly as practicable (but in any event within 75 days),
after receipt of a written request (the "Registration Request") by a
Holder or Holders holding of record (or having the right to acquire
upon exercise of Warrants) at least 50% of the total number of
<PAGE>
shares of Common Stock issuable upon exercise of the Warrants granted
to the Manager and its designees pursuant to the Offering, prepare and
file with the Commission at the Company's expense a Registration
Statement, and (if required) any related filing with any State
securities regulator, sufficient to permit the public offering of the
Shares covered by the Registration Request. Within ten days of the
Company's receipt of a Registration Request, it shall give written
notice thereof to the Holders who did not join in the Registration
Request, at their respective addresses appearing on the records of the
Company, and shall offer to include and shall include in such
Registration Statement any Shares as to which written requests for
such inclusion are received by the Company from such Holders not more
than 20 days after the Company's notice is mailed to such Holders. The
Company will use its best efforts at its expense to cause such
Registration Statement to become effective under the Act as promptly
as practicable and to maintain such effectiveness until the earlier of
the time that all the registered Shares have been sold or the
expiration of three hundred sixty-five (365) days from the effective
date of the Registration Statement. The Company shall be required to
file one Registration Statement under this Section 1 l(b)(ii) (or two
in the circumstances provided in Section 11(b)(i)).
(iii) In addition to any Registration Statement pursuant to
subparagraphs (i) and (ii) above, during the five-year period
beginning on the Commencement Date and ending on the Termination Date,
the Company shall, as promptly as practicable (but in any event within
75 days), after receipt of a written request (the "Registration
Request") by Warrantholders holding of record at least 50% of the
total number of Warrants to be issued pursuant to the Offering,
prepare and file with the Commission at such Warrantholders' expense a
Registration Statement, and (if required) any related filing with any
State securities regulator, sufficient to permit the public offering
of the Shares covered by the Registration Request. Within ten days of
the Company's receipt of a Registration Request, it shall give written
notice thereof to the Warrantholders who did not join in the
Registration Request, at their respective addresses appearing on the
records of the Company, and shall offer to include and shall include
in such Registration Statement any Shares as to which written requests
for such inclusion are received by the Company from such
Warrantholders not less than 20 days after the Company's notice is
mailed to such Warrantholders. The Company will use its best efforts
at the Warrantholders' expense to cause such Registration Statement to
become effective under the Act as promptly as practicable and to
maintain such effectiveness until the earlier of the time that all the
registered Shares have been sold or the expiration of three hundred
sixty-five (365) days from the effective date of the Registration
Statement. The Company shall be required to file one Registration
Statement under this Section 11 (b)(iii).
(c) In connection with any Registration Statement filed pursuant to
paragraph (b) of this Section 11, the Company shall take such action as may be
necessary or appropriate to comply with the securities or blue sky laws of such
states of the United States as shall reasonably be
<PAGE>
requested by the Holders, and shall do any and all other acts which may be
necessary or advisable to permit the proposed sale or other disposition of the
Shares in any such state; provided that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation or as a
dealer in any jurisdiction where it is not already so qualified, or to execute a
general consent for service of process in suits other than those arising .out of
the offer and sale of the Shares, or to take any action which would subject it
to taxation in any jurisdiction where it is not then so subject.
(d) The Company's obligations under paragraph (b) of this Section 11 with
respect to any Holder shall be conditioned in each instance upon the timely
receipt by the Company in writing of (i) information from such Holder as to the
proposed plan of distribution of such Holder's Shares to be included in a
Registration Statement, (ii) such other information as may be required by law
from such holder, or its underwriter or other agent, for inclusion in such
Registration Statement, and (iii) if such holder is not the Manager or the
Manager Designee, an agreement to be bound by the provisions of Sections 12 and
13 of this Agreement.
(e) Each Holder will not make any sale of the Shares, pursuant to the
Registration Statement referred to in this Section 11 without effectively
causing the prospectus delivery requirements under the Securities Act to be
satisfied. Each Holder acknowledges that there may occasionally be times when
the Company must suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to such registration
statement has been filed by the Company and declared effective by the Commission
or until the Company has amended or supplemented such prospectus. The Company
will use its best efforts to cause such amended registration statement to be
declared effective and/or to deliver such amended or supplemented prospectus as
soon as possible. Each Holder hereby covenants that it will not sell any Shares
pursuant to said prospectus without first confirming with the Company that the
Registration Statement has not been suspended, and during the period commencing
at the time at which the Company gives the Holder notice of the suspension of
the use of said prospectus and ending at the time the Company gives the Holder
notice that the Holder may thereafter effect sales pursuant to said prospectus.
(f) The Company shall pay all fees, disbursements and out-of-pocket
expenses (other than any Holder's brokerage fees and commissions and legal fees)
payable in connection with (i) any Registration Statement filed under paragraph
11(b)(i) and (ii) (or the opinion of counsel referred to in paragraph 1l(f) and
any related no-action letter of the Commission staff) and (ii) compliance with
applicable state securities and blue sky laws. The Company at its expense will
supply the Holders of Shares included in a Registration Statement with copies of
such Registration Statement and the prospectus included therein and other
related documents and opinions and no-action letters, in such quantities as may
be reasonably requested by such Holders. In connection with each Registration
Statement, the Company shall furnish to Holders of Shares included therein such
opinions of counsel, comfort letters of accountants, certificates and other
documents that are customary in connection with underwritten public offerings
and that are reasonably requested by such Holders.
<PAGE>
(g) The Company shall not be required by this Section 11 to include in any
Registration Statement any Shares which, in the opinion of counsel for the
Company, could be sold pursuant to Rule 144 under the Act in any three-month
period without volume limitation.
(h) The Company represents that the registration rights provided in this
Section 11 are not inconsistent with, and will in no way be limited by,
registration rights previously granted by the Company to its securityholders.
Section 12. INDEMNIFICATION.
(a) In the event that any Registration Statement is filed pursuant to
Section 11 hereof, the Company will indemnify and hold harmless each Holder
identified as a selling security holder therein, and each person, if any, who
controls such Holder within the meaning of the Act, against any and all losses,
claims, damages or liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they or any of them may become subject under the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or other
federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement, any related
preliminary prospectus, final prospectus, or amendment thereof or supplement
thereto, or any related blue sky filing, or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided that the Company shall not be
liable under this section 12(a) in any such case to the extent that any such
losses, claims, damages or liabilities arise solely out of or are based upon an
untrue statement of a material fact contained in, or any omission of a material
fact from, such Registration Statement, preliminary prospectus, final prospectus
or amendment thereof or supplement thereto in reliance upon, and in conformity
with, information furnished in writing to the Company by such Holder
specifically for use therein. This indemnity will be in addition to any
liability which the Company may otherwise have.
(b) Each Holder who is identified as a selling security holder in a filed
Registration Statement will severally, and not jointly, indemnify and hold
harmless the Company, each other person referred to in subparts (1), (2) and (3)
of Section 11 (a) of the Act in respect of the Registration Statement, and each
person, if any, who controls the Company or any such person within the meaning
of Section 15 of the Act, against any and all losses, claims, damages or
liabilities (including any reasonable investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they, or any of them, may
become subject under the Act, the Exchange Act or other federal or state law or
regulation, at common law, or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in such Registration Statement, any related preliminary prospectus,
final prospectus or amendment thereof or supplement thereto, or any related blue
sky filing, or (ii) the omission or alleged omission to state therein a material
<PAGE>
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
omission was made in such Registration Statement, preliminary prospectus, final
prospectus or amendment thereof or supplement thereto in reliance upon, and in
conformity with, information furnished in writing to the Company by such Holder
specifically for use therein. This indemnity will be in addition to any
liability which a Holder may otherwise have to the Company.
(c) Any party that proposes to assert the right to be indemnified under
this Section 12 shall, promptly after receipt of notice of the commencement of
any action, suit or proceeding against such party in respect of which a claim is
to be made against an indemnifying party or parties under this Section, notify
each such indemnifying party of the commencement thereof, enclosing a copy of
all papers served. No indemnification provided for in Section 12(a) or 12(b)
shall be available to any party who shall fail to give notice as provided in
this Section 12(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, but the omission so to notify such
indemnifying party of any such action, suit or proceeding shall not relieve it
from any liability that it may have to any indemnified party otherwise than
under this Section 12 or Section 13. In case any such action, suit or
proceeding is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, such indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party, and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and the approval by the indemnified party of such
counsel (which approval shall not unreasonably be withheld), the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in connection with
the defense thereof. The indemnified party shall have the right to employ its
own counsel in any such action, suit or proceeding but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in writing
by the indemnifying parties, (ii) the indemnified party shall have reasonably
concluded that there may be differing or additional defenses available to it and
not to one or more of the indemnifying parties in such action, suit or
proceeding (in which case the indemnifying parties shall not have the right to
direct the defense of such action, suit or proceeding on behalf of the
indemnified party), or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time after
notice of the commencement thereof, in each of which cases the fees and expenses
of the indemnified party's counsel shall be at the expense of the indemnifying
parties; however, the indemnifying party shall not, in connection with any one
such action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for the Holders and
controlling persons, which firm shall be designated in writing by a majority in
interest of such Holders and controlling persons (based upon the value of the
Shares included in the Registration Statement). An indemnifying party shall
<PAGE>
not be liable for any settlement of any action, suit, proceeding or claim
effected without its written consent.
Section 13. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 12 is due in accordance with its terms but for any reason is held to be
unavailable or insufficient to hold harmless an indemnified party, the Company
(including for this purpose any controlling person of the Company, any director
of the Company and any officer of the Company who signed the Registration
Statement) on the one hand, and the Holders (including for this purpose any
controlling persons thereof) on the other hand, shall, in lieu of indemnifying
such indemnified party, contribute to the aggregate losses, claims, damages or
liabilities referred to in Section 12 above (including any investigation, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claims asserted, but
after deducting any contribution received by or payable to the Company from
other persons other than the Holders, such as other selling securityholders,
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement, and directors of the Company),
(a) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Holders from the offering or offerings covered
by the Registration Statement or, (b) if the allocation provided by clause (a)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (a) above but
also the relative fault of the Company and the Holders in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and any Holder on
the other hand shall be deemed to be in the same proportion as (x) the total
proceeds (if any) received by the Company from the offering or offerings covered
by the Registration Statement (net of underwriting discounts but before
deducting expenses, if applicable), plus all cash proceeds received by the
Company from the exercise of the Warrants for the Shares of such Holder included
in the Registration Statement, bear to (y) the total proceeds received by such
Holder from the sale of Shares included in the Registration Statement. The
relative fault of the Company and any Holder shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission related to information supplied by, the Company or
such Holder, and their relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Manager, the Manager Designee and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 13 were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 13, in no case shall any Holder (except as may be provided by
agreement among them) be liable or responsible for any amount in excess of the
proceeds received by such Holder from the sale of the Shares included in the
Registration Statement; provided that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 13, each person, if
any, who controls a Holder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
such Holder, and each person, if any,
<PAGE>
who controls the Company within the meaning of the Section 15 of the Act or
Section 20(a) of the Exchange Act, each director of the Company and each officer
of the Company who shall have signed the Registration Statement, shall have the
same rights to contribution as the Company, subject in each case to clauses (i)
and (ii) in the immediately preceding sentence of this Section 13. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this Section
13, notify such party or parties from whom contribution may be sought, and the
omission so to notify such party or parties from whom contribution may be sought
shall relieve the party or parties from whom contribution may be sought (if such
party was unaware of such action, suit or proceeding and was materially
prejudiced by such omission) from any liability under this Section 13, but not
from any other obligation it or they may have hereunder or otherwise than under
this Section 13. No party shall be liable for contribution with respect to any
settlement of an action, suit, proceeding or claim effected without its written
consent. The obligations of the Holders to contribute pursuant to this Section
13 are several in proportion to their respective number of Shares included in
the Registration Statement, and not joint.
Section 14. NOTICES. Any notice pursuant to this Agreement shall be in
writing and shall be deemed to have been duly given (i) if given by facsimile
transmission on the business day on which such transmission is sent and
confirmed, (ii) if given by air courier, two business days following the date it
was sent or (iii) if mailed by certified mail, return receipt requested, ten
business days following the date it was mailed, to the following addresses
(unless another address is herein specified):
(a) If to a Holder, addressed to: Sunrise Securities Corp., 135 East 57th
Street, 11th Floor, New York, New York 10022, Attention: Mr. Nathan Low (fax:
212-421-5924), with a copy to Carter, Ledyard & Milburn, 2 Wall Street, New
York, New York 10005, Attention: Steven J. Glusband, Esq. (fax: 212-732-3232).
(b) If to the Company, addressed to: 330 Nevada Street, Newton,
Massachusetts 02160, Attention: Stephen D. Chubb (fax: 617-928-0821) with a copy
to: Testa, Hurwitz & Thibeault, LLP, High Street Tower, 125 High Street, Boston,
Massachusetts 02110, Attention: Rufus C. King, Esq. (fax: 617-248-7100).
Each party may from time to time change the address or fax number to which
notices to it are to be delivered or mailed hereunder by notice in accordance
herewith to the other party.
Section 15. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Manager and the Holders
shall bind and inure to the benefit of their respective successors and assigns.
Section 16. MERGER OR CONSOLIDATION OF THE COMPANY. The Company shall not
merge or consolidate with or into any other corporation or sell all or
substantially all of its property to another corporation, unless the provisions
of Section 8.4 are complied with.
<PAGE>
Section 17. APPLICABLE LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK
AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
SAID STATE (WITHOUT REFERENCE TO ITS RULES AS TO CONFLICTS OF LAWS). The Company
hereby agrees to the exclusive jurisdiction of the courts of the State of
Delaware or the federal courts sitting in the State of Delaware in connection
with any action arising out of this Agreement.
Section 18. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrantholders and holders of Shares any legal or equitable right, remedy or
claim under this Agreement. This Agreement shall be for the sole and exclusive
benefit of the Company and the Holders.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the date and year first above written.
MATRITECH, INC.
By:__________________________________________
Name:
Title:
[PLACEMENT MANAGER DESIGNEE]
By:__________________________________________
Name:
<PAGE>
[FORM OF WARRANT CERTIFICATE]
EXHIBIT A
---------
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE, AND THE SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS, HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES. SUCH WARRANTS AND SECURITIES MAY
NOT BE SOLD, ASSIGNED, EXCHANGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN ANY MANNER EXCEPT IN COMPLIANCE WITH SECTION 11 OF THE
PLACEMENT MANAGER'S WARRANT AGREEMENT BY AND BETWEEN THE ISSUER AND
SUNRISE SECURITIES CORP. DATED MAY 28, 1997."
WARRANT CERTIFICATE NO. _________
MATRITECH, INC.
(ORGANIZED UNDER THE LAWS
OF THE STATE OF DELAWARE)
WARRANTS TO PURCHASE COMMON STOCK
This certifies that, for value received, ___________________________ (the
"Warrantholder") is the registered owner of _____ warrants (the "Warrants") to
purchase from Matritech, Inc. (the "Company"), at any time during the period
commencing at 9:00 a.m., Eastern Time, on May 28, 1997 and ending at 5:00 p.m.,
Eastern Time, on May 28, 2002, at an initial purchase price per share of $5.00
(the "Warrant Price"), one share of Common Stock of the Company. The Warrants
are subject to, and each Warrantholder, by acceptance of this certificate,
consents to all the terms and provisions of the Warrant Agreement dated as of
May 28, 1997, between the Company and the Warrantholder, pursuant to which the
Warrants evidenced hereby were issued (the "Warrant Agreement").
The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Purchase Form herein duly
executed (with a signature guarantee as provided therein), and simultaneous
payment of the Warrant Price for each Warrant exercised, at the principal office
of the Company. Payment of such price shall be made at the option of each
Warrantholder in cash or by certified or cashier's check, in next day funds.
The Warrantholder may also receive Common Stock without any cash payment by
presentation of this Warrant Certificate with the Cashless Exercise Form herein
duly executed (with a signature guarantee as-provided therein) at the principal
office of the Company.
<PAGE>
Upon any partial exercise of the Warrants evidenced hereby, there shall be
signed and issued to the Warrantholder effecting such partial exercise a new
Warrant Certificate in respect of the Common Stock as to which the Warrants
evidenced hereby shall not have been exercised. These Warrants may be exchanged
at the office of the Company by surrender of this Warrant Certificate properly
endorsed for one or more new Warrants of the same aggregate number of shares of
Common Stock as here evidenced by the Warrant or Warrants exchanged. No
fractional shares of Common Stock will be issued upon the exercise of rights to
purchase hereunder, but the Company shall pay the cash value of any fraction
upon the exercise of one or more Warrants. These Warrants are transferable at
the office of the Company in the manner and subject to the limitations set forth
in the Warrant Agreement.
This Warrant Certificate does not entitle any Warrantholder to any of the
rights of a shareholder of the Company.
MATRITECH, INC.
By:__________________________________________
Title:_______________________________________
ATTEST:
______________________________
Title:________________________
Dated: _________________, 1997
<PAGE>
PURCHASE FORM
Matritech, Inc.
330 Nevada Street
Newton, Massachusetts 02160
Pursuant to paragraphs 3(a) and (c) of the Warrant Agreement, the
undersigned hereby irrevocably elects to exercise the right of purchase
represented by this Warrant Certificate for, and to purchase thereunder,
________ shares of Common Stock ("Common Stock") provided for therein, and
requests that certificates for such Common Stock be issued in the name of:
______________________________
(Please Print or Type Name(s), Address and Taxpayer Identification Number(s))
______________________________
______________________________
______________________________
If this Warrant Certificate is hereby being exercised with respect to fewer
than all the Common Stock specified herein, please issue a new Warrant
Certificate for the unexercised balance of the Warrants, registered in the name
of the undersigned Warrantholder or his assignee as below indicated and
delivered to the address stated below.
Dated: ____________
Name of Warrantholder(s)
or Assignee(s) (Please Print):___________________________
___________________________
Address (Please Print):__________________________________
__________________________________
Signature(s):____________________________________________
____________________________________________
Note: The above signature(s) must correspond exactly with the name(s) as
written upon the face of this Warrant Certificate, without alteration or
enlargement or any change whatever, unless these Warrants have been assigned.
<PAGE>
CASHLESS EXERCISE FORM
Matritech, Inc.
330 Nevada Street
Newton, Massachusetts 02160
Pursuant to paragraphs 3(b) and (c) of the Warrant Agreement, the
undersigned hereby irrevocably elects to exercise the right represented by this
Warrant Certificate for, and to receive thereunder without any cash payment,
_______ of the shares of Common Stock ("Common Stock") provided for therein, and
requests that certificates for such shares of Common Stock be issued in the name
of:
______________________________
(Please Print or Type Name(s), Address and Taxpayer Identification Number(s))
______________________________
______________________________
_______________________________
If this Warrant Certificate is hereby being exercised with respect to fewer
than all the Common Stock specified herein, please issue a new Warrant
Certificate for the unexercised balance of the Warrants, registered in the name
of the undersigned Warrantholder or his assignee as below indicated and
delivered to the address stated below.
Dated: ____________
Name of Warrantholder(s)
or Assignee(s) (Please Print):_____________________________
_____________________________
Address (Please Print):____________________________________
____________________________________
Signature(s):______________________________________________
______________________________________________
Note: The above signature(s) must correspond exactly with the name(s) as
written upon the face of this Warrant Certificate, without alteration or
enlargement or any change whatever, unless these Warrants have been assigned.
<PAGE>
ASSIGNMENT
(To be signed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
______________________________
______________________________
______________________________
(Name(s) and Address(es) of Assignee(s) Must be Printed or Typewritten)
the within Warrants, hereby irrevocably constituting and appointing
___________________ the undersigned's attorney-in-fact to transfer said Warrants
on the books of the Company, with full power of substitution.
Dated: _______________
______________________________
______________________________
Signature(s) of Registered Holder(s)
Note: The above signature(s) must correspond exactly with the name(s) as
written upon the face of this Warrant Certificate, without alteration or
enlargement or any change whatever.
<PAGE>
Exhibit 4.3
-----------
MATRITECH, INC.
SUBSCRIPTION INSTRUCTIONS
(Please Read Carefully)
NO PERSON WILL BE ACCEPTED AS A PURCHASER PRIOR TO A CLOSING OF THE
OFFERING. THE COMPANY AND THE PLACEMENT MANAGER EACH RESERVE THE RIGHT TO
REJECT ANY SUBSCRIPTION, IN WHOLE OR IN PART, OR TO ALLOT TO ANY PROSPECTIVE
PURCHASER FEWER THAN THE NUMBER OF SHARES SUBSCRIBED FOR BY SUCH PURCHASER. ANY
REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND MUST NOT BE RELIED UPON.
Up to 2,200,000 shares of Matritech, Inc. (the "Company") common stock having a
par value of $0.01 per share (the "Shares"), are being offered for $5.00 (U.S.)
per Share.
I. This Subscription Booklet contains all the materials necessary for you (the
"Purchaser") to purchase the Shares. This material is arranged in the following
order:
. Subscription Agreement
. A. Subscription Package for an INDIVIDUAL investor
. B. Subscription Package for a TRUST investor
. C. Subscription Package for a PARTNERSHIP investor
. D. Subscription Package for a CORPORATE investor
. E. Subscription Package for a RETIREMENT investor
. F. Internal Revenue Service Form W-9
Each Subscription Package contains:
(1) a Questionnaire designed to enable you to demonstrate that you
meet the minimum legal requirements under Federal and state securities laws to
purchase the Shares; and
(2) a Signature Page for the Questionnaire and the Subscription
Agreement containing representations relating to your subscription.
Section F contains an Internal Revenue Service Form W-9: "Request for
Taxpayer Identification Number and Certification" for U.S. Federal income tax
purposes only.
i
<PAGE>
II. After reading the Subscription Agreement, please turn to the appropriate
Subscription Package (A, B, C, D or E) and fill in all applicable information.
You must complete and sign ALL of the documents in the appropriate section.
This includes: (a) the Questionnaire and (b) the Signature Page. You also
must complete the Internal Revenue Service Form W-9: "Request for Taxpayer
Identification Number and Certification" found in Section F. Once you have
completed the appropriate portions of the Subscription Booklet and (if
applicable) the Form W-9 found in Section F, please return the entire
Subscription Booklet, the Form W-9 and any additional required documents (as
described in the Questionnaire) to the Placement Manager at its address set
forth below in Section IV.
III. Payment for the Shares: The Company has entered into an Escrow Agreement
(the "Escrow Agreement") with United States Trust Company of New York (the
"Bank"), and the Bank has established an escrow account (the "Escrow Account").
The Purchaser shall forthwith cause the full amount of the subscription price to
be paid by check, payable to "United States Trust Company of New York, as escrow
agent for Matritech, Inc." or wire transferred to the Escrow Agent at: Chase
NYC, ABA# 021000021, Credit: United States Trust Co. of New York, Account # 920-
1-073195, further credit: Matritech, Inc., Account # 07865100, Attn: James E.
Logan.
If the subscription price is paid by wire transfer, the Purchaser shall (i)
include the Purchaser's name in the wire transfer instructions; and (ii) request
from the bank or other financial institution that is originating the transfer
the federal wire number with respect to the subscription and retain that number
for future reference. You will not earn interest on your money that is
deposited in the Escrow Account.
IV. Send all complete documents together with the requisite payment to the
Placement Manager at the following address:
Sunrise Securities Corp.
135 East 57th Street, 11th Floor
New York, New York 10022
Attention: Nathan Low
V. Questions regarding completion of subscription documents should be directed
to Nathan Low at the above address of Sunrise Securities Corp. at (212) 421-
1616.
PLEASE PRINT IN INK OR TYPE ALL INFORMATION
FAILURE TO COMPLY WITH THE ABOVE INSTRUCTIONS WILL CONSTITUTE AN INVALID
SUBSCRIPTION, WHICH, IF NOT CORRECTED, WILL RESULT IN THE REJECTION OF YOUR
SUBSCRIPTION. EVEN IF CORRECTED, THE DELAY MAY RESULT IN (1) THE ACCEPTANCE OF
PURCHASERS WHOSE SUBSCRIPTION BOOKLETS WERE INITIALLY RECEIVED BY THE PLACEMENT
ii
<PAGE>
MANAGER AFTER YOURS OR (2) THE OFFERING BEING CLOSED WITHOUT YOUR SUBSCRIPTION
BEING CONSIDERED BY THE COMPANY.
iii
<PAGE>
SUBSCRIPTION AGREEMENT
___________________________________________
MATRITECH, INC.
___________________________________________
up to 2,200,000 Shares
___________________________________________
To: Matritech, Inc.
This Subscription Agreement is made between Matritech, Inc., a Delaware
corporation (the "Company"), and the undersigned prospective purchaser who is
subscribing hereby for ________ shares of the common stock of the Company (the
"Shares"), each share having a par value of $0.01. The purchase price per Share
(the "Purchase Price") is $5.00 (U.S.). This subscription is submitted to you
in accordance with and subject to the terms and conditions described in this
Subscription Agreement relating to the offering (the "Offering") of a minimum of
1,000,000 Shares and up to 2,200,000 Shares. The minimum investment is 10,000
Shares ($50,000), which minimum amount may be reduced by Sunrise Securities
Corp. (the "Placement Manager") with the agreement of the Company.
In consideration of the Company's agreement to sell Shares, subject to the
discretion of the Company and the Placement Manager, to the undersigned upon the
terms and conditions contained herein, the undersigned agrees and represents as
follows:
A. SUBSCRIPTION.
-------------
(1) The undersigned hereby irrevocably subscribes for and agrees to
purchase the number of Shares indicated on the cover and signature pages hereto
at a purchase price of $5.00 per Share. The undersigned encloses herewith a
check or has arranged for a wire transfer payable to "United States Trust
Company of New York, as escrow agent for Matritech, Inc." in the full amount of
the purchase price of the Shares for which the undersigned is subscribing (the
"Payment").
(2) The undersigned understands that Payments by check as provided in
Paragraph 1 above shall be delivered to the Placement Manager and, thereafter,
such Payments will be deposited as soon as practicable in escrow for the
undersigned's benefit with United States Trust Company of New York (the "Escrow
Agent") pursuant to the terms of an Escrow Agreement. The Payment (or, in the
case of the rejection of a portion of the undersigned's subscription, the part
of the Payment relating to such rejected portion) will be returned promptly,
without interest, if the undersigned's subscription is rejected in whole or in
part. A minimum number of 1,000,000 Shares must be subscribed for before the
closing of the Offering, and there may be one or more closings (each a "Closing
Date") before the final closing (the "Final Closing"). Upon receipt by
iv
<PAGE>
the Company of the requisite Payment for all Shares to be purchased by the
Purchasers whose subscriptions are accepted (each, a "Purchaser") the stock
certificates for the number of Shares purchased will be issued in the name of
each such Purchaser, and the name of such Purchaser will be registered on the
stock transfer books of the Company as the record owner of such Shares. The
Shares are not freely transferable.
(3) The undersigned hereby agrees to be bound hereby upon the (i)
execution and delivery to the Company, in care of the Placement Manager, of the
signature page to the undersigned's completed questionnaire submitted by the
undersigned (the "Questionnaire") and this Subscription Agreement and (ii)
acceptance on a Closing Date by the Company of the undersigned's subscription
(the "Subscription").
(4) The undersigned agrees that the Placement Manager may, in its sole and
absolute discretion, reduce the undersigned's subscription to any number of
Shares that in the aggregate does not exceed the number of Shares hereby applied
for without any prior notice to or further consent by the undersigned. The
undersigned hereby irrevocably constitutes and appoints the Placement Manager
and each officer of the Placement Manager, each of the foregoing acting singly,
in each case with full power of substitution, the true and lawful agent and
attorney-in-fact of the undersigned, with full power and authority in the
undersigned's name, place and stead, to amend this Subscription Agreement and
the Questionnaire, including in each case the undersigned's signature page
thereto, to effect any of the foregoing provisions of this Paragraph 4.
B. REPRESENTATION AND WARRANTIES.
------------------------------
The undersigned hereby represents and warrants to, and agrees with, the
Company and the Placement Manager and each selected dealer, if any, selected by
the Placement Manager for consultation with the Company (the "Selected
Dealers"), as follows:
(1) The undersigned has been furnished with and has carefully read
the Private Placement Memorandum (the "Memorandum"), including the
appendices thereto and is familiar with and understands the terms of the
Offering. With respect to individual or partnership tax and other economic
considerations involved in this investment, the undersigned has carefully
considered and has, to the extent the undersigned believes such discussion
necessary, discussed with the undersigned's professional legal, tax,
accounting and financial advisers the suitability of an investment in the
Shares for the undersigned's particular tax and financial situation and has
determined that the Shares being subscribed for by the undersigned are a
suitable investment for the undersigned.
(2) The undersigned acknowledges that all documents, records, and
books pertaining to this investment which the undersigned has requested
have been made available for inspection by the undersigned, and the
undersigned's attorney, accountant or adviser(s).
(3) The undersigned has performed its own due diligence and is not
relying on any information supplied by the Placement Manager. The
undersigned and/or the
v
<PAGE>
undersigned's adviser(s) has/have had a reasonable opportunity to ask
questions of and receive answers from a person or persons acting on behalf
of the Company concerning the Offering and all such questions have been
answered to the full satisfaction of the undersigned.
(4) The undersigned is not subscribing for Shares as a result of or
subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or meeting.
(5) The undersigned: (i) has a pre-existing business relationship
with either (a) the Company or any of its officers, directors or
controlling persons or (b) the Placement Manager or any Selected Dealer and
(ii) by reason of the undersigned's business or financial experience of the
undersigned's professional advisers who are unaffiliated with and who are
not compensated by the Company or the Placement Manager or any Selected
Dealer or any affiliate of any of them, directly or indirectly, can be
reasonably assumed to have the capacity to protect the undersigned's
interests in connection with an investment in the Shares.
(6) If the undersigned is a natural person, the undersigned has
reached the age of majority in the state in which the undersigned resides,
has adequate means of providing for the undersigned's current financial
needs and contingencies, is able to bear the substantial economic risks of
an investment in the Shares for an indefinite period of time, has no need
for liquidity in such investment and, at the present time, could afford a
complete loss of such investment.
(7) The undersigned or the undersigned's purchaser representative, as
the case may be, has such knowledge and experience in financial, tax and
business matters so as to enable the undersigned to utilize the information
made available to the undersigned in connection with the Offering to
evaluate the merits and risks of an investment in the Shares and to make an
informed investment decision with respect thereto.
(8) The undersigned will not sell or otherwise transfer any Shares
without registration of such securities under the Securities Act of 1933,
as amended (the "Securities Act") and any applicable state securities laws
or an exemption therefrom. The Shares have not been registered under the
Securities Act or under the securities laws of certain states. The
undersigned represents that the undersigned is purchasing the Shares for
the undersigned's own account, for investment and not with a view to resale
or distribution except in compliance with the Securities Act and such "blue
sky" laws as may be applicable. The undersigned has not offered or sold
any portion of the Shares being acquired nor does the undersigned have any
present intention of dividing such Shares with others or of selling,
distributing or otherwise disposing of any portion of such Shares either
currently or after the passage of a fixed or determinable period of time or
upon the occurrence or non-occurrence of any predetermined event or
circumstance in violation of the Securities Act. The undersigned is aware
that except as provided in Section D, the
vi
<PAGE>
Company has no obligation to register the Shares subscribed for hereunder,
or to make available an exemption from the registration requirements
pursuant to Rule 144 or any successor rule for resale of the Shares.
(9) Further, the undersigned has carefully read and considered the
matters set forth under the caption "Risk Factors" in the Memorandum
previously delivered to the undersigned, and has taken full cognizance of
and understands all of the risks related to the purchase of the Shares.
The undersigned's financial condition is such that he is able to bear the
risk of holding Shares for an indefinite period of time, has adequate means
to provide for his current financial needs and contingencies and can risk
the loss of his entire investment in the Shares.
(10) The undersigned acknowledges that each certificate representing
the Shares contained in the Shares shall be stamped or otherwise imprinted
with a legend substantially in the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE,
DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE
BOOKS OF THE COMPANY, WITHOUT REGISTRATION OF SUCH SECURITIES UNDER
ALL APPLICABLE UNITED STATES FEDERAL SECURITIES LAWS OR COMPLIANCE
WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE AT THE OPTION
OF THE COMPANY, TO BE EVIDENCED BY AN OPINION OF SHAREHOLDER'S
COUNSEL, IN FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION OF SUCH
REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT"
(11) The undersigned acknowledges and agrees that it shall not be
entitled to seek any remedies with respect to the Offering from any party
other than the Company.
(12) If this Subscription Agreement is executed and delivered on
behalf of a partnership, corporation, trust or estate: (i) such
partnership, corporation, trust or estate has the full legal right and
power and all authority and approval required (a) to execute and deliver,
or authorize execution and delivery of, this Subscription Agreement and all
other instruments executed and delivered by or on behalf of such
partnership, corporation, trust or estate in connection with the purchase
of its Share(s), (b) to delegate authority pursuant to a power of attorney
and (c) to purchase and hold such Share(s); (ii) the signature of the party
signing on behalf of such partnership, corporation, trust or estate is
binding upon such partnership, corporation, trust or estate; and (iii) such
partnership, corporation or trust has not been formed for the specific
purpose of acquiring such
vii
<PAGE>
Share(s), unless each beneficial owner of such entity is qualified as a QIB
or an accredited investor within the meaning of Rule 501(a) of Regulation D
promulgated under the Act ("Regulation D") and has submitted information
substantiating such individual qualification.
(13) If the undersigned is a retirement plan or is investing on behalf
of a retirement plan, the undersigned acknowledges that investment in the
Shares poses additional risks including the inability to use losses
generated by an investment in the Shares to offset taxable income.
(14) The undersigned shall indemnify and hold harmless the Company,
the Placement Manager and any Selected Dealer and each officer, director or
control person of any such entity, who is or may be a party or is or may be
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or
state facts made or alleged to have been made by the undersigned to the
Company, the Placement Manager or any Selected Dealer (or any agent or
representative of any of them) or omitted or alleged to have been omitted
by the undersigned, concerning the undersigned or the undersigned's
authority to invest or financial position in connection with the Offering,
including, without limitation, any such misrepresentation, misstatement or
omission contained in the Subscription Agreement, the Questionnaire or any
other document submitted by the undersigned, against losses, liabilities
and expenses for which the Company, the Placement Manager, Selected Dealers
or any officer, director or control person of any such entity has not
otherwise been reimbursed (including attorneys' fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by the
Company, the Placement Manager, Selected Dealers or such officer, director
or control person in connection with such action, suit or proceeding.
C. UNDERSTANDINGS.
---------------
The undersigned understands, acknowledges and agrees with the Company, the
Placement Manager and each Selected Dealer as follows:
(1) This Subscription may be rejected, in whole or in part, by the
Company or the Placement Manager, in the sole and absolute discretion of
either of them, at any time before a Closing Date notwithstanding prior
receipt by the undersigned of notice of acceptance of the undersigned's
Subscription.
(2) Except as set forth in paragraph C(1) above, the undersigned
hereby acknowledges and agrees that the subscription hereunder is
irrevocable by the undersigned, that, except as required by law, the
undersigned is not entitled to cancel, terminate or revoke this
Subscription Agreement or any agreements of the undersigned hereunder and
that this Subscription Agreement and such other agreements shall survive
the death or disability of the undersigned and shall be binding upon and
inure to the benefit
viii
<PAGE>
of the parties and their heirs, executors, administrators, successors,
legal representatives and permitted assigns. If the undersigned is more
than one person, the obligations of the undersigned hereunder shall be
joint and several and the agreements, representations, warranties and
acknowledgments herein contained shall be deemed to be made by and be
binding upon each such person and his/her heirs, executors, administrators,
successors, legal representatives and permitted assigns.
(3) No Federal or state agency has made any finding or determination
as to the accuracy or adequacy of the information provided by the Company
to the undersigned in connection with the Offering, or as to the fairness
of the terms of this Offering for investment nor any recommendation or
endorsement of the Shares.
(4) The Offering is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) of the Securities Act and the
provisions of Regulation D thereunder, which is in part dependent upon the
truth, completeness and accuracy of the statements made by the undersigned
herein and in the Questionnaire.
(5) The Placement Manager and the Selected Dealers will receive
compensation in connection with the Offering but none of them is
guaranteeing or assuming responsibility for the operation or possible
liability of the Company, including, without limitation, compliance by the
Company, with the agreements entered into in connection with the Offering,
and none of them will supervise or participate in the operation or
management of the Company.
(6) The undersigned acknowledges that the information as to the
Offering is confidential and non-public and agrees that all such
information shall be kept in confidence by the undersigned and neither used
by the undersigned for the undersigned's personal benefit (other than in
connection with this Subscription) nor disclosed to any third party for any
reason; provided, however, that this obligation shall not apply to any such
information that (i) is part of the public knowledge or literature and
readily accessible at the date hereof, (ii) becomes part of the public
knowledge or literature and readily accessible by publication (except as a
result of a breach of this provision) or (iii) is received from third
parties (except third parties who disclose such information in violation of
any confidentiality agreements or obligations, including, without
limitation, any Subscription Agreement entered into with the Company).
(7) The representations, warranties and agreements of the undersigned
contained herein and in any other writing delivered in connection with the
transactions contemplated hereby shall be true and correct in all respects
on and as of the Closing Date of the sale of the Shares as if made on and
as of such date and shall survive the execution and delivery of this
Subscription Agreement and the purchase of the Shares.
(8) IN MAKING AN INVESTMENT DECISION PURCHASERS MUST RELY ON THEIR
OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THE
ix
<PAGE>
SHARES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES
HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THE OFFERING
OR THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
(9) THE SHARES MAY NOT BE TRANSFERRED, RESOLD OR OTHERWISE DISPOSED
OF EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
PURCHASERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
(10) For Residents of Florida:
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES ACT
(THE "FLORIDA ACT") AND WILL BE OFFERED AND SOLD PURSUANT TO AN EXEMPTION
UNDER SECTION 517.061 OF THE FLORIDA ACT. IF SALES ARE MADE TO FIVE OR
MORE FLORIDA PURCHASERS, EACH PURCHASER MAY VOID THE PURCHASE OF ANY SHARES
WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE COMPANY, AN AGENT OF THE COMPANY, OR AN ESCROW AGENT OR
WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED
TO SUCH PURCHASER, WHICHEVER OCCURS LATER.
(11) For Residents of Maine:
THESE SECURITIES ARE BEING SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE BANK SUPERINTENDENT OF THE STATE OF MAINE UNDER
SECTION 10502 (2) (R) OF TITLE 32 OF THE MAINE REVISED STATUTES. THESE
SECURITIES MAY BE DEEMED RESTRICTED AND AS SUCH THE HOLDER MAY NOT BE ABLE
TO RESELL THE SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER STATE OR
FEDERAL SECURITIES LAWS OR UNLESS AN EXEMPTION UNDER SUCH LAWS EXIST.
(12) For Residents of Missouri:
THE SHARES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE MISSOURI
UNIFORM SECURITIES ACT AND MAY ONLY BE DISPOSED OF THROUGH A REGISTERED
BROKER-DEALER. IT IS A FELONY TO SELL SECURITIES IN VIOLATION OF THE
MISSOURI SECURITIES ACT.
x
<PAGE>
D. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.
--------------------------------------------------------------
(1) The Company shall:
(a) prepare and file with the SEC a registration
statement (the "Registration Statement") covering the resale of
the Shares by the Purchasers from time to time on the Nasdaq
Small-Cap Market, on the Boston Stock Exchange ("BSE") or on such
securities market or system on which the Company's Shares shall
then be publicly traded, or in privately negotiated transactions,
no later than 30 days following the Final Closing Date;
(b) use its best efforts, subject to receipt of
necessary information from the Purchasers, to cause the
Registration Statement to become effective as soon as possible
thereafter;
(c) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used
in connection therewith as may be necessary to comply with the
provisions of the Securities Act until the later of such time as
all of the Shares have been sold pursuant thereto or, by reason
of Rue 144(k) under the Securities Act or any other rule of
similar effect, such Shares are no longer required to be
registered for the unrestricted sale thereof by the Purchasers;
(d) furnish to the Purchasers such number of copies of
prospectuses and preliminary prospectuses in conformity with the
requirements of the Securities Act and such other documents as
the Purchasers may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Shares held
by the Purchasers, provided, however, that the obligation of
-------- -------
the Company to deliver copies of prospectuses or preliminary
prospectuses to the Purchasers shall be subject to the receipt by
the Company of reasonable assurances from the Purchasers that the
Purchasers will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws as
may be applicable in connection with any use of such prospectuses
or preliminary prospectuses;
(e) file documents required of the Company for normal
blue sky clearance in all states provided however, that the
Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented;
(f) bear all expenses in connection with the
procedures in paragraphs (a) through (c) of this Section 9.1,
other than brokerage commissions or placement agent fees and fees
and expenses, if any, of counsel or other advisers to the
Purchaser with respect to the registration and resale of the
Shares; and
xi
<PAGE>
(g) prepare and file additional listing applications
for the Shares on the Nasdaq Small-Cap Market and the BSE.
The Company understands that the Purchaser disclaims being an underwriter,
but the Purchaser being deemed an underwriter shall not relieve the Company
of any obligations is has hereunder.
(2) The Purchaser agrees that it will not effect any disposition of
the Shares, that would constitute a sale within the meaning of the
Securities Act except as contemplated in the Registration Statements
referred to in Section 1 or pursuant to an available exemption from
registration under the Securities Act and applicable state securities laws,
and further that as a condition to inclusion of the Shares in the
--- -------
Registration Statement the Purchaser agrees to provide to the Company such
information as it may reasonably request in order to include such Shares in
such Registration Statement.
(3) The Purchaser agrees not to make any sale of the Shares, pursuant
to the Registration Statement referred to in this Section D without
effectively causing the prospectus delivery requirements under the
Securities Act to be satisfied. The Purchaser acknowledges that there may
occasionally be times when the Company must suspend the use of the
prospectus forming a part of the Registration Statement until such time as
an amendment to such Registration Statement has been filed by the Company
and declared effective by the SEC or until the Company has amended or
supplemented such prospectus. The Company agrees to use its best efforts
to cause such amended registration statement to be declared effective
and/or to deliver such amended or supplemented prospectus as soon as
possible. The Purchaser hereby covenants that it will not sell any Shares
pursuant to said prospectus without first confirming with the Company that
the Registration Statement has not been suspended, and during any period
commencing at the time at which the Company gives the Purchaser notice of
the suspension of the use of said prospectus and ending at the time the
Company gives the Purchaser notice that the Purchaser may thereafter effect
sales pursuant to said prospectus.
(4) For the purpose of this Section 4:
(a) the term "Selling Shareholder" shall mean any person or
entity selling Shares pursuant to the Registration Statement, and any
affiliate thereof;
(b) the term "Registration Statement" shall include any
preliminary prospectus, final prospectus, exhibit, supplement or amendment
included in or relating to the Registration Statement; and
xii
<PAGE>
(c) the term "untrue statement" shall mean any untrue statement
or alleged untrue statement of a material fact in the Registration
Statement, or any omission or alleged omission to state in the Registration
Statement a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling Shareholder
from and against any losses, claims, damages or liabilities to which such
Selling Shareholder may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement, or arise out of any failure by the Company to fulfill any undertaking
included herein or in the Registration Statement, and the Company promptly will
reimburse such Selling Shareholder for any legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon, an untrue statement made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Shareholder specifically for use in preparation of the Registration
Statement, or the failure of such Selling Shareholder to comply with the
covenants and agreements contained herein; provided further, that the
indemnification contained in this Section D (4) with respect to any prospectus
after it has been amended or supplemented, shall not inure to the benefit of any
Selling Shareholder (or any person controlling such Selling Shareholder) from
whom the person asserting such loss, claim, damage, or liability shall have
purchased Shares, that are the subject thereof if, after copies thereof have
been delivered by the Company to such Selling Shareholder, such Selling
Shareholder shall have failed to send or give a copy of the prospectus as then
amended or supplemented, as the case may be, to such person at or prior to the
confirmation of such sale of such Shares, to such person, and, if such loss,
claim, damage or liability would not have arisen but for the failure of such
Selling Shareholder to deliver the same.
The Purchaser agrees to indemnify and hold harmless the Company (and each
other person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure of
the Purchaser to comply with its covenants and agreements contained herein, or
any untrue statement if such untrue statement was made in reliance upon and in
conformity with written information furnished by or on behalf of the Purchaser
specifically for use in preparation of the Registration Statement, and the
Purchaser promptly will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim.
Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant
xiii
<PAGE>
to this Section D(4), such indemnified person shall notify the indemnifying
person in writing of such claim or of the commencement of such action, and,
subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person and such indemnifying person shall have
been notified thereof, such indemnifying person shall be entitled to participate
therein, and, to the extent it shall wish, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice from
the indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof. In the event that the
indemnifying party shall have assume the defense of such action, such
indemnifying party shall not enter into any compromise or settlement without the
indemnified party's prior written consent, which consent shall not be
unreasonably withheld, delayed or denied.
(5) The restrictions imposed by Sections B(8) and D(2) upon the
transferability of the Shares shall cease and terminate as to any particular
Shares when such Shares shall have been effectively registered under the
Securities Act and sold or otherwise disposed of in accordance with the intended
method of disposition set forth in the Registration Statement or at such time as
an opinion of counsel satisfactory to the Company shall have been rendered to
the effect that such restrictions are not necessary in order to comply with the
Securities Act.
(6) So long as the Registration Statement is effective covering the
sale of Shares owned by the Purchaser, the Company will furnish to the Purchaser
upon request;
(a) any document filed by the Company with the SEC, with the
exception of documents for which confidential treatment has
been granted by the SEC;
(b) upon the reasonable request of the Purchaser, any other
information concerning the Company that is generally
available to the public; and
(c) an adequate number of copies of the prospectuses relating to
the resale of the Shares to supply to any party requiring
such prospectuses.
E. MISCELLANEOUS.
--------------
(1) All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, impersonal, singular or plural,
as the identity of the person or persons may require.
(2) Except as set forth in paragraphs A(4) and C(1) herein, neither
this Subscription Agreement nor any provision hereof shall be waived,
modified, changed, discharged, terminated, revoked or canceled except by an
instrument in writing signed by the party effecting the same against whom
any change, discharge or termination is sought.
xiv
<PAGE>
(3) Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally
delivered or sent by registered mail, return receipt requested, addressed:
(i) if to the Company, at Matritech, Inc., 330 Nevada Street, Newton,
Massachusetts 02160, Attention: Chief Executive Officer, with a copy to the
Placement Manager at the address contained on page ii hereof or (ii) if to
the undersigned, at the address for correspondence set forth in the
Questionnaire, or at such other address as may have been specified by
written notice given in accordance with this Section E(3).
(4) Failure of the Company to exercise any right or remedy under this
Subscription Agreement or any other agreement between the Company and the
undersigned, or otherwise, or delay by the Company in exercising such right
or remedy, will not operate as a waiver thereof. No waiver by the Company
will be effective unless and until it is in writing and signed by the
Company.
(5) This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of New
York, as such laws are applied by New York courts to agreements entered
into and to be performed in New York by and between residents of New York,
and shall be binding upon the undersigned, the undersigned's heirs, estate,
legal representatives, successors and assigns and shall inure to the
benefit of the Company, its successors and assigns. If any provision of
this Subscription Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform with such statute or rule of law. Any provision
hereof that may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision hereof.
F. EXECUTION OF AGREEMENT BY POWER OF ATTORNEY.
--------------------------------------------
THE UNDERSIGNED ACKNOWLEDGES THAT THE UNDERSIGNED HAS SIGNED THIS
SUBSCRIPTION AGREEMENT ON THE UNDERSIGNED'S OWN BEHALF, AND NOT BY POWER OF
ATTORNEY, UNLESS SUCH POWER OF ATTORNEY EXPRESSLY PROVIDES FOR THE FURTHER
DELEGATION OF SUCH POWER OF ATTORNEY BY THE HOLDER THEREOF AND, IN SUCH EVENT,
THE UNDERSIGNED REPRESENTS THAT ATTACHED HERETO IS A TRUE AND COMPLETE COPY OF
SUCH POWER OF ATTORNEY.
G. SIGNATURE.
----------
The signature of this Subscription Agreement is contained as part of the
applicable Subscription Package, entitled "Signature Page".
xv
<PAGE>
A. MATRITECH, INC.
INDIVIDUAL INVESTOR QUESTIONNAIRE
----------------------------------------------------------
IMPORTANT: Investor Name:_________________________________________
Please Complete
PPM Number_____________________________________________
(from the cover of the Private Placement Memorandum)
----------------------------------------------------------
To: Matritech, Inc.
The information contained in this Questionnaire is being furnished in order
to determine whether the undersigned's subscription to purchase the Shares may
be accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned understands, however, that the Company may
present this Questionnaire to such parties as it deems appropriate if called
upon to establish that the proposed offer and sale of the Shares is exempt from
registration under the Securities Act of 1933, as amended, or meets the
requirements of applicable state securities or "blue sky" laws. Further, the
undersigned understands that the Offering is required to be reported to the
Securities and Exchange Commission and to various state securities or "blue sky"
regulators.
IN ADDITION TO SIGNING THE SIGNATURE PAGE (PAGE A-5), YOU MUST COMPLETE
FORM W-9 FOUND AT PAGES F-1 AND F-2 AT THE END OF THIS SUBSCRIPTION PACKAGE.
- --------------------------------------------------------------------------------
IF YOU ARE PURCHASING Shares WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE
SIGNATURE PAGE (PAGE A-5).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IF YOU ARE PURCHASING Shares WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU MUST
EACH FILL OUT A SEPARATE QUESTIONNAIRE INCLUDING FORM W-9 OR W-8. Please make a
photocopy of pages A-1 to A-5 and F-1 and F-2 and return both completed
Questionnaires to the Placement Manager in the same envelope.
- --------------------------------------------------------------------------------
I. PLEASE INDICATE DESIRED TYPE OF OWNERSHIP OF SHARES.
[_] Individual
[_] Joint Tenants (rights of survivorship)
[_] Tenants in Common (no rights of survivorship)
[_] Community Property
A-1
<PAGE>
II. PLEASE CHECK ANY OF THE STATEMENTS 1-5 BELOW THAT APPLIES TO YOU.
[_]1. I have an individual net worth * or net worth with my spouse in
excess of $1,000,000.
[_]2. I have had an individual income* in excess of $200,000 in each of
1995 and 1996, and I reasonably expect an individual income in
excess of $200,000 for 1997. NOTE: IF YOU ARE BUYING JOINTLY WITH
YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN EXCESS OF
$200,000 IN EACH OF THESE YEARS IN ORDER TO CHECK THIS BOX.
[_]3. My spouse and I have had a joint income in excess of $300,000 in
each of 1995 and 1996, and I reasonably expect a joint income in
excess of $300,000 for 1997, and I am a resident of Alabama,
Arizona, California, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana,
Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico, New York, North
Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,
Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee,
Texas, Utah, Vermont, Virginia, Washington, West Virginia,
Wisconsin or Wyoming.
[_]4. I am a Massachusetts resident, and my investment in the Shares does
not exceed 25% of my net worth or, if I am married, 25% of the
combined net worth of my spouse and me, excluding principal
residence and home furnishings.
[_]5. I am a director or executive officer of Matritech, Inc.
III. OTHER CERTIFICATIONS.
By signing the Signature Page, I certify the following (or, if I am
purchasing Shares with my spouse as co-owner, each of us certifies the
following):
(a) that I am at least 21 years of age;
(b) that my purchase of Shares will be solely for my own account
and not for the account of any other person (other than my spouse
or other co-owner); and
____________________
/*/ For purposes of this Questionnaire, the term "net worth" means the
excess of total assets over total liabilities. In determining income,
an investor should add to his or her adjusted gross income any amounts
attributable to tax-exempt income received, losses claimed as a
limited partner in any limited partnership, deductions claimed for
depletion, contributions to IRA or Keogh retirement plan, alimony
payments and any amount by which income from long-term capital gains
has been reduced in arriving at adjusted gross income.
A-2
<PAGE>
(c) that the name, residence address and social security or
taxpayer identification number as set forth in this Questionnaire
are true, correct and complete.
IV. GENERAL INFORMATION.
(a) PURCHASER.
Name:
________________________________________________________________________________
Social Security or Taxpayer Identification Number:
________________________________________________________________________________
Residence Address:
________________________________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Residence Telephone Number:
________________________________________________________________________________
(Area Code) (Number)
Business Name and Address:
________________________________________________________________________________
(Name of Business)
________________________________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Business Telephone Number:
________________________________________________________________________________
(Area Code) (Number)
I prefer to have correspondence sent to: [_] Residence [_] Business
A-3
<PAGE>
(b) SPOUSE, IF CO-OWNER.
Name:
________________________________________________________________________________
Social Security or Taxpayer Identification Number:
________________________________________________________________________________
Residence Address
(if different from Purchaser's):
________________________________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Residence Telephone Number
(if different from Purchaser's):________________________________________________
(Area Code) (Number)
Business Name and Address
(if different from Purchaser's):________________________________________________
(Business Name)
________________________________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Business Telephone Number
(if different from Purchaser's):________________________________________________
(Area Code) (Number)
I prefer to have correspondence sent to: [_] Residence [_] Business
A-4
<PAGE>
MATRITECH, INC.
INDIVIDUAL SIGNATURE PAGE
-------------------------
Your signature on this Individual Signature Page evidences your agreement
to be bound by the QUESTIONNAIRE and the SUBSCRIPTION AGREEMENT.
The undersigned represents that (a) he/she has read and understands this
Subscription Agreement, (b) the information contained in this Questionnaire is
complete and accurate and (c) he/she will telephone the Placement Manager
(contact by collect call at the telephone number contained on page ii hereof)
immediately if any material change in any of this information occurs before the
acceptance of his/her subscription and will promptly send the Placement Manager
written confirmation of such change.
________________________________ ________________________________
Number of Shares applied for Date
__________________________________________
Signature
__________________________________________
Name (Please Type or Print)
__________________________________________
Signature of Spouse if Co-Owner
__________________________________________
Name of Spouse if Co-Owner
(Please Type or Print)
- --------------------------------------------------------------------------------
IF YOU ARE PURCHASING Shares WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE
SIGNATURE PAGE (PAGE A-5).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IF YOU ARE PURCHASING Shares WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU MUST EACH
FILL OUT A SEPARATE QUESTIONNAIRE INCLUDING FORM W-9 OR W-8. Please make a
photocopy of pages A-1 to A-5 and F-1 and F-2 and return both completed
Questionnaires to the Placement Manager in the same envelope.
- --------------------------------------------------------------------------------
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR AN OPINION OF COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS
BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT
REQUIRED.
A-5
<PAGE>
B. MATRITECH, INC.
TRUST QUESTIONNAIRE
-------------------------------------------------------
IMPORTANT: Investor Name: ____________
Please Complete
PPM Number
(from the cover of the Private Placement Memorandum)
-------------------------------------------------------
To: Matritech, Inc.
The information contained in this Questionnaire is being furnished in order
to determine whether the undersigned TRUST's subscription to purchase the Shares
may be accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned TRUST understands, however, that the Company
may present this Questionnaire to such parties as it deems appropriate if called
upon to establish that the proposed offer and sale of the Shares is exempt from
registration under the Securities Act of 1933, as amended, or meets the
requirements of applicable state securities or "blue sky" laws. Further, the
undersigned TRUST understands that the Offering is required to be reported to
the Securities and Exchange Commission and to various state securities or "blue
sky" regulators.
IN ADDITION TO SIGNING THE SIGNATURE PAGE (PAGE B-6), THE UNDERSIGNED TRUST
MUST COMPLETE FORM W-9 FOUND AT PAGES F-1 AND F-2 AT THE END OF THIS
SUBSCRIPTION PACKAGE.
- --------------------------------------------------------------------------------
NOTE: RETIREMENT PLANS SHOULD COMPLETE THE QUESTIONNAIRE ON PAGES E-1 TO
E-7.
- --------------------------------------------------------------------------------
I. PLEASE CHECK STATEMENTS 1 OR 2 BELOW, AS APPLICABLE.
[_] 1. All of the trustees of the TRUST are residents of Alabama, Arizona,
California, Colorado, Connecticut, Delaware, the District of
Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico, New York, North
Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,
Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee,
Texas, Utah, Vermont, Virginia, Washington, West Virginia,
Wisconsin or Wyoming; and
a. the TRUST has total assets in excess of $5,000,000; AND
b. the TRUST was not formed for the specific purpose of acquiring
the Shares; and
B-1
<PAGE>
c. the purchase by the TRUST is directed by a person who has such
knowledge and experience in financial and business matters that
he/she is capable of evaluating the merits and risks of an
investment in the Shares.
[_] 2. The TRUST is a revocable grantor TRUST which grantor may revoke at
any time without the consent or approval of any other person; the
grantor retains sole investment control over the assets of the
trust; and
a. the grantor is a natural person whose individual net worth/*/
or joint net worth with the grantor's spouse exceeds $1,000,000; or
b. the grantor is a natural person who had an individual income*
in excess of $200,000 in each of 1995 and 1996, and who reasonably
expects an individual income in excess of $200,000 for 1997; or
c. the grantor is a natural person who, together with his or her
spouse, has had a joint income in excess of $300,000 in each of
1995 and 1996 and who reasonably expects a joint income in excess
of $300,000 in 1997, and all of the trustees of the TRUST are
residents of Alabama, Arizona, California, Colorado, Connecticut,
Delaware, the District of Columbia, Florida, Georgia, Hawaii,
Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New
Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma,
Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,
Washington, West Virginia, Wisconsin or Wyoming; or
d. the grantor is a director or executive officer of Matritech,
Inc.
- --------------------------------------------------------------------------------
IF THE TRUST IS A REVOCABLE GRANTOR TRUST, EACH GRANTOR MUST PHOTOCOPY AND
COMPLETE SECTION II BELOW.
- --------------------------------------------------------------------------------
________________________
/*/ For purposes of this Questionnaire, the term "net worth" means
the excess of total assets over total liabilities. In determining
income, an investor should add to his or her adjusted gross income
any amounts attributable to tax-exempt income received, losses
claimed as a limited partner in any limited partnership, deductions
claimed for depletion, contributions to IRA or Keogh retirement
plan, alimony payments and any amount by which income from long-
term capital gains has been reduced in arriving at adjusted gross
income.
B-2
<PAGE>
II. FOR REVOCABLE GRANTOR TRUSTS ONLY: PLEASE CHECK ANY OF STATEMENTS 1-5 BELOW
THAT APPLY TO THE GRANTOR.
[_] 1. I have an individual net worth or net worth or joint net worth
with my spouse in excess of $1,000,000.
[_] 2. I have had an individual income in excess of $200,000 in each
of 1995 and 1996, and I reasonably expect an individual income in
excess of $200,000 for 1997. NOTE: IF YOU ARE BUYING JOINTLY WITH YOUR
SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN EXCESS OF $200,000
IN EACH OF THESE YEARS IN ORDER TO CHECK THIS BOX.
[_] 3. My spouse and I have had a joint income in excess of $300,000
in each of 1995 and 1996, and I reasonably expect a joint income in
excess of $300,000 for 1997, and I am a resident of Alabama, Arizona,
California, Colorado, Connecticut, Delaware, the District of Columbia,
Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New
Hampshire, New Jersey, New Mexico, New York, North Carolina, North
Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode
Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont,
Virginia, Washington, West Virginia, Wisconsin or Wyoming.
[_] 4. I am a Massachusetts resident, and my investment in the Shares
does not exceed 25% of my net worth or, if I am married, 25% of the
combined net worth of my spouse and me, excluding principal residence
and home furnishings.
[_] 5. I am a director or executive officer of Matritech, Inc.
_________________________________ ___________________________________
_________________________________ ___________________________________
Print Name(s) of Grantor(s) Signature(s) of Grantor(s)
B-3
<PAGE>
III. OTHER CERTIFICATIONS.
By signing the Signature Page, the undersigned certifies the following:
(a) that the TRUST's purchase of the Shares will be solely for the TRUST'
own account and not for the account of any other person;
(b) that the TRUST's purchase of the Shares is within the investment
powers and authority of the TRUST (as set forth in the declaration of
trust or other governing instrument) and that all necessary consents,
approvals and authorizations for such purchase have been obtained and
that each person who signs the Signature Page has all requisite power
and authority as trustee to execute this Questionnaire and the
Subscription Agreement on behalf of the TRUST;
(c) that the TRUST has not been established in connection with either (i)
an employee benefit plan (as defined in Section 3(3) of ERISA),
whether or not subject to the provisions of Title I of ERISA, or (ii)
a plan described in Section 4975(e) (i) of the Internal Revenue Code;
and
(d) that the TRUST's name, address, place of formation and taxpayer
identification number as set forth in this Questionnaire are true,
complete and complete.
IV. GENERAL INFORMATION.
(a) PROSPECTIVE PURCHASER (THE TRUST).
Name: __________________________________________________________________________
Address:________________________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Address for Correspondence (if different): _____________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
State in which Formed:__________________________________________________________
Date of Formation:______________________________________________________________
Taxpayer Identification Number:_________________________________________________
B-4
<PAGE>
(b) TRUSTEE(S) WHO ARE EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
TRUST.
Name(s) of
Trustee(s):___________________________________________________________
If Grantor Trust, Name(s) of Grantor(s):______________________________
______________________________
V. ADDITIONAL INFORMATION.
- --------------------------------------------------------------------------------
A TRUST MAY BE REQUIRED TO ATTACH A COPY OF THE TRUST AGREEMENT, DECLARATION OF
TRUST OR OTHER GOVERNING INSTRUMENT, AS AMENDED, AS WELL AS ALL OTHER DOCUMENTS
THAT AUTHORIZE THE TRUST TO INVEST IN THE Shares. ALL DOCUMENTATION MUST BE
COMPLETE AND CORRECT.
- --------------------------------------------------------------------------------
B-5
<PAGE>
MATRITECH, INC.
TRUST SIGNATURE PAGE
--------------------
Your signature on this TRUST Signature Page evidences the agreement by the
Trustee(s), on behalf of the TRUST, to be bound by the Questionnaire and the
Subscription Agreement.
1. The undersigned trustees represent that (a) the information contained
in this Questionnaire is complete and accurate and (b) the TRUST will notify the
Placement Manager (contact by collect call at the telephone number contained on
page ii hereof) immediately if any material change in any of this information
occurs before the acceptance of the TRUST's subscription and will promptly send
the Placement Manager written confirmation of such change.
2. The undersigned trustees hereby certify that they have read and
understand this Subscription Agreement.
3. The undersigned trustees hereby represent and warrant that the persons
signing this Subscription Agreement on behalf of the TRUST are duly authorized
to acquire the Shares and sign this Subscription Agreement on behalf of the
TRUST and, further, that the undersigned TRUST has all requisite authority to
purchase such Shares and enter into this Subscription Agreement.
___________________________________ ______________________________________
Number of Shares applied for Date
Please Type or Print the Exact Legal Title of
Trust as follows: Trustee's name, as trustee
_____________________________________
for [NAME OF GRANTOR] under Agreement [OR Title of Trust
DECLARATION] of Trust dated [DATE OF TRUST
FORMATION]
Name of Name of
Trustee:_____________________________ Trustee:__________________________
(Please Type or Print) (Please Type or Print)
By:___________________________________ By:_______________________________
(Signature of Trustee) (Signature of Trustee)
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS
SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR AN OPINION OF COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS BEEN
DELIVERED TO THE EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.
C-1
<PAGE>
C. MATRITECH, INC.
PARTNERSHIP QUESTIONNAIRE
-------------------------------------------------------------
IMPORTANT: Investor Name: _____________________________________________
Please Complete
PPM Number__________________________________________________
(from the cover of the Private Placement Memorandum)
-------------------------------------------------------------
To: Matritech, Inc.
The information contained in this Questionnaire is being furnished in order
to determine whether the undersigned PARTNERSHIP's subscription to purchase the
Shares may be accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned PARTNERSHIP understands, however, that the
Company may present this Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares is
exempt from registration under the Securities Act of 1933, as amended, or meets
the requirements of applicable state securities or "blue sky" laws. Further,
the undersigned PARTNERSHIP understands that the Offering is required to be
reported to the Securities and Exchange Commission and to various state
securities or "blue sky" regulators.
IN ADDITION TO SIGNING THE SIGNATURE PAGE (PAGE C-6), THE UNDERSIGNED
PARTNERSHIP MUST COMPLETE FORM W-9 FOUND AT PAGES F-1 AND F-2 AT THE END OF THIS
SUBSCRIPTION PACKAGE.
I. PLEASE CHECK ANY OF STATEMENTS 1-3 BELOW THAT APPLIES TO THE PARTNERSHIP.
[_]1. The undersigned PARTNERSHIP: (a) has total assets in excess of
$5,000,000; (b) was not formed for the specific purpose of
acquiring the Shares and (c) has its principal place of business
in Alabama, Arizona, Colorado, Connecticut, Delaware, the
District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington,
West Virginia, Wisconsin or Wyoming.
C-2
<PAGE>
[_]2. Each of the partners of the undersigned PARTNERSHIP is able to
certify that such partner meets at least one of the following
three conditions:
a. the partner is a natural person whose individual net
worth* or joint net worth with his or her spouse exceeds
$1,000,000; or
b. the partner is a natural person whose individual income* was
in excess of $200,000 in each of 1995 and 1996 and who
reasonably expects an individual income in excess of
$200,000 in 1997; or
c. the partner is a director or executive officer of Matritech,
Inc.
[_]3. Each of the partners of the undersigned PARTNERSHIP is able to
certify that such partner is a natural person who, together with
his or her spouse, has had a joint income in excess of $300,000
in each of 1995 and 1996 and who reasonably expects a joint
income in excess of $300,000 in 1997, and the undersigned
PARTNERSHIP has its principal place of business in Alabama,
Arizona, Colorado, Connecticut, Delaware, the District of
Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana,
Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington,
West Virginia, Wisconsin or Wyoming.
- --------------------------------------------------------------------------------
IF YOU CHECKED STATEMENT 2 OR STATEMENT 3 IN SECTION I AND DID NOT CHECK
STATEMENT I, YOU MUST PROVIDE A LETTER SIGNED BY A GENERAL PARTNER OF THE
UNDERSIGNED PARTNERSHIP LISTING THE NAME OF EACH PARTNER (WHETHER A GENERAL OR
LIMITED PARTNER) AND THE REASON (UNDER STATEMENT 2 OR STATEMENT 3) SUCH PARTNER
QUALIFIES AS AN ACCREDITED INVESTOR (ON THE BASIS OF NET WORTH, INDIVIDUAL
INCOME OR JOINT INCOME), OR EACH PARTNER MUST PHOTOCOPY AND COMPLETE SECTION II
BELOW.
- --------------------------------------------------------------------------------
_____________________
For purposes of this questionnaire, the term "net worth" means
the excess of total assets over total liabilities. In determining
income, an investor should add to his or her adjusted gross
income any amounts attributable to tax-exempt income received,
losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh
retirement plan, alimony payments and any amount by which income
from long-term capital gains has been reduced in arriving at
adjusted gross income.
C-3
<PAGE>
II. IF YOU CHECKED STATEMENT 2 OR STATEMENT 3 IN SECTION I ABOVE, EACH PARTNER
MUST CHECK ANY OF THE STATEMENTS 1-5 BELOW THAT APPLIES TO SUCH PARTNER AND
SIGN WHERE INDICATED.
[_]1. I have an individual net worth or joint net worth with my
spouse in excess of $1,000,000.
[_]2. I have had an individual income in excess of $200,000 in each of
1995 and 1996, and I reasonably expect an individual income in
excess of $200,000 for 1997. NOTE: IF YOU ARE BUYING JOINTLY WITH
YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN EXCESS OF
$200,000 IN EACH OF THESE YEARS IN ORDER TO CHECK THIS BOX.
[_]3. My spouse and I have had a joint income in excess of $300,000 in
each of 1995 and 1996, and I reasonably expect a joint income in
excess of $300,000 for 1997, and I am a resident of Alabama,
Arizona, Colorado, Connecticut, Delaware, the District of
Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana,
Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington,
West Virginia, Wisconsin or Wyoming.
[_]4. I am a Massachusetts resident, and my investment in the Shares
does not exceed 25% of my net worth or, if I am married, 25% of
the combined net worth of my spouse and me, excluding principal
residence and home furnishings.
[_]5. I am a director or executive officer of Matritech, Inc.
__________________________________ _____________________________________
__________________________________ _____________________________________
Print Name (s) of Partner(s) Signature(s) of Partner(s)
III. OTHER CERTIFICATIONS.
By signing the Signature page, the undersigned certifies the following:
(a) that the PARTNERSHIP's purchase of the Shares will be solely for
the PARTNERSHIP'S own account and not for the account of any other
person; and
(b) that the PARTNERSHIP's name, address of principal place of business,
place of formation and taxpayer identification number as set forth in this
Questionnaire are true, correct and complete.
C-4
<PAGE>
IV. GENERAL INFORMATION.
(a) PROSPECTIVE PURCHASER (THE PARTNERSHIP)
Name: __________________________________________________________________________
Principal Place of Business:____________________________________________________
(Number and Street)
______________________________________________________________________________
(City) (State) (Zip Code)
Address for Correspondence (if different):______________________________________
(Number and Street)
______________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number: _____________________________________________________________
(Area Code) (Number)
State in which Formed:__________________________________________________________
Date of Formation:______________________________________________________________
Taxpayer Identification Number:_________________________________________________
Number of Partners:_____________________________________________________________
(b) THE PERSON WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
PARTNERSHIP
Name: _________________________________________________________________________
Position or Title:______________________________________________________________
(c) 1.IF SECTION II HAS BEEN COMPLETED, NAMES AND SIGNATURES OF
ALL INDIVIDUAL PARTNERS MUST APPEAR ON PAGE C-3
C-5
<PAGE>
MATRITECH, INC.
PARTNERSHIP SIGNATURE PAGE
--------------------------
Your signature on this Partnership Signature page evidences the agreement
by the PARTNERSHIP to be bound by the Questionnaire and the Subscription
Agreement.
1. The undersigned PARTNERSHIP hereby represents that (a) the information
contained in this Questionnaire is complete and accurate and (b) the PARTNERSHIP
will notify the Placement Manager (contact by collect call at the telephone
number contained on page ii hereof) immediately if any material change in any of
this information occurs before the acceptance of the undersigned PARTNERSHIP's
subscription and will promptly send the Placement Manager written confirmation
of such change.
2. The undersigned PARTNERSHIP hereby certifies that it has read and
understands this Subscription Agreement.
3. The undersigned PARTNERSHIP hereby represents and warrants that the
person signing this Subscription Agreement on behalf of the PARTNERSHIP is a
general partner of the PARTNERSHIP, has been duly authorized by the PARTNERSHIP
to acquire the Shares and sign this Subscription Agreement on behalf of the
PARTNERSHIP and, further, that the undersigned PARTNERSHIP has all requisite
authority to purchase such Shares and enter into this Subscription Agreement.
____________________________________ _________________________________
Number of Shares applied for Date
_________________________________
Name of Partnership
(Please Type or Print)
By: _________________________________
(Signature)
Name: _______________________________
(Please Type or Print)
Title: ______________________________
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR AN OPINION OF COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS
BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT
REQUIRED.
C-6
<PAGE>
D. MATRITECH, INC.
CORPORATION QUESTIONNAIRE
------------------------------------------------------
IMPORTANT: Investor Name:_______
Please Complete
PPM Number
(from the cover of the Private Placement Memorandum)
------------------------------------------------------
To: Matritech, Inc.
The information contained in this Questionnaire is being furnished in order
to determine whether the undersigned CORPORATION'S subscription to purchase the
Shares may be accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned CORPORATION understands, however, that the
Company may present this Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares is
exempt from registration under the Securities Act of 1933, as amended, or meets
the requirements of applicable state securities or "blue sky" laws. Further,
the undersigned CORPORATION understands that the Offering is required to be
reported to the Securities and Exchange Commission and to various state
securities or "blue sky" regulators.
IN ADDITION TO SIGNING THE SIGNATURE PAGE (PAGE D-6), THE UNDERSIGNED
CORPORATION MUST COMPLETE FORM W-9 FOUND AT PAGES F-1 AND F-2 AT THE END OF THIS
SUBSCRIPTION PACKAGE.
I. PLEASE CHECK ANY OF STATEMENTS 1-5 BELOW THAT APPLIES TO THE CORPORATION.
[_] 1. The undersigned CORPORATION: (a) has total assets in excess of
$5,000,000; (b) was not formed for the specific purpose of
acquiring any Shares and (c) has its principal place of business
in Alabama, Arizona, Colorado, Connecticut, Delaware, the
District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South
Dakota, Tennessee, Utah, Texas, Virginia, Washington, West
Virginia, Wisconsin or Wyoming.
D-1
<PAGE>
[_] 2. The undersigned CORPORATION: (a) has total assets in excess of
$14,000,000; (b) was not formed for the specific purpose of
acquiring any Shares and (c) has its principal place of business
in California.
[_] 3. Each of the shareholders of the undersigned CORPORATION is able
to certify that such shareholder meets at least one of the
following two conditions:
a. the shareholder is a natural person whose individual net
worth/*/ or joint net worth with his or her spouse exceeds
$1,000,000; or
b. the shareholder is a natural person who had an individual
income* in excess of $200,000 in each of 1995 and 1996 and
who reasonably expects an individual income in excess of
$200,000 in 1997.
[_] 4. Each of the shareholders of the undersigned CORPORATION is able
to certify that such shareholder is a natural person who,
together with his or her spouse, has had a joint income in excess
of $300,000 in each of 1995 and 1996 and who reasonably expects a
joint income in excess of $300,000 during 1997, and the
undersigned CORPORATION has its principal place of business in
Alabama, Arizona, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana,
Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington,
West Virginia, Wisconsin or Wyoming.
[_] 5. The undersigned CORPORATION is:
a. a bank as defined in Section 3(a)(2) of the Securities Act;
or
b. a savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the Securities Act whether
acting in its individual or fiduciary capacity; or
____________________
/*/ For purposes of this Questionnaire, the term "net worth" means
the excess of total assets over total liabilities. In determining
income, an investor should add to his or her adjusted gross
income any amounts attributable to tax-exempt income received,
losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh
retirement plan, alimony payments and any amount by which income
from long-term capital gains has been reduced in arriving at
adjusted gross income.
D-2
<PAGE>
c. a broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; or
d. an insurance company as defined in Section 2(13) of the
Securities Act; or
e. an investment company registered under the Investment
Company Act of 1940 or a business development company as
defined in Section 2(a)(48) of the Investment Company Act of
1940; or
f. a small business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958; or
g. a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
- --------------------------------------------------------------------------------
IF YOU CHECKED STATEMENT 3 OR STATEMENT 4 IN SECTION I AND DID NOT CHECK
STATEMENT 1, YOU MUST PROVIDE A LETTER SIGNED BY AN OFFICER OF THE UNDERSIGNED
CORPORATION LISTING THE NAME OF EACH SHAREHOLDER AND THE REASON (UNDER
STATEMENT 3 OR STATEMENT 4) WHY SUCH SHAREHOLDER QUALIFIES AS AN ACCREDITED
INVESTOR (ON THE BASIS OF NET WORTH, INDIVIDUAL INCOME OR JOINT INCOME) OR EACH
SHAREHOLDER MUST PHOTOCOPY AND COMPLETE SECTION II BELOW.
- --------------------------------------------------------------------------------
II. IF YOU CHECKED STATEMENT 3 OR STATEMENT 4 IN I ABOVE, EACH SHAREHOLDER MUST
CHECK ANY OF THE STATEMENTS 1-5 BELOW THAT APPLIES TO SUCH SHAREHOLDER AND
SIGN BELOW WHERE INDICATED.
[_] 1. I have an individual net worth or joint net worth with my spouse
in excess of $1,000,000.
[_] 2. I have had an individual income in excess of $200,000 in each of
1995 and 1996, and I reasonably expect an individual income in
excess of $200,000 for 1997. NOTE: IF YOU ARE BUYING JOINTLY
WITH YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN
EXCESS OF $200,000 IN EACH OF THESE YEARS IN ORDER TO CHECK THIS
BOX.
[_] 3. My spouse and I have had a joint income in excess of $300,000 in
each of 1995 and 1996, and I reasonably expect a joint income in
excess of $300,000 for 1997, and I am a resident of Alabama,
Arizona, California, Colorado, Connecticut, Delaware, the
District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
D-3
<PAGE>
Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington,
West Virginia, Wisconsin or Wyoming.
[_] 4. I am a Massachusetts resident, and my investment in Shares does
not exceed 25% of my net worth or, if I am married, 25% of the
combined net worth of my spouse and me, excluding principal
residence and home furnishings.
[_] 5. I am a director or executive officer of Matritech, Inc.
________________________________________________________________________________
________________________________________________________________________________
Print Name(s) of Shareholder(s) Signature(s) of Shareholder(s)
III. OTHER CERTIFICATIONS.
By signing the Signature Page, the undersigned certifies the following:
(a) that the CORPORATION'S purchase of Shares will be solely for the
CORPORATION's own account and not for the account of any other person
or entity; and
(b) that the CORPORATION's name, address of principal place of business,
place of incorporation and taxpayer identification number as set forth
in this Questionnaire are true, correct and complete.
IV. GENERAL INFORMATION.
(a) PROSPECTIVE PURCHASER (THE CORPORATION)
Name:___________________________________________________________________________
Principal Place of Business:____________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Address for Correspondence (if different):______________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
D-4
<PAGE>
Telephone Number:_______________________________________________________________
(Area Code) (Number)
State of Incorporation:_________________________________________________________
Date of Formation:______________________________________________________________
Taxpayer Identification Number:_________________________________________________
Number of Shareholders:_________________________________________________________
(b) INDIVIDUAL WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
CORPORATION
Name:___________________________________________________________________________
Position or Title:______________________________________________________________
(c) IF SECTION II HAS BEEN COMPLETED, NAMES AND SIGNATURES OF ALL
INDIVIDUAL SHAREHOLDERS MUST APPEAR ON D-4.
D-5
<PAGE>
MATRITECH, INC.
CORPORATION SIGNATURE PAGE
--------------------------
Your signature on this Corporation Signature Page evidences the agreement
by the CORPORATION to be bound by the Questionnaire and the Subscription
Agreement.
1. The undersigned CORPORATION hereby represents that (a) the information
contained in this Questionnaire is complete and accurate and (b) the CORPORATION
will notify the Placement Manager (contact by collect call at the telephone
number contained on page ii hereof) immediately if any material change in any of
the information occurs prior to the acceptance of the undersigned CORPORATION's
subscription and will promptly send the Placement Manager written confirmation
of such change.
2. The undersigned CORPORATION hereby certifies that it has read and
understands this Subscription Agreement.
3. The undersigned CORPORATION hereby represents and warrants that the
person signing this Subscription Agreement on behalf of the CORPORATION has been
duly authorized by all requisite action on the part of the CORPORATION to
acquire the Shares and sign this Subscription Agreement on behalf of the
CORPORATION and, further, that the undersigned CORPORATION has all requisite
authority to purchase the Shares and enter into this Subscription Agreement.
_______________________________________ __________________________________
Number of Shares applied for Date
__________________________________
Name of Corporation
(Please Type or Print)
By:_______________________________
(Signature)
Name:_____________________________
(Please Type or Print)
Title:____________________________
(Please Type or Print)
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR AN OPINION OF COUNSEL, CONCURRED BY COUNSEL TO THE COMPANY, HAS BEEN
DELIVERED TO THE EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.
D-6
<PAGE>
E. MATRITECH, INC.
RETIREMENT PLAN QUESTIONNAIRE
-------------------------------------------------------
IMPORTANT: Investor Name:_____________________________
Please Complete
PPM Number_________________________________
(from the cover of the Private Placement Memorandum)
-------------------------------------------------------
To: Matritech, Inc.
The information contained in this Questionnaire is being furnished in order
to determine whether the undersigned RETIREMENT PLAN's subscription to purchase
the Shares may be accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned RETIREMENT PLAN understands, however, that the
Company may present this Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares is
exempt from registration under the Securities Act of 1933, as amended, or meets
the requirements of applicable state securities or "blue sky" laws. Further, the
undersigned RETIREMENT PLAN understands that the Offering is required to be
reported to the Securities and Exchange Commission and to various state
securities or "blue sky" regulators.
IN ADDITION TO SIGNING THE SIGNATURE PAGE (PAGE E-7), YOU MUST COMPLETE
FORM W-9 FOUND AT PAGES F-1 AND F-2 AT THE END OF THIS SUBSCRIPTION PACKAGE.
I. PLEASE CHECK ANY OF THE FOLLOWING STATEMENTS, AS APPLICABLE.
[_] 1. The undersigned RETIREMENT PLAN certifies that it is a Keogh
plan or Individual Retirement Account in which each participant
satisfies at least one of the following conditions:
a. such person's individual net worth /*/ or joint net worth
with his or her spouse exceeds $1,000,000; or
________________________
/*/ For purposes of this Questionnaire, the term "net worth" means
the excess of total assets over total liabilities. In determining
income, an Investor should add to his or her adjusted gross income
any amounts attributable to tax-exempt income received, losses
claimed as a limited partner in any limited partnership, deductions
claimed for depletions, contributions to IRA or Keogh retirement
plan, alimony payments and any amount by which income from long-term
capital gains has been reduced in arriving at adjusted gross income.
E-1
<PAGE>
b. such person had an individual income* in excess of
$200,000 in each of 1995 and 1996 and reasonably expects
an individual income in excess of $200,000 in 1997;
c. such person, together with his or her spouse, had a joint
income in excess of $300,000 in each of 1995 and 1996 and
reasonably expects a joint income in excess of $300,000 in
1997 and is a resident of Alabama, Arizona, Colorado
Connecticut, Delaware, the District of Columbia, Florida,
Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Montana,
Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma,
Oregon, Pennsylvania, Puerto, Rico, Rhode Island, South
Carolina, South Dakota, Tennessee, Texas, Vermont,
Virginia, Washington, West Virginia, Wisconsin or Wyoming.
2. The undersigned RETIREMENT PLAN certifies that it is an employee
benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and:
[_] a. The undersigned RETIREMENT PLAN is self-directed, with
investment decisions made solely by persons that are not
residents of Alaska, Arkansas, California, Maryland, Texas or
Utah, and each such person directing his account and for whom
the investment is being made satisfies at least one of the
following conditions:
(1) such person's individual net worth or joint net worth
with his or her spouse exceeds $1,000,000; or
(2) such person had an individual income in excess of
$200,000 in each of 1995 and 1996 and reasonably
expects an individual income in excess of $200,000 in
1997; or
(3) such person together with his or her spouse, had a
joint income in excess of $300,000 in each of 1995 and
1996 and reasonably expects a joint income in excess
of $300,000 in 1997 and is a resident of Alabama,
Arizona, Colorado, Connecticut, Delaware, the District
of Columbia, Florida, Georgia, Hawaii, Idaho,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana,
Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nebraska, Nevada, New
Hampshire, New Jersey, New Mexico, New York, North
Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Puerto, Rico, Rhode Island, South
Carolina, South Dakota, Tennessee, Texas, Vermont,
Virginia, Washington, West Virginia, Wisconsin or
Wyoming.
(4) such person is a director or executive officer of
Matritech, Inc.
E-2
<PAGE>
[_] b. The undersigned RETIREMENT PLAN has total assets in excess of
$5,000,000 and such Plan is not maintained in Alaska or
California; or
[_] c. The investment decisions are made by a plan fiduciary as
defined in Section 3(21) of ERISA that (1) is either a bank,
insurance company or registered investment adviser or (2) is
located in jurisdictions other than Alaska, Arkansas,
California or Texas and is a savings and loan association.
- --------------------------------------------------------------------------------
IF YOU CHECKED STATEMENT 1 OR STATEMENT 2(a) IN SECTION I ABOVE, EACH RETIREMENT
PLAN PARTICIPANT FOR WHOSE ACCOUNT THE INVESTMENT IS BEING MADE MUST PHOTOCOPY
AND COMPLETE SECTION II BELOW.
- --------------------------------------------------------------------------------
E-3
<PAGE>
II. IF YOU CHECKED STATEMENT 1 OR STATEMENT 2(A) IN SECTION I ABOVE, EACH
RETIREMENT PLAN PARTICIPANT FOR WHOSE ACCOUNT THE INVESTMENT IS BEING MADE MUST
CHECK ANY OF THE STATEMENTS 1-5 BELOW THAT APPLIES TO SUCH PARTICIPANT.
[_] 1. I have an individual net worth or joint net worth with my spouse
in excess of $1,000,000.
[_] 2. I have had an individual income in excess of $200,000 in each of
1995 and 1996, and I reasonably expect an individual income
in excess of $200,000 for 1997. NOTE: IF YOU ARE BUYING
JOINTLY WITH YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL
INCOME IN EXCESS OF $200,000 IN EACH OF THESE YEARS IN ORDER
TO CHECK THIS BOX.
[_] 3. My spouse and I have had a joint income in excess of $300,000 in
each of 1995 and 1996, and I reasonably expect a joint
income excess of $300,000 for 1997, and I am a resident of
Alabama, Arizona, Colorado Connecticut, Delaware, the
District of Columbia, Florida, Georgia, Hawaii, Idaho,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, Montana, Nebraska, Nevada, New Hampshire, New
Jersey, New Mexico, New York, North Carolina, North Dakota,
Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode
Island, South Carolina, South Dakota, Tennessee, Texas,
Vermont, Virginia, Washington, West Virginia, Wisconsin or
Wyoming.
[_] 4. I am a Massachusetts resident, and my investment in the Shares
does not exceed 25% of my net worth or, if I am married, 25%
of the combined net worth of my spouse and me, excluding
principal residence and home furnishings.
[_].5. I am a director or executive officer of Matritech, Inc.
_____________________________________ _____________________________________
Print Name(s) of Participant(s) Signature(s) of Participant(s)
E-4
<PAGE>
III. OTHER CERTIFICATIONS.
By signing the Signature Page, the undersigned certifies the following:
(a) that the RETIREMENT PLAN's purchase of Shares will be solely for the
RETIREMENT PLAN's own account and not for the account of any other
person or entity;
(b) that the RETIREMENT PLAN's governing documents duly authorize the type
of investment contemplated herein, and the undersigned is authorized
and empowered to make such investment on behalf of the RETIREMENT
PLAN; and
(c) that the RETIREMENT PLAN's name, address, place of formation and
taxpayer identification number as set forth in this Questionnaire are
true, correct and complete.
IV. GENERAL INFORMATION.
(a). PROSPECTIVE PURCHASER (THE RETIREMENT PLAN).
Name:___________________________________________________________________________
Address:________________________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Address for Correspondence (if different):
Name:___________________________________________________________________________
Address:________________________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number:
________________________________________________________________________________
(Area Code) (Number)
State in which Formed:__________________________________________________________
Date of Formation:______________________________________________________________
E-5
<PAGE>
Taxpayer Identification Number:_________________________________________________
(b). INDIVIDUAL WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
RETIREMENT PLAN (TRUSTEE FOR AN EMPLOYEE BENEFIT PLAN; CUSTODIAN FOR
AN IRA OR KEOGH).
Name:___________________________________________________________________________
Position or Title:______________________________________________________________
V. ADDITIONAL INFORMATION.
- --------------------------------------------------------------------------------
THE RETIREMENT PLAN MAY BE REQUIRED TO ATTACH COPIES OF ALL DOCUMENTS GOVERNING
THE PLAN AS WELL AS ALL OTHER DOCUMENTS AUTHORIZING THE RETIREMENT PLAN TO
INVEST IN THE Shares. INCLUDE, AS NECESSARY, THE TRUST AGREEMENT AND DOCUMENTS
DEFINING PERMITTED INVESTMENTS BY THE RETIREMENT PLAN AND DEMONSTRATING
AUTHORITY OF THE SIGNING INDIVIDUAL TO ACT ON BEHALF OF THE PLAN. ALL
DOCUMENTATION MUST BE COMPLETE AND CORRECT.
- ------------------------------------------------------------------------------
E-6
<PAGE>
MATRITECH, INC.
RETIREMENT PLAN SIGNATURE PAGE
------------------------------
Your signature on this RETIREMENT PLAN Signature Page evidences the
agreement by the RETIREMENT PLAN to be bound by the Questionnaire and the
Subscription Agreement.
1. The undersigned RETIREMENT PLAN hereby represents that (a) the
information contained in this Questionnaire is complete and accurate and (b) the
RETIREMENT PLAN will notify the Placement Manager (contact by collect call at
the telephone number contained on page ii hereof) immediately if any material
change in any of the information occurs prior to the acceptance of the
undersigned RETIREMENT PLAN'S subscription and will promptly send the Placement
Manager written confirmation of such change.
2. The undersigned RETIREMENT PLAN hereby certifies that it has read and
understands this Subscription Agreement.
3. The undersigned RETIREMENT PLAN hereby represents and warrants that
the person signing this Subscription Agreement on behalf of the RETIREMENT PLAN
has been duly authorized to acquire the Shares and sign this Subscription
Agreement on behalf of the RETIREMENT PLAN and, further, that the undersigned
RETIREMENT PLAN has all requisite authority to purchase the Shares and enter
into this Subscription Agreement.
_______________________________________ ___________________________________
Number of Shares applied for Date
___________________________________
Name of Retirement Plan
(Please Type or Print)
By:________________________________
(Signature)
Name:______________________________
(Please Type or Print)
Title:_____________________________
(Please Type or Print)
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR AN OPINION OF COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS
BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT
REQUIRED.
E-7
<PAGE>
W-9 TO BE INSERTED HERE
F-1 AND F-2
F-1
<PAGE>
W-9 TO BE INSERTED HERE
F-2
