<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 23, 1996
SEC REGISTRATION NO. 333-09011
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
ACCUMED INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
------------------------------
<TABLE>
<S> <C> <C>
DELAWARE 2835 36-4054899
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) No.)
</TABLE>
--------------------------
900 NORTH FRANKLIN STREET, SUITE 401
CHICAGO, ILLINOIS 60610
(312) 642-9200
(Address and Telephone Number of Registrant's Principal Executive Offices)
------------------------------
PETER P. GOMBRICH
CHIEF EXECUTIVE OFFICER
ACCUMED INTERNATIONAL, INC.
900 NORTH FRANKLIN STREET, SUITE 401
CHICAGO, ILLINOIS 60610
(312) 642-9200
(Name, Address, and Telephone Number, of Agent for Service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
GILLES S. ATTIA, ESQ.
KEVIN A. COYLE, ESQ. CHARLES W. MULANEY, JR., ESQ.
GRAHAM & JAMES LLP SKADDEN, ARPS, SLATE, MEAGHER & FLOM
400 CAPITOL MALL, SUITE 2400 333 WEST WACKER DRIVE, SUITE 2100
SACRAMENTO, CALIFORNIA 95814 CHICAGO, ILLINOIS 60606
FACSIMILE: (916) 441-6700 FACSIMILE: (312) 407-0411
TELEPHONE: (916) 558-6700 TELEPHONE: (312) 407-0700
</TABLE>
Approximate date of commencement of proposed sale to the public: as soon as
practicable on or after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If the registrant elects to deliver its latest annual report to
security-holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this form, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT FOR THE SOLE
PURPOSE OF FILING THE EXHIBITS CONTAINED HEREIN. THE PORTIONS OF THE
REGISTRATION STATEMENT OMITTED FROM THIS AMENDMENT AND PREVIOUSLY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ARE INCORPORATED BY THIS REFERENCE.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the issuance and distribution of the securities being registered hereunder.
All of the amounts shown are estimates (except for the SEC and NASD registration
fees).
<TABLE>
<CAPTION>
SEC registration fee........................................... $ 10,003
<S> <C>
NASD registration fee.......................................... 3,401
Printing and engraving expenses................................ 175,000
Accounting fees and expenses................................... 100,000
Legal fees and expenses........................................ 450,000
Blue Sky fees and expenses..................................... 30,000
Miscellaneous.................................................. 12,446
---------
TOTAL...................................................... $ 780,850
---------
---------
</TABLE>
None of these expenses will be paid by the Selling Stockholders pursuant to
the terms of the agreements under which the shares of Common Stock to be sold
hereby are being registered.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has provisions in its Certificate of Incorporation which
eliminate the liability of the Company's directors to the Company and its
stockholders for monetary damages to the fullest extent permissible under
Delaware law and provisions which authorize the Company to indemnify its
directors and agents by Bylaws, agreements or otherwise, to the fullest extent
permitted by law. Such limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission. The Company's
Bylaws provide that the Company shall indemnify its directors and officers to
the fullest extent permitted by Delaware law, including circumstances in which
indemnification is otherwise discretionary under Delaware law.
The Company's officers and directors are covered by a directors' and
officers' liability insurance policy maintained by the Company. Under the
insurance policy, the Company is entitled to be reimbursed for indemnity
payments that it is required or permitted to make to its directors and officers.
ITEM 16. EXHIBITS AND INDEX OF EXHIBITS.
(a) Exhibits. The following exhibits are filed herewith.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of the Registrant (incorporated by reference to the Registrant's
Transition Report on Form 10-KSB for the transition period ended December 31, 1995 (the "Transition
Report")).
3.2 Bylaws of the Registrant (incorporated by reference to the Transition Report).
4.1 Specimen stock certificate for Common Stock (incorporated by reference to the Transition Report).
4.2 Certificate of Appointment of American Stock Transfer & Trust Company as Transfer Agent and Registrar
(incorporated by reference to Pre-Effective Amendment No. 4 to the Registration Statement on Form
S-1 (Reg. No. 33-48302), filed with the Commission on October 9, 1993 ("Pre-Effective Amendment No.
4 to Form S-1")).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
4.3 Warrant Agreement between the Registrant and American Equities Overseas, Inc. dated as of September
1, 1995 (incorporated by reference to the Registrant's Registration Statement on Form S-3 (Reg. No.
33-98902), filed with the Commission on October 31, 1995 (the "Form S-3")).
<C> <S>
4.4 Securities Purchase Agreement between the Registrant and G&G Dispensing, Inc. dated as of March 22,
1994 (incorporated by reference to the Form S-3).
4.5 Common Stock Purchase Warrant dated as of March 22, 1994 by the Registrant in favor of G&G
Dispensing, Inc. (incorporated by reference to the Form S-3).
4.6 Form of Warrant Agreement between the Registrant and Commonwealth Associates dated as of December 31,
1994 (incorporated by reference to the Form S-3).
4.7 Form of Common Stock Purchase Warrant dated as of December 31, 1994 by the Registrant in favor of
Commonwealth Associates, Inc. (incorporated by reference to the Form S-3).
4.8 Warrant Agreement between the Registrant and Commonwealth Associates dated as of May 9, 1995
(incorporated by reference to the Form S-3).
4.9 Form of Common Stock Purchase Warrant dated as of May 9, 1995 by the Registrant in favor of
Commonwealth Associates, Inc. (incorporated by reference to the Form S-3).
4.10 Warrant Agreement between the Registrant and Commonwealth Associates dated as of August 22, 1995
(incorporated by reference to the Form S-3).
4.11 Form of Common Stock Purchase Warrant dated as of August 22, 1995 by the Registrant in favor of
Commonwealth Associates (incorporated by reference to the Form S-3).
4.12 Form of Letter Agreement between the Registrant and John Robinson dated as of February 21, 1995
(incorporated by reference to the Form S-3).
4.13 Form of Registration Rights Agreement between the Registrant and John Robinson dated as of February
21, 1995 (incorporated by reference to the Form S-3).
4.14 Form of Common Stock Purchase Warrant dated as of December 29, 1995 by the Registrant in favor of
Commonwealth Associates (incorporated by reference to the Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-3 (Reg. No. 33-98902), filed with the Commission on
May 30, 1996 ("Post-Effective Amendment No. 1 to Form S-3")).
4.15 Form of Warrant Agreement between the Registrant and Commonwealth Associates dated as of December 29,
1995 pertaining to Warrants to purchase up to 750,000 shares of Common Stock of the Company
(incorporated by reference to the Post-Effective Amendment No. 1 to Form S-3).
4.16 Warrant Certificate dated as of December 29, 1995 registered in the name of The P.L. Thomas Group,
Inc. representing the right to purchase up to 237,840 shares of Common Stock of the Registrant
(incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
4.17 Warrant Certificate dated as of December 29, 1995 registered in the name of The P.L. Thomas Group,
Inc. representing the right to purchase up to 63,473 shares of Common Stock of the Registrant
(incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
4.18 Warrant Certificate dated as of December 29, 1995 registered in the name of The P.L. Thomas Group,
Inc. representing the right to purchase up to 63,472 shares of Common Stock of the Registrant
(incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
4.19 Warrant Agreement dated as of January 25, 1996 between the Registrant and Robert Priddy (incorporated
by reference to the Post-Effective Amendment No. 1 to the Form S-3).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
4.20 Warrant Certificate dated as of January 25, 1996 registered in the name of Robert Priddy representing
the right to purchase 100,000 shares of Common Stock of the Registrant (incorporated by reference to
the Post-Effective Amendment No. 1 to the Form S-3).
<C> <S>
4.21 Form of Warrant Agreement between the Registrant and Commonwealth Associates dated as of December 29,
1995 pertaining to Warrants to purchase up to 104,000 shares of Common Stock of the Registrant,
including form of Warrant Certificate issued to designees of Commonwealth Associates dated as of
December 29, 1995 representing the right to purchase up to an aggregate of 104,000 shares of Common
Stock of the Registrant (incorporated by reference to the Post-Effective Amendment No. 1 to the Form
S-3).
4.22 Form of Warrant Agreement dated March 14, 1996 between the Registrant and certain of the Selling
Securityholders, including form of Warrant Certificate evidencing right to purchase Common Stock at
$3.42 per share (incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
4.23 Form of Warrant Agreement dated March 14, 1996 between the Registrant and certain of the Selling
Securityholders, including form of Warrant Certificate evidencing right to purchase Common Stock at
$3.87 per share (incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
5.1 Opinion of Graham & James LLP, counsel to the Registrant, regarding the legality of the securities
offered hereby. (1)
10.1 Agreement and Plan of Reorganization dated as of April 21, 1995 between the Registrant and AccuMed,
Inc., as amended by Amendment No. 1 dated as of August 1, 1995 and Amendment No. 2 dated as of
October 6, 1995 (incorporated by reference to the Registrant's Registration Statement on Form S-4
(File No. 33-99680), filed with the Commission on November 22, 1995 (the "Form S-4")).
10.2 The Registrant's Board of Directors Compensation Plan (the "Plan") (incorporated by reference to
Exhibit 10.11 to Form S-1) with Minutes of Board of Directors meeting dated January 18, 1996
amending the Plan by authorizing grants of stock options to non-employee directors (incorporated by
reference to the Transition Report). (2)
10.3 Sale and Leaseback Agreement between the Registrant and Leasetec, Inc. (incorporated by reference to
the Registration Statement on Form S-1 (Reg. No. 33-48302), filed with the Commission on June 3,
1992 ("Form S-1")).
10.4 Employment Agreement between the Registrant and Peter P. Gombrich dated August 1, 1994 (incorporated
by reference to the Transition Report).(2)
10.5 Employment Letter between the Registrant and Kenneth Miller dated March 2, 1995 (incorporated by
reference to the Transition Report).(2)
10.6 Employment Letter between the Registrant and Mark L. Santor dated February 28, 1995 (incorporated by
reference to the Transition Report).(2)
10.7 Employment Letter between the Registrant and Michael Burke dated April 21, 1995 (incorporated by
reference to the Transition Report).(2)
10.8 Employment Agreement between the Registrant and Norman J. Pressman dated June 13, 1996 and Addendum
to Employment Agreement between the Registrant and Norman J. Pressman dated July 16, 1996. (2)(3)
10.9 European Distributor Agreement, dated November 22, 1993, by and between the Registrant and Sclavo
(incorporated by reference to Exhibit 10.22 to the Registrant's Annual Report on Form 10-KSB for the
year ended September 30, 1994 (the "1994 10-K")).
10.10 United States Distributor Agreement, dated November 22, 1993, by and between the Registrant and
Sclavo (incorporated by reference to the 1994 10-K).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
10.11 Joint Research and Development Agreement, dated November 22, 1993, by and between the Registrant and
Sclavo (incorporated by reference to Exhibit 10.24 to the 1994 10-K).
<C> <S>
10.12 Securities Purchase Agreement, dated November 22, 1993, by and between the Registrant and Sclavo
(incorporated by reference to Exhibit 10.25 to the 1994 10-K).
10.13 Escrow Agreement dated as of March 22, 1994, between the Registrant and G&G Dispensing, Inc.
(incorporated by reference to Exhibit 10.13 to the Form S-4).
10.14 License Agreement between the Registrant and Becton, Dickinson and Company effective as of October
11, 1995 (incorporated by reference to Exhibit 10.17 to the Form S-4).
10.15 Research and Development Service Agreement between the Registrant and RADCO Ventures, Inc. dated
March 15, 1996.(3)+
10.16 License and Distribution Agreement dated February 20, 1996 between the Registrant and BioKit, S.A.
(incorporated by reference to the Transition Report).
10.17 1995 Stock Option Plan (incorporated by reference to the Transition Report). (2)
10.18 Amendment No. 1 to the Registrant's 1995 Stock Option Plan. (1)(2)
10.19 Form of Non-Qualified Stock Option Agreement governing options granted to former employees of
AccuMed, Inc. pursuant to the Agreement and Plan of Reorganization dated as of April 21, 1995, as
amended (incorporated by reference to the Transition Report). (2)
10.20 Form of Non-Qualified Stock Option Agreement governing options granted to employees and consultants
under the 1995 Stock Option Plan (incorporated by reference to the Transition Report). (2)
10.21 Form of Incentive Stock Option Agreement Governing options granted to employees under the 1995 Stock
Option Plan (incorporated by reference to the Transition
Report). (2)
10.22 Amended and Restated 1990 Stock Option Plan (incorporated by reference to the Form S-1). (2)
10.23 The Registrant's Amended and Restated 1992 Stock Option Plan (incorporated by reference to
Pre-Effective Amendment No. 1 to Form SB-2, filed with the Commission on November 8, 1993). (2)
10.24 Lease between the Registrant and NCP, LTD dated February 20, 1995 pertaining to the offices located
at 29299 Clemens, Suite I-K, Westlake, Ohio 44145 (incorporated by reference to the Transition
Report).
10.25 Franklin Square Commercial Lease dated July 13, 1994 between the Registrant and the Lumber Company as
Agent for the Beneficiary of LaSalle National Trust, N.A. pertaining to the premises located at
Suite 401, 4th Floor North, 900 North Franklin Street, Chicago, Illinois (incorporated by reference
to the Transition Report).
10.26 Rider 1 to Franklin Square Commercial Lease between the Registrant and the Lumber Company dated May
30, 1996.(3)
10.27 License Agreement dated July 6, 1994, between the Registrant, Vanellus AB, and Uppsala
Bildbehandlings AB (incorporated by reference to the Transition Report).
10.28 Collaboration Agreement and Worldwide Exclusive License between the Registrant and G&G Dispensing,
Inc. dated March 22, 1994.(3)
10.29 Form of Custody Agreement by each of the Selling Stockholders.(3)
10.30 Form of Lock-Up Agreement between each of the Selling Stockholders and the Underwriters.(3)
10.31 Form of Irrevocable Power of Attorney of Selling Stockholders.(3)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
10.32 O.E.M. Supply Agreement between Olympus America, Inc., Precision Instrument division and the
Registrant dated March 31, 1996.+
<C> <S>
10.33 Securities Purchase Agreement dated May 31, 1996 among the Registrant, Kingdon Associates, L.P.,
Kingdon Partners, L.P., and Kingdon Offshore N.V. (incorporated by reference to the Registrant's
Registration Statement on Form S-3 (Reg. No. 333-07681), filed with the Commission on July 3, 1996).
10.34 Promissory Note in the original principal amount of $61,000 made May 22, 1996 by Peter P. Gombrich in
favor of the Registrant.(3)
10.35 Non-negotiable Promissory Note in the original principal amount of $775,000 made July 22, 1996 by the
Registrant in favor of RADCO Ventures, Inc.(3)
10.36 Employment Separation Agreement and Release between the Registrant and Kenneth D. Miller dated June
27, 1996.(2)(3)
10.37 Employment Separation Agreement and Release between the Registrant and Mark L. Santor dated June 10,
1996.(2)(3)
10.38 Amended and Restated Employment Separation Agreement and Release between the Registrant, Kenneth D.
Miller and RADCO Ventures, Inc., dated August 8, 1996.(1)(2)
10.39 Share Purchase Agreement between the Registrant and Xillix Technologies Corp. dated as of August 16,
1996.(1)
10.40 Subscription Agreement between the Registrant and Oncometrics Imaging Corp. dated as of August 16,
1996.(1)
10.41 Stock Purchase Agreement by and among the Registrant, RADCO Ventures, Inc. and the Selling
Stockholders named therein dated as of August 15, 1996.(1)
10.42 Distribution Agreement by and between the Registrant and Fisher Scientific Company, dated September
10, 1996.+
10.43 Employment Agreement between the Registrant and Leonard Prange dated September 29, 1996.(2)
10.44 Commercial Guaranty, Assignment of Deposit Account and Disbursement Request and Authorization between
the Registrant and The Northern Trust Company dated July 22, 1996.
23.1 Consent of Graham & James, LLP (contained in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand LLP.(1)
23.3 Consent of Coopers & Lybrand (UK).(1)
23.4 Consent of KPMG Peat Marwick LLP.(1)
23.5 Consent of KPMG.(1)
23.6 Consent of Banner & Allegreti, Ltd. (3)
23.7 Consent of Townsend and Townsend and Crew. (3)
24.1 Powers of Attorney included on signature page to the Pre-effective Amendment No. 1, with respect to
Mr. Lavallee, and the signature page of the Registration Statement previously filed with the
Commission, with respect to all other signatories.
</TABLE>
- ------------------------
(1) Previously filed with Pre-effective Amendment No. 1 to the Registration
Statement on August 29, 1996.
(2) Represents a management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Registration Statement.
(3) Previously filed with the Registration Statement on July 26, 1996.
+ Confidential treatment requested as to certain portions.
II-5
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) That, for the purpose of determining any liability under the
Securties Act, the Registrant will treat the information ommitted from the
form of Prospectus filed as part of this Registration Statement as of the
time the Commission declares it effective.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-2 and duly caused this Pre-effective Amendment
No. 2 to the Registration Statement on Form S-2 (Reg. No. 333-09011) to be
signed on its behalf by the undersigned, hereunto duly authorized, in the City
of Chicago, State of Illinois on September 23, 1996.
ACCUMED INTERNATIONAL, INC.
By: /s/ PETER P. GOMBRICH
-----------------------------------
Peter P. Gombrich
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
In accordance with the requirements of the Securities Act of 1933, this
Pre-effective Amendment No. 2 to the Registration Statement on Form S-2 (Reg.
No. 333-09011) has been signed by the following persons in the capacities and on
the dates stated.
<TABLE>
<C> <S> <C>
SIGNATURE TITLE DATE
- ------------------------------------------------------ --------------------------------- ----------------------
/s/ PETER P. GOMBRICH Chairman of the Board, Chief September 23, 1996
------------------------------------------- Executive Officer and President
(Peter P. Gombrich) (Principal Executive Officer)
/s/ LEONARD R. PRANGE Chief Financial Officer and September 23, 1996
------------------------------------------- Corporate Vice President
(Leonard R. Prange) (Principal Financial and
Accounting Officer)
/s/ JOHN H. ABELES* Director September 23, 1996
-------------------------------------------
(John H. Abeles)
/s/ HAROLD S. BLUE* Director September 23, 1996
-------------------------------------------
(Harold S. Blue)
/s/ JACK H. HALPERIN* Director September 23, 1996
-------------------------------------------
(Jack H. Halperin)
/s/ PAUL F. LAVALLEE* Director September 23, 1996
-------------------------------------------
(Paul F. Lavallee)
</TABLE>
II-7
<PAGE>
<TABLE>
<C> <S> <C>
/s/ JOSEPH W. PLANDOWSKI* Director September 23, 1996
-------------------------------------------
(Joseph W. Plandowski)
/s/ LEONARD M. SCHILLER* Director September 23, 1996
-------------------------------------------
(Leonard M. Schiller)
* /s/ PETER P. GOMBRICH
-------------------------------------------
Peter P. Gombrich,
as Attorney-in-fact
</TABLE>
II-8
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of the Registrant (incorporated by reference to the Registrant's
Transition Report on Form 10-KSB for the transition period ended December 31, 1995 (the "Transition
Report")).
3.2 Bylaws of the Registrant (incorporated by reference to the Transition Report).
4.1 Specimen stock certificate for Common Stock (incorporated by reference to the Transition Report).
4.2 Certificate of Appointment of American Stock Transfer & Trust Company as Transfer Agent and Registrar
(incorporated by reference to Pre-Effective Amendment No. 4 to the Registration Statement on Form
S-1 (Reg. No. 33-48302), filed with the Commission on October 9, 1993 ("Pre-Effective Amendment No.
4 to Form S-1")).
4.3 Warrant Agreement between the Registrant and American Equities Overseas, Inc. dated as of September
1, 1995 (incorporated by reference to the Registrant's Registration Statement on Form S-3 (Reg. No.
33-98902), filed with the Commission on October 31, 1995 (the "Form S-3")).
4.4 Securities Purchase Agreement between the Registrant and G&G Dispensing, Inc. dated as of March 22,
1994 (incorporated by reference to the Form S-3).
4.5 Common Stock Purchase Warrant dated as of March 22, 1994 by the Registrant in favor of G&G
Dispensing, Inc. (incorporated by reference to the Form S-3).
4.6 Form of Warrant Agreement between the Registrant and Commonwealth Associates dated as of December 31,
1994 (incorporated by reference to the Form S-3).
4.7 Form of Common Stock Purchase Warrant dated as of December 31, 1994 by the Registrant in favor of
Commonwealth Associates, Inc. (incorporated by reference to the Form S-3).
4.8 Warrant Agreement between the Registrant and Commonwealth Associates dated as of May 9, 1995
(incorporated by reference to the Form S-3).
4.9 Form of Common Stock Purchase Warrant dated as of May 9, 1995 by the Registrant in favor of
Commonwealth Associates, Inc. (incorporated by reference to the Form S-3).
4.10 Warrant Agreement between the Registrant and Commonwealth Associates dated as of August 22, 1995
(incorporated by reference to the Form S-3).
4.11 Form of Common Stock Purchase Warrant dated as of August 22, 1995 by the Registrant in favor of
Commonwealth Associates (incorporated by reference to the Form S-3).
4.12 Form of Letter Agreement between the Registrant and John Robinson dated as of February 21, 1995
(incorporated by reference to the Form S-3).
4.13 Form of Registration Rights Agreement between the Registrant and John Robinson dated as of February
21, 1995 (incorporated by reference to the Form S-3).
4.14 Form of Common Stock Purchase Warrant dated as of December 29, 1995 by the Registrant in favor of
Commonwealth Associates (incorporated by reference to the Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-3 (Reg. No. 33-98902), filed with the Commission on
May 30, 1996 ("Post-Effective Amendment No. 1 to Form S-3")).
4.15 Form of Warrant Agreement between the Registrant and Commonwealth Associates dated as of December 29,
1995 pertaining to Warrants to purchase up to 750,000 shares of Common Stock of the Company
(incorporated by reference to the Post-Effective Amendment No. 1 to Form S-3).
4.16 Warrant Certificate dated as of December 29, 1995 registered in the name of The P.L. Thomas Group,
Inc. representing the right to purchase up to 237,840 shares of Common Stock of the Registrant
(incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
<C> <S>
4.17 Warrant Certificate dated as of December 29, 1995 registered in the name of The P.L. Thomas Group,
Inc. representing the right to purchase up to 63,473 shares of Common Stock of the Registrant
(incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
4.18 Warrant Certificate dated as of December 29, 1995 registered in the name of The P.L. Thomas Group,
Inc. representing the right to purchase up to 63,472 shares of Common Stock of the Registrant
(incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
4.19 Warrant Agreement dated as of January 25, 1996 between the Registrant and Robert Priddy (incorporated
by reference to the Post-Effective Amendment No. 1 to the Form S-3).
4.20 Warrant Certificate dated as of January 25, 1996 registered in the name of Robert Priddy representing
the right to purchase 100,000 shares of Common Stock of the Registrant (incorporated by reference to
the Post-Effective Amendment No. 1 to the Form S-3).
4.21 Form of Warrant Agreement between the Registrant and Commonwealth Associates dated as of December 29,
1995 pertaining to Warrants to purchase up to 104,000 shares of Common Stock of the Registrant,
including form of Warrant Certificate issued to designees of Commonwealth Associates dated as of
December 29, 1995 representing the right to purchase up to an aggregate of 104,000 shares of Common
Stock of the Registrant (incorporated by reference to the Post-Effective Amendment No. 1 to the Form
S-3).
4.22 Form of Warrant Agreement dated March 14, 1996 between the Registrant and certain of the Selling
Securityholders, including form of Warrant Certificate evidencing right to purchase Common Stock at
$3.42 per share (incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
4.23 Form of Warrant Agreement dated March 14, 1996 between the Registrant and certain of the Selling
Securityholders, including form of Warrant Certificate evidencing right to purchase Common Stock at
$3.87 per share (incorporated by reference to the Post-Effective Amendment No. 1 to the Form S-3).
5.1 Opinion of Graham & James LLP, counsel to the Registrant, regarding the legality of the securities
offered hereby. (1)
10.1 Agreement and Plan of Reorganization dated as of April 21, 1995 between the Registrant and AccuMed,
Inc., as amended by Amendment No. 1 dated as of August 1, 1995 and Amendment No. 2 dated as of
October 6, 1995 (incorporated by reference to the Registrant's Registration Statement on Form S-4
(File No. 33-99680), filed with the Commission on November 22, 1995 (the "Form S-4")).
10.2 The Registrant's Board of Directors Compensation Plan (the "Plan") (incorporated by reference to
Exhibit 10.11 to Form S-1) with Minutes of Board of Directors meeting dated January 18, 1996
amending the Plan by authorizing grants of stock options to non-employee directors (incorporated by
reference to the Transition Report). (2)
10.3 Sale and Leaseback Agreement between the Registrant and Leasetec, Inc. (incorporated by reference to
the Registration Statement on Form S-1 (Reg. No. 33-48302), filed with the Commission on June 3,
1992 ("Form S-1")).
10.4 Employment Agreement between the Registrant and Peter P. Gombrich dated August 1, 1994 (incorporated
by reference to the Transition Report).(2)
10.5 Employment Letter between the Registrant and Kenneth Miller dated March 2, 1995 (incorporated by
reference to the Transition Report).(2)
10.6 Employment Letter between the Registrant and Mark L. Santor dated February 28, 1995 (incorporated by
reference to the Transition Report).(2)
10.7 Employment Letter between the Registrant and Michael Burke dated April 21, 1995 (incorporated by
reference to the Transition Report).(2)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.8 Employment Agreement between the Registrant and Norman J. Pressman dated June 13, 1996 and Addendum
to Employment Agreement between the Registrant and Norman J. Pressman dated July 16, 1996. (2)(3)
10.9 European Distributor Agreement, dated November 22, 1993, by and between the Registrant and Sclavo
(incorporated by reference to Exhibit 10.22 to the Registrant's Annual Report on Form 10-KSB for the
year ended September 30, 1994 (the "1994 10-K")).
10.10 United States Distributor Agreement, dated November 22, 1993, by and between the Registrant and
Sclavo (incorporated by reference to the 1994 10-K).
10.11 Joint Research and Development Agreement, dated November 22, 1993, by and between the Registrant and
Sclavo (incorporated by reference to Exhibit 10.24 to the 1994 10-K).
10.12 Securities Purchase Agreement, dated November 22, 1993, by and between the Registrant and Sclavo
(incorporated by reference to Exhibit 10.25 to the 1994 10-K).
10.13 Escrow Agreement dated as of March 22, 1994, between the Registrant and G&G Dispensing, Inc.
(incorporated by reference to Exhibit 10.13 to the Form S-4).
10.14 License Agreement between the Registrant and Becton, Dickinson and Company effective as of October
11, 1995 (incorporated by reference to Exhibit 10.17 to the Form S-4).
10.15 Research and Development Service Agreement between the Registrant and RADCO Ventures, Inc. dated
March 15, 1996.(3)+
10.16 License and Distribution Agreement dated February 20, 1996 between the Registrant and BioKit, S.A.
(incorporated by reference to the Transition Report).
10.17 1995 Stock Option Plan (incorporated by reference to the Transition Report). (2)
10.18 Amendment No. 1 to the Registrant's 1995 Stock Option Plan. (1)(2)
10.19 Form of Non-Qualified Stock Option Agreement governing options granted to former employees of
AccuMed, Inc. pursuant to the Agreement and Plan of Reorganization dated as of April 21, 1995, as
amended (incorporated by reference to the Transition Report). (2)
10.20 Form of Non-Qualified Stock Option Agreement governing options granted to employees and consultants
under the 1995 Stock Option Plan (incorporated by reference to the Transition Report). (2)
10.21 Form of Incentive Stock Option Agreement Governing options granted to employees under the 1995 Stock
Option Plan (incorporated by reference to the Transition
Report). (2)
10.22 Amended and Restated 1990 Stock Option Plan (incorporated by reference to the Form S-1). (2)
10.23 The Registrant's Amended and Restated 1992 Stock Option Plan (incorporated by reference to
Pre-Effective Amendment No. 1 to Form SB-2, filed with the Commission on November 8, 1993). (2)
10.24 Lease between the Registrant and NCP, LTD dated February 20, 1995 pertaining to the offices located
at 29299 Clemens, Suite I-K, Westlake, Ohio 44145 (incorporated by reference to the Transition
Report).
10.25 Franklin Square Commercial Lease dated July 13, 1994 between the Registrant and the Lumber Company as
Agent for the Beneficiary of LaSalle National Trust, N.A. pertaining to the premises located at
Suite 401, 4th Floor North, 900 North Franklin Street, Chicago, Illinois (incorporated by reference
to the Transition Report).
10.26 Rider 1 to Franklin Square Commercial Lease between the Registrant and the Lumber Company dated May
30, 1996.(3)
10.27 License Agreement dated July 6, 1994, between the Registrant, Vanellus AB, and Uppsala
Bildbehandlings AB (incorporated by reference to the Transition Report).
10.28 Collaboration Agreement and Worldwide Exclusive License between the Registrant and G&G Dispensing,
Inc. dated March 22, 1994.(3)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.29 Form of Custody Agreement by each of the Selling Stockholders.(3)
10.30 Form of Lock-Up Agreement between each of the Selling Stockholders and the Underwriters.(3)
10.31 Form of Irrevocable Power of Attorney of Selling Stockholders.(3)
10.32 O.E.M. Supply Agreement between Olympus America, Inc., Precision Instrument division and the
Registrant dated March 31, 1996.+
10.33 Securities Purchase Agreement dated May 31, 1996 among the Registrant, Kingdon Associates, L.P.,
Kingdon Partners, L.P., and Kingdon Offshore N.V. (incorporated by reference to the Registrant's
Registration Statement on Form S-3 (Reg. No. 333-07681), filed with the Commission on July 3, 1996).
10.34 Promissory Note in the original principal amount of $61,000 made May 22, 1996 by Peter P. Gombrich in
favor of the Registrant.(3)
10.35 Non-negotiable Promissory Note in the original principal amount of $775,000 made July 22, 1996 by the
Registrant in favor of RADCO Ventures, Inc.(3)
10.36 Employment Separation Agreement and Release between the Registrant and Kenneth D. Miller dated June
27, 1996.(2)(3)
10.37 Employment Separation Agreement and Release between the Registrant and Mark L. Santor dated June 10,
1996.(2)(3)
10.38 Amended and Restated Employment Separation Agreement and Release between the Registrant, Kenneth D.
Miller and RADCO Ventures, Inc., dated August 8, 1996.(1)(2)
10.39 Share Purchase Agreement between the Registrant and Xillix Technologies Corp. dated as of August 16,
1996.(1)
10.40 Subscription Agreement between the Registrant and Oncometrics Imaging Corp. dated as of August 16,
1996.(1)
10.41 Stock Purchase Agreement by and among the Registrant, RADCO Ventures, Inc. and the Selling
Stockholders named therein dated as of August 15, 1996.(1)
10.42 Distribution Agreement by and between the Registrant and Fisher Scientific Company, dated September
10, 1996.+
10.43 Employment Agreement between the Registrant and Leonard Prange dated September 29, 1996.(2)
10.44 Commercial Guaranty, Assignment of Deposit Account and Disbursement Request and Authorization between
the Registrant and The Northern Trust Company dated July 22, 1996.
23.1 Consent of Graham & James, LLP (contained in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand LLP.(1)
23.3 Consent of Coopers & Lybrand (UK).(1)
23.4 Consent of KPMG Peat Marwick LLP.(1)
23.5 Consent of KPMG.(1)
23.6 Consent of Banner & Allegreti, Ltd. (3)
23.7 Consent of Townsend and Townsend and Crew. (3)
24.1 Powers of Attorney included on signature page to the Pre-effective Amendment No. 1, with respect to
Mr. Lavallee, and the signature page of the Registration Statement previously filed with the
Commission, with respect to all other signatories.
</TABLE>
- ------------------------
(1) Previously filed with Pre-effective Amendment No. 1 to the Registration
Statement on August 29, 1996.
(2) Represents a management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Registration Statement.
(3) Previously filed with the Registration Statement on July 26, 1996.
+ Confidential treatment requested as to certain portions.
<PAGE>
4,750,000 Shares
ACCUMED INTERNATIONAL, INC.
Common Stock
UNDERWRITING AGREEMENT
September , 1996
TUCKER ANTHONY INCORPORATED
VECTOR SECURITIES INTERNATIONAL, INC.
As Representatives of the Several Underwriters
c/o TUCKER ANTHONY INCORPORATED
One World Financial Center
200 Liberty Street
Third Floor
New York, New York 10281
Ladies and Gentlemen:
AccuMed International, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell an aggregate of 2,831,455 shares of its common stock,
par value $0.01 per share, and the persons named on Schedule I hereto (the
"Selling Stockholders") propose to sell an aggregate of 1,918,545 shares of
common stock of the Company, including 589,797 shares that will be issued to
certain Selling Stockholders upon exercise of outstanding options or warrants
and sold in connection herewith (such shares to be sold by the Selling
Stockholders together with the 2,831,455 shares of common stock to be issued and
sold by the Company, the "Initial Securities"), to the several Underwriters
named in Schedule II hereto for whom Tucker Anthony Incorporated ("Tucker
Anthony") and Vector Securities International, Inc. ("Vector") are acting as
representatives (the "Representatives"). In addition, solely for the purpose of
covering over-allotments, the Company proposes to grant to the several
Underwriters, upon the terms and conditions set forth in Section 2 hereof, an
option to purchase up to an additional 712,500 shares of Common Stock of the
Company (the "Option Securities"). The Company and the Selling Stockholders are
hereinafter sometimes referred to as the "Sellers." The Initial Securities and
the Option Securities are hereinafter collectively referred to as the
"Securities." The Company's common stock, par value $0.01 per share, including
the Securities, is hereinafter referred to as the "Common Stock." The Company
and the Selling
<PAGE>
Stockholders wish to confirm as follows their agreements with you and the other
Underwriters on whose behalf you are acting in connection with the several
purchases by the Underwriters of the Securities:
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-2 (No. 333-09011) covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus, or prospectuses, and either (A)
has prepared and filed, prior to the effective date of such registration
statement, an amendment to such registration statement, including a final
prospectus or (B) if the Company has elected to rely upon Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"), will prepare and file a prospectus, in accordance with
the provisions of Rule 430A and Rule 424(b) ("Rule 424(b)") of the 1933 Act
Regulations, promptly after execution and delivery of this Agreement.
Additionally, if the Company has elected to rely upon Rule 434 ("Rule 434") of
the 1933 Act Regulations, the Company will prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b),
promptly after execution and delivery of this Agreement. The information, if
any, included in such prospectus or in such Term Sheet, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it becomes effective (a)
pursuant to paragraph (b) of Rule 430A, is referred to herein as the "Rule 430A
Information," or (b) pursuant to paragraph (d) of Rule 434, is referred to
herein as the "Rule 434 Information." Each prospectus used before the time such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information that was used
after effectiveness and prior to the execution and delivery of this Agreement,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-2 under the 1933 Act, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto, schedules thereto, if
any, and the documents incorporated by reference therein pursuant to Item 12 of
Form S-2 under the 1933 Act, at the time it became effective and including, if
applicable, the Rule 430A Information or the Rule 434 Information, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term Registration
Statement shall include the Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-2 under the 1933 Act, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities, is
herein referred to as the "Prospectus." If Rule 434 is relied upon, the term
"Prospectus" shall refer to the prelimi-
<PAGE>
nary prospectus last furnished to the Underwriters in connection with the
offering of the Securities, together with the Term Sheet, and all references to
the date of the Prospectus shall mean the date of the Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy, if any, filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of similar import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
2. AGREEMENTS TO SELL AND PURCHASE. Upon the basis of the
representations, warranties and agreements contained herein and subject to all
the terms and conditions set forth herein and to such adjustments as you may
determine to avoid fractional shares, the Company hereby agrees to issue and
sell to each Underwriter and each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $ per share (the
"purchase price per share"), the number of Initial Securities set forth in
Schedule II opposite the name of such Underwriter under the column "Number of
Initial Securities to be Purchased from the Company" (or such number of Initial
Securities increased as set forth in Section 12 hereof).
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein
and to such adjustments as you may determine to avoid fractional shares, each
Selling Stockholder agrees to sell to each Underwriter and each Underwriter
agrees, severally and not jointly, to purchase from each Selling Stockholder, at
the purchase price per share, that number of Initial Securities as is equal to
the product of (i) the number of Initial Securities set forth in Schedule I
opposite such Selling Stockholder's name multiplied by (ii) the percentage of
Initial Securities that such Underwriter is purchasing from the Company as set
forth in Schedule II (or such number of Initial Securities increased as set
forth in Section 12 hereof).
<PAGE>
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein,
the Company hereby grants an option (the "over-allotment option") to the
Underwriters to purchase from the Company, at the purchase price per share, up
to an aggregate of 712,500 Option Securities. Option Securities may be
purchased solely for the purpose of covering over-allotments made in connection
with the offering of the Securities. Such option shall expire at 5:00 P.M.,
Chicago time, on the 30th day after the date of this Agreement (or, if such 30th
day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange is open for trading). Such over-
allotment option may be exercised at any time or from time to time until its
expiration. Upon any exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company that proportion
of the total number of Option Securities as is equal to the percentage of
Initial Securities that such Underwriter is purchasing from the Company and the
Selling Stockholders (or such number of Initial Securities increased as set
forth in Section 12 hereof), subject to such adjustments as you may determine to
avoid fractional shares.
Certificates in transferable form for the Securities that each of the
Selling Stockholders agrees to sell pursuant to this Agreement (together with
stock powers endorsed in blank) and, with respect to the Initial Securities to
be sold by the Selling Stockholders hereby upon the exercise of warrants or
options, warrant certificates or stock option agreements and notices of
exercise, have been placed in custody with American Stock Transfer & Trust
Company (the "Custodian") for delivery under this Agreement pursuant to a Letter
of Transmittal and Custody Agreement and an Irrevocable Power of Attorney of
Selling Stockholder (collectively, the "Custody Agreement") executed by each of
the Selling Stockholders appointing Peter P. Gombrich and Jude Augustine as
agents and attorneys-in-fact (the "Attorneys-in-Fact"). Each Selling
Stockholder agrees that (i) the Securities represented by the certificates, the
warrant certificates, the stock option agreements, the notices of exercise and
the stock powers held in custody pursuant to the Custody Agreement are subject
to the interests of the Underwriters, the Company and each other Selling
Stockholder, (ii) the arrangements made by the Selling Stockholders for such
custody are, except as specifically provided in the Custody Agreement,
irrevocable, and (iii) the obligations of the Selling Stockholders hereunder and
under the Custody Agreement shall not be terminated by any act of such Selling
Stockholder or by operation of law, whether by the death or incapacity of any
Selling Stockholder or the occurrence of any other event or, if the Selling
Stockholder is not a natural person, upon any dissolution, winding up,
distribution of assets or other event affecting the legal existence of such
Selling Stockholder. If any Selling Stockholder shall die or be incapacitated
or if any other event shall occur before the delivery of the Securities
hereunder or if the Selling Stockholder is not a
<PAGE>
natural person and shall dissolve, wind up, distribute assets or if any other
event affecting the legal existence of such Selling Stockholder shall occur
before the delivery of the Securities hereunder, certificates for the Securities
of such Selling Stockholder shall be delivered to the Underwriters by the
Attorneys-in-Fact, or either of them, in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such death or
incapacity, dissolution, winding up or distribution of assets or other event had
not occurred, regardless of whether or not the Attorneys-in-Fact or any
Underwriter shall have received notice of such death, incapacity, dissolution,
winding up or distribution of assets or other event. Each Attorney-in-Fact is
authorized, on behalf of each of the Selling Stockholders, to execute this
Agreement and any other documents necessary or desirable in connection with the
sale of the Securities to be sold hereunder by such Selling Stockholder, to make
delivery of the certificates for such Securities, to receive the proceeds of the
sale of such Securities, to give receipts for such proceeds, to pay therefrom
any expenses to be borne by such Selling Stockholder in connection with the sale
and public offering of such Securities, to distribute the balance thereof to
such Selling Stockholder, and to take such other action as may be necessary or
desirable in connection with the transactions contemplated by this Agreement.
Each Attorney-in-Fact agrees to perform his or her duties under the Custody
Agreement.
3. TERMS OF PUBLIC OFFERING. The Sellers have been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Securities as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Securities upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SECURITIES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Initial Securities shall be made at the
office of Skadden, Arps, Slate, Meagher & Flom, 333 West Wacker Drive, Suite
2100, Chicago, Illinois 60606, at 9:00 A.M., Chicago time, on the third
(fourth, if the pricing occurs after 4:30 p.m. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 12 hereof) (the "Closing Date"). The place of closing for
the Initial Securities and the Closing Date may be varied by agreement among
you, the Attorneys-in-Fact (or either of them) and the Company.
Delivery to the Underwriters of and payment for any Option Securities
to be purchased by the Underwriters shall be made at the aforementioned office
of Skadden, Arps, Slate, Meagher & Flom at such time on such date (an "Option
Closing Date"), which may be the same as the Closing Date but shall in no event
be earlier than the Closing Date nor earlier than two nor later than ten
business days after the giving of the notice hereinafter
<PAGE>
referred to, as shall be specified in a written notice from you on behalf of the
Underwriters to the Company of the Underwriters' determination to purchase a
number, specified in such notice, of Option Securities. The place of closing
for any Option Securities and the Option Closing Date for such Option Securities
may be varied by agreement between you and the Company.
Certificates for the Initial Securities and for any Option Securities
to be purchased hereunder shall be registered in such names and in such
denominations as you shall request by written notice (it being understood that a
facsimile transmission shall be deemed written notice) prior to 9:30 A.M.,
Chicago time, on the second business day preceding the Closing Date or any
Option Closing Date, as the case may be. Such certificates shall be made
available to you in Chicago, Illinois or New York, New York, as requested by you
in the aforesaid notice, for inspection and packaging not later than 9:30 A.M.,
Chicago time, on the business day next preceding the Closing Date or an Option
Closing Date, as the case may be. The certificates and stockpowers evidencing
the Initial Securities and any Option Securities to be purchased hereunder shall
be delivered to you on the Closing Date or the Option Closing Date, as the case
may be, against payment of the purchase price therefor by certified or official
bank check or checks payable in New York Clearing House (next day) funds to the
order of the Company or the Attorneys-in-Fact, as the case may be. It is
understood that each Underwriter has authorized you, for its account, to accept
delivery of, acknowledge receipt of, and make payment of the purchase price for,
the Initial Securities and the Option Securities, if any, that it has agreed to
purchase. Tucker Anthony and Vector, individually and not as Representatives,
may (but shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter whose check has not been received by the Closing Date or the Option
Closing Date, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
5. AGREEMENTS OF THE COMPANY. The Company covenants and agrees with
the several Underwriters as follows:
a. The Company will notify the Underwriters immediately, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement and any amendment thereto, (ii) of the receipt of any comments from
the Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the suspension of
qualification of the Securities for offering or sale in any jurisdiction or the
initiation of any proceedings for such purpose and (v) during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
of any
<PAGE>
change, or any event or occurrence which could result in such a change, in the
Company's condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company or the happening of any event, including
the filing of any information, documents or reports pursuant to the 1934 Act,
that makes any statement of a material fact made in the Registration Statement
or the Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to state a material fact required by the 1933 Act or the
1933 Act Regulations to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus to comply with the 1933 Act, the 1933 Act Regulations or any
other law. The Company shall use its best efforts to prevent the issuance of
any stop order or order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, and, if at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, the Company shall use
every reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
b. The Company (i) will give the Underwriters notice of its
intention to prepare or file any amendment to the Registration Statement
(including any post-effective amendment), any Rule 462(b) Registration
Statement, any Term Sheet or any amendment or supplement to the Prospectus
(including any revised prospectus or Term Sheet and preliminary prospectus which
the Company proposes for use by the Underwriters in connection with the offering
of the Securities which differs from the prospectus on file at the Commission at
the time the Registration Statement becomes effective, whether or not such
revised prospectus or Term Sheet and preliminary prospectus is required to be
filed pursuant to Rule 424(b)), whether pursuant to the 1933 Act, the 1934 Act
or otherwise, (ii) will furnish the Underwriters with copies of any Rule 462(b)
Registration Statement, Term Sheet, amendment or supplement a reasonable amount
of time prior to such proposed filing or use, as the case may be, and (iii) will
not file any such Rule 462(b) Registration Statement, Term Sheet, amendment or
supplement or use any such prospectus to which the Underwriters or counsel for
the Underwriters shall object.
c. The Company has furnished or will deliver to the
Underwriters and their counsel, without charge, as many signed and conformed
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference
therein) as the Underwriters may reasonably request. If applicable, the copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be
<PAGE>
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
d. The Company will furnish to each Underwriter, without
charge, from time to time during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request for the purposes contemplated by the 1933 Act, the 1934 Act, the 1933
Act Regulations or the rules and regulations of the Commission under the 1934
Act (the "1934 Act Regulations"). If applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
e. The Company will comply with the 1933 Act and the 1933 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act, the 1934 Act, the 1933 Act Regulations
or the 1934 Act Regulations to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 5(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
f. During the period of five years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission or the Nasdaq National
Market ("NASDAQ"), and (ii) from time to time such other information concerning
the Company as you may request.
g. The Company will use its best efforts, in cooperation with
counsel to the Underwriters, to qualify the Securities for offering and sale
under the applicable securities or Blue Sky laws of such states and other
jurisdictions of the United States as the
<PAGE>
Underwriters may designate and to maintain such qualifications in effect for a
period of not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement; PROVIDED,
HOWEVER, that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement.
h. The Company will make generally available to its security
holders as soon as practicable, but not later than 45 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
i. The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus under "Use
of Proceeds."
j. If, at the time that the Registration Statement becomes
effective, any Rule 430A Information or Rule 434 Information shall have been
omitted therefrom, then immediately following the execution of this Agreement,
the Company will prepare, and file or transmit for filing with the Commission in
accordance with Rule 430A or Rule 434 and Rule 424(b), copies of a Prospectus or
Term Sheet containing such Rule 430A Information and Rule 434 Information,
respectively, or, if required by Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus), containing such Rule
430A Information.
k. If the Company elects to rely upon Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the 1933 Act Regulations by the earlier of (i) 10:00 P.M. Eastern time on
the date hereof and (ii) the time confirmations are sent or given, as specified
by Rule 462(b)(2).
l. The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file all
documents required to be filed with the Commission pursuant to Section 13, 14 or
15 of the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
m. During a period of 180 days from the date of the Prospectus,
the Company will not, without the prior written consent of the
<PAGE>
Representatives, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of
security outstanding on the date hereof and referred to in the Prospectus, (C)
any shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to in the
Prospectus, (D) any shares of Common Stock issued pursuant to any non-employee
director stock plan, (E) up to 100,000 shares of Common Stock to be issued by
the Company on or before December 31, 1996 in connection with the acquisition of
the intellectual property assets of Accuron Corporation or Technostics
Corporation or (F) file a registration statement (or a pre effective amendment
to an existing registration statement) covering Common Stock held by
stockholders subject to the lock-up agreements described in n. below.
n. The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current officers and directors and each of its stockholders designated by you.
o. The Company will supply the Underwriters with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Securities under the 1933 Act.
p. Prior to the Closing Date, the Company shall furnish to the
Underwriters, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Company and its subsidiaries,
for any periods subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.
q. Prior to the Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no press
conference with respect to the Company or any of its subsidiaries, the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of any of them, or the offering of the Securities, without the prior
written consent
<PAGE>
of the Representatives unless in the judgment of the Company and its counsel,
and after notification to the Representatives, such press release or
communication is required by law.
r. The Company will comply with all provisions of Florida H.B.
1771, codified as Section 517.075 of the Florida statutes, and all regulations
promulgated thereunder relating to issuers doing business with Cuba.
s. The Company has not taken, nor will it take, directly or
indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Securities.
t. The Company will use its best efforts to maintain the
quotation of the Common Stock (including the Securities) on NASDAQ and will file
with NASDAQ all documents and notices required by NASDAQ of companies that have
securities that are traded in the over-the-counter market and quotations for
which are reported by NASDAQ.
u. During a period of one year from the date of the Prospectus,
the Company will not, without the prior written consent of the Representatives,
purchase or redeem any of the outstanding Redeemable Warrants described in the
Prospectus under the caption "Description of Capital Stock" exercisable for an
aggregate amount of 2,702,705 shares of Common Stock.
6. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each of the Selling
Stockholders severally covenants and agrees with the several Underwriters as
follows:
a. Such Selling Stockholder will cooperate to the extent
necessary to cause the Registration Statement or any post-effective amendment
thereto to become effective at the earliest possible time.
b. Such Selling Stockholder will pay all Federal, state and
other taxes, if any, on the transfer or sale of such Securities that are sold by
the Selling Stockholder to the Underwriters. In order to document the
Underwriters' compliance with the reporting and withholding provisions of the
Tax Equity and Fiscal Responsibility Act of 1982 and the Interest and Dividend
Tax Compliance Act of 1983 with respect to the transaction herein contemplated
each of the Selling Stockholders agrees to deliver to you prior to or at the
Closing Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
<PAGE>
c. Such Selling Stockholder will do or perform all things
required to be done or performed by such Selling Stockholder prior to the
Closing Date to satisfy all conditions precedent to the delivery of the
Securities pursuant to this Agreement relating to such Selling Stockholder.
d. Other than as set forth in this paragraph d., such Selling
Stockholder will not, without the prior written consent of the Representatives,
offer, sell or otherwise dispose of any shares of Common Stock, options or
warrants to acquire shares of Common Stock or securities exchangeable for or
convertible into shares of Common Stock owned by them (other than through the
offering) for a period of 270 days after the date of the Prospectus, except that
such holder may (i) after 90 days following the date of the Prospectus, dispose
of one third of their shares of Common Stock, options, warrants and exchangeable
securities and (ii) after 180 days following the date of the Prospectus, dispose
of an additional one third of their shares of Common Stock, options, warrants
and exchangeable securities; PROVIDED, HOWEVER, that, notwithstanding the
foregoing provisions, (A) with respect to 977,807 Redeemable Warrants held by
Commonwealth Associates, Commonwealth Associates shall not, without the prior
written consent of the Representatives, offer, sell or otherwise dispose of any
shares of Common Stock underlying 900,000 Redeemable Warrants beneficially owned
by Commonwealth Associates for a period of 60 days after the date of the
Prospectus (the foregoing 900,000 Redeemable Warrants are not subject to any
restriction on transfer and the remaining 77,807 Redeemable Warrants (including
the underlying shares of Common Stock) are not subject to any restriction on
transfer) and (B) with respect to the shares of Common Stock, options or
warrants to acquire shares of Common Stock or securities exchangeable for or
convertible into shares of Common Stock owned by Peter P. Gombrich ("Gombrich
Securities"), Peter P. Gombrich agrees that he will not, without the prior
written consent of the Representatives, offer, sell or otherwise dispose of any
Gombrich Securities (other than through the offering) for a period of 270 days
after the date of the Prospectus.
e. Such Selling Stockholder has not taken, nor will it take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Securities.
f. Such Selling Stockholder promptly will advise you on behalf
of the several Underwriters, and immediately confirm such advice in writing, (i)
of receipt by such Selling Stockholder or by any representative or agent of such
Selling Stockholder, of any communication from the Commission relating to the
Registration Statement or the Prospectus, or any notice or order of the
Commission relating to the Company or such Selling Stockholder in connection
with the transactions contemplated by this Agreement and
<PAGE>
(ii) of the happening of any event which makes or may make any statement made in
the Registration Statement or the Prospectus untrue or that requires the making
of any change in the Registration Statement or Prospectus in order to make any
such statement, in the light of the circumstances under which it was made, not
misleading or to comply with the 1933 Act, the 1934 Act or any other law.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
a. When the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto becomes
effective, at the date of the Prospectus, if different, and at the Closing Date
and the Option Closing Date, as the case may be, the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements thereto
complied or will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
The Prospectus and any supplements or amendments thereto will not at the date of
the Prospectus, at the date of any such supplements or amendments, or at the
Closing Date or the Option Closing Date, if any, include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially different,"
as such term is used in Rule 434, from the Prospectus included in the
Registration Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus relating to any Selling Stockholder or
any Underwriter made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter, through the
Representatives, or such Selling Stockholder, as the case may be, expressly for
use in the Registration Statement or Prospectus. The Company has not
distributed any offering materials in connection with the offering or sale of
the Securities other than the Registration Statement, the preliminary
prospectus, the Prospectus, the Term Sheet, if applicable, or any other
materials, if any, permitted by the 1933 Act or the 1933 Act Regulations.
b. Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and, if applicable,
each preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted
<PAGE>
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
c. The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when they became
effective or at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations or the 1934 Act and the 1934 Act
Regulations, as applicable, and, when read together with the other information
in the Prospectus, at the date of the Prospectus and on the Closing Date (and,
if any Option Securities are purchased, on the applicable Option Closing Date),
will 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 the light of the circumstances under which they were made, not
misleading.
d. The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
e. The financial statements included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates indicated and the
results of their operations for the periods specified; except as otherwise
stated in the Registration Statement, said financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. The
financial information and statistical data set forth in the Prospectus are
prepared on an accounting basis consistent with such financial statements. The
pro forma financial statements and the related notes thereto included in the
Registration Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein.
f. Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise stated
therein, (i) there has been no material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) there have been
no
<PAGE>
transactions entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with respect to the
Company, and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock. The
Company has no material contingent obligations which are not disclosed in the
Registration Statement.
g. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not, singly or in the aggregate,
have a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
h. Each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; all of the issued and outstanding
capital stock of each such subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company, directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, charge, encumbrance, claim or equity. There are no outstanding
subscriptions, options, warrants, commitments, convertible or exchangeable
securities or other rights granted by the Company or any subsidiary to acquire
any shares of capital stock of or ownership interests in any subsidiary of the
Company and there are no commitments, plans or arrangements to do so. Except as
described in the Prospectus, the Company does not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity.
i. The authorized, issued and outstanding capital stock of the
<PAGE>
Company is as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement or pursuant to
reservations, agreements, employee or director benefit plans or the exercise of
convertible securities referred to in the Prospectus); the shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable and have not been issued in
violation of or are not otherwise subject to any preemptive or other similar
rights; the Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and non-assessable; the
certificates evidencing the Securities are in due and proper form under Delaware
law; the authorized capital stock of the Company, including the Securities,
conforms to all statements relating thereto contained in the Prospectus; and the
issuance of the Securities is not subject to preemptive or other similar rights.
There are no outstanding subscriptions, options, warrants, convertible or
exchangeable securities or other rights granted to or by the Company to purchase
shares of Common Stock or other securities of the Company and there are no
commitments, plans or arrangements to issue any shares of Common Stock or any
security convertible into or exchangeable for Common Stock, in each case other
than as described in the Prospectus.
j. Except as disclosed in the Registration Statement and except
as would not, singly or in the aggregate, reasonably be expected to have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, (A) the Company and its subsidiaries
are each in compliance with all applicable Environmental Laws, (B) the Company
and its subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with the
requirements of such permits authorizations and approvals, (C) there are no
pending or, to the best knowledge of the Company, threatened Environmental
Claims against the Company or any of its subsidiaries and (D) under applicable
law, there are no circumstances with respect to any property or operations of
the Company or its subsidiaries that are reasonably likely to form the basis of
an Environmental Claim against the Company or any of its subsidiaries.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) Federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgement, relating to the environment,
health, safety or any chemical, material or substance, exposure to
<PAGE>
which is prohibited, limited or regulated by any governmental authority.
"Environmental Claims" means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigations or proceedings relating in any way to any
Environmental Law.
k. Each of (i) this Agreement, (ii) the Share Purchase
Agreement, dated as of August 16, 1996 (the "Oncometrics Share Purchase
Agreement"), by and between the Company and Xillix Technologies Corp., (iii) the
Subscription Agreement, dated as of August 16, 1996 (the "Oncometrics
Subscription Agreement"), by and between the Company and Oncometrics Imaging
Corp., (iv) the Stock Purchase Agreement, dated as of August 15, 1996 (the
"RADCO Purchase Agreement" and, together with the Oncometrics Share Purchase
Agreement and the Oncometrics Subscription Agreement, the "Acquisition
Agreements"), by and among the Company, RADCO Ventures, Inc., American Equities
Overseas, Inc. and the holders of common stock of RADCO Ventures, Inc. named on
Schedule 1 to the RADCO Purchase Agreement, and (v) the agreements and
instruments to be executed and delivered by the Company in connection with the
Acquisition Agreements (such agreements and instruments, together with the
Acquisition Agreements, being referred to herein as the "Related Agreements"),
has been duly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as rights to indemnity and contribution hereunder and
thereunder may be limited by Federal or state securities laws or the public
policy underlying such laws and except that enforcement thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in proceeding in equity or at law). The
execution and delivery of the Related Agreements by the Company and the
consummation of the transactions contemplated thereby have been duly authorized
by requisite corporate action on the part of the Company.
l. Neither the Company nor any of its subsidiaries is in
violation of its charter or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, deed, trust, note, lease, sublease, voting
agreement, voting trust, or other instrument or agreement to which the Company
or any of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject; and the execution, delivery and performance of this
Agreement and each of the Related Agreements and the consummation of the
transactions contemplated herein and therein and compliance by the Company with
its obligations hereunder and thereunder have been duly authorized by all
necessary
<PAGE>
corporate action and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan agreement,
deed, trust, note, lease, sublease, voting agreement, voting trust or other
instrument or agreement to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the charter or
bylaws of the Company or any of its subsidiaries or any applicable statute, law,
rule, regulation, ordinance, decision, directive or order.
m. No labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the best knowledge of the Company, is imminent;
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers or contractors
which might, singly or in the aggregate, be expected to result in any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
n. There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which, singly or in the
aggregate, might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, or
which, singly or in the aggregate, might materially and adversely affect the
properties or assets thereof or which might materially and adversely affect the
consummation of this Agreement; all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and there are no
contracts or documents of the Company or any of its subsidiaries which are
required to be filed as exhibits to the Registration Statement by the 1933 Act
or by the 1933 Act Regulations which have not been so filed.
o. The Company and its subsidiaries own or are licensed to use
all patents, patent applications, inventions, trademarks, trade names,
applications for registration of trademarks, service marks, service mark
applications, copyrights, know-how, manufacturing processes, formulae, trade
secrets, licenses and rights in any thereof and any other intangible property
and assets (herein called the "Propri-
<PAGE>
etary Rights") which are material to the businesses of the Company and its
subsidiaries as now conducted and as proposed to be conducted, in each case as
described in the Prospectus. The description of the Proprietary Rights is
correct in all material respects and fairly and correctly describes the
Company's and its subsidiaries' rights with respect thereto. The Company does
not have any knowledge of, and the Company has not given or received any notice
of, any pending conflicts with or infringement of the rights of others with
respect to any Proprietary Rights or with respect to any license of Proprietary
Rights. No action, suit, arbitration, or legal, administrative or other
proceeding, or investigation is pending, or, to the best knowledge of the
Company, threatened, which involves any Proprietary Rights. Neither the Company
nor any subsidiary is subject to any judgment, order, writ, injunction or decree
of any court or any Federal, state, local, foreign or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or any arbitrator, or has entered into or is a party to any contract
which restricts or impairs the use of any such Proprietary Rights in a manner
which would have a material adverse effect on the use of any of the Proprietary
Rights. To the best knowledge of the Company, no Proprietary Rights used by the
Company or any of its subsidiaries, and no services or products sold by the
Company or any of its subsidiaries, conflict with or infringe upon any
proprietary rights available to any third party. Neither the Company nor any
subsidiary has received written notice of any pending conflict with or
infringement upon such third-party proprietary rights. Neither the Company nor
any subsidiary has entered into any consent, indemnification, forbearance to sue
or settlement agreement with respect to Proprietary Rights other than in the
ordinary course of business. No claims have been asserted by any person with
respect to the validity of the Company's or any of its subsidiaries' ownership
or right to use the Proprietary Rights and, to the best knowledge of the
Company, there is no reasonable basis for any such claim to be successful. The
Proprietary Rights are valid and enforceable and no registration relating
thereto has lapsed, expired or been abandoned or cancelled or is the subject of
cancellation or other adversarial proceedings, and all applications therefore
are pending and are in good standing. The Company and its subsidiaries have
complied, in all material respects, with their respective contractual
obligations relating to the protection of the Proprietary Rights used pursuant
to licenses. To the best knowledge of the Company, no person is infringing on
or violating the Proprietary Rights owned or used by the Company or any of its
subsidiaries.
p. No registration, authorization, approval, qualification or
consent of any court or governmental authority or agency is necessary in
connection with the offering, issuance or sale of the Securities hereunder,
except such as may be required under the 1933 Act or the 1933 Act Regulations or
state securities or Blue Sky laws (or such as may be required by the NASD).
<PAGE>
q. The Company and each of its subsidiaries possess and are
operating in compliance with all material licenses, certificates, consents,
authorities, approvals and permits (collectively, "permits") from all state,
Federal, foreign and other regulatory agencies or bodies necessary to conduct
the businesses now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such permit or any circumstance which would lead it to
believe that such proceedings are reasonably likely which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
r. Except as described in the Prospectus, there are no persons
with registration or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act.
s. No order preventing or suspending the use of any preliminary
prospectus has been issued and no proceedings for that purpose are pending or,
to the knowledge of the Company, threatened or contemplated by the Commission;
and to the best knowledge of the Company, no order suspending the offering of
the Securities in any jurisdiction designated by the Underwriters pursuant to
Section 5(g) of this Agreement has been issued and, to the best knowledge of the
Company, no proceedings for that purpose have been instituted or threatened or
are contemplated.
t. The Company and each of its subsidiaries have good and
marketable title to their respective properties, free and clear of all material
security interests, mortgages, pledges, liens, charges, encumbrances, claims and
equities of record. The properties of the Company and its subsidiaries are, in
the aggregate, in good repair (reasonable wear and tear excepted), and suitable
for their respective uses. Any real properties held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
conduct of the business of the Company and its subsidiaries considered as one
enterprise.
u. The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and
<PAGE>
appropriate action is taken with respect to any differences.
v. The Company and its subsidiaries have conducted and are
conducting their respective businesses in compliance with all applicable
Federal, state, local and foreign statutes, laws, rules, regulations,
ordinances, codes, decisions, decrees, directives and orders, except where the
failure to do so would not, singly or in the aggregate, have a material adverse
effect on the condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise.
w. To the best of the Company's knowledge, neither the Company
nor any of its subsidiaries nor any employee or agent of the Company or any
subsidiary has made any payment of funds of the Company or any subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
x. The Company is not now, and after sale of the Securities to
be sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds" will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
y. All offers and sales of capital stock of the Company prior
to the date hereof were at all relevant times duly registered or exempt from the
registration requirements of the 1933 Act and were duly registered or subject to
an available exemption from the registration requirements of the applicable
state securities or Blue Sky laws.
z. The Company has complied with all provisions of Florida H.B.
1771, codified as Section 517.075 of the Florida statutes, and all regulations
promulgated thereunder relating to issuers doing business with Cuba.
aa. The Common Stock is registered pursuant to Section 12(g) of
the 1934 Act. The Securities have been duly authorized for quotation on NASDAQ,
subject to meeting all applicable listing requirements on the Closing Date and
subject to notice of issuance. The Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common Stock
under the 1934 Act or delisting the Common Stock from NASDAQ, nor has the
Company received any notification that the Commission or NASDAQ is contemplating
terminating such registration or listing.
ab. Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates has taken, and at the Closing Date and at any
later Option Closing Date, neither the Company nor, to its knowledge, any of its
officers, directors or affiliates will have taken, directly or indirectly, any
action which has constituted, or
<PAGE>
might reasonably be expected to constitute, the stabilization or manipulation of
the price of sale or resale of the Securities.
ac. The Company and each of its subsidiaries maintain insurance
of the types and in amounts adequate for its and its subsidiaries' business and
consistent with insurance coverage maintained by similar companies in similar
business, including but not limited to, insurance covering clinical trial
liability, product liability and real and personal property owned or leased
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and effect.
ad. The Company and each of its subsidiaries have filed all
material tax returns required to be filed, which returns are true and correct in
all material respects, and neither the Company nor any of its subsidiaries is in
default in the payment of any taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or otherwise assessed,
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without interest which were
payable pursuant to said returns or any assessments with respect thereto.
ae. Except as described in the Prospectus, to the best of the
Company's knowledge, there are no rulemaking or similar proceedings before the
United States Food and Drug Administration or comparable Federal, state, local
or foreign government bodies which involve or affect the Company or any
subsidiary, which, if the subject of an action unfavorable to the Company or any
subsidiary, could involve a prospective material adverse change in or effect on
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
af. The Company has not received any communication (whether
written or oral) relating to the termination or threatened termination or
modification or threatened modification of any material, consulting, licensing,
marketing, research and development, cooperative or any similar agreement,
including, without limitation, the collaborative research and license agreements
listed under the section of the Prospectus entitled, "Business--Cytopathology--
Cytopathology Sales and Marketing," "--Microbiology--Microbiology Products--
alamarBlue" and "--Microbiology Products--KB Reader." Each such collaborative
and licensing agreement is in effect substantially as described in such section
of the Prospectus.
ag. To the knowledge of the Company, if any full-time employee
identified in the Prospectus has entered into any non-competition, non-
disclosure, confidentiality or other similar agreement with any party other than
the Company or any subsidiary, such employee is
<PAGE>
neither in violation thereof nor is expected to be in violation thereof as a
result of the business conducted or expected to be conducted by the Company or
any subsidiary as described in the Prospectus or such person's performance of
his or her obligations to the Company or any subsidiary; and neither the Company
nor any subsidiary has received written notice that any consultant or scientific
advisor of the Company or any subsidiary is in violation of any non-competition,
non-disclosure, confidentiality or similar agreement.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally represents and warrants to each Underwriter that:
a. Such Selling Stockholder is not prompted to sell the
Securities to be sold by such Selling Stockholder pursuant to this Agreement by
any information concerning the Company or any of its subsidiaries that is not
set forth in the Prospectus or other documents filed with the Commission.
b. Such Selling Stockholder now has, and on the Closing Date
will have, or, with respect to the Securities to be sold by the Selling
Stockholders hereby upon the exercise of warrants or options, such Selling
Stockholder will have upon payment to the Company of the exercise price for such
Securities to be issued upon the exercise of such warrants or options, good and
marketable title to the Securities to be sold by such Selling Stockholder, free
and clear of any security interest, mortgage, pledge, lien, charge, encumbrance,
claim or equity, including, without limitation, any restriction on transfer.
c. Such Selling Stockholder now has, and on the Closing Date
will have, or, with respect to the Securities to be sold by the Selling
Stockholders hereby upon the exercise of warrants or options, such Selling
Stockholder will have upon payment to the Company of the exercise price for such
Securities to be issued upon the exercise of such warrants or options, full
legal right, power and authorization to sell, assign, transfer and deliver such
Securities in the manner provided in this Agreement, and upon delivery of and
payment for such Securities hereunder, the several Underwriters will acquire
good and marketable title to such Securities free and clear of any security
interest, mortgage, pledge, charge, encumbrance, claim or equity, including,
without limitation, any restriction on transfer.
d. Such Selling Stockholder has full power (corporate or other)
to enter into this Agreement and the Custody Agreement and to perform its
obligations hereunder and thereunder. This Agreement and the Custody Agreement
have been duly authorized, executed and delivered by or on behalf of such
Selling Stockholder and are the valid and binding agreements of such Selling
Stockholder enforceable against such Selling Stockholder in accordance with
their terms, except as
<PAGE>
to rights to indemnity and contribution thereunder may be limited by Federal or
state securities laws or the public policy underlying such laws and except that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether enforceability is
considered in proceeding in equity or at law).
e. Neither the sale of the Securities, the execution, delivery
or performance of this Agreement or the Custody Agreement by or on behalf of
such Selling Stockholder, nor the consummation by or on behalf of such Selling
Stockholder of the transactions contemplated hereby and thereby (i) requires any
registration, authorization, approval, qualification or consent of or with any
governmental authority, court or person by such Selling Stockholder (except such
as may be required under the 1933 Act or the 1933 Act Regulations or state
securities or Blue Sky laws of various jurisdictions in which the Securities are
being distributed or as may be required by the NASD) or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
any contract, indenture, mortgage, loan agreement, deed, trust, note, lease,
sublease, voting agreement, voting trust or other instrument or agreement to
which such Selling Stockholder is a party or by which such Selling Stockholder
is or may be bound, or violates or will violate the charter documents, by-laws,
partnership agreement or comparable governing documents of such Selling
Stockholder or any statute, law, rule, regulation, ordinance, code, decision,
directive or order applicable to such Selling Stockholder, or will result in the
creation or imposition of any security interest, mortgage, pledge, charge,
encumbrance, claim or equity upon any property or assets of such Selling
Stockholder pursuant to the terms of any contract, indenture, mortgage, loan
agreement, deed, trust, note, lease, sublease, voting agreement, voting trust or
other instrument or agreement to which such Selling Stockholder is a party or by
which such Selling Stockholder may be bound or to which any of the property or
assets of such Selling Stockholder is subject.
f. The Registration Statement and the Prospectus, insofar as
they relate to such Selling Stockholder, do not and will not contain an 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 not misleading and,
to the best of such Selling Stockholder's knowledge, each representation and
warranty of the Company is true and correct in all material respects.
g. The representations and warranties of such Selling
Stockholder in the Custody Agreement are, and on the Closing Date will be, true
and correct.
h. Such Selling Stockholder has not taken and will not take,
<PAGE>
directly or indirectly, any action designed to, or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Securities; and such
Selling Stockholder has not distributed and will not distribute any prospectus
or other offering material in connection with the offering and sale of the
Securities other than the preliminary prospectus filed with the Commission or
other materials permitted by the 1933 Act and the 1933 Act Regulations.
i. Such Selling Stockholder does not have any knowledge or any
reason to believe that the Registration Statement or the Prospectus (or any
amendment or supplement thereto) contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
j. Except with respect to Commonwealth Associates and Michael
Falk, neither the Selling Stockholder nor any of his, her or its affiliates
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, or has any other association
with (within the meaning of Article I, Section (q) of the By-Laws of the NASD),
any member firm of the NASD.
9. INDEMNIFICATION AND CONTRIBUTION.
a. The Company and Peter P. Gombrich, (the "Controlling Selling
Stockholder"), jointly and severally, agree to indemnify and hold harmless
(i) each Underwriter and (ii) each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act (any of the persons referred to
in this clause (ii) being hereinafter referred to as a "controlling person") and
(iii) the respective directors, officers, partners and employees of any of the
Underwriters or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Person") to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities and expenses whatsoever (including, without limitation, all
reasonable costs of pursuing, investigating and defending any claim, suit or
action or any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of counsel
to any Indemnified Person), directly or indirectly, caused by, related to, based
upon or arising out of or in connection with any untrue statement or
<PAGE>
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereto, including the Rule 430A Information and Rule
434 Information, if applicable, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or caused by, related to, based upon, arising
out of or in connection with any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) or any omission or alleged omission to
state therein 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, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such Underwriter furnished in writing to the Company by or on behalf
of any Underwriter through you.
b. If any action, suit or proceeding shall be brought against
any Indemnified Person in respect of which indemnity may be sought against the
Company or the Controlling Selling Stockholder, such Indemnified Person shall
promptly notify the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such Indemnified Person shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying parties have failed
to assume the defense and employ counsel or (iii) the named parties to any such
action, suit, investigation or proceeding (including any impleaded parties)
include both such Indemnified Person and the indemnifying parties and
representation of such Indemnified Person and any indemnifying party by the same
counsel would, in the reasonable judgment of the Indemnified Person, be
inappropriate due to actual or potential differing interests between them (in
which case the indemnifying party shall not have the right to assume the defense
of such action, suit or proceeding on behalf of such Indemnified Person). It is
understood, however, that the indemnifying parties shall, 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 only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Persons not having actual or
potential differing interests with you or among themselves, which firm shall be
designated in writing by the Representatives, and that all such fees and
expenses shall be reimbursed as they are incurred. The indemnifying parties
shall not be liable for any settlement of any such action, suit or proceeding
effected without their written consent, which consent shall not be unreasonably
withheld, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless any
<PAGE>
Indemnified Person, to the extent provided in the preceding paragraph, from and
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
c. Each Selling Stockholder (excluding the Controlling Selling
Stockholder) agrees, severally and not jointly, to indemnify and hold harmless
each Indemnified Person, the Company, its directors, its officers who sign the
Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the 1933 Act to the same extent as the foregoing
indemnity from the Company and the Controlling Selling Stockholder to each
Underwriter, but only with respect to the information furnished in writing by or
on behalf of such Selling Stockholder expressly for use in the Registration
Statement, the Prospectus or any preliminary prospectus, or any amendment or
supplement thereto. If any action, suit, investigation or proceeding shall be
brought against any Indemnified Person, the Company, any of its directors, any
such officer, or any such controlling person of the Company, based on the
Registration Statement, the Prospectus or any preliminary Prospectus or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Selling Stockholder pursuant to this paragraph (c), such Selling
Stockholder shall have the rights and duties given to the Company and the
Controlling Selling Stockholder by paragraph (b) above, and each Indemnified
Person, the Company, its directors, any such officer, and any such controlling
person of the Company shall have the rights and duties given to the Indemnified
Persons by paragraph (b) above.
d. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person who controls the Company within the
meaning of Section 15 of the 1933 Act and the Selling Stockholders, to the same
extent as the foregoing indemnity from the Company and the Selling Stockholders
to each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus
or any preliminary prospectus, or any amendment or supplement thereto. If any
action, suit, investigation or proceeding shall be brought against the Company,
any of its directors, any such officer, any such controlling person or any
Selling Stockholder based on the Registration Statement, the Prospectus or any
preliminary prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any Underwriter pursuant to this
paragraph (d), such Underwriter shall have the rights and duties given to the
Company and the Controlling Selling Stockholders by paragraph (b) above, and the
Company, its directors, any such officer and any such controlling person, and
the Selling Stockholders, shall have the rights and duties given to the
Indemnified Persons by paragraph (b) above.
<PAGE>
e. If the indemnification provided for in this Section 9 is
unavailable to, or insufficient to hold harmless, an indemnified party under
paragraphs (a), (c) or (d) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall 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 and the Selling
Stockholders on the one hand and the Underwriters on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law or judicial determination, 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 and the
Selling Stockholders on the one hand and the Underwriters on the other hand, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus or, if Rule 434 is used,
the corresponding location on the Term Sheet. The relative fault of the Company
and the Selling Stockholders on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders on the one hand or by the Underwriters on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The indemnity and
contribution obligations of the Company and the Selling Stockholders set forth
herein shall be in addition to any liability or obligation the Company or the
Selling Stockholders may otherwise have to any Indemnified Person.
f. The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a PRO RATA allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such
<PAGE>
action, suit or proceeding. Notwithstanding the provisions of this Section 9,
no Underwriter (or any of its related Indemnified Persons) shall be required to
contribute (whether pursuant to subsection (d) or (e) or otherwise) any amount
in excess of the underwriting discount applicable to the Securities underwritten
by such Underwriter. Notwithstanding the provisions of this Section 9, no
Selling Stockholder shall be required to contribute (whether pursuant to
subsection (a), (c) or (e) or otherwise) any amount in excess of the net
proceeds received by such Selling Stockholder from the sale of the Securities
contemplated hereby. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to the respective numbers of Securities set forth opposite their
names in Schedule II hereto (or such numbers of Securities increased as set
forth in Section 12 hereof) and not joint.
g. No indemnifying party shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such action, suit or proceeding.
h. Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 9 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Indemnified
Person, the Company, its directors or officers or the Selling Stockholders, any
director, officer or partner of a Selling Stockholder or any person controlling
the Company or any Selling Stockholder, (ii) acceptance of any Securities and
payment therefor hereunder and (iii) any termination of this Agreement.
i. The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including, without limitation, the
provisions of this Section 9, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 9 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the 1933 Act
<PAGE>
and the 1934 Act.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase the Initial Securities hereunder are subject to
the following conditions:
a. The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective on the date hereof; no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act nor shall proceedings therefor have been initiated or
threatened by the Commission. If the Company has elected to rely upon Rule
430A, Rule 430A Information previously omitted from the effective Registration
Statement pursuant to Rule 430A shall have been transmitted to the Commission
for filing pursuant to Rule 424(b) within the prescribed time period and the
Company shall have provided evidence satisfactory to the Underwriters of such
timely filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirements of Rule 430A. If the Company has elected to rely upon Rule 434, a
Term Sheet shall have been transmitted to the Commission for filing pursuant to
Rule 424(b) within the prescribed time period.
b. The Underwriters shall have received:
(i) The favorable opinion, dated as of the Closing Date, of
Graham & James LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
A. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
B. The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement.
C. To the best of their knowledge, the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required.
D. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
the Underwriting Agreement or reservations, agreements, employee
benefit plans or the exercise of convertible securities or options
referred to in the Prospectus); and the shares of issued and
outstanding capital stock of the Company, including the Common Stock,
have been duly authorized and validly issued and are fully paid and
non-assessable; and to the best of their knowledge, none of the
<PAGE>
outstanding shares of capital stock of the Company was issued in
violation of or are not otherwise subject to any preemptive rights or
other similar rights.
E. The Securities to be purchased by the Underwriters from the
Company and the shares of Common Stock to be issued to and sold by the
Selling Stockholders upon exercise of outstanding options or warrants
have been duly authorized for issuance and sale and (i) when issued
and delivered by the Company to the Underwriters pursuant to the
Underwriting Agreement against payment of the consideration set forth
in the Underwriting Agreement and (ii) in the case of shares of Common
Stock to be sold by the Selling Stockholders to the Underwriters upon
exercise of outstanding options or warrants, upon exercise and payment
to the Company of the respective exercise prices, will be validly
issued and fully paid and non-assessable; and the issuance of the
Securities is not subject to preemptive or other similar rights.
F. To the best of their knowledge and information, except as
described in the Prospectus, there are no outstanding options,
warrants or other rights granted to or by the Company to purchase
shares of Common Stock or other securities of the Company and there
are no commitments, plans or arrangements to issue any shares of
Common Stock or other securities.
G. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
H. The form of certificate used to evidence each of the
Securities is in due and proper form and complies with all applicable
statutory requirements.
I. To the best of their knowledge, there are no legal or
governmental proceedings pending or threatened which are required to
be disclosed in the Registration Statement other than those disclosed
therein, and all pending legal or governmental proceedings known to us
to which the Company or the Subsidiary is a party or to which any of
their respective properties is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material.
J. The information in the Prospectus under "Risk Factors--
Shares Eligible for Future Sale," "Business--Cytopathology--
Cytopathology Sales and Marketing," "--Microbiology--Microbiology
Products--alamarBlue," "--Microbiology--Microbiology Products--KB
Reader," "--Facilities," "--Legal Proceedings," "Management--Director
Compensation," "--Employment, Severance and Separation Agreements," "-
-Stock Option Plans," "Certain Relationships and Related Transactions"
and "Description of Capital Stock" and in the Registration Statement
under Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, documents or pro-
<PAGE>
ceedings, or legal conclusions, has been reviewed by them and is
correct in all material respects and fairly and correctly presents the
information called for with respect thereto.
K. To the best of their knowledge, there are no contracts,
indentures, mortgages, loan agreements, deeds, trusts, notes, leases,
subleases, voting trusts, voting agreements or other instruments or
agreements required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits or incorporated
by reference thereto and the descriptions thereof or references
thereto are correct; and to the best of their knowledge, no default
exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, deed, trust, note,
lease, sublease, voting trust, voting agreement or other instrument or
agreement of the Company or any of its subsidiaries.
L. The Company has the corporate power and corporate authority
to execute and deliver this Agreement and each of the Related
Agreements and to perform its respective obligations contemplated
hereby and thereby. The execution and delivery of this Agreement and
each of the Related Agreements by the Company and the consummation of
the transactions contemplated hereby and thereby have been duly
authorized by requisite corporate action on the part of the Company.
This Agreement and each of the Related Agreements have been duly
executed and delivered by the Company and each of this Agreement and
the Related Agreements is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except that enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in proceeding in
equity or at law).
M. No authorization, approval, consent or order of any court or
governmental authority or agency is required in connection with the
offering, issuance or sale of the Securities to the Underwriters,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or state securities or blue sky laws or the rules and
regulations of the NASD; and the execution, delivery and performance
of this Agreement and each of the Related Agreements and the
consummation of the transactions contemplated herein and therein and
the compliance by the Company with its obligations hereunder and
thereunder will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any material contract, indenture,
mortgage, loan agreement, note, deed, trust, lease, sublease, voting
trust, voting agreement or other instrument or agreement
<PAGE>
known to them after due inquiry to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the charter or bylaws of the Company or any of
its subsidiaries, or any applicable statute, law, rule, regulation,
ordinance, code, decision, directive or order.
N. To the best of their knowledge and information, the Company
and its subsidiaries possess and are in compliance with all permits
issued by the appropriate regulatory body or agency, including the
Food and Drug Administration and any foreign regulatory agency
performing similar functions, necessary to conduct the businesses now
operated by them, except where the failure to so possess or comply
with any permit would not have, singly or in the aggregate, a material
adverse effect on the business or condition, financial or otherwise,
of the Company and its subsidiaries considered as one enterprise. To
the best of their knowledge and information, there are no proceedings,
pending or threatened, which if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the business or condition, financial or otherwise, of the Company and
its subsidiaries considered as one enterprise.
O. Except as described in the Prospectus, to the best of their
knowledge, there are no persons with registration or other
similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by
the Company under the 1933 Act.
P. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Q. All sales of the Company's capital stock during the three
years immediately prior to the date hereof were at all relevant times
duly registered or exempt from the registration requirements of the
1933 Act.
R. To the best of their knowledge, the Company and its
subsidiaries are in compliance with, and conduct their respective
businesses in conformity with, all applicable laws and regulations
relating to the operation of its business as described in the
Registration Statement, except to the extent that any failure so to
comply or conform would not have a material adverse effect upon the
business or condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise.
S. The Registration Statement has become effective under the
1933 Act; any required filing of the Prospectus, and any supplements
thereto or the Term Sheet, pursuant to Rule 424(b) and if applicable,
Rule 434, has been made in the manner and within the time period
<PAGE>
required; and to the best of their knowledge and information, no stop
order suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceedings therefor have been
instituted or are pending or threatened under the 1933 Act.
T. The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which no
opinion need be rendered) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations.
U. The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which no opinion need be
rendered), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the 1933 Act or the 1934 Act, as
applicable, and the rules and regulations of the Commission
thereunder.
V. If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it
became effective.
(ii) The favorable opinion, dated as of the Closing Date,
of Townsend and Townsend and Crew LLP, patent counsel for the Company
with respect to matters in connection with the Alamar microbiology
technology of the Company and the trade secret litigation which
occurred from late 1994 until early 1996, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
A. To the best of their knowledge, the
information in the Prospectus under "Risk Factors--Protection of
Intellectual Property," and "Business--Intellectual Property,"
insofar as it relates to patent matters in connection with the
Alamar microbiology technology of the Company and the trade secret
litigation which occurred from late 1994 until early 1996, to the
extent that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has be
en reviewed by them and is correct in all material respects and
fairly and correctly presents the information called for with respect
thereto.
B. To the best of their knowledge, there are no
pending, threatened or contemplated legal or governmental
proceedings, or allegations on
<PAGE>
the part of any person of infringement, relating to patent rights,
trade secrets, trademarks, service marks, copyrights or other
proprietary information or know-how of the Company.
C. To the best of their knowledge, the Alamar
microbiology technology of the Company is not infringing on or
otherwise violating any patents, trade secrets, trademarks, service
marks, copyrights or other proprietary information or know-how of
any persons, except as set forth in the Prospectus, and to the best
of their knowledge, without conducting any independent investigation,
no person is infringing on or otherwise violating any patents of the
Company in a way in which could materially affect the use thereof by
the Company.
D. To the best of their knowledge, pursuant to a
settlement agreement (the "Settlement Agreement") between the Company
and Difco Laboratories, Inc. ("Difco"), Difco has covenanted not to
sue the Company and its direct and indirect wholly-owned subsidiaries
and, subject to certain restrictions, their successors, for
infringement of U.S. Patent No. 5,164,301 (the "'301 Patent"),
assigned to Difco, for the manufacture, sale, offer for sale, use,
import or other disposal of any technology described in the '301
Patent. The Settlement Agreement is duly executed, validly binding
and enforceable in accordance with its terms and, to the best of
their knowledge, the Company is not in default (declared or
undeclared) of any material provision of the Settlement Agreement.
E. The Company is listed in the records of the
United States Patent and Trademark Office ("PTO") as the sole
assignee of record of U.S. Patent No. 5,501,959. To the best of
their knowledge, there are no asserted or unasserted claims of any
persons relating to the scope or ownership of such patent, there are
no liens which have been filed against such patent and there are no
material defects of form in the preparation or filing of such patent.
F. The Company is listed in the records of the
appropriate foreign patent offices as the sole assignee of record of
European Patent No. 0454784 (herein called the "Foreign Patent") and
Japanese Patent Application No. 503076/90 and Canadian Patent
Application No. 2044265-4 (herein called the "Foreign Applications").
To the best of their knowledge, there are no asserted or unasserted
claims of any persons relating to the scope or ownership of the
Foreign Patent or the Foreign Applications, there are no liens which
have been filed against the Foreign Patent or the Foreign
Applications, there are no material defects of form in the
preparation or filing of the Foreign Applications, the Foreign
Applications are being diligently prosecuted, and none of the
Foreign Applications has been finally rejected or abandoned.
G. Nothing has come to their attention that leads
them to believe that the Foreign Applications will not eventuate in
issued patents, or that any patents issued in respect of any such
Foreign Applications
<PAGE>
will not be valid or will not afford the Company reasonable patent
protection relative to the claimed subject matter thereof.
H. To the best of their knowledge, all pertinent
prior art references known to the Company or its counsel during the
prosecution of the applications which resulted in the issuance of
U.S. Patent No. 5,501,959 were disclosed to the PTO and, to the
best of their knowledge, neither such counsel nor the Company made
any misrepresentation to, or concealed any material fact from, the
PTO during such prosecution.
In giving their opinions required by subsection (b)(ii) of this
Section 10, Townsend and Townsend and Crew LLP shall additionally state that
nothing has come to their attention that leads them to believe that, with
respect to the subject matter of the foregoing opinions, the Registration
Statement, at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus, as of its date (unless the term "Prospectus" refers to a prospectus
which has been provided to the Underwriters by the Company for use in connection
with the offering of the Securities which differs from the Prospectus on file at
the Commission at the time the Registration Statement becomes effective, in
which case at the time it is first provided to the Underwriters for such use) or
at the Closing Date or the Option Closing Date, as the case may be, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(iii) The favorable opinion, dated as of the Closing Date, of
Banner & Allegretti, Ltd., patent counsel for the Company other than with
respect to patent matters relating to the Alamar microbiology technology
and the trade secret litigation which occurred from late 1994 until early
1996, in form and substance satisfactory to counsel for the Underwriters,
to the effect that:
A. To the best of their knowledge, the information in the
Prospectus under "Risk Factors--Protection of Intellectual Property,"
"--Microbiology--Microbiology Products--KB Reader" and "--Intellectual
Property," other than with respect to patent matters relating to the
Alamar microbiology technology and the trade secret litigation which
occurred from late 1994 until early 1996, to the extent that it
constitutes matters of intellectual property law, summaries of
intellectual property legal matters, documents or proceedings, or
legal conclusions relating to intellectual property, has been reviewed
by them and is correct in all material respects and fairly and
correctly presents the information called for with respect thereto.
B. To the best of their knowledge, there are no pending or
threatened
<PAGE>
legal or governmental proceedings, nor allegations on the part of any
person of infringement, relating to patent rights, trade secrets,
trademarks, service marks, copyrights or other proprietary information
or know-how of the Company and, to the best of their knowledge, no
such proceedings are threatened or contemplated.
C. To the best of their knowledge, the Company is not
infringing on or otherwise violating any patents, trade secrets,
trademarks, service marks, copyrights or other proprietary information
or know-how of any persons, and no person is infringing on or
otherwise violating any of the Company's patents, trade secrets,
trademarks, service marks, copyrights or other proprietary information
or know-how of the Company in a way in which could materially affect
the use thereof by the Company.
D. To the best of their knowledge, the Company owns or
possesses sufficient licenses or other rights to use all patents,
trade secrets, trademarks, service marks or other proprietary
information or know-how necessary to conduct the business now being or
proposed to be conducted by the Company as described in the
Prospectus.
E. Documents have been submitted to the United States Patent
and Trademark Office ("PTO") sufficient to cause the Company to be
listed as the sole assignee of record of each of the applications
listed on Schedule I hereto (herein called the "Applications"). To
the best of their knowledge, there are no asserted or unasserted
claims of any persons relating to the scope or ownership of the
Applications, there are no liens which have been filed against any of
the Applications, there are no material defects of form in the
preparation or filing of the Applications, the Applications are being
diligently prosecuted, and none of the Applications has been finally
rejected or abandoned.
F. Documents have been submitted to the appropriate foreign
patent offices sufficient to cause the Company to be listed as the
sole assignee of record of each of the foreign applications listed on
Schedule II hereto (herein called the "Foreign Applications"). To the
best of their knowledge, there are no asserted or unasserted claims of
any persons relating to the scope or ownership of the Foreign
Applications, there are no liens which have been filed against any of
the Foreign Applications, there are no material defects of form in the
preparation or filing of the Foreign Applications, the Foreign
Applications are being diligently prosecuted, and none of the Foreign
Applications has been finally rejected or abandoned.
G. Nothing has come to their attention that leads them to
believe that the Applications and the Foreign Applications will not
eventuate in issued patents, or that any patents issued in respect of
any such Applications or Foreign Applications will not be valid or
will not afford the Company reasonable patent protection relative to
the subject matter thereof.
<PAGE>
H. The Company is the non-exclusive licensee of the United
States and foreign patents and patent applications listed on Schedule
III and is the exclusive licensee of the United States and foreign
patents and patent applications listed on Schedule IV. All such
licenses are duly executed, validly binding and enforceable in
accordance with their terms and, to the best of their knowledge, the
Company is not in default (declared or undeclared) of any material
provision of any such licenses.
I. To the best of their knowledge, all material prior art
references known to the Company or its counsel during the prosecution
of the Applications were disclosed to the PTO and, to the best of
their knowledge, neither such counsel nor the Company made any
misrepresentation to, or concealed any material fact from, the PTO
during such prosecution.
J. To the best of their knowledge, the Company takes security
measures adequate to assert trade secret protection in its non-
patented technology.
K. The agreements executed by the Company's employees,
consultants and other advisors respecting trade secrets,
confidentiality, or intellectual property rights are valid, binding
and enforceable in accordance with their express terms.
L. After due inquiry, we believe that the technology necessary
to conduct the business now being and proposed to be conducted by the
Company as described in the Prospectus does not infringe upon or
misappropriate any proprietary rights originating with the Swedish
Fund for Industrial Development or Vanellus AB.
In giving their opinions required by subsection (b)(iii) of this
Section 10, Banner & Allegretti, Ltd. shall additionally state that nothing has
come to their attention that leads them to believe that, with respect to
licenses, patents, trade secrets, copyrights or other proprietary information or
know-how owned or used by the Company which are the subject of the foregoing
opinions, the Registration Statement, at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date (unless the term "Prospectus"
refers to a prospectus which has been provided to the Underwriters by the
Company for use in connection with the offering of the Securities which differs
from the Prospectus on file at the Commission at the time the Registration
Statement becomes effective, in which case at the time it is first provided to
the Underwriters for such use) or at the Closing Date or the Option Closing
Date, as the case may be, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
<PAGE>
(iv) The favorable opinion, dated as of the Closing Date, of
McKenna & Cuneo, L.L.P., regulatory counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
A. The statements in the Registration Statement under the
captions "Risk Factors--Government Regulation" and "Business--
Government Regulation," to the best of such counsel's knowledge and
belief, are accurate and complete statements or summaries of the
United States Food and Drug Administration ("FDA") matters therein set
forth.
B. Such counsel is not aware of any adverse legal or
governmental proceedings pending or threatened relating to products or
potential products of the Company, or any such proceedings threatened
or contemplated by governmental authorities or other.
C. To the best of their knowledge and information, the Company
and its subsidiaries are in compliance with, and conduct their
respective businesses in conformity with, all applicable FDA laws and
regulations relating to the operation of its business as described in
the Registration Statement, except to the extent that any failure so
to comply or conform would not have a material adverse effect upon the
business or condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise.
In giving their opinions required by subsection (b)(iv) of this
Section 10, McKenna & Cuneo, L.L.P. shall additionally state that nothing has
come to their attention that leads them to believe that, with respect to
regulatory matters of the Company which are the subject of the foregoing
opinions, the Registration Statement, at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date (unless the term "Prospectus"
refers to a prospectus which has been provided to the Underwriters by the
Company for use in connection with the offering of the Securities which differs
from the Prospectus on file at the Commission at the time the Registration
Statement becomes effective, in which case at the time it is first provided to
the Underwriters for such use) or at the Closing Date or the Option Closing
Date, as the case may be, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(v) The favorable opinion, dated as of the Closing Date, of
Skadden, Arps, Slate, Meagher & Flom, counsel for the Underwriters with
respect to the issuance and sale of the Securities, the Registration
Statement and the Prospectus and such other related matters as the
Underwriters shall reasonably request.
<PAGE>
(vi) The favorable opinion, dated as of the Closing Date, of
Graham & James LLP, counsel for the Selling Stockholders with respect to
the sale of the Securities, the Registration Statement and the Prospectus
and such related matters as the Underwriter shall reasonably request, in
form and substance satisfactory to counsel for the Underwriters, to the
effect that:
A. Each Custody Agreement has been duly executed and delivered
by each Selling Stockholder and the execution and delivery of this
Agreement on behalf of each of the Selling Stockholders by the
Attorneys-in-Fact, or either of them, has been duly authorized by all
necessary action (whether corporate or other) by each Selling
Stockholder and constitutes legal, valid, binding and enforceable
instruments of each of the Selling Stockholders. The Underwriting
Agreement had been duly authorized, executed and delivered by or on
behalf of each Selling Stockholder.
B. To the best of their knowledge, each Selling Stockholder has
full right, power and authority and any approval required by law to
sell, transfer and deliver the Securities to be offered by such
Selling Stockholder pursuant to this Agreement.
C. By delivery of a certificate or certificates representing
the Securities to be offered by a Selling Stockholder pursuant to this
Agreement, and upon the receipt of payment therefor as contemplated
herein, such Selling Stockholder will transfer to the Underwriters who
have purchased such Securities good and marketable title to such
Securities, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
D. The execution and delivery of this Agreement and the Custody
Agreement by the Selling Stockholders and the consummation of the
transactions contemplated herein and therein will not conflict with,
constitute a breach of, or a default under any material contract,
indenture, mortgage, loan agreement, deed, trust, note, lease,
sublease, voting trust, voting agreement or other instrument or
agreement known to such counsel to which any Selling Stockholder is a
party or by which any of them or any of their assets or property is
bound, or violate the charter documents, by-laws, partnership
agreement or comparable governing document of any Selling Stockholders
or any statute, law, rule, regulation, ordinance, code, decision,
directive or order known to such counsel to be applicable to any
Selling Stockholder or to any of the property or assets of any Selling
Stockholder, except for any such conflicts, breaches, defaults or
violations that would not have a material adverse effect on the
ability of such Selling Stockholder to consummate the transactions
contemplated by this Agreement and by the Custody Agreement.
E. Each Attorney-in-Fact has been authorized by the Selling
Stockholders to deliver the Securities on behalf of the Selling
Stockholders in accordance with the terms of this Agreement.
<PAGE>
(vii) In giving their opinions required by subsections (b)(i) and
(b)(vi) and (b)(v), respectively, of this Section 10, Graham & James LLP
and Skadden, Arps, Slate, Meagher & Flom shall each additionally state that
nothing has come to their attention that leads them to believe that the
Registration Statement (except for financial statements and schedules and
other financial information included therein, as to which counsel need make
no statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (except for financial statements and
schedules and other financial information included therein, as to which
counsel need make no statement), as of its date (unless the term
"Prospectus" refers to a prospectus which has been provided to the
Underwriters by the Company for use in connection with the offering of the
Securities which differs from the Prospectus on file at the Commission at
the time the Registration Statement becomes effective, in which case at the
time it is first provided to the Underwriters for such use) or at the
Closing Date or the Option Closing Date, as the case may be, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
c. (i) There shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) the
representations and warranties of the Company in Section 7 hereof shall be true
and correct with the same force and effect as though expressly made at and as of
the Closing Date, except to the extent that any such representation or warranty
relates to a specific date, (iii) the Company shall have complied in all
material respects with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Date, (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission and (v) the Representatives shall have received a certificate, dated
the Closing Date and signed by the President or any Vice President and the chief
financial or accounting officer of the Company to the effect set forth in
clauses (i), (ii), (iii) and (iv) above.
d. At the time of the execution of this Agreement, the
Underwriters shall have received from KPMG Peat Marwick LLP a letter dated such
date, in form and substance satisfactory to the Underwriters, together with
signed or reproduced copies of such letter for each
<PAGE>
of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
e. The Underwriters shall have received from KPMG Peat Marwick
LLP a letter, dated as of the Closing Date, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not more
than three business days prior to the Closing Date.
f. The Securities shall have been approved for quotation on
NASDAQ.
g. The representations and warranties of each Selling
Stockholder in Section 8 shall be true and correct with the same force and
effect as though expressly made at and as of the Closing Date, except to the
extent that any such representation or warranty relates to a specific date; and
each Selling Stockholder shall have complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Date. The Representatives shall have received a
certificate, dated as of the Closing Date and signed by or on behalf of each
Selling Stockholder, to the effect set forth in this subsection g.
h. In the event that the Underwriters exercise their option
provided in Section 2 hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company hereunder shall
be true and correct as of the Option Closing Date and, at the relevant Option
Closing Date, the Underwriters shall have received:
(1) A certificate, dated such Option Closing Date, of the
President or any Vice President of the Company and of the chief financial
or accounting officer of the Company confirming that the certificate
delivered at the Closing Date pursuant to Section 10(c) hereof remains true
and correct as of such Option Closing Date.
(2) The favorable opinion of Graham & James LLP, in form
and substance satisfactory to counsel for the Underwriters, dated such
Option Closing Date, relating to the Option Securities to be purchased on
such Option Closing Date and otherwise to the same effect as the opinion
required by Sections 10(b)(i) and 10(b)(vii) hereof.
(3) The favorable opinion of Townsend and Townsend and Crew
LLP, in form and substance satisfactory to counsel for the Underwriters,
dated such Option Closing Date to the same effect as the opinion required
by Section 10(b)(ii) hereof.
<PAGE>
(4) The favorable opinion of Banner & Allegretti, Ltd., in
form and substance satisfactory to counsel for the Underwriters, dated such
Option Closing Date to the same effect as the opinion required by Section
10(b)(iii) hereof.
(5) The favorable opinion of McKenna & Cuneo, L.L.P., in
form and substance satisfactory to counsel for the Underwriters, dated such
Option Closing Date to the same effect as the opinion required by Section
10(b)(iv) hereof.
(6) The favorable opinion of Skadden, Arps, Slate, Meagher
& Flom, counsel for the Underwriters, dated such Option Closing Date,
relating to the Option Securities to be purchased on such Option Closing
Date and otherwise to the same effect as the opinion required by Sections
10(b)(v) and 10(b)(vii) hereof.
(7) A letter from KPMG Peat Marwick LLP in form and
substance satisfactory to the Underwriters and dated such Option Closing
Date, substantially the same in form and substance as the letter furnished
to the Underwriters pursuant to Section 10(e) hereof, except that the
"specified date" in the letter furnished pursuant to this Section 10(h)(7)
shall be a date not more than three business days prior to such Option
Closing Date.
i. At the date of this Agreement, the Underwriters shall have
received lock-up agreements in form and substance satisfactory to the
Underwriters by the persons listed on Schedule B hereto.
j. Counsel for the Underwriters shall have been furnished with
such documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties or the fulfillment of any of the conditions herein
contained; and all proceedings taken by the Company in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the Underwriters and counsel for the Underwriters.
k. The NASD shall not have raised any objection with respect to
the fairness and reasonableness of the underwriting terms and arrangements.
l. Any certificate or document signed by any officer of the
Company or any Attorney-in-Fact or any Selling Stockholder and delivered to you,
as Representatives of the Underwriters, or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Company, the Selling
Stockholders or the particular Selling Stockholder, as the case may be, to each
Underwriter as to the statements made therein.
m. If any condition specified in this Section 10 shall not have
been
<PAGE>
fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any condition to the purchase of Option Securities, on an Option Closing Date
which is after the Closing Date, the obligations of the several Underwriters to
purchase the relevant Option Securities, may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing Date
or such an Option Closing Date as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section
11 and except that Sections 7, 8 and 9 shall survive any such termination and
remain in full force and effect.
11. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it and
the Selling Stockholders of their respective obligations hereunder: (i) the
preparation, printing or reproduction, and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto),
each preliminary prospectus, the Prospectus, and each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight and charges for counting and packaging) of such copies of
the Registration Statement, each preliminary prospectus, the Prospectus, and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Securities; (iii) the
preparation, printing, authentication, issuance and delivery of certificates for
the Securities, including any stamp taxes in connection with the original
issuance and sale of the Securities; (iv) the printing (or reproduction) and
delivery of this Agreement, the preliminary and supplemental Blue Sky Memoranda
and all other agreements or documents printed (or reproduced) and delivered in
connection with the original issuance and sale of the Securities; (v) the
quotation of the Securities on NASDAQ; (vi) the registration or qualification of
the Securities for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 5(g) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Underwriters relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); (vii)
the filing fees and the reasonable fees and expenses of counsel for the
Underwriters incident to securing any required review by the NASD; (viii) the
fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company and the Selling
Stockholders; and (ix) the fees and expenses of the Custodian in connection with
the performance of its duties under the Custody Agreements.
<PAGE>
If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 or pursuant to clauses (ii), (iii), (iv) and (v)
of Section 13 hereof) or if this Agreement shall be terminated by the
Underwriters because of any failure or refusal on the part of the Company or any
of the Selling Stockholders to comply, in any material respect, with the terms
or fulfill, in any material respect, any of the conditions of this Agreement,
the Company agrees to reimburse the Representatives for all reasonable
out-of-pocket expenses (including reasonable fees and expenses of counsel for
the Underwriters) incurred by you in connection herewith.
12. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by or on behalf of the
parties hereto; or (ii) if, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Securities
may commence, when notification of the effectiveness of the Registration
Statement or such post-effective amendment has been released by the Commission.
Until such time as this Agreement shall have become effective, it may be
terminated by the Company, by notifying you, or by you, as Representatives of
the several Underwriters, by notifying the Company and the Selling Stockholders.
If one or more of the Underwriters shall fail on the Closing Date to
purchase the Initial Securities which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
a. if the number of Defaulted Securities does not exceed 10% of
the number of Initial Securities, the non-defaulting Underwriters shall be
obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
b. if the number of Defaulted Securities exceeds 10% of the
number of Initial Securities, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in
<PAGE>
a termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 12.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. TERMINATION OF AGREEMENT. a. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Date
or Option Closing Date, as the case may be, (i) if there has been, since the
date of this Agreement or since the respective dates as of which information is
given in the Registration Statement, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, (ii) if
there has occurred any change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which is such as to make it, in your judgement,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, (iii) if trading in the Common Stock has been
suspended by the Commission, or if trading generally on the American Stock
Exchange, the New York Stock Exchange or in the over-the-counter markets has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange or
markets or by order of the Commission or any other governmental authority, or if
a banking moratorium has been declared by either Federal, New York or Illinois
authorities, (iv) the enactment, publication, decree or other promulgation of
any Federal or state statute, regulation, rule or order of any court or other
governmental authority which in your judgement materially and adversely affects
or may materially or adversely affect the business or operations of the Company
and its subsidiaries or (v) the taking of any action by any Federal, state or
local government or agency in respect of its monetary or fiscal affairs which in
your judgement has a material adverse effect on the securities markets in the
United States, and would in your judgement make it impracticable or inadvisable
to market the Securities or to enforce any contract for the sale thereof.
Notice of such termination may be given by telegram, telecopy or telephone and
shall be subsequently confirmed by letter.
b. If this Agreement is terminated pursuant to this Section 13,
such termination shall be without liability of any party to any other
<PAGE>
party except as provided in Section 11 and provided further that Sections 7, 8
and 9 shall survive such termination and remain in full force and effect.
14. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover page, and the statements under the caption "Underwriting" in
any preliminary prospectus and in the Prospectus constitute the only information
furnished by or on behalf of the Underwriters through you as such information is
referred to in Sections 7(a) and 9 hereof.
15. MISCELLANEOUS. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the Company at the office of the
Company or the Selling Stockholders at AccuMed International, Inc., 900 North
Franklin Street, Suite 401, Chicago, Illinois 60610, Attention: Peter P.
Gombrich, President and Chief Executive Officer; or (ii) if to you, as
Representatives of the several Underwriters, care of Tucker Anthony
Incorporated, One World Trade Center, 200 Liberty Street, Third Floor, New York,
New York 10281, Attention: Syndicate Department.
16. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois applicable
to contracts made and to be performed within the State of Illinois. This
Agreement may be signed in various counterparts which together constitute one
and the same instrument. If signed in counterparts, this Agreement shall not
become effective unless at least one counterpart hereof shall have been executed
and delivered on behalf of each party hereto.
17. SUCCESSORS. This Agreement has been and is made solely for the
benefit of the several Underwriters, the Company, its directors and officers,
the other persons referred to in Section 9 hereof and the Selling Stockholder
and their respective successors and assigns, to the extent provided herein, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any Underwriter of any
of the Securities in his status as such purchaser.
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
ACCUMED INTERNATIONAL, INC.
By:
---------------------------------
Peter P. Gombrich
President and Chief
Executive Officer
Each of the Selling Stockholders named in
Schedule I hereto
By:
---------------------------------
Peter P. Gombrich
Attorney-in-Fact
By:
---------------------------------
Jude Augustine
Attorney-in-Fact
TUCKER ANTHONY INCORPORATED
VECTOR SECURITIES INTERNATIONAL, INC.
As Representatives of the Several Underwriters
By: TUCKER ANTHONY INCORPORATED
By:
--------------------------------------
Vice President
<PAGE>
SCHEDULE I
ACCUMED INTERNATIONAL, INC.
Selling Stockholders Number of Initial Securities
Peter Gombrich 250,000
Robert Priddy 200,000
Clarion Capital Corp. 150,000
Commonwealth Associates 100,000
Michael Falk 100,000
Gallagher Investment Corp. 72,000
Richard Friedman 71,630
Hultquist Capital LLC 54,327
John Robinson 50,000
G&G Diagnostics LP I 50,000
Fred Kassner 48,000
John H. Abeles 41,020
Andrew B. Hart 40,000
Charles Potter 40,000
William R. and Barbara J. Schoen 40,000
George B. and Anna M. Pocisk 36,000
Ann F. Gallagher 35,000
Christopher C. Gallagher 35,000
Vincent LaBarbara 30,000
J.A. Cardwell 30,000
John Luck 30,000
G & G Dispensing, Inc. 28,000
Anne Falk 25,000
American Equities Overseas, Inc. 25,000
Jack H. Halperin 20,000
Frederick J. Oswald 20,000
James A. Cardwell, Jr. 20,000
Broadmark Capital Corporation 15,600
P.L. Thomas Group, Inc. 15,500
Richard Corbin 15,000
Leslie Hannefy 15,000
Michael Burke 12,000
Alan Hammerman 12,000
Stephen Warner 11,379
Murray Segal 10,298
Richard A. Voell 10,000
Shiela Y. Schiller 10,000
Suzanne Schiller 10,000
Cathy Ross 10,000
Joel S. Kanter 9,215
Philip L. Thomas 8,500
Leonard M. Schiller 8,000
Hamilton T. Bailey 8,000
Joseph L. Schocken 7,895
Donald M. Earhart 7,700
<PAGE>
Paul Lavallee 7,500
Joseph D. Ferrone, M.D. 6,400
Alan Ebler 6,000
David Panvelle 6,000
Peggy Howard 6,000
Peter Korreng 6,000
Sharon Gignac 6,000
Paul Goldenheim 5,000
Robert O'Sullivan 5,000
Henry T. Wilson 4,050
Wertheimer Partnership 4,000
Keith Rosenbloom 4,000
Robert Tucker 3,530
Basil Ascuitto 1,988
Marc Siegel 1,988
Alan C. and Linda Alhadeff 1,906
Leslie Group 1,788
Marco Giudice 1,367
Vincent Ricciardi 1,367
Russell Bailenson 1,000
Eric Rand 597
Total 1,918,545
---------
---------
<PAGE>
SCHEDULE II
ACCUMED INTERNATIONAL, INC.
Number of Initial Number of Initial Total Number of Ini-
Securities to be Securities to be tial Securities to
Purchased from Purchased from the be Purchased under
Underwriter the Company Selling Stockholders the Agreement
- ----------- ----------------- -------------------- --------------------
Tucker Anthony
Incorporated
Vector Securities
International, Inc.
<PAGE>
Exhibit 10.31
O.E.M. SUPPLY AGREEMENT
BETWEEN
OLYMPUS AMERICA INC.,
PRECISION INSTRUMENT DIVISION
AND
ACCUMED INTERNATIONAL, INC.
May 31, 1996
<PAGE>
O.E.M. SUPPLY AGREEMENT
AGREEMENT made as of the 31st day of May, 1996, by and between ACCUMED
INTERNATIONAL, INC., a company organized and existing under the laws of Delaware
and having its principal office at 920 N. Franklin Street, Suite 402, Chicago,
Illinois 60610 ("VENDOR"), and OLYMPUS AMERICA INC.-Precision Instrument
Division, a company organized and existing under the laws of New York and having
its principal office at Two Corporate Center Drive, Melville, New York 11747-
3157. ("OLYMPUS")
W I T N E S S E T H:
WHEREAS, VENDOR designs and manufactures IN VITRO diagnostic products for
hospitals, physicians, and clinical laboratories; and
WHEREAS, OLYMPUS is a recognized distributor and supplier of medical and
scientific equipment within the Territory (as defined in Section 1.16); and
WHEREAS, OLYMPUS desires to engage in the purchase of the Products (as
defined in Section 1.11) from VENDOR for the purpose of resale within the
Territory; and
WHEREAS, VENDOR IS willing to sell the products to OLYMPUS on an exclusive
basis within and for resale in the territory and on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
promises hereinafter set forth, the parties agree as follows:
ARTICLE 1. DEFINITIONS.
1.1 "Accessories" shall mean the accessories to the systems, a list and
description of which is contained in SCHEDULE 1.11 attached hereto (which
Schedule may be amended from time to time and at any time upon mutual written
agreement) .
1.2 "Affiliate" shall mean a corporation or, other entity that controls,
is controlled by or is under common control with, the designated party.
"Control" shall mean the ownership, directly or indirectly, through one or more
intermediaries, of at least 49% of the shares of stock entitled to vote for the
election of directors in the case of a corporation (or comparable officers or
representatives of the particular entity), or at least 49% of the interest in
profits in the case of a business entity other than a corporation, except that
in any country of incorporation or registration where the maximum permitted by
law is less than 49%, such lower maximum permitted percent shall be substituted.
<PAGE>
1.3 "Agreement" shall mean this O.E.M. Supply Agreement, including the
Recitals, Schedules, and Exhibits hereto, as it may be amended or supplemented
from time to time in accordance with its terms.
1.4 "Agreement Term" shall have the meaning set forth in Section 7.1.
1.5 "Business Day" shall mean any day which is not a Saturday, Sunday, or
bank holiday in the State of New York.
1.6 "Consumables" shall mean the consumables of the Systems, a list and
description of which is contained in SCHEDULE 1.1 attached hereto (which
Schedule may be amended from time to time and at any time upon mutual written
agreement).
1.7 "Effective Date" shall mean the date first above written.
1.8 "FCC" shall mean the United States Federal Communications Commission.
1.9 "FDA" shall mean the United States Food and Drug Administration.
1.10 "Intellectual Property" shall have the meaning set forth in Section
5.6.
1.11 "Products" shall mean, collectively, the Systems, the Accessories
thereto and Consumables thereof; the user and calibration instruction manuals,
user and field service guides and the like; and any Product Changes.
1.12 "Product Changes" shall mean any material changes, improvements,
alterations, modifications, upgrades, new generations, and substitutions to or
of the Products or the Products' labelling, relating to the form, fit, function,
or appearance of the Products.
1.13 "Quarterly Minimum(s)" shall have the meaning set forth in Section
4.1.
1.14 "Recall" shall have the meaning set forth in Section 3.9.
1.15 "Systems" shall mean the AcCell-TM- systems, a list and description of
which is contained in SCHEDULE 1.11 attached hereto (which Schedule may be
amended from time to time and at any time upon mutual written agreement).
2
<PAGE>
1.16 "Territory" shall mean the Western Hemisphere and Alaska and Hawaii.
1.17 "UL" shall mean Underwriters' Laboratories.
1.18 "Yearly Forecast(s)" shall have the meaning set forth in Section 4.1.
1.19 THE TERM "SALE" OR "RESALE" (IN ANY TENSE OR FORM), WHENEVER USED IN
THIS AGREEMENT, SHALL MEAN LICENSE IN THE CASE OF SOFTWARE PRODUCTS.
ARTICLE 2. PURCHASE AND SALE.
2.1 GENERAL. (a) During the Agreement Term, VENDOR agrees to sell the
Products exclusively to OLYMPUS and OLYMPUS may purchase the Products from
VENDOR (only if OLYMPUS submits a purchase order therefor) in accordance with
and subject to the terms and conditions of this Agreement. Notwithstanding
the foregoing, VENDOR may solicit purchases of the Systems within the
Territory in accordance with the following guidelines:
(i) VENDOR shall inform OLYMPUS prior to each solicitation
effort and will fully involve OLYMPUS, the pertinent OLYMPUS
dealer, or other OLYMPUS representative in all such
solicitation and related ensuing activities.
(ii) All quotations and purchase orders shall be generated by and
submitted to (as the case may be) OLYMPUS.
(iii) All sales generated as a result of VENDOR'S solicitation
efforts will be treated as OLYMPUS sales for all purposes,
including but not limited to satisfaction of Yearly
Forecasts and Quarterly Minimums.
(iv) Within the Territory, VENDOR shall promote only OLYMPUS
microscopes in conjunction with all Systems to be sold with
an integrated microscope.
(v) VENDOR shall receive a fee of (x) [ * ] of the sale
price to the end-user for each Model 2000 System, bar code
reader, and automated dotter sale, and (y) [ * ] of
the sale price to the end-user for each Model 2001 System,
bar code reader, and automated dotter sale; generated
substantially as a result of VENDOR'S
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
3
<PAGE>
solicitation efforts and related ensuing activities,
including but not limited to demonstration, installation,
and initial end-user training, each as requested by OLYMPUS
in OLYMPUS'S sole and absolute discretion.
Except as set forth in this Section, VENDOR shall not promote, market, sell,
license, or distribute (directly or indirectly) the Products or products
substantially similar to or competitive with the Products within the Territory.
(B) OLYMPUS shall not (by itself or with others) market, sell, or
distribute products within the Territory that are competitive with the Products
("Competitive Products"), PROVIDED that (i) the Products are competitive with
respect to price, design, features, and quality to the Competitive Products, and
(ii) VENDOR is not in default under this Agreement.
2.2 LICENSE. VENDOR hereby unconditionally and irrevocably grants to
OLYMPUS and its Affiliates a royalty-free, fully paid-up exclusive right and
license under VENDOR's Intellectual Property, to use, market, sell, rent, lease,
grant sublicenses to end-users, and/or otherwise dispose of (or have others do
any of the foregoing on OLYMPUS's behalf) the Products within the Territory.
OLYMPUS shall determine all terms and conditions of sale to its end-users and
dealers (including but not limited to Government Services Administration and
other private, governmental, and commercial entities), including but not limited
to prices. OLYMPUS shall not (i) transfer the Products to an Affiliate or (ii)
sell the Products outside of the Territory or authorize its (sub)distributors or
(sub)dealers; to sell the Products outside of the Territory. In the event a
(sub)distributor or (sub)dealer has sold the Products outside of the Territory
and refuses to cease such activity, OLYMPUS must, if legally permitted,
terminate such (sub)distributor's or (sub) dealer's right to sell the Products.
2.3 PRODUCT DELIVERY. All OLYMPUS purchase orders shall be for delivery in
45 days and shall be deemed accepted by VENDOR unless OLYMPUS is notified to the
contrary in writing by VENDOR within ten Business Days of VENDOR'S receipt of a
written purchase order from OLYMPUS. Delivery shall be "F.O.B. destination" and
shall be made by VENDOR to OLYMPUS's facility in Woodbury, New York, or other
OLYMPUS, OLYMPUS dealer, or OLYMPUS distributor facility in the Territory, as
designated by OLYMPUS. OLYMPUS may cancel any purchase order provided that such
cancellation is made in writing no later than 15 days after VENDOR's receipt of
such purchase order. In addition, OLYMPUS may cancel a purchase order if
delivery of such purchase order is more than 30 days past due.
4
<PAGE>
2.4 CONDITIONS OF SALE. The order terms and conditions set forth in this
Agreement shall govern all orders made under this Agreement, and any standard
printed forms or other documents of either party (such as those contained on a
quotation, proposal, purchase order, or invoice) shall have no force or effect
with respect to such orders unless such form or document specifically states
that it is an amendment to this Agreement and is signed by an authorized
signatory of each party. Title to and risk of loss for the Products sold to
OLYMPUS shall pass upon the receipt of the Products by OLYMPUS (or the OLYMPUS
dealer or OLYMPUS distributor, as the case may be). Notwithstanding anything
contained in this Agreement to the contrary, (i) OLYMPUS's purchase order shall
fix Product quantities, reference applicable pricing, and set destinations and
delivery schedules, and (ii) OLYMPUS shall have no obligation to purchase until
it submits a purchase order to VENDOR.
2.5 INSPECTION RIGHTS.
(a) PROCEDURE. OLYMPUS and/or its designees shall have the right, at
its expense, to count and conduct an inspection and test of the shipped Products
for a period of 30 days following receipt of such Products at the designated
incoming delivery point or facility. Within 30 days of the Effective Date,
VENDOR and OLYMPUS shall develop mutually agreed upon inspection and test
procedures to be used hereunder. Upon completion, such inspection and test
procedures shall become a part of this Agreement as EXHIBIT A hereof. If any
Product fails such inspection and testing, VENDOR agrees to accept and pay the
shipping costs for (i) the return of such defective Product to VENDOR and (ii)
the delivery of the repaired or replacement Product to OLYMPUS or its designee,
PROVIDED that the defect is not the result of OLYMPUS negligence or misuse such
as the failure to properly store the Product while in OLYMPUS's possession.
VENDOR shall, at OLYMPUS'S option, promptly, replace any such defective Product
without charge or refund the purchase price thereof in full. If OLYMPUS fails
to reject received Products within the aforementioned 30-day inspection period,
such Products shall be deemed accepted. Inspection, testing, acceptance, or use
of the Products, or failure to do the same, on any occasion shall not affect
VENDOR's obligation under any warranty contained herein or any other rights or
remedies available to OLYMPUS whether at law or in equity, and such warranties,
rights, and remedies shall survive such inspection, testing, acceptance, and
use.
(b) QUANTITY DEFICIENCY. If OLYMPUS (or the OLYMPUS dealer or OLYMPUS
distributor, as the case may be) finds any quantity deficiency in the Product
units received, OLYMPUS may, at its option, (i) require VENDOR to immediately
deliver the difference by air freight at VENDOR's expense, or (ii) reduce the
purchase amount specified in the related purchase order accordingly.
5
<PAGE>
(c) OVERSHIPMENT. If OLYMPUS (or the OLYMPUS dealer or OLYMPUS
distributor, as the case may be) finds an overshipment of Product units, it/they
may store or return the excess Product units to VENDOR, both at VENDOR's risk
and expense.
2.6 PRICE.
(a) PRICING. For the duration of the Agreement Term, the Products'
prices shall be as set forth in SCHEDULE 1.11 attached hereto. Notwithstanding
the foregoing, if OLYMPUS accepts a Product Change in accordance with Section
3.3 and such Product Change generates an increase in the cost of the relevant
Product, such increase may generate an increase in the price of the Product to
OLYMPUS, PROVIDED that such price increase is acceptable to OLYMPUS in its sole
and absolute discretion. Failure by OLYMPUS and VENDOR to agree upon a price
increase due to a Product Change shall constitute rejection of such Product
Change regardless of any earlier acceptance by OLYMPUS. In the event VENDOR is
30 days past due in delivering the Products (in accordance with Section 2.3) the
purchase price for such "late" Products shall be reduced by [ * ]
for each additional month that such delivery is overdue. Instruction manuals,
user guides, and the like shall be included in the prices reflected in SCHEDULE
1.11.
(b) PAYMENT. OLYMPUS shall pay for all Products accepted by it no
later than 30 days from the date of receipt by OLYMPUS of VENDOR'S invoice
corresponding to the Products received. Notwithstanding the foregoing, if
OLYMPUS pays for Product within 15 days of receipt by OLYMPUS of VENDOR's
corresponding invoice, OLYMPUS shall receive a [ * ] discount off of such
invoice amount.
ARTICLE 3. OBLIGATIONS OF VENDOR
3.1 APPROVALS AND CLEARANCES. VENDOR shall ensure that no Product is sold
to OLYMPUS or end-users before all required governmental or private approvals
and clearances have been obtained, including without limitation (i) all FDA and
FCC approvals and clearances and (ii) UL standards applicable to laboratory
equipment and power supplies; EXCEPT, that the initial 25 System units to be
purchased on the Effective Date will be so approved and marked (at VENDOR'S
expense) within 60 days of the Effective Date.
3.2 PACKING AND MARKING: TRADEMARKS. (a) VENDOR shall pack and mark the
Products in accordance with OLYMPUS's instructions. VENDOR shall permanently
affix OLYMPUS's serial number, trade name, trademark, colors, and logo (the
"Authorized Trademarks") on all Product packaging, printed materials, labels,
and tags in accordance with OLYMPUS's instructions, which instructions shall be
provided to VENDOR within 45 days after the Effective Date.
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
6
<PAGE>
Upon termination or expiration of this Agreement, VENDOR shall (i) not sell any
Product which is packaged in materials containing the Authorized Trademarks and
(ii) immediately cease any use of the Authorized Trademarks. Except as
expressly set forth herein, VENDOR shall not have any right to use nor shall
VENDOR acquire any right, title, license, or other interest in the OLYMPUS name,
or any trade name, trademark, or logo belonging to OLYMPUS.
(b) Any use by VENDOR of the Authorized Trademarks or any trade,
name, trademark, or logo which is similar to an Authorized Trademark, and the
goodwill of any business associated with such trade names, trademarks, or logos,
shall inure to the benefit of OLYMPUS.
(c) During the Agreement Term, VENDOR shall not apply VENDOR's or any
third party's name, trademark, or logo to the Products or to any packaging,
printed materials, labels, tags, or nameplates provided with the Products,
EXCEPT (i) to the extent to which VENDOR may by law be required to identify
itself as the manufacturer or supplier thereof and (ii) VENDOR'S trademark
AcCell-TM- will appear on the Systems on the facing front plate of the stage.
3.3 PRODUCT CHANGES. VENDOR shall give OLYMPUS 60 days' prior written
notice of any proposed Product Changes, which OLYMPUS may accept or reject, but
acceptance may not be unreasonably withheld (see also Section 2.6(a)). Examples
of issues that would be a reasonable basis for non-acceptance or rejection shall
include, without limitation, Product marketability, performance, function, and
pricing. If OLYMPUS chooses to reject a Product Change and VENDOR nevertheless
proceeds to implement such Product Change, OLYMPUS may, in addition to all other
rights and remedies at law or in equity or otherwise, terminate this Agreement
and all pending purchase orders pursuant to Section 7.2(c). If OLYMPUS accepts a
Product Change, VENDOR shall, prior to implementation, promptly (i) obtain all
approvals and clearances required to manufacture the Product and sell the
Product (as changed, modified, or added) within the Territory and (ii) document
and validate such accepted Product Changes to the complete satisfaction of
OLYMPUS. No Product Change shall be effective unless and until it is accepted
for sale by OLYMPUS.
3.4 TECHNICAL ASSISTANCE & SUPPORT. VENDOR shall furnish to OLYMPUS,
without additional charge, beginning on the effective Date and for the duration
of the Agreement Term and for a period of three years thereafter, the following
technical assistance and support:
7
<PAGE>
(a) DOCUMENTATION. All technical information, manuals, schematics,
parts lists, flow diagrams, and other documentation and data (in both printed
and electronic media formats) necessary to inventory, market, sell, and provide
field service for the Products within the Territory. Such materials shall be
consistent with similar information furnished to other distributors and
resellers of the Products and/or similar products manufactured by VENDOR.
VENDOR hereby grants to OLYMPUS a fully-paid license for the Agreement Term to
copy or otherwise reproduce all or portions of VENDOR's brochures, or to
incorporate portions of VENDOR-copyrighted material in Product brochures or
advertising material composed by OLYMPUS, PROVIDED that OLYMPUS shall submit
such materials composed by OLYMPUS which incorporate such VENDOR-copyrighted
material to VENDOR for prior approval, which approval shall not be unreasonably
withheld or delayed. Such reproduction will be subject to all applicable
copyright laws. In addition to the foregoing, VENDOR shall furnish to OLYMPUS
master copies (in both printed and electronic media formats) of field service
manuals and troubleshooting guides with respect to the Products which OLYMPUS
may print and use, and furnish to VENDOR for VENDOR's use in accordance with
this Agreement. Alternatively, at OLYMPUS's option, VENDOR may print such
Product manuals and guides and sell them to OLYMPUS, at VENDOR's cost, for
OLYMPUS's use.
(b) TELEPHONE SUPPORT. On-going telephone support to OLYMPUS on
Business Days, via a toll-free telephone number, between 8 a.m. and 6 p.m.
(Central). Such telephone support shall respond to all requests for information
or other technical support regarding Product use, maintenance, repair, storage,
handling, and shipping.
3.5 INSURANCE. Commencing on the first date of Product delivery until the
expiration of the most remote statute of limitations, VENDOR shall maintain
general liability insurance with an insurance company in the amount of
[ * ] naming OLYMPUS as an additional insured, for any death or bodily
injury or property damage resulting from the manufacture, design, testing, sale,
or use of the Products. Copies of all such policies and any certificates or
notices thereunder shall be forwarded to OLYMPUS along with prior notice of
termination or cancellation of such policies.
3.6 AUDITS. OLYMPUS shall have the right to perform a complete audit of
the development, manufacture, and packaging of the Products (including but not
limited to the pertinent facilities and Quality Assurance System(s)) during
normal business hours and upon seven days prior notice to VENDOR. The parties
will cooperate with each other to arrange such visits at mutually convenient
times.
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
8
<PAGE>
3.7 COMPLAINTS. In the event OLYMPUS cannot resolve end-user complaints
regarding the Products, OLYMPUS shall forward such complaints to VENDOR and
VENDOR shall conduct a complete and documented investigation and shall fully
resolve such complaints to OLYMPUS's complete satisfaction. All such complaint
investigations shall be performed and completed promptly but in no event later
than 30 days from receipt of the complaint by VENDOR. If as a result of
VENDOR's investigation a Product Change is necessary, VENDOR will perform,
document, and validate such Product Change in accordance with this Agreement, to
OLYMPUS's complete satisfaction and at no charge to OLYMPUS. OLYMPUS shall
have the right to review and approve all changes or corrective actions resulting
from a complaint investigation prior to implementation. VENDOR shall notify
OLYMPUS immediately of any claims that it receives of Product defects.
3.8 SPECIAL INVESTIGATIONS; INQUIRIES. If any government or other
regulatory authorities or private standards board in the Territory require any
investigations to be performed on or with respect to the Products, and VENDOR
has not performed such investigations or if, for any reason, such authorities
will not accept the results of VENDOR's investigations, then VENDOR shall use
its best efforts in promptly undertaking and completing such investigations.
VENDOR agrees to notify OLYMPUS of any formal or informal inquiries relating to
the Products by the FCC or any other regulatory agency, or any state, province,
region, district, and/or Federal government.
3.9 RECALLS. In the event that any Product defect or regulatory or
governmental action requires a Product's recall, destruction, withholding from
the market, or other action (a "Recall"), VENDOR shall bear all costs and
expenses of such Recall. OLYMPUS shall reasonably assist VENDOR, at VENDOR's
cost and expense, in carrying out any such Recall. OLYMPUS shall bear the costs
and expenses of a Recall if such Recall is the direct result of any act or
omission to act attributable solely to OLYMPUS. If a Recall is the direct
result of acts or omissions to act attributable to both VENDOR and OLYMPUS, or
should it prove impossible to assign fault for such Recall, VENDOR and OLYMPUS
shall share the costs and expenses of such Recall equally.
3.10 REPLACEMENT & REPAIR PARTS: ACCESSORIES & CONSUMABLES.
(a) During the Agreement Term and for a period of five years
thereafter, VENDOR agrees to offer for sale to OLYMPUS all replacement and
repair parts for the Systems, and all Accessories and Consumables.
(b) VENDOR agrees that its Accessories and Consumables pricing for
the five-year period following the Agreement Term shall be, in the aggregate,
no more than 1.3 times the value of the applicable System at the end of the
Agreement Term. VENDOR
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agrees that its replacement and repair parts pricing (during and after the
Agreement Term) shall be, in the aggregate, no more than 1.3 times the value of
the applicable System at the relevant point of the Agreement Term or at the end
of the Agreement Term (as the case may be).
(c) In the event VENDOR is unable to supply such Accessories, Consumables,
and replacement and repair parts and VENDOR is unable to obtain another source
of supply for OLYMPUS, then such inability shall be considered noncompliance
with this Section and VENDOR shall, with neither obligation nor charge to
OLYMPUS, provide OLYMPUS with drawings and other documents required to either
manufacture or buy such Accessories, Consumables, and parts and the technical
information or any other rights necessary for OLYMPUS to manufacture or obtain
such Accessories, Consumables, and parts from other sources, together with an
exclusive license to make or have made such Accessories, Consumables, and parts
for the purpose of supporting OLYMPUS's customer base. The technical
information includes, by example and not by way of limitation (i) manufacturing
drawings and specifications of materials and parts comprising the Accessories,
Consumables, and replacement and repair parts and components; (ii) manufacturing
drawings and specifications covering special tooling and operation thereof;
(iii) a detailed list of all commercially available parts and components
purchased by VENDOR on the open market, disclosing the part number, name and
location of the supplier and price lists for the purchase thereof and (iv) one
complete copy of the source code used in the preparation of any software
licensed or otherwise acquired by OLYMPUS from VENDOR, PROVIDED, HOWEVER, that
such source code may not be changed by OLYMPUS (except to fix software bugs and
deficiencies in the event VENDOR is unable to so fix) and shall remain the
property of VENDOR and shall be separately licensed to OLYMPUS for OLYMPUS's
possession and use exclusively for maintenance of OLYMPUS's end-users.
3.11 UPDATES AND MINOR UPGRADES. During the Agreement Term and thereafter
(with respect to Products still under warranty) VENDOR shall provide OLYMPUS
with Product software fixes, updates, and minor upgrades at no charge to
OLYMPUS. Upon expiration of the relevant warranty periods, OLYMPUS will pay
a software maintenance fee of [ * ] per annum per each System unit for
which the end-user elects to purchase software updates and minor upgrades
(the "Maintenance Fee"). Upon expiration or earlier termination of the
Agreement Term AND upon expiration of the relevant warranty period, VENDOR
shall, for a period of five years, provide OLYMPUS with Product software
updates and upgrades at reasonable mutually agreed-upon prices, EXCEPT that
if OLYMPUS has paid the Maintenance Fee prior to the and of the Agreement
Term, VENDOR shall honor such Maintenance Fee for the duration of that year.
All updates and upgrades shall be validated to OLYMPUS's complete
satisfaction.
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
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3.12 VENDOR DELIVERABLES. (a) VENDOR shall furnish to OLYMPUS the following
deliverables (which must be ready for delivery to end-users) within the time
frames corresponding thereto:
(i) AccuMap-TM- 2000 automated screener (hardware only; related
software will be licensed to end-users directly by
VENDOR).....[ * ] from the Effective Date (including
software availability from VENDOR);
(ii) generic archiver with image capture.....VENDOR's best
efforts to furnish within [ * ] from the date of mutual
agreement on detailed specifications
(iii) deliverable networking software and hardware for the
Systems.....[ * ] from the Effective Date; and
(iv) deliverable interface software for specified Laboratory
Information Systems.....[ * ] after OLYMPUS places an
order for same with VENDOR.
Once available, the parties shall negotiate a reasonable price for such
deliverables in good faith and the deliverables will be deemed "Products"
hereunder, subject in all respects to this Agreement and added to SCHEDULE 1.11
accordingly, EXCEPT for the AccuMap-TM- 2000 software to be licensed directly by
VENDOR to end-users, which software will only be deemed a "Product" for purposes
of Sections 3.1, 3.5, 3.7, 3.8, 3.9, 3.11, 3.14, 5.5, 5.6, 5.7, 5.8, 5.10, and
Article 8. Notwithstanding anything contained herein to the contrary, if the
parties fail to agree upon prices for the deliverables, then the Quarterly
Minimums and Yearly Forecasts shall no longer be applicable.
(b) VENDOR shall use its best efforts so that, within 30 months from the
Effective Date, the AccuMap-TM- 3000 automated screener will be FDA-approved and
ready for end-user delivery, directly or indirectly, by VENDOR. Unless
otherwise decided by VENDOR, OLYMPUS will not be reselling this particular
product.
(c) In the event any one or more of the aforementioned deliverables is not
furnished by VENDOR to OLYMPUS within their corresponding time frames, (i) the
Yearly Forecasts and Quarterly Minimums shall no longer apply and OLYMPUS will
have no further obligations with respect thereto and (ii) the parties shall
endeavor to arrive at a mutually-acceptable solution to resolve the consequences
of such failure to so timely furnish the deliverables.
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
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(d) Time is of the essence of the performance of VENDOR's obligations
pursuant to this Section 3.12.
3.13 LOANER SYSTEMS. VENDOR shall maintain a reserve of Systems as a loaner
pool in the following amounts: (a) By end of Year One - [ * ]; (b) By end of
Year Two - [ * ]; (c) By end of Year Three - [ * ]. Loaner Systems shall
be available [ * ] with respect to Products that are within the
warranty period set forth in Section 5.9(b), and at a [ * ] charge
thereafter.
3.14 TRAINING. During the first eight months of the Agreement Term, VENDOR
shall, upon reasonable prior request, provide OLYMPUS and OLYMPUS's dealers with
full maintenance, service, installation, and application training with respect
to the Products. In addition, for the duration of the Agreement Term, when
Product Changes are implemented or when Product software updates and upgrades
are provided, the aforementioned training shall be provided to OLYMPUS and
OLYMPUS's dealers therefor.
ARTICLE 4. OBLIGATIONS OF OLYMPUS.
4.1 YEARLY FORECASTS & QUARTERLY MINIMUMS. During the first, second, and
third years of the Agreement Term, OLYMPUS forecasts that it will purchase an
aggregate of [ * ] System units, respectively ("Yearly
Forecast(s)"). During the Agreement Term, OLYMPUS shall purchase, at a minimum,
the quarterly quantity of System units ("Quarterly Minimum(s)") in accordance
with SCHEDULE 4.1 attached hereto. Sales generated as a result of VENDOR's
solicitation efforts shall be included when calculating the OLYMPUS purchases in
any given year or quarter. In particular, with respect to the first year of the
Agreement Term, VENDOR guarantees that it will generate sales of at least [*]
System units through its own solicitation efforts in accordance with Section
2.1(a). If OLYMPUS exceeds the Yearly Forecast in either or both of years one
and two of the Agreement Term, such excess amount shall be deducted from the
ensuing Agreement Term year's Yearly Forecast. Similarly, if OLYMPUS exceeds
the Quarterly Minimum in any or all Agreement Term quarters, such excess amount
shall be deducted from the ensuing quarter(s)' Quarterly Minimum(s). If, at the
end of either the first or second year of the Agreement Term, it is determined
that such year's Yearly Forecast has not been met, the parties shall have 60
days to mutually agree to either (i) amend the Yearly Forecast for the ensuing
Agreement Term year with OLYMPUS retaining its exclusivity hereunder or (ii)
removing the concept of Yearly Forecasts and Quarterly Minimums for the balance
of the Agreement Term and permitting OLYMPUS to market and sell the Products but
on a non-exclusive basis. Should the parties fail to agree, during such 60-day
period, on either one of the
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
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foregoing solutions or a different mutually-acceptable solution, either party
may terminate this Agreement upon 30 days' written notice. Failure by VENDOR to
send such a notice of termination within 10 days of the end of such 60-day
period shall mean OLYMPUS's rights under Section 2.2 shall continue on an
exclusive basis for at least the ensuing year of the Agreement Term.
Notwithstanding anything contained herein to the contrary, the Yearly Forecasts
shall not constitute a commitment by OLYMPUS to purchase such Yearly Forecasts
and OLYMPUS shall not have any liability whatsoever to VENDOR in the event such
Yearly Forecasts are not satisfied.
4.2 SCOPE OF RESPONSIBILITY. During the Agreement Term, OLYMPUS shall, at
its own cost and expense, use commercially reasonable efforts to sell, install,
and provide field service for the Products within the Territory.
4.3 BI-MONTHLY SALES REPORT. During the Agreement Term, OLYMPUS shall
submit to VENDOR once every two months a written sales report summarizing sales
activity of the Products for the prior two months.
4.4 OLYMPUS PRODUCTS. During the Agreement Term, OLYMPUS shall provide
VENDOR (at no charge to VENDOR) with reasonable technical support (at OLYMPUS's
sole and absolute discretion) with respect to OLYMPUS's microscope products used
by VENDOR in connection with the development of future products not competitive
with OLYMPUS products, PROVIDED OLYMPUS shall have a right of first negotiation
and refusal with respect to such future products.
4.5 AcCELL-TM-; COPYRIGHT & TRADEMARK NOTICES. OLYMPUS will use
reasonable efforts to inform VENDOR upon receipt of information regarding (i)
third-party infringement of VENDOR's AcCell-TM- trademark or (ii) VENDOR
infringement of a third party's trademark. In addition, OLYMPUS shall
incorporate into relevant Product documentation and materials, the appropriate
and reasonable copyright and trademark notices provided to OLYMPUS by VENDOR.
ARTICLE 5. REPRESENTATIONS, COVENANTS, & WARRANTIES OF VENDOR.
VENDOR hereby represents, covenants, and warrants to OLYMPUS, its successors and
permitted assigns that:
5.1 DUE ORGANIZATION. VENDOR is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware, and has
the full power and authority to conduct all activities conducted by it under
this Agreement.
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5.2 AUTHORIZATION TO EXECUTE. The person executing this Agreement on
behalf of VENDOR has been duly authorized to do so by all requisite corporate
and other action of VENDOR, and this Agreement has been duly executed and
delivered to OLYMPUS by such person.
5.3 VALIDITY OF AGREEMENT. This Agreement is the legal, valid and binding
obligation of VENDOR, enforceable in accordance with its terms.
5.4 NO CONFLICT. To the knowledge of VENDOR, the execution, delivery and
performance of this Agreement by VENDOR does not and will not conflict with or
result in a breach of any agreement, instrument or understanding, oral or
written, to which VENDOR is a party. There is no litigation, arbitration or
administrative proceeding pending or threatened which would, in any event,
conflict with or result in a breach of this Agreement or interfere with VENDOR's
obligations hereunder.
5.5 RIGHT TO USE TECHNOLOGY. VENDOR has the legally enforceable right to
use all technology contained within or related to the Products, whether patented
or not patented, copyrighted or not copyrighted, and the use of such technology
does not violate any agreement, instrument or understanding, oral or written, to
which VENDOR is a party.
5.6 WARRANTY OF NON-INFRINGEMENT. Except for OLYMPUS's rights and
licenses received hereunder, VENDOR is, and for the Agreement Term VENDOR will
be, the sole and exclusive owner of all right, title and interest in and to the
Products. To the best of VENDOR's knowledge, the Products do not incorporate or
infringe upon any copyright, patent, trademark, service mark, trade mark, trade
secret, idea, process, know-how, development, invention, technology, or other
form of intellectual property (collectively "Intellectual Property") not owned
by or licensed to VENDOR. VENDOR will promptly notify OLYMPUS of any alleged or
actual infringement by VENDOR of any Intellectual Property relating to the
Products or their manufacture.
5.7 RIGHT TO SELL FOR RESALE: OBLIGATION TO DELIVER. VENDOR has the right
to sell the Products to OLYMPUS for resale by OLYMPUS in the Territory. VENDOR
has and will have the ability to timely deliver all of the Products ordered by
OLYMPUS during the Agreement Term.
5.8 PRODUCT QUALITY. The Products to be sold and delivered to OLYMPUS and
end-users hereunder shall (i) be merchantable and fit for their particular
purpose, (ii) be new and free from defects in design, materials and workmanship,
and (iii) meet the specifications attached hereto as EXHIBIT B. VENDOR shall
possess a Quality Assurance System that adheres to all applicable laws, rules,
and regulations.
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5.9 REPAIR, REPLACE OR REFUND WARRANTY. (a) With respect to each Product
unit sold and delivered to OLYMPUS, VENDOR shall, at OLYMPUS's option and at no
charge, replace or repair and render fully operational or fully refund the
purchase price of any defective, damaged, or non-conforming Product unit by
reason of breach of any warranty by VENDOR hereunder, within seven Business Days
after receipt by VENDOR of the defective, damaged, or non-conforming Product
unit.
(b) The warranty period for repair, replacement, or refund shall be
twelve months commencing on the date the Product is received by the end-users.
Written notice of a defect in material or workmanship must be received by VENDOR
within 15 months from the date the Product is received by OLYMPUS's end-users.
(c) Notwithstanding the foregoing, in the event of failure by VENDOR
to repair, replace, or refund defective, damaged, or non-conforming Product
units within the seven-day period set forth in subsection 5.9(a), (i) OLYMPUS
may, at its sole and absolute discretion, make such corrections or replace such
Product units and charge VENDOR for the cost incurred by OLYMPUS in doing so and
(ii) VENDOR shall reimburse OLYMPUS for any and all additional costs and
expenses incurred by OLYMPUS as a result of such failure to repair, replace, or
refund, which costs and expenses would not have been incurred if not for such
failure to repair, replace or refund. The foregoing reimbursement plan shall
continue until the non-conforming Product unit is repaired, replaced or
refunded. OLYMPUS shall have the right to offset the amounts due VENDOR
hereunder against any and all refund amounts owed to OLYMPUS pursuant to this
Section 5.9 or any other amounts owed to OLYMPUS by VENDOR arising under this
Agreement.
(d) Shipping costs incurred by OLYMPUS and risk of loss upon return
of Product units to VENDOR for in-warranty repair, replacement, or refund shall
be borne by VENDOR. Shipping costs incurred by VENDOR and risk of loss upon
delivery of the in-warranty repaired or replacement Product unit to OLYMPUS or
OLYMPUS's designees shall be borne by VENDOR.
5.10 COMPLIANCE. VENDOR has ensured and shall continue to ensure that, in
manufacturing and selling the Products, it shall (i) comply with all applicable
laws and regulations, (ii) not engage in any deceptive or misleading practices,
and (iii) obtain and maintain all required governmental and private approvals
and clearances (including without limitation compliance with UL and the FCC).
5.11 PRICE WARRANTY. VENDOR warrants that the prices listed in SCHEDULE
1.11 shall be complete and no additional charges of any kind shall be added
without OLYMPUS's prior
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written consent. Examples of additional charges include, but shall not be
limited to, packaging, labeling, taxes, storage, insurance, boxing, or crating.
5.12 RIGHT OF FIRST NEGOTIATION AND REFUSAL. VENDOR hereby grants to
OLYMPUS a right of first negotiation and refusal to be the exclusive OEM
purchaser of new VENDOR microscopy products (including but not limited to
telemedicine and telepathology workstations) in the Territory, PROVIDED OLYMPUS
has achieved, to such date, (i) the Quarterly Minimums, with respect to the
first year of the Agreement Term, or (ii) 75% of the PRO RATA amount of the
relevant Yearly Forecast, with respect to each of the second and third years
of the Agreement Term.
5.13 POST-WARRANTY REPAIR SERVICE. During the Agreement Term and for a
period of three years thereafter, VENDOR shall provide all post-warranty repair
service for the Products at the hourly rates set forth on SCHEDULE 5.13 attached
hereto.
5.14 OLYMPUS ENHANCEMENTS. VENDOR agrees to evaluate and use its best
efforts to incorporate OLYMPUS's recommended design changes and/or enhancements
to the Products ("OLYMPUS Enhancements"). Any increase or reduction in
VENDOR's manufacturing costs (labor and/or materials) resulting from OLYMPUS
Enhancements shall be reflected in reasonable price adjustments to the affected
Products. Any engineering/design costs and delivery dates for OLYMPUS
Enhancements shall be quoted to OLYMPUS for its approval and payment. OLYMPUS
shall pay such engineering/design costs plus burdened overhead. Any and all
Intellectual Property relating to (i) OLYMPUS Enhancements shall be owned by
OLYMPUS and (ii) Product design changes and/or enhancements conceived jointly
by OLYMPUS and VENDOR shall be owned by OLYMPUS and VENDOR jointly. VENDOR
shall not use the OLYMPUS Enhancements for itself or for any other party for
any purpose other than the performance of its obligations hereunder.
ARTICLE 6. REPRESENTATIONS, COVENANTS, & WARRANTIES OF OLYMPUS. OLYMPUS hereby
represents, covenants, and warrants to VENDOR, its successors and permitted
assigns that:
6.1 DUE ORGANIZATION. OLYMPUS is a corporation organized and validly
existing under the laws of the State of New York, and has the full power and
authority to conduct all activities conducted by it under this Agreement.
6.2 AUTHORIZATION TO EXECUTE. The person executing this Agreement on
behalf of OLYMPUS has been duly authorized to do so by all requisite
corporate and other action of OLYMPUS, and this Agreement has been duly executed
and delivered to VENDOR by such person.
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6.3 VALIDITY OF AGREEMENT. This Agreement is the legal, valid and binding
obligation of OLYMPUS, enforceable in accordance with its terms.
6.4 NO CONFLICT. To the knowledge of OLYMPUS, the execution, delivery and
performance of this Agreement by OLYMPUS does not and will not conflict with or
result in a breach of any agreement, instrument or understanding, oral or
written, to which OLYMPUS is a party.
ARTICLE 7. TERMS AND TERMINATION.
7.1 TERM. This Agreement shall remain in full force and effect commencing
on the Effective Date and expiring on the third anniversary of such date (the
"Agreement Term") unless earlier terminated pursuant to Section 7.2.
Notwithstanding the foregoing, the Agreement Term may be suspended pursuant to
the provisions of Section 10.1 of this Agreement.
7.2 EVENTS OF TERMINATION. This Agreement may be terminated, without
limiting any party's rights to any other remedies:
(a) Immediately upon written notice by either party (the "Terminating
Party") to the other party (the "Breaching Party") if:
(i) the Breaching Party has not performed or has otherwise
breached its obligations (whether material or
otherwise) hereunder and if such nonperformance or
breach is incapable of cure; or
(ii) any proceeding in bankruptcy, reorganization or
arrangement for the appointment of a receiver or a
trustee to take possession of the Breaching Party's
assets or any similar proceeding under the law for
relief of creditors shall be instituted by or against
the Breaching Party; or
(iii) the Breaching Party shall make an assignment for the
benefit of its creditors.
The Breaching Party immediately shall notify the Terminating Party in
writing of the occurrence of any event of the type described in
subsections 7.2,(a)(ii) and (iii).
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(b) By the Terminating Party upon the expiration of 30 days (or such
additional period as the Terminating Party may authorize) after the
Breaching Party's receipt of written notice of its breach or
nonperformance of its obligations (whether material or otherwise)
hereunder and if such breach or nonperformance is capable of cure and
has not been cured during such 30-day period.
(c) By OLYMPUS upon 30 days' prior written notice to VENDOR of the
rejection of a Product Change which VENDOR nevertheless proceeds to
implement. See Section 3.3.
(d) By either party in accordance with the provisions of Section 4.1.
7.3 PURCHASE ORDERS. Unless OLYMPUS decides that it does not wish to
have a purchase order filled, any purchase order placed by OLYMPUS but not
shipped by VENDOR prior to the date that notice of termination is delivered
hereunder or the date that this Agreement otherwise expires, shall be timely
delivered to the destination points designated by OLYMPUS, PROVIDED that such
termination did not arise from OLYMPUS's default.
7.4 RIGHTS AND OBLIGATIONS UPON TERMINATION. Upon expiration or earlier
termination of this Agreement, OLYMPUS shall have the right to (i) sell all
Products ordered or in inventory and (ii) provide on-going support and service
to its end-users. Notwithstanding anything contained herein to the contrary and
without limiting OLYMPUS's other remedies. In the event this Agreement is
terminated, OLYMPUS shall have the right to require VENDOR to repurchase (at the
price paid by OLYMPUS) any portion of or all ordered Products and OLYMPUS's
inventory of Products, PROVIDED (i) OLYMPUS furnishes VENDOR with the relevant
open purchase orders (with respect to ordered Products not yet in OLYMPUS
inventory), (ii) the Products in OLYMPUS inventory are in new condition and have
not been used, and (iii) the Products in OLYMPUS inventory are in their original
packaging with all manuals and other materials.
7.5 RIGHT TO MANUFACTURE. In the event of termination by OLYMPUS pursuant
to Section 7.2 (a) (ii) or (iii), OLYMPUS shall have the right to manufacture or
to sublicense a third party to manufacture the Products. In order to secure the
rights of OLYMPUS upon the happening of such an event and to secure the
indemnity obligations of VENDOR pursuant to Article 8 hereof, VENDOR hereby
grants to Data Securities International, Inc. (Westmont, Illinois), as escrow
agent (the "Escrow Agent"), as security for the obligations described herein, a
security interest in all of its common law proprietary rights relating to the
Products, the molds used to manufacture the Product, the
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software source code and related documentation, and the rights of VENDOR in and
to all contracts and agreements relating to the manufacture of the Products.
OLYMPUS shall have the right to independently ascertain that the complete and
correct materials and information have been submitted to the Escrow Agent.
OLYMPUS shall have the right to terminate any purchase orders for the Products
outstanding at the time the aforementioned manufacturing or sublicensing rights
are utilized. VENDOR shall cooperate with OLYMPUS by providing OLYMPUS with
technical information and know-how as to the manufacture of the Products. The
parties agree that the rights granted in this Section shall be deemed a license
of intellectual property rights within the meaning of Section 365(n) of Title 11
of the United States Code.
7.6 SURVIVAL. Sections 2.2, 2.3, 2.4, 2.5, 2.6, 3.1, 3.2(a), 3.2(b), 3.3,
3.4, 3.5, 3.7, 3.8, 3.9, 3.10, 3.11, 3.13, 5.4, 5.5, 5.6, 5.7 (first sentence
only), 5.8, 5.9, 5.10, 5.11, 5.13, 5.14, 6.4, 7.3, 7.4, and 7.5, and Articles 8,
9, and 10 (except Section 10.6), shall survive the execution, and termination or
expiration of this Agreement.
ARTICLE 8. INDEMNIFICATION.
8.1 INFRINGEMENT INDEMNITY. (a) Should any aspect of any Product become
the subject of any third party Intellectual Property infringement claim, action,
or proceeding, VENDOR shall, at OLYMPUS's option and within 60 days, (i) obtain
a license that would permit OLYMPUS to exercise all rights granted to it under
this Agreement or (ii) modify the Product to render it non-infringing. VENDOR
shall bear the cost of such license or modification. In addition, OLYMPUS may,
without limiting its remedies, without any liability whatsoever, and at its sole
and absolute discretion, suspend purchases of the Products from VENDOR
immediately. Notwithstanding the foregoing, should VENDOR fail to accomplish
either one of the foregoing solutions (set forth in clauses (i) and (ii) above)
within such 60-day period with respect to any such Intellectual Property
infringement claim, action, or proceeding, OLYMPUS may terminate this Agreement
without limiting its remedies, without any liability whatsoever, and at its sole
and absolute discretion. In addition, OLYMPUS shall have the right to require
VENDOR to repurchase (at the price paid by OLYMPUS) any portion of or all
ordered Products and OLYMPUS's inventory of Products, PROVIDED (i) OLYMPUS
furnishes VENDOR with the relevant open purchase orders (with respect to ordered
Products not yet in OLYMPUS inventory), (ii) the Products in OLYMPUS inventory
are in new condition and have not been used, and (iii) the Products in OLYMPUS
inventory are in their original packaging with ail manuals and other materials.
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(b) In addition to its obligations under subsection 8.1(a) above and
provided that VENDOR receives prompt written notice of any Intellectual Property
infringement claim, action, or proceeding covered by this Section 8.1, VENDOR
shall ai all times indemnify and hold harmless OLYMPUS, its successors, and
permitted assigns, and any of its officers, directors, employees,
representatives, and/or agents, and each of them, from and against any and all
claims, liabilities, losses, costs, damages, and expenses, including but not
limited to (i) the damages, losses, costs, and expenses payable to the third
party claiming Intellectual Property infringement, (ii) all of OLYMPUS's
reasonable attorneys' fees and disbursements, settlement costs, judgments, court
costs and expenses, incurred by OLYMPUS in any action or proceeding between
VENDOR and OLYMPUS and/or between OLYMPUS and any third party or otherwise,
(iii) reimbursement for the cost of Products that can no longer be sold, and
(iv) any other losses, costs, expenses, and damages incurred by OLYMPUS, arising
out of or resulting from any Intellectual Property infringement claim, action or
proceeding between VENDOR And OLYMPUS and/or between OLYMPUS and any third party
or otherwise. The failure of OLYMPUS to give prompt notice shall not result in
the loss of indemnification unless VENDOR shall have been materially prejudiced
thereby.
(c) OLYMPUS shall not be entitled to the foregoing Intellectual
Property infringement indemnity from VENDOR to the extent that the Intellectual
Property infringement claim, action, or proceeding arises or results solely from
changes to the Products made by OLYMPUS without VENDOR's authorization, PROVIDED
the Products have not been modified by VENDOR without OLYMPUS's knowledge and
prior written consent.
8.2 VENDOR PRODUCT LIABILITY AND OTHER DAMAGE INDEMNITY.
(a) VENDOR shall at all times indemnify and hold harmless OLYMPUS,
its successors and permitted assigns, and any of its officers, directors,
employees, representatives, and/or agents, and each of them, from and against
any and all claims, liabilities, losses, costs, damages, and expenses,
including but not limited to all of OLYMPUS's reasonable attorneys' fees and
disbursements, court costs and expenses, incurred by OLYMPUS in any action or
proceeding between VENDOR and OLYMPUS (if OLYMPUS is the prevailing party)
and/or between OLYMPUS and any third party or otherwise arising out of or
resulting from (i) a defect or alleged defect in a Product, including without
limitation defects relating to manufacturing, improper testing, or design, or
any breach of warranty regarding such Product or any component thereof, (ii)
misrepresentations made in connection with the promotion, marketing, sale,
distribution, use, safety, or efficacy of such Product based upon information
supplied to OLYMPUS by VENDOR, (iii) the contents of any labelling, inserts,
instruction manuals, or related documentation prepared by VENDOR or based
upon information supplied to OLYMPUS by VENDOR, or (iv)
20
<PAGE>
a Product Recall. OLYMPUS Shall provide VENDOR with, at VENDOR's expense for
all of OLYMPUS's out-of-pocket costs, reasonable assistance in connection with a
third party action or proceeding of the kind described in this Section 8.2 (a).
(b) OLYMPUS shall not be entitled to the foregoing indemnity from
VENDOR to the extent that the claim, action, or proceeding arises or results
solely from (i) unauthorized representations made by OLYMPUS regarding the
Product which are different than or in addition to the representations made by
VENDOR to OLYMPUS, or (ii) unauthorized changes to the Product made by OLYMPUS,
PROVIDED the Product in not defective and has not been modified by VENDOR
without OLYMPUS's knowledge and prior written consent.
8.3 OLYMPUS PRODUCT LIABILITY AND OTHER DAMAGE INDEMNITY.
(a) OLYMPUS shall at all times, indemnify and hold harmless VENDOR,
its successors and permitted assigns and any of its officers, directors,
employees, representatives, and/or agents, and each of them, from and against
any and all claims, liabilities, losses, costs, damage, and expenses, including
but not limited to all of VENDOR's reasonable attorneys' fees and disbursements,
court costs and expenses, incurred by VENDOR in any action or proceeding between
VENDOR and OLYMPUS (if VENDOR is the prevailing party) and/or between VENDOR and
any third party (attorneys', fees and disbursements only in the event OLYMPUS
fails to defend) arising out of or resulting from (i) unauthorized
representations made by OLYMPUS regarding a Product which are different than or
in addition to the representations made by VENDOR to OLYMPUS or (ii)
unauthorized changes to a Product made by OLYMPUS, PROVIDED the Product is not
defective and has not been modified by VENDOR without OLYMPUS's knowledge and
prior written consent. OLYMPUS shall have the right to control the defense and
settlement of a third party claim, action or proceeding. VENDOR shall provide
OLYMPUS with, at OLYMPUS's expense for all of VENDOR's out-of-pocket costs,
reasonable assistance in connection with a third party action or proceeding
of the kind described in this Section 8.3(a).
(b) VENDOR shall not be entitled to the foregoing indemnity from
OLYMPUS to the extent that the claim, action, or proceeding arises or results
solely from (i) a defect or alleged defect in a Product, including without
limitation defects relating to manufacturing, improper testing, or design, or
any breach of warranty regarding such Product or any component thereof, (ii)
misrepresentations made in connection with the promotion, marketing, sale,
distribution, use, safety , or efficacy of such Product based upon information
supplied to OLYMPUS by VENDOR, (iii) the contents of any labelling, inserts,
instruction manuals, or related documentation prepared by VENDOR or based upon
information supplied to OLYMPUS by VENDOR, or (iv) a Product Recall.
21
<PAGE>
ARTICLE 9. CONFIDENTIALITY.
For purposes of this Agreement, the term "Confidential Information" shall
mean all documents, clearly marked as "PROPRIETARY" or "CONFIDENTIAL",
relating to the respective products and business of the parties which (i) is
disclosed, upon request, by one party hereto to the other and (ii) is claimed
by the disclosing party to be secret, confidential and proprietary to the
disclosing party.
During the Agreement Term and for a period of two years thereafter, each party
(except as is explicitly otherwise required hereby) shall keep confidential,
shall not use for the benefit of others, and shall not copy or allow to be
copied, in whole or in part, any Confidential Information disclosed to such
party by the other.
The obligations of confidentiality imposed upon the parties by the foregoing
paragraph shall not apply with respect to any alleged Confidential Information
which:
(a) is known to the recipient thereof prior to receipt thereof from the
other party hereto;
(b) is disclosed to said recipient by a third party who has the right to
make such disclosure;
(c) is or becomes a part of the public domain or public knowledge through
no fault of said recipients;
(d) is independently developed by the recipient; and
(e) is required to be disclosed under operation of law.
ARTICLE 10. MISCELLANEOUS.
10.1 FORCE MAJEURE. Each party hereto shall be excused from the
performance of its obligations hereunder in the event such performance is
prevented by FORCE MAJEURE, and such excuse shall continue for so long as the
condition constituting such FORCE MAJEURE and any consequences resulting from
such condition continues. In addition, in the event the condition constituting
the FORCE MAJEURE causes a substantial inability by either party hereto to
manufacture, deliver, sell, or otherwise distribute, as the case may be, the
Products, the term of this Agreement may be suspended for the period of such
inability, but not to exceed six months. For the purposes of this Agreement,
FORCE MAJEURE shall mean causes beyond either party's control including, without
limitation, acts of God; war, riot or civil commotion; damage to or destruction
of production facilities or materials by fire,
22
<PAGE>
earthquake, storm or other disaster; strikes or other labor disturbances;
epidemic; failure or default of public utilities or common carriers; and other
similar acts. (Non)Compliance with laws or government regulations shall not
constitute a FORCE MAJEURE event.
10.2 RELATIONSHIP. The relationship created between VENDOR and OLYMPUS by
this Agreement shall be that of independent contractors. Neither OLYMPUS nor
VENDOR shall be deemed an agent, representative, partner, joint venturer, or
employee of the other party. Neither VENDOR nor OLYMPUS shall have the right to
enter into any contracts or commitments or to make any representations or
warranties, whether express or implied, in the name of or on behalf of the other
party, or to bind the other party in any respect whatsoever, unless agreed to in
writing or expressly permitted in this Agreement.
10.3 ASSIGNMENT; BINDING EFFECT. (a) Neither party to this Agreement may
assign all or any part of its rights and obligations under this Agreement,
except to an Affiliate, without the prior written consent of the other party.
No permitted assignment by any party pursuant to this subsection (a) shall
result in any additional expense to the other party. Any purported
assignment in contravention of this subsection (a) shall, at the option of
the non-assigning party, be null and void and of no effect.
(b) Except as otherwise provided above, this Agreement will be binding
upon and inure to the benefit of the successors and assigns of the parties. The
parties to this Agreement are VENDOR and OLYMPUS, exclusively. Therefore,
except as expressly set forth herein, the respective obligations, covenants,
representations, and warranties undertaken and made by VENDOR and/or OLYMPUS in
this Agreement, shall not be deemed the obligations, covenants, representations,
and warranties of VENDOR's and OLYMPUS's respective Affiliates.
10.4 NOTICES. Any notice or other communication required or permitted to
be given to either party under this Agreement shall be given in writing and
shall be delivered (i) by hand, or (ii) by registered or certified mail, postage
prepaid and return receipt requested, or (iii) by confirmed facsimile
transmission; addressed to each party at the following address or such other
address as may be designated by such party by notice pursuant to this Section:
To VENDOR: AccuMed International, Inc.
920 N. Franklin Street, Suite 402
Chicago, Illinois 60610
Fax: 312-642-8694
ATTENTION: Peter Gombrich, Chairman & CEO
23
<PAGE>
To OLYMPUS: Olympus America Inc.
Precision Instrument Division
Two Corporate Center Drive
Melville, New York 11747-3157
Fax: 516-844-5111
ATTENTION: Division Manager
with and copy to OLYMPUS'S General Counsel at the same address
(FAX: 516-844-5296).
Any notice, consent, or other communication given in conformity with this
Section shall be deemed effective when received by the addressee, if delivered
by hand or facsimile transmission, and seven days after mailing, if mailed.
10.5 GOVERNING LAW: SUBMISSION TO JURISDICTION. This Agreement and any
other documents or instruments related hereto and all transactions hereunder
shall be deemed to have been made within and under the laws of the State of
New York, including the Uniform Commercial Code of the State of New York, and
for all purposes shall be governed by and construed in accordance with the
laws of the State of New York without regard to the conflict of laws rules
thereof. The parties expressly agree that any controversy, dispute or claim
with respect to any provision of this Agreement shall be adjudicated
exclusively by a court of competent jurisdiction within Suffolk County, the
State of New York, or the Federal District Court for the Eastern District of
New York, applying New York law without regard to the rules of conflicts of
law and VENDOR and OLYMPUS irrevocably waive any objections either may have
and consent to the personal jurisdiction or the designation of a forum or
venue of the courts set forth herein, including without limitation waiving a
motion to change or transfer venue or that the forum is not convenient.
Notwithstanding the foregoing, either party may, in any jurisdiction, seek to
enforce, collect, or take any other action to effectuate a judgment, order, or
decree obtained from a court in Suffolk County, State of New York or the
Federal District Court for the Eastern District of New York.
10.6 EXECUTION OF ADDITIONAL DOCUMENTS. Each party hereto agrees to execute
and deliver such documents as may be necessary or desirable to carry out the
provisions of this Agreement.
10.7 ENTIRE AGREEMENT. Except for OLYMPUS purchase orders pending as of the
Effective Date, this Agreement constitutes the entire agreement between VENDOR
and OLYMPUS with respect to the subject matter hereof. All prior or
contemporaneous agreements, proposals, understandings, representations, and
communications with respect to the subject matter hereof, whether written or
oral, between or involving VENDOR and OLYMPUS hereby are cancelled and
superseded. This Agreement may be amended or
24
<PAGE>
modified only in and writing executed by both parties, which states that it is
an amendment or modification to this Agreement.
10.8 SEVERABILITY. If any provision or part thereof of this Agreement is
held to be invalid, void or unenforceable, the remaining provisions or parts
thereof of this Agreement shall continue in full force without being impaired or
invalidated in any way, to the maximum extent possible consistent with the
intent of the parties in entering into this Agreement.
10.9 TAXES. Each party shall be responsible for payment of its own taxes.
10.10 COUNTERPARTS. This Agreement may be executed in duplicate
counterparts, each of which when so executed shall be deemed to be an original
and both of which when taken together shall constitute one and the same
instrument.
10.11 NO WAIVER. No WAIVER of any right under this Agreement shall be
deemed effective unless contained in a writing signed by the party charged with
such waiver and specifically stating that it waives a provision of this
Agreement, and no waiver of any breach or failure to perform shall be deemed
to be a waiver of any future breach or failure to perform or of any other
provisions of this Agreement.
10.12 HEADINGS. The headings contained herein are for reference only and
are not and part of this Agreement and shall not be used in connection with the
interpretation of this Agreement.
10.13 RIGHTS AND REMEDIES CUMULATIVE; DAMAGES. All rights and remedies
hereunder are cumulative and may be enforced separately or concurrently and from
time to time, unless otherwise specifically stated herein. The enforcement of
any particular remedy shall not constitute an election of remedies, and no
remedy is exclusive unless specifically stated herein. Each party's sole
remedies for the breach by the other party of any obligations contained in this
Agreement shall be recovery of direct damages, if any, and/or termination of
this Agreement in accordance with Section 7.2. In no event shall either party be
liable to the other party under this Agreement for indirect, special,
incidental, or consequential damages of any kind, including but not limited to
damages for lost profits, lost investments, or lost business opportunities
(collectively, "Consequential Damages") OLYMPUS and VENDOR hereby agree that
direct damages shall not include or contain Consequential Damages.
10.14. CONTRACT INTERPRETATION. Each party hereto acknowledges that it has
had ample opportunity to review and comment on this Agreement. This Agreement
shall be read and interpreted according to its plain meaning and an ambiguity
shall
25
<PAGE>
not be construed against either party. It is expressly agreed by the parties
that the judicial rule of construction that a document should be more strictly
construed against the draftsperson thereof shall NOT apply to any provision of
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives of the date first above written.
ACCUMED INTERNATIONAL, INC.
By: /s/ Peter Gombrich
---------------------------
Name: Peter Gombrich
Title: Chairman & CEO
OLYMPUS AMERICA INC.-Precision Instrument Division
By: /s/ Sidney Braginsky
---------------------------
Name: Sidney Braginsky
Title: President
26
<PAGE>
SCHEDULE 1.11
PRODUCTS & PRICING
SYSTEMS PRICE
------- -----
AcCell-TM- 2000 [ * ]
AcCell-TM- 2000C with Data
Management System [ * ]
AcCell-TM- 2001 slide handling system
with two cassettes [ * ]
AcCell-TM- 2001C with Data Management
System and two cassettes [ * ]
ACCESSORIES
-----------
Bar code reader [ * ]
Automated dotter [ * ]
Calibration tool for Model 2001
System [ * ]
15001 calibration slide [ * ]
Data Management Software
(as upgrades to Systems) [ * ]
AcCell-TM- Data Management System to
Laboratory information System
software link [ * ]
per installation (estimated, to be
quoted on and case-by-case basis
per end-user specifications)
CONSUMABLES
-----------
Box of four dotter cartridges
(2,000 dots per cartridge) [ * ]
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
<PAGE>
SCHEDULE 4.1
QUARTERLY MINIMUMS
Quarter Minimum System Units
- ------- --------------------
Effective Date [+]
2 [+]
3 [+]
4 [+]
5 [+]
6 [+]
7 [+]
8 [+]
9 [+]
10 [+]
11 [+]
12 [+]
* The [+] System units ordered on the Effective Date shall only be delivered
by VENDOR to OLYMPUS when complete and ready for delivery, including but
not limited to (i) inclusion of the System, Accessories, Consumables, and
System firmware, and (ii) full compliance with the requirements set forth
in Sections 2.5(a), 3.1(i), 3.2(a), and 3.5 of this Agreement.
+PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
<PAGE>
SCHEDULE 5.13
POST-WARRANTY REPAIR SERVICE RATES
[ * ] per labor hour
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
<PAGE>
EXHIBIT A
INSPECTION & TEST PROCEDURES
TO BE COMPLETED AND ATTACHED WITHIN 30 DAYS FROM THE EFFECTIVE
DATE.
<PAGE>
EXHIBIT B
SPECIFICATIONS
SEE ATTACHED
<PAGE>
AcCell-TM Cytopathology System Model 2000 Specifications
Major Components
-Base
-Stage
-Mouse
-Microscope
-Motorized Focus
-Dotter
-Bar Code Reader
-Slide Handler
-Data Management System
[-Motorized Nosepiece]
Base:
- ----
Structure: Hardened aluminum casting containing the system electronics
Dimensions: 22.75"(58.7cm)w X 8.875"(22.5cm)dx15"(38.1cm)h
Weight: 30 lbs/13.6 Kgs
Primary Microscope: Olympus BX-40 F
Other Microscopes Accommodated (with adapters):
-Olympus BH-2
-Nikon Optiphot 2, Labophor 2
-Zeiss Axiolab
-Leitz Laborlux
Electrical Power
Power Entry: IEC compliant module with integral switch
Auxiliary AC Output: IEC compliant (for microscope power only)
Internal Power Supply:
Input Voltage: 85-264 VAC, single phase autoranging
Input Frequency: 47-63 Hz single phase autoranging
Input Current: 0.74 A. at 115 VAC.(max)
Output Voltage: 24 VDC (fixed)
Output Current: 3.4 A. (max)
Noise and Ripple: less than 0.5%
Input Protection: Fuse
Output Protection: Overcurrent shutdown with automatic recovery
EMI: FCC 20870 Part B and VDE 0871 Part B compliant
Approvals: UL, CSA, VDE, IEC
Communications and Control:
Internal Microprocessor: 80C196KC
External I/O: RS-232 (bidirectional)
9-pin DIN connector
9600 Baud 8 bit 1 start 1 stop no parity
Command Set: ASCII
Message Format: ESC-command-parameters-CR
ACK/NAK handshake
1
<PAGE>
Stage:
- -----
Structure: Hardened aluminum casting with glass working surface
Travel: 7.5"(19.0 cm) X, 1.23 "(3.175 cm) Y
Drive: Stepping motor driven precision antibacklash screw (X,Y)
lead screw: 10mm pitch
motor 200 step/rev 24 volt 2 phase
controller: microstepping 50 microsteps/step
Bearings: Precision linear ball slide (X); Precision crossed roller
bearings (Y)
Translation Speed: 5mm/sec nominal; 0-7mm/sec presettable; 0-7mm/sec
interactive (X,Y)
Settling Time: Less than 10mSec.
Positional Precision (bidirectional): less than 5 microns
Mounting to Microscope: Microscope specific plate (circular gib retainer
except for Leica)
Gripper Capacity: 1 standard 1"X3"x0.04" (nominal) micropscope slide
Installation: Factory, field service or customer
Mouse:
- -----
TYpe: Custom 3-button/3-axis serial mouse
Encoders: Optical Quadrature
Interface: Modified RS-232 1200 Baud 1 Start/8 Data/1 Stop No Parity 5 volt
RTS RS-232 +/-6Volt
Connector: mini DIN-6 (male)
Data Format: Standard Microsoft Specification [X,Y, switches]
Quadrature encoder pulses [Z,200 pulses/rev]
Design: Ergonomic, available in right and left hand versions
Microscope
- ----------
Type: Customer suppled from list above (BX-40 optionally available from
AccuMed)
Mounting: Bolted to base casting or adapter plate as appropriate
Uses existing holes in microscope frame for mounting
Motorized Focus:
- ---------------
Type: Stepping motor embedded in the manual focus control knob assembly of
the microscope motor. 200 step/rev 24 volt 2 phase
coupling; magnetic clutch
Travel: 2"(50.8 mm)
Speed: 2000 microns/sec (max)
Resolution: 1 micron
Accuracy: 1 micron
Precision (bidirectional): less than 2 microns
Istallation: Factory or field service only
Dotter
- ------
Type: Punched tape
Medium: Kapton or ester backing with acrylic adhesive
Colors: Red, Yellow, Blue or Black
Dot Size: 1mm
Repetition Rate: 4 dots/sec. (max)
Capacity: 2000 dots/cartridge
Installation: Factory, field service or customer
2
<PAGE>
Bar Code Reader
- ---------------
Type: self scanning with internal decoder
Interface: RS-232
Scan Width: less than 1.25"
Scan Rate: less than 10 scans/sec.
Code: Code 128C (other codes available)
Printed Information: Both machine and human readable
Code length: 9 active characters (max)
Label Alignment and Positioning: +/-0.120"(3mm)X; +/-0.040"(1mm)Y; +/-10"
rotational
Label Contrast: less than 25%
Slide Handler (Model 2001 only)
- -------------------------------
Type: Cassette based
Structure: Modular
Capacity: 20 specimens
Elevation Drive: Timing belt driven dual rack and pinion
Stepping motor 48 steps/rev. 24V not microstepped
Tongue and groove bearing and cassette guide
Shuttle drive: Lead screw 10mm pitch
Stepping motor 200 steps/rev 24V not microstepped
Linear ball slide
Compliant coupling
Vacuum slide retention: 5" (125mmHG) minimum
Embedded rotary vent pump 24VDC
Sensors: Cassette position
Slide presence
Shuttle position
Insufficient vacuum
Data Management System (DMS)
- ----------------------
Type: Relational database [Microsoft Access]
Shell: Visual Basic 4.0
Operating System: Windows for Workgroups 3.1
Minimum Computer Requirements: '486-75MHz or higher IBM compatible PC
16MB RAM
540MB hard disk drive
2 serial ports
800 x 600 color display
Options Available:
-Ether Net (10BaseT) network interface (HL-7 compatible)
-Phone/Fax modem
-Printer (local)
-Bar code reader (hand held style)
-Bar code printer
Provides:
-Specimen logging
-Specimen tracking (future)
3
<PAGE>
-Specimen assignment
-Cell coordinate capture
-Cell classification
-Specimen classification
-Specimen review
-Report generation
-Electronic signout (future)
-Data archiving
-Technician scheduling (future)
-Technician performance capture and tracking
-Production statistics capture and tracking
-Consolidated patient history and demographics
-Customer information
-Stand alone or networked operation
Motorized Nosepiece (future)
- -------------------
Type: 6 position
Drive: DC gear motor
Encoder: Hall effect
Operating Modes: Sequential or 2 position toggle (random access with DMS)
Availability: Olympus BX-40, Nikon (both models)
Istallation: Olympus-factory installation only; Nikon-factory or field
service installation
Environmental: (Instrument)
Ambient Temperature (operating): 15DEG.C. to 30DEG.C. at less than 85% RH
(non-condensing)
Ambient Temperature (storage/shipping): -40DEG.C. to 50DEG.C. at less than
85% RH (non-condensing)
Ambient Humidity (operating/storage/shipping): 10% to 90% RH non-condensing
Altitude (operating): to 8000 feet above mean sea level
4
<PAGE>
DISTRIBUTORSHIP AGREEMENT
This Agreement, made and entered into to be effective as of the day
of , 1996 by and between:
ACCUMED INTERNATIONAL, INC.
Microbiology Division
29299 Clemens Road, Suite K
Westlake, OH 44145
a corporation organized under the laws of the state of Delaware, hereinafter
referred to as SUPPLIER; and
FISHER SCIENTIFIC COMPANY
2000 Park Lane
Pittsburgh, PA 15275
a corporation organized under the laws of the state of Delaware, hereinafter
referred to as DISTRIBUTOR.
W I T N E S S E T H
WHEREAS, SUPPLIER desires to sell and/or market its products through the
use of a distributor; and
WHEREAS, DISTRIBUTOR desires to purchase the SUPPLIER's products for resale
to customers; and
WHEREAS, the parties desire to enter into a distributorship agreement
governing their relationship;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth herein, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. PRODUCT
1.1 PRODUCTS: The Products covered by this Agreement are those products
together with accessories, parts and components necessary for their maintenance
and repair, set forth and attached hereto in Exhibit A ("Products"), and
manufactured by or for SUPPLIER, and any improved or updated versions thereof.
Exhibit A may be amended from time to time by mutual consent of the parties.
1
<PAGE>
1.2 [ * ] SUPPLIER shall offer to DISTRIBUTOR in writing
the right to distribute [ * ] developed by SUPPLIER during
the term of this Agreement on the same terms as set forth herein. For any
period during which the arrangement between the parties for distribution of any
Products is exclusive, DISTRIBUTOR shall accept distribution rights with respect
to [ * ] if at all, in writing, within sixty (60) days after
SUPPLIER advises DISTRIBUTOR of the availability of such [ * ].
In the event DISTRIBUTOR elects not to exercise such right as to all or any of
the products so offered by SUPPLIER within such period, SUPPLIER may distribute
any such rejected [ * ] to any third party on terms no more
advantageous than those offered to DISTRIBUTOR.
1.3 SHELF LIFE: SUPPLIER represents and warrants that all Products with
a limited shelf life have been so indicated on Exhibit A with the useful life of
each Product stated in months from the date of manufacture.
1.4 SPARE PARTS: SUPPLIER represents and warrants that spare parts
necessary for the operation and repair of Products furnished hereunder, if any,
shall be available to DISTRIBUTOR and its customers for a period of five (5)
years after the date of SUPPLIER's invoice for such Products.
1.5 MSDS: SUPPLIER shall provide required Material Safety Data Sheets
for, any Product containing hazardous chemicals as required by Federal, state or
local law.
1.6 CONTROL OVER PRODUCTS: SUPPLIER reserves the right, at any time and
from time to time, to change the design of or discontinue any of the Products.
SUPPLIER agrees to provide DISTRIBUTOR at least sixty (60) days prior written
notice of any such occurrence. In the event of a Product shortage, SUPPLIER
shall allocate its available inventory in such a manner as to ensure DISTRIBUTOR
receives an equitable share.
2. DISTRIBUTION RIGHTS AND RESTRICTIONS
2.1 DISTRIBUTION RIGHTS: SUPPLIER hereby appoints DISTRIBUTOR and
DISTRIBUTOR accepts the appointment as the exclusive distributor of the Products
during the term and pursuant to the provisions of this Agreement. Further, for
so long as this Agreement is in effect, but in no event beyond December 31,
2000, DISTRIBUTOR agrees not to carry another product which directly competes
with the Products; provided, however, this prohibition shall not apply to the
Pasco product line from Difco.
2.2 TERRITORY: The territory in which the DISTRIBUTOR has the right to
sell and distribute the Products shall be the United States and its territories
and possessions.
* PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
2
<PAGE>
2.3 SUPPLIER DISTRIBUTION RIGHTS: SUPPLIER reserves the right to sell
the Products in the Territory to its current customers, as identified on Exhibit
C hereof, but will promptly direct all leads and inquiries from other potential
customers to DISTRIBUTOR. SUPPLIER will use reasonable efforts to transfer all
business from its customers listed on Exhibit C to DISTRIBUTOR no later than
December 31, 1997.
3. ORDERS
3.1 ORDERS: DISTRIBUTOR shall make purchases by submitting firm purchase
orders to SUPPLIER.
3.2 VOLUME: DISTRIBUTOR's estimated annual sales volume for stated
periods are set forth in Exhibit B. SUPPLIER acknowledges that this is a non-
binding estimate only, and not a commitment to purchase. Calculation of sales
volume shall be determined based upon reports customarily generated by
DISTRIBUTOR to monitor sales.
3.3 SOLE REMEDY: SUPPLIER's sole and exclusive remedy for DISTRIBUTOR's
failure to sell the estimated volume of Products as referenced in Exhibit B
shall be the termination of the exclusivity provision of this Agreement,
provided that such termination shall be effective only at the end of the
calendar year following the expiration of the estimated purchase forecast
period. Additionally, any excess sales in a stated time period shall be carried
forward and applied toward the estimated sales volume for the next estimated
sales period.
4. SHIPPING AND DELIVERY
4.1 SHIPPING: SUPPLIER shall ship all Products F.O.B. Cleveland, Ohio or
import point, if sent from outside the United States, freight prepaid and added.
SUPPLIER shall ship Products to DISTRIBUTOR or DISTRIBUTOR's customers, at
DISTRIBUTOR's election, via a carrier selected by DISTRIBUTOR.
4.2 OBSOLETE INVENTORY: Any Products owned by DISTRIBUTOR and rendered
unsalable, in DISTRIBUTOR's and SUPPLIER's reasonable opinion, due to (i) a
change in any Product specification, (ii) discontinuation or elimination by
SUPPLIER of any Product from its offering, or (iii) release by SUPPLIER of any
improved or updated version of any Product, shall be repurchased from
DISTRIBUTOR by SUPPLIER within thirty (30) days following DISTRIBUTOR's written
request therefor at the price paid for such Product(s) by DISTRIBUTOR; provided,
however, that SUPPLIER shall not be obligated to repurchase (i) any Products
which have been modified or customized pursuant to DISTRIBUTOR's or its
customer's order ("Custom Products"), or (ii) any Products delivered to
DISTRIBUTOR more than six months prior to the date of DISTRIBUTOR's notice
pursuant to this Section 4.2. DISTRIBUTOR shall pay for return freight and
related transportation and insurance charges to Cleveland, Ohio for all such
returned Products.
3
<PAGE>
4.3 SHELF LIFE: SUPPLIER shall ship Products so that 70% of the shelf
life described in Exhibit A will be remaining at the time of receipt at
DISTRIBUTOR's warehouse, or at the customer's facility if drop shipped.
SUPPLIER agrees to take back for full invoice credit plus shipping charges any
dated Products shipped contrary to this provision.
4.4 DELIVERY: SUPPLIER shall ship all Products for which it has received
a firm purchase order within thirty (30) days of order receipt. Delivery
information for Custom Products will be quoted at the time of order placement.
SUPPLIER agrees that time is of the essence regarding its delivery of Products.
5. SALES AND MARKETING SUPPORT
5.1 TRAINING: SUPPLIER shall provide to DISTRIBUTOR's sales personnel,
at DISTRIBUTOR's premises or such other location as the parties may agree, such
training in the demonstration and use of the Products as may be reasonably
requested by DISTRIBUTOR. For such training purposes, SUPPLIER, at its expense,
will provide its trainers' training materials and demonstration products.
DISTRIBUTOR, at its expense, will make available to its sales personnel
SUPPLIER-prescribed training materials and demonstration products. DISTRIBUTOR
shall provide transportation and lodging expenses for DISTRIBUTOR personnel for
the training of DISTRIBUTOR representatives by SUPPLIER.
5.2 TECHNICAL SUPPORT: SUPPLIER shall provide technical support to
DISTRIBUTOR's sales personnel and customers, and promptly provide to DISTRIBUTOR
such additional technical information developed or acquired by SUPPLIER from
time to time as may reasonably be expected to be of assistance to DISTRIBUTOR in
fulfilling its obligations hereunder. SUPPLIER shall provide at its own expense
a toll free long distance telephone service for sales and customer support.
5.3 LITERATURE: SUPPLIER shall provide, at its expense, reasonable
quantities of such instruction manuals and point of sale literature as may, from
time to time, be requested by DISTRIBUTOR for use in connection with the
marketing, sale and distribution of the Products. Subject to DISTRIBUTOR's
prior written approval, DISTRIBUTOR's name may be incorporated in SUPPLIER's
advertising literature intended for distribution by DISTRIBUTOR's sales
representatives. DISTRIBUTOR agrees that it will not without written consent
from SUPPLIER alter any advertising material, brochure or other literature
furnished by SUPPLIER other than to place thereon its own name and trademark.
If requested to do so by DISTRIBUTOR, SUPPLIER shall furnish DISTRIBUTOR with
suitable copy and photographs for use by DISTRIBUTOR in cataloging the Products.
DISTRIBUTOR shall submit all brochures, manuals, advertising and other Product
literature and promotional materials, including all catalog copy with respect to
the Products, to SUPPLIER for approval prior to the distribution thereof, shall
identify SUPPLIER as the manufacturer of the Products described therein and
properly identify SUPPLIER's
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trademarks with respect to the Products. SUPPLIER agrees to promptly review any
such material submitted to it by DISTRIBUTOR and not unreasonably withhold,
delay or condition its approval.
5.4 SAMPLES: SUPPLIER shall provide DISTRIBUTOR with Product samples
during the term of this Agreement to assist DISTRIBUTOR with its marketing and
sales efforts relative to the Products. SUPPLIER will provide [ * ] annually
in free product samples to DISTRIBUTOR, at DISTRIBUTOR's cost.
5.5 DEMONSTRATION UNITS: SUPPLIER shall provide DISTRIBUTOR with a
reasonable quantity of Products to be used for demonstration purposes and
training during the term of this Agreement.
5.6 PROMOTION: DISTRIBUTOR shall make reasonable efforts to market, sell
and distribute the Products during the term of this Agreement.
5.7 SALES REPORTS: At SUPPLIER's request, DISTRIBUTOR shall submit to
SUPPLIER such reports as are customarily provided to suppliers similarly
situated with SUPPLIER at DISTRIBUTOR's standard charge for such reports then in
effect.
6. PRICE AND PAYMENT TERMS
6.1 PRICE: SUPPLIER shall supply and ship Products at the prices or at
the discount(s) shown in Exhibit A through [ * ] ("Firm Price
Period"). Such prices may be reduced by SUPPLIER, but may be increased only
according to the terms hereof. In no event shall SUPPLIER decrease any discount
to DISTRIBUTOR without DISTRIBUTOR's prior written consent.
6.2 DISTRIBUTOR PRICING: SUPPLIER represents and warrants that the
prices and terms at which the Products are and will be sold to DISTRIBUTOR
pursuant to this Agreement shall be no less favorable than those made available
to the SUPPLIER's most favored distributor(s) of similar size and volume.
6.3 PRICE INCREASES: [ *
] SUPPLIER shall give at least sixty (60) days prior written notice to
the DISTRIBUTOR of any price increase. Such price increases shall be as
negotiated in good faith by the parties. Shipments shall be billed at the price
in effect at time of order placement.
* PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
5
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Notice of price changes shall be sent to:
PRICING DEPARTMENT
Fisher Scientific
2000 Park Lane
Pittsburgh, PA 15275
With a copy to: CENTRAL PURCHASING
6.4 PAYMENT TERMS: Payment terms shall be [ * ] from the date of
receipt of the SUPPLIER's invoice.
6.5 RESALE: DISTRIBUTOR shall be entitled to resell Products on such
terms as it may, in its sole discretion, determine, including without
limitation, price, returns, credit and discounts.
6.6 SPECIAL PRICING: SUPPLIER shall negotiate in good faith with
DISTRIBUTOR to provide special pricing (i) where required for DISTRIBUTOR to
meet competition, and (ii) on any large quantity order for Products which may be
requested by DISTRIBUTOR's customers.
6.7 INFORMATION EXCHANGE: All price changes and additions of new
products accepted by DISTRIBUTOR shall be sent to DISTRIBUTOR at the address set
forth in Section 6.4 hereof in an electronic format acceptable to DISTRIBUTOR.
In addition, SUPPLIER shall make reasonable efforts to gain Electronic Data
Interchange (EDI) capability in a format compatible with DISTRIBUTOR's systems
for receipt of purchase orders and transmission of invoices.
7. PACKAGING
7.1 PACKAGING: SUPPLIER shall supply Products in sizes and packaging
configurations corresponding to those set forth in Exhibit A, as it may be
amended from time to time. SUPPLIER further agrees to prepare and mark all
outer packaging with DISTRIBUTOR's catalog numbers.
7.2 LOT NUMBERS AND EXPIRATION DATE: SUPPLIER shall print lot numbers
and expiration date, if any, conspicuously on both outer shipping cartons and on
inner shelf packs. DISTRIBUTOR, at the time of Product receipt, shall
accurately record into its order entry system lot and serial numbers for all
Products purchased from SUPPLIER.
* PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
6
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8. TERM AND TERMINATION
8.1 TERM: The initial term of this Agreement shall be from the effective
date on the first page hereof through December 31, 2000.
8.2 TERMINATION FOR CAUSE: Notwithstanding the foregoing, this Agreement
may be terminated for cause at any time as follows:
(i) SUPPLIER may terminate this Agreement in the event that
DISTRIBUTOR defaults in any payment to ACCUMED for any Products purchased from
ACCUMED and such default continues unremedied for a period of thirty (30) days
after written notice thereof.
(ii) Either party may terminate this Agreement in the event the other
party is in default or material breach of any of the terms of this Agreement,
and such failure or default continues unremedied for a period of sixty (60) days
after written notice thereof by the non-defaulting party.
(iii) Either party may terminate this Agreement immediately, in
the event of nationalization, expropriation, liquidation or bankruptcy of, or an
assignment for the benefit of creditors or insolvency of either party.
8.3 TERMINATION FOR CONVENIENCE: Notwithstanding any other provision
regarding termination, either party may terminate this Agreement at any time
prior to expiration of the initial term upon at least six (6) months prior
written notice to the other party. After expiration of the initial term, either
party may terminate this Agreement upon ninety (90) days prior written notice.
9. PROCEDURES ON TERMINATION
9.1 PROCEDURES: Upon the date of termination of this Agreement for any
reason, (i) DISTRIBUTOR shall promptly pay to SUPPLIER amounts owing to SUPPLIER
in accordance with the terms of this Agreement; (ii) SUPPLIER shall deliver to
DISTRIBUTOR Products satisfying all orders, if any, received prior to the
termination date in accordance with the terms of this Agreement; and (iii)
except to the extent necessary to complete outstanding orders and for Products
held in inventory, DISTRIBUTOR shall cease to use any of SUPPLIER's trademarks,
logos or trade names in connection with any promotion or advertising of the
Products.
9.2 SURVIVAL: The rights and duties of each party under this Agreement
and the Exhibits hereto in respect of performance prior to termination shall
survive and be enforceable in accordance with the terms of this Agreement.
7
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9.3 EXISTING INVENTORY: Upon termination of this Agreement by SUPPLIER,
SUPPLIER shall repurchase from DISTRIBUTOR, at DISTRIBUTOR's request and at
DISTRIBUTOR's invoiced cost therefor, such Products as are then owned by
DISTRIBUTOR; provided, however, that SUPPLIER shall not be required to
repurchase any Product not returned to SUPPLIER within thirty (30) days of the
termination date, any
Custom Product, and any previously used or obsolete Product not suitable for
sale as new. Delivery of Products repurchased from DISTRIBUTOR hereunder shall
be F.O.B. origin, freight collect.
10. WARRANTIES, INDEMNITY, RECALL AND INSURANCE
10.1 WARRANTIES: In addition to the warranties of SUPPLIER set forth in
this Agreement and in the Continuing Guaranty which is attached hereto as
Exhibit C, SUPPLIER warrants that the Products will conform to the
specifications set forth in SUPPLIER's product literature and Exhibit A; that
they will comply and be manufactured, packaged, sterilized (if applicable),
labeled and shipped by SUPPLIER in compliance with all applicable federal, state
and local laws, orders regulations and standards; and that they will be
merchantable and fit for their intended purpose.
All Products shall include SUPPLIER's warranty statement containing the
customer's warranty. All SUPPLIER's Products shall be warranted to
DISTRIBUTOR's customer against defects in materials and workmanship, including
parts and labor, under normal use for a period of one (1) year. SUPPLIER
warrants that the Products have been thoroughly tested before shipment and that,
if applicable, they are free of mechanical and electrical defects. The warranty
period becomes effective at the earlier of installation or fifteen (15)
days from date of shipment to DISTRIBUTOR's customer. DISTRIBUTOR shall request
customers to present reasonably acceptable documentation verifying the effective
warranty date.
The above warranty against Product defects shall only be available and
enforceable if: (i) DISTRIBUTOR's customer operates and maintains the Products
in accordance with SUPPLIER's operating manual, service manual, or other
documents relating to the Products, and the defect does not arise from accident,
negligence, installation error, normal wear and tear, or the improper use or
application of the Products; and (ii) the defective Product or component has not
been modified, altered or tampered with in any way by DISTRIBUTOR's customer or
any other third party, other than repairs or alterations thereto made during the
warranty period by an authorized representative of SUPPLIER in accordance with
SUPPLIER's service manuals.
During the warranty period, DISTRIBUTOR may, at its option, return any
Product requiring service to SUPPLIER for replacement or repair, or service the
instrument through Fisher Service Division ("FSD"). All reasonable charges for
parts, labor and travel incurred by FSD shall be paid by SUPPLIER. DISTRIBUTOR
shall cause FSD to provide SUPPLIER with quarterly service reports reasonably
detailing total warranty costs for the
8
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Products by categories of parts, labor and travel. FSD shall be considered a
third party beneficiary and obligor to this Agreement only insofar as this
paragraph of Section 10.1 may be concerned. Notwithstanding the foregoing,
SUPPLIER will provide all warranty and post-warranty service with respect to the
Products until such time as SUPPLIER, DISTRIBUTOR and/or FSD have entered into a
Service Agreement. Upon execution, such Service Agreement shall be attached to
this Agreement as Exhibit E and incorporated herein by this reference.
10.2 QUALITY INVESTIGATIVE REPORTS AND PRODUCT IMPROVEMENT REPORTS:
SUPPLIER shall promptly respond to all Quality Investigative Reports (QIR) and
Product Improvement Reports (PIR) submitted by DISTRIBUTOR, and take all
reasonably necessary and appropriate corrective action.
10.3 CONTINUING GUARANTY: SUPPLIER shall execute and abide by the terms
of DISTRIBUTOR's Continuing Guaranty, a copy of which is attached hereto as
Exhibit D and incorporated herein by reference. The terms and provisions of the
Continuing Guaranty shall survive the termination of this Agreement.
10.4 INSURANCE: On or prior to execution of this Agreement, SUPPLIER
shall provide DISTRIBUTOR with a Certificate of Insurance which meets the
requirements of Paragraph D of the Continuing Guaranty. SUPPLIER shall provide
DISTRIBUTOR with renewal insurance certificate in the form mandated by Paragraph
D of the Continuing Guaranty during the term of this Agreement, without demand
therefor by DISTRIBUTOR.
10.5 RECALL: In the event of a confirmed Product failure, or a recall
required by a government agency or requested by SUPPLIER, SUPPLIER agrees to pay
the costs of retrieval, recall and Product corrective action, including Products
already delivered to DISTRIBUTOR's customers, and further agrees to reimburse
DISTRIBUTOR for all affected Products including shipping charges plus any
reasonable out-of-pocket expenses associated therewith which are incurred by
DISTRIBUTOR. In addition, SUPPLIER shall notify DISTRIBUTOR immediately in
writing should SUPPLIER become aware of any defect or condition which may render
any of the Products in violation of any statute or regulation, or which in any
way alters the specifications or quality of the Products.
11. TRADEMARKS
11.1 TRADEMARKS AND TRADE NAMES: SUPPLIER recognizes that DISTRIBUTOR is
the owner of the trademarks and trade names connoting DISTRIBUTOR or DISTRIBUTOR
products which it may elect to use in the distribution and sale of the Products,
and that SUPPLIER has no right or interest in such trademarks and trade names.
11.2 TRADEMARK USAGE: SUPPLIER hereby grants to DISTRIBUTOR the non-
exclusive, royalty-free right to use SUPPLIER's trademark Sensititre-Registered
Trademark- and the trade name
9
<PAGE>
"AccuMed International, Inc." solely in connection with DISTRIBUTOR's promotion,
sale and distribution of the Products during the term of this Agreement, it
being expressly understood that if DISTRIBUTOR elects to use SUPPLIER's
trademarks during the term of the Agreement, DISTRIBUTOR shall properly do so
and shall discontinue the use of such trademarks in any new published material
following the termination hereof. Following the termination of this Agreement,
SUPPLIER grants DISTRIBUTOR the right to continue to use its trademarks to
complete any outstanding orders for Products and in connection with sale or
service of Products purchased by DISTRIBUTOR during the term of this Agreement.
DISTRIBUTOR disclaims any rights to SUPPLIER's trademarks other than the said
license. DISTRIBUTOR shall provide to SUPPLIER, at its request, reasonable
access to DISTRIBUTOR's facilities for purposes of inspection to ensure that
storage, handling, marketing, service and support of the Products is being
accomplished in a manner consistent with the terms of this Agreement to ensure
appropriate use of the trademark and trade name.
12. CONFIDENTIALITY
The parties expressly agree to hold as confidential ("Confidential
Information") the terms of this Agreement and for two (2) years from the date of
disclosure any information which is designated in writing by the disclosing
party as confidential. The transmittal of such information is and shall be upon
the express condition that the information is to be used solely to effectuate
this Agreement; and the receiving party shall not use, publish, or disclose said
information, in whole or in part, for any purpose other than that stated herein.
SUPPLIER expressly acknowledges and agrees that DISTRIBUTOR's customer names,
address and key contacts are and shall be the Confidential Information of
DISTRIBUTOR. Upon expiration or termination of this Agreement, the receiving
party shall promptly return to the disclosing party all Confidential Information
in its possession, including all documents, records and notes prepared by the
receiving party and incorporating such Confidential Information.
Notwithstanding the foregoing, the above restrictions on disclosures and use
shall not apply to any information which the party can show by written evidence,
was known to it at the time of receipt, or which may be obtained from third
parties who are not bound by a confidentiality agreement, or which is in the
public domain.
13. SOFTWARE LICENSE
SUPPLIER hereby grants DISTRIBUTOR a royalty-free, non-exclusive license to
use the software embodied in certain of the Products as identified on Exhibit A
hereto exclusively in connection with its promotion and sale of such Products.
Such license shall be automatically transferred to DISTRIBUTOR's customer
immediately upon purchase of the Product from DISTRIBUTOR without any further
action by any party. Apart from installing any upgrades or enhancements
supplied by SUPPLIER, DISTRIBUTOR shall not modify, amend or adapt the software
in any way. SUPPLIER represents and warrants that it has the right and power to
grant to DISTRIBUTOR the license contained herein. SUPPLIER shall defend,
indemnify and hold harmless DISTRIBUTOR from and against
10
<PAGE>
any and all claims, demands, losses, expenses (including attorneys' fees) and
damages as a result of any third party claims to the contrary.
14. MISCELLANEOUS
14.1 FORCE MAJEURE: The obligations of either party to perform under this
Agreement shall be excused during each period of delay if such delay arises from
any cause or causes which are reasonably beyond the control of the party
obligated to perform, including, but not limited to, the following: acts of
God, acts or omissions of any government, or any rules, regulations or orders of
any governmental authority or any officer, department, agency or instrumentality
thereof; fire, storm, flood, earthquake, insurrection, riot, invasion or
strikes. The affected party shall use its best efforts to remedy the effects of
such force majeure. Any force majeure shall not excuse performance by the
party, but shall postpone performance, unless such force majeure continues for a
period in excess of ninety (90) days. In such event, the party seeking
performance may cancel its obligations hereunder.
14.2 ASSIGNMENT: This Agreement shall not be assigned, transferred or
delegated to another by either party, in whole or in part, without the prior
written consent of the other party, which shall not be unreasonably withheld,
delayed or conditioned.
14.3 NOTICES: Any notice required by this Agreement shall be in writing
and shall be deemed sufficient if given personally or by registered or certified
mail, postage prepaid, or by any nationally recognized overnight delivery
service, addressed to the party to be notified at the address set forth in the
initial paragraph of this Agreement. Either party may, by notice to the other,
change its address for receiving such notices.
14.4 ENTIRE AGREEMENT: This Agreement, including exhibits, constitutes
the entire agreement between the parties relating to the subject matter hereof
and cancels and supersedes all prior agreements and understandings, whether
written or oral, between the parties with respect to such subject matter.
14.5 EXISTING OBLIGATIONS: SUPPLIER warrants that the terms of this
Agreement do not violate any existing obligations or contracts of SUPPLIER.
SUPPLIER shall protect, defend, indemnify, and hold harmless DISTRIBUTOR from
and against any claims, demands, liabilities or actions which are brought
against DISTRIBUTOR and which allege any such violation.
14.6 MODIFICATIONS, WAIVER: No amendment, modification or claimed waiver
of the terms of this Agreement shall be binding on either party unless reduced
to writing and signed by an authorized officer of the party to be bound. In
ordering and delivery of the Products, the parties may employ their standard
forms, but nothing in those forms shall be construed to modify or amend the
terms of this Agreement.
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14.7 RELATIONSHIP OF THE PARTIES: This Agreement does not constitute
either party as the agent or legal representative of the other for any purpose
whatsoever.
14.8 GOVERNING LAWS: This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the date first written above.
ACCUMED INTERNATIONAL, INC.
By: /s/ Michael Burke
------------------------------
Date: September 10, 1996
-----------------------------
FISHER SCIENTIFIC COMPANY
By: /s/ J. M. Daniels
-------------------------------
Date: September 10, 1996
-----------------------------
12
<PAGE>
"EXHIBIT A"
ACCUMED/CMS CONTRACT
PRODUCT DESCRIPTION/PRICING INFORMATION
Catalog Shelf Price/ Price/
[ * ] No. Life Each Unit
[ * ] MA 24 mos [ * ] [ * ]
[ * ] MB 18 mos. [ * ] [ * ]
[ * ] MC 18 mos. [ * ] [ * ]
[ * ] MD 18 mos. [ * ] [ * ]
[ * ] MF 24 mos. [ * ] [ * ]
[ * ] HP 18 mos. [ * ] [ * ]
[ * ] BC 18 mos. [ * ] [ * ]
[ * ] BD 24 mos. [ * ] [ * ]
[ * ] BE 24 mos. [ * ] [ * ]
[ * ] BH 24 mos. [ * ] [ * ]
[ * ] BG 18 mos. [ * ] [ * ]
[ * ] N/A 12 mos. [ * ] [ * ]
[ * ] AP80 12 mos. [ * ] [ * ]
[ * ] JO-AM 24 mos. [ * ] [ * ]
[ * ] JO-AMC 24 mos. [ * ] [ * ]
[ * ] JO-IPM 18 mos. [ * ] [ * ]
[ * ] JO-P1 24 mos. [ * ] [ * ]
[ * ] JO-VA 24 mos. [ * ] [ * ]
[ * ] JO-EBP2 24 mos. [ * ] [ * ]
[ * ] JO-UBP2 24 mos. [ * ] [ * ]
[ * ] E3010 N/A [ * ] [ * ]
[ * ] E1012 12 mos. [ * ] [ * ]
[ * ] V3010 N/A [ * ] [ * ]
[ * ] V3029 N/A [ * ] [ * ]
[ * ] V3027 N/A [ * ] [ * ]
[ * ] BM100 N/A [ * ] [ * ]
[ * ] V3090 N/A [ * ] [ * ]
*PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST
13
<PAGE>
"EXHIBIT A"
ACCUMED/CMS CONTRACT
SERVICE DESCRIPTIONS/PART NUMBERS
AUTOINOCULATOR
PRODUCT DESCRIPTION PART NUMBER
SW MEMB 552006
MOTOR 580035
DISPLAY BOARD 901855
PCB CPU BOARD 901856
ANALOG BOARD 901857
MAIN MOTOR 999255
E-PROMS 999369
PCV SENSOR/NEPH 901862
BELTS SET 999303
SENSITOUCH
PRODUCT DESCRIPTION PART NUMBER
WSHR 5.1 X 10 X 2 042509
MEMBRAND SWITCH 552013
PCB KEY PAD 901931
PCB DISP LCD 902022
PCB SERIAL (NEW) 999275
POWER SUPPLY 999281
COILED CABLE 999288
LCD RIBBON CABLE 999318
LAMP 999320
IC CPU CHIP/6501q 999322
PCB SERIAL (OLD) 999379
14
<PAGE>
"EXHIBIT A"
ACCUMED/CMS CONTRACT
SERVICE DESCRIPTIONS/PART NUMBERS
AUTOREADER
PRODUCT DESCRIPTION PART NUMBER
PHOTOMULTIPLIER TUBE 999257
XENON FLASH LAMP 999258
STEPPER MOTOR 999262
A/D BOARD 999263
CPU BOARD 999264
POWER SUPPLY 999271
POWER SUPPLY (OLD STYLE) 999327
PLATEHOLDER FOR USE IN ARIS 888060
COMPUTER BOARD FOR USE IN ARIS 902287
ARIS
PRODUCT DESCRIPTION PART NUMBER
KEYBOARD KEY PAD 552-033
CAROUSEL DC MOTOR (C MOTOR) & GEARBOX 580321
X STEPPER MOTOR & GEARBOX 580047
Y STEPPER MOTOR & GEARBOX 580048
GRIPPER STEPPER MOTOR (G MOTOR) & GEARBOX 580046
MEMBRANE KEYPAD 552023
VF DISPLAY 311036
MAIN HEATING TRANSISTOR 360243
DC FAN (INTERNAL/EXTERNAL) 580169
FLEXIBLE CABLE (Y MOTOR) 617898
FLEXIBLE CABLE (G MOTOR) 617897
SLOTTED OPTICAL SENSOR 360260
PERSPEX USER DOOR WINDOW 977167
FUSE 100-120 V:2-5A(T) 450124
FUSE 220-240 V:1-5A(T) 450021
FUSES FOR POWER SUPPLY PCB, SLOW BLOW:
F1, F2 AND F8:3-2A(T) 450138
F3, F4, F5 AND F6: 0-8A(T) 450131
15
<PAGE>
"EXHIBIT A"
ACCUMED/CMS CONTRACT
SERVICE DESCRIPTIONS/PART NUMBERS
ARIS (CON'T)
PRODUCT DESCRIPTION PART NUMBER
CAROUSEL AND Y ENCODER BOARD 901907
MMI BOARD 902077
MAIN CPU BOARD 902080
TEMP. AND CAROUSEL CONTROL BOARD 902082
LED INDICATOR BOARD 902083
POWER SUPPLY BOARD 902084
CAROUSEL INTERFACE BOARD 902085
Y MOTOR CONTROL BOARD 902086
CAROUSEL BOARD 902087
GRIPPER MOTOR BOARD 902090
CCD AND MOTOR CONTROL BOARD 902091
16
<PAGE>
EXHIBIT B
a. Distributor shall make good faith commercial efforts to promote,
distribute and sell the Products during the term of this Agreement.
Specifically, Distributor shall make good faith commercial efforts to sell such
stated amounts to its customers within such contract periods (the "Contract
Period(s)") as are set forth below:
Contract Period Estimated Sales of
Instruments/Reagents/Consumables Products to
be sold by Distributor
Period 1 9/96 - 12/97 [ * ]
Period 2 1/98 - 12/98 [ * ]
Period 3 1/99 - 12/99 [ * ]
Period 4 1/00 - 12/00 [ * ]
The foregoing shall constitute non-binding Estimated Sales targets.
During Period 2 and beyond, the Estimated Sales targets are predicated upon
Supplier launching its new products, specifically, the Kirby Bauer Reader and
the [ * ]. In the event Supplier fails to launch both of such
products prior to the end of Period 1, the parties shall mutually agree to new
Estimated Sales targets for Period 2 and beyond. Failure of the parties to
agree shall result in the Estimated Sales targets for Period 1 being carried
forward to Period 2 and beyond.
b. In the event Distributor is unable to meet the Estimated Sales targets
due to the failure of Supplier to supply the quantities of Products required to
meet such Estimated Sales targets or other fault of Supplier, Distributor's
obligation to meet such Estimated Sales targets shall be deemed to have been
met.
* PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
17
<PAGE>
"EXHIBIT C"
ACCUMED/CMS CONTRACT
ACCOUNT NAME CITY, STATE
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
* PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
18
<PAGE>
"EXHIBIT C"
ACCUMED/CMS CONTRACT
ACCOUNT NAME CITY, STATE
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
* PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
19
<PAGE>
"EXHIBIT C"
ACCUMED/CMS CONTRACT
ACCOUNT NAME CITY, STATE
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
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* PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
20
<PAGE>
"EXHIBIT C"
ACCUMED/CMS CONTRACT
ACCOUNT NAME CITY, STATE
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[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
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[ * ] [ * ]
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* PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
21
<PAGE>
CONTINUING GUARANTY
A. AccuMed International, Inc. (hereinafter referred to as "Seller"), having
its principal office and place of business at 900 North Franklin Street,
Suite 402, Chicago, IL 60610, hereby guarantees that all Products
(including their packaging, labelling and shipping) comprising each
shipment or other delivery hereinafter made by Seller (hereinafter referred
to as "Products") to or on the order of Fisher Scientific Company, a
Delaware corporation, having a place of business at 9999 Veterans Memorial
Drive, Houston, Texas 77038, or any of their customers (hereinafter
collectively referred to as "Fisher"), are, as of the date of such shipment
or delivery, in compliance with applicable federal, state and local laws,
and any regulations, rules, declarations, interpretations and orders issued
thereunder, including, without limitation, the Federal Food, Drug and
Cosmetic Act, as amended, and conform to representations and warranties
made by Seller in its advertising, product labelling and literature.
B. Further, with respect to any Product that it privately labeled for Fisher,
Seller agrees to make no change in such Products or the Fisher artwork on
the labelling or packaging relating thereto without first obtaining the
written consent of Fisher. Seller recognizes that Fisher is the owner of
the trademarks and trade names connoting Fisher which it may elect to use
in the promotion and sale of such private label Products and that Seller
has no right or interest in such trademarks or trade names, Seller shall
periodically analyze and review packaging and labelling for any Products
which are private labeled for Fisher to ensure conformality with the
provisions of paragraph A hereof and the adequacy of Product warnings and
instructions.
C. Seller hereby agrees that it will reimburse Fisher for all reasonable out-
of-pocket costs and expenses incurred in connection with any product
corrective action or recall relating to the Products which is requested by
Seller or required by any governmental entity.
D. Seller agrees to procure and maintain on an occurrence form basis product
liability insurance with respect to the Products and contractual liability
coverage relating to this Guaranty, with insurer(s) having Best(s)
rating(s) of A or better, naming Fisher as an additional insured (Broad
Form Vendors Endorsement), with minimum limits in each case of $1,000,000.
Seller shall promptly furnish to Fisher a certificate of insurance and
renewal certificates of insurance evidencing the foregoing coverages and
limits. The insurance shall not be canceled, reduced or otherwise changed
without providing Fisher with at least ten (10) days prior written notice.
E. Seller agrees to and shall protect, defend, indemnify and hold harmless
Fisher (and with respect to subparagraph E, (1) below, Fisher's customers)
from any and all claims, actions, costs, expenses and damages, including
attorney's fees and expenses arising out of: (i) any actual or alleged
patent trademark or copyright infringement in the design, composition, use,
sale, advertising or packaging of the Products which is not attributable to
the acts of Fisher in violation of the terms of the Distribution Agreement:
(ii) any breach of the representations or warranties set forth in this
Guaranty; (iii) the sale or use of the Products where such liability
results from the acts or omission of Seller (whether for breach of
warranty, stict liability in tort, negligence or otherwise).
F. Seller agrees to and shall provide to Fisher Material Safety Data Sheets
and other information concerning any Product as required by then applicable
federal, state or local law.
G. Seller agrees to and shall accept, at its facility, all of Fisher's unsold
or expired Products containing hazardous chemicals, materials or substances
for disposal, recycling or use. Fisher shall be responsible for packing
and transportation costs to Seller. Seller shall be responsible for all
other costs, including without limitation, any costs associated with
Seller's disposal, recycling or use.
H. If the Products to be furnished by Seller are to be used in the performance
if a U.S. government contract or subcontract, those clauses of the
applicable U.S. government procurement regulation which are mandatorily
required by Federal Statute to be included in U.S. government subcontracts
shall be incorporated herein by reference including, without limitation,
the Fair Labor Standards Act of 1938, as amended.
I. The representations and obligations set forth herein shall be continuing
and shall be binding upon the Seller and Fisher and his or its heirs,
executors, administrators, successors and/or assigns, whichever the case
may be, and shall inure to the benefit of Fisher, its successors and
assigns and to the benefit of its officers, directors, agents and employees
and their heirs, executors, administrators, and assigns.
J. The agreements and obligations of Seller and Fisher set forth in this
Guaranty are in consideration of sales made to Fisher by Seller and
purchases made by Fisher from Seller and said obligations are in addition
to (and supersede to the extent of any conflict) any obligations of Seller
to Fisher or Fisher to Seller. This Guaranty shall be effective upon the
first sale to Fisher of any Product by Seller, and the obligations of
Seller under this Guaranty shall survive and be enforceable in accordance
with its terms.
ACCUMED INTERNATIONAL, INC.
/s/ Michael Burke
- ----------------------------------------
Signature of Authorized Representative
President Microbiology 9/10/96
- ----------------------------------------
Title Date
FISHER SCIENTIFIC COMPANY
/s/ J.M. Daniels
- ----------------------------------------
Signature of Authorized Representative
V.P. Marketing 9/11/96
- ----------------------------------------
Title Date
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made retroactive to the 9th day
of September, 1996, by and between AccuMed International, Inc., a Delaware
corporation (the "Employer"), and Leonard R. Prange (the "Executive").
WITNESSETH
WHEREAS, Employer desires to employ Executive and Executive is willing to accept
such employment, and this Agreement contains the parties' entire agreement and
understanding as to the matters contemplated herein, and supersedes any and all
prior oral or written agreements, including the Offer of Employment Letter dated
September 3rd, 1996 from the Employer to the Executive.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT AND DUTIES. Employer hereby employs Executive and Executive
accepts employment with Employer as Chief Financial Officer and Corporate
Vice President subject to the direction of the Chairman/CEO of the
Employer. Executive shall perform such other or additional duties as shall
be assigned to Executive from time to time by the Chairman/CEO.
2. COMPENSATION. During the term of this Agreement, Employer shall pay
Executive the following compensation:
a. ANNUAL BASE SALARY Executive's annual salary shall be $125,000,
payable in accordance with Employer's regular semi-monthly payroll
procedures. Annual performance and compensation reviews will be
conducted by the CEO and Board thereafter. (Employee's annual base
salary as in effect from time to time is referred to as the "Annual
Base Salary.")
b. BONUS Executive will be eligible to receive an amount up to Twenty-
Five Percent (25%) of his then Annual Base Salary as a performance
bonus annually. Earned bonus amounts will be payable as follows: an
amount up to Fifteen Percent (15%) of the Annual Base Salary, and
prorated over three quarters may be earned based upon satisfactory
performance of mutually agreed upon quarterly goals/objectives; and
an amount up to Ten Percent 10% of the Annual Base Salary may be
earned based upon performance of year end goals. The fiscal year
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begins January 1st each year and ends December 31st. Executive's
Bonus program will commence with the first Quarter of 1997.
c. STOCK OPTIONS As a signing bonus, Stock Options for 150,000 shares of
the Employer's Common Stock will be granted. Price of the Options
will be set at fair market value at the date of the Executive
commencing full-time employment.
i) Vesting will occur as follows:
25,000 Shares will be vested immediately upon shareholder
approval of the amendment to increase shares available under the
1995 Stock Option Plan; and
25,000 Shares will be vested each year on the anniversary of the
grant for the next five (5) years in accordance with the
Employer's Stock Option Plan.
ii) Additional Options may be granted at the full discretion of the
Board of Directors, based on recommendation of Chief Executive
Officer for meritorious performance.
iii) In the event the control of the Company changes, or Peter P.
Gombrich cease to hold the office of Chairman & CEO, the entire
150,000 shares shall be immediately vested.
d. BENEFITS Eligible for such company benefits as exist, and subject to
the terms and conditions of third party policies for:
Medical Insurance with $15,000 Life/AD&D 99% paid by Company
Dependant medical insurance at the option and expense of the
Executive Excess Life and AD&D Benefit 1 1/2 times base salary
(less $15,000) up to $150,000 cap, fully paid by the Company
Short Term Disability $500/wk benefit for 26 weeks fully paid by
Company Long Term Disability 60% of monthly salary ($6000/mo cap)
to age 65/ own occupation - Executive Option Dental Insurance -
option available. No Company contribution
e. EXPENSES Reimbursement of normal business expenses with submission of
expense reports and receipts.
f. OTHER COMPENSATION Nothing herein shall preclude Executive from
receiving any additional compensation from the Company or any parent
or subsidiary, or from participating in the present or future life,
major medical, hospitalization, profit sharing, pension or retirement,
sickness or disability or other plan for the benefit of the Executives
of Employer; in each case to the extent and in the manner approved or
determined by the Board of Directors of the Employer.
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<PAGE>
3. EXTENT OF SERVICES.
a. Except as otherwise provided in Section 3.b., Executive shall devote
his entire attention and energy to the business and affairs of the
Employer on a full-time basis and shall not be engaged in any other
business activity, whether or not such business activity is pursued
for gain, profit or other pecuniary advantage, unless Employer
otherwise consents; but this shall not be construed as preventing
Executive from investing Executive's assets in such form or manner as
will not require any services on the part of the Executive in the
operation of the affairs of the companies in which such investment are
made. "Full-time," as used above, shall mean a forty (40) hour work
week, or such lessor work week as the Employer shall from time to time
adopt.
b. Employer hereby consents to the performance by the Executive of his
obligations to Richardson Electronics pursuant to the Consulting
Agreement dated April 1, 1994 and effective June 1, 1995, as in
effect on the date hereof, 1 copy of which has been delivered to
Employer. Further, Employer acknowledges and consents to Executive's
continued ownership of Lovett International, Inc..
4. TERM & TERMINATION Unless otherwise terminated pursuant to the provisions
set forth below, this Agreement shall be in effect for an initial term of
twelve months and shall thereafter be renewed annually for additional terms
unless either party shall provide written notice of cancellation to the
other at least sixty (60) days prior to the end of the then current term
subject to the following:
a. ILLNESS OR DISABILITY If Executive is absent from employment by
reason of illness or other incapacity for more than 180 consecutive
days, Employer may, after such 180 days, but only if Executive has not
returned to active employment with Employer, terminate Executive's
employment by furnishing him notice of such termination, and Employer
shall be obligated to pay Executive's salary to the date of such
notice, provided that Employer has received satisfactory written
documentation of such illness or incapacity from Executive's
physician, less that amount equal to the weekly Short Term Disability
Benefit, which date shall be for all purposes of this Agreement, the
date of termination of his employment.
b. DEATH. If Executive shall die, thereupon his employment shall
terminate, and Employer shall be only obligated to pay Executive's
salary to the end of the month during which Executive dies.
c. TERMINATION BY EMPLOYER. Employer may terminate this Agreement
immediately at any time for Cause or a Material breach hereof by
Executive:
i) As used herein, "Cause" is defined to mean (1) any act of fraud,
misappropriation, embezzlement, or like act of dishonesty, or
negligence; (2) conviction of a felony; (3) other behavior which
adversely reflects on the reputation of Employer such as
substance abuse, public intoxication, etc.; or (4) material
failure to perform the services and duties described
3
<PAGE>
herein, material violation of any other provisions set forth
herein, or Material Breach of any fiduciary duty to Employer, if
the material failure, violation, or breach unreasonably continues
after written notice thereof is given to the Executive by the
Employer.
ii) "Material Breach" is defined to mean a material violation of any
of the provisions and conditions set forth herein if such
violation unreasonably continues after written notice thereof is
given to the violator.
If Employer terminates this Agreement for Cause or Material Breach by
Executive, Employer shall pay Executive's then salary up to the date of the
delivery of notice of termination, which date shall be for all purposes of
this Agreement, the date of termination of his employment, and Executive
shall not be entitled to any other compensation.
d. TERMINATION BY EXECUTIVE If Executive's employment is terminated by
Employer without Cause or a Material Breach hereof by Executive, or if
Employer fails to pay any salary owed to Executive hereunder, or if
Employer engages in any other Material Breach of this Agreement,
Executive may, in addition and without prejudice to any other remedies
for a breach hereof, terminate this Agreement effective upon written
notice to the Employer and all of Executive's further obligations
hereunder except for the requirements of Sections 8 and 10.
5. SEVERANCE.
a. If Executive terminates this Agreement, other than under Section 4(d)
above, prior to September 9, 1997, any then outstanding stock options
granted pursuant to Section 2.c. shall thereupon terminate and shall
not thereafter be exercisable.
b. If Employer terminates this Agreement without Cause or Material Breach
by Executive prior to September 9, 1997, Employer will pay, subject to
the last paragraph of Section 7, Executive his then current Annual
Base Salary, less applicable taxes and deductions, payable semi-
monthly over twelve months according to normal payroll procedures;
additionally, all of the Stock Options granted pursuant to Section
2.c. shall become fully vested and immediately exercisable.
6. VACATION. During the first, second and third calendar years of employment,
Executive shall be entitled to three weeks of vacation with pay. During
the fourth and fifth calendar years of continuous service and during each
subsequent calendar year of continuous service thereafter, the Executive
shall be entitled to four weeks vacation with pay. In the event that the
full vacation is not taken by Executive within 60 days of the end of any
calendar year, the unused vacation time shall not accrue for use in future
years.
7. RESTRICTIVE COVENANT. During the term, and each renewal term of this
Agreement, and for a period of two year(s) thereafter, subject to Section
7.e., Executive shall not either as an individual on his own account; as a
partner, join venturer, employee, agent, salesman for any person;
4
<PAGE>
as an officer, director or stockholder (other than beneficial holder of
not more than 25% of the outstanding voting stock of a company having at
least 2 holders of voting stock) of a corporation; or otherwise, directly
or indirectly:
a. enter into or engage in any business directly competitive with that
carried on by Employer within any area of the United States in which
Employer is then doing business, provided that Executive has had
access to any of Employer's trade secrets (including but not limited
to that Confidential Information defined in Section 8 hereof);
b. solicit or attempt to solicit any of Employer's customers with whom
Executive has had contact as an employee of Employer in the charge of
Executive's duties and responsibilities hereunder with the intent or
purpose to perform for such customer the same or similar services or
to sell to such customer the same or similar goods which Executive
performed for or sold to such customer during the term of his
employment hereunder;
c. employ or solicit, or attempt to employ or solicit, for Executive or
any third party, the employment of any of Employer's employees; or
d. induce or attempt to induce any employee, consultant or agent of the
Employer to discontinue services to the Employer.
e. In the event the Executive terminates this Agreement with the Company,
without Cause or Material Breach the provisions in Section 7. shall
apply in full. In the event that the Company should terminate the
Agreement without Cause or Material Breach the Executive is released
from the provisions in Section 7. a.. All other provisions in Section
7. (b., c., d. and e.) shall remain in full force and effect.
The above referenced two (2) year period shall be tolled during any time
that Executive is in violation of any provision(s) of this Section 7. If
Executive violates any provision of this Section 7, Employer's obligation
to make any further payments to Executive pursuant to Section 5 shall
terminate. Should Executive be found in a binding judicial proceeding to
have violated the provisions of Section 7, the above two (2) period shall
run from the date of the most recent violation such provisions.
8. CONFIDENTIAL INFORMATION AND DISCOVERIES. Executive agrees that all
information of a technical or business nature such as know-how, trade
secrets, secret business information, plans, data, processes, techniques,
customer information, inventions, discoveries, formulae, patterns, devices,
etc. (the "Confidential Information"), acquired by Executive in the course
of his employment under this Agreement, is a valuable business property
right of the Employer. Executive agrees that such Confidential
Information, whether in written, verbal or model form, shall not be
disclosed to anyone outside the employment of Employer without the express
authorization of Employer. This disclosure restriction
5
<PAGE>
shall continue until the earlier of termination of the non-competition
provisions of Section 7 and such time as the Confidential Information has
become public information other than through disclosure by Executive.
Any and all improvements, inventions, discoveries, formulae or processes in
any way related to Employer's business which Executive may conceive or make
during his regular working hours or otherwise shall be the sole and
exclusive property of the Employer and Executive will disclose the same to
Employer and will, whenever requested by Employer to do so (either during
the term of this Agreement or thereafter), execute and assign any and all
applications, assignments and/or other instruments and do all things which
Employer may deem necessary or appropriate in order to apply for, obtain,
maintain, enforce and defend patents, copyrights, trademarks or other forms
of protection, or in order to assign and convey or otherwise make available
to Employer the sole and exclusive right, title and interest in and to said
improvements, inventions, discoveries, formulae, processes, applications or
patents.
No provision in this Agreement is intended to require assignment of any of
the Executive's rights in an invention if no equipment, supplies,
facilities, or trade secret information of the Employer was used, and the
invention was developed entirely on the Executive's own time; and the
invention does not relate to the business of the Employer or to the
Employer's actual or demonstrably anticipated research or development; and
does not result from any work performed by the Executive for the Employer.
9. ENFORCEMENT. Both parties recognize that the services to be rendered
under this Agreement by Executive are special, unique and of extraordinary
character and that in the event of the breach by Executive of any of the
terms and conditions of this Agreement to be performed by Executive, then
Employer shall be entitled, if it so elects, to institute and prosecute
proceedings in any court of competent jurisdiction, either in law or in
equity, to obtain damages for any breach hereof, or to enforce the specific
performance hereof by Executive or to enjoin Executive from performing acts
prohibited above during the period herein covered, but nothing herein
contained shall be construed to prevent such other remedy in the courts as
Employer may elect to invoke.
10. RETURN OF DOCUMENTS. Upon the termination of this Agreement for any
reason, Executive shall forthwith return and deliver to Employer and shall
not retain any original or copies of any books, papers, price lists or
customer contacts, bids or customer lists, files, books of account,
notebooks and other documents and data relating to the performance of
services rendered by Executive hereunder, all of which materials are hereby
agreed to be the property of the Employer.
11. MISCELLANEOUS.
a. NOTICES Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if hand delivered or
sent by registered or certified mail to Executive or Employer at the
address set forth below their signatures at the end of this Agreement
or to such other address as they shall notify each other in writing.
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<PAGE>
b. ASSIGNMENT This Agreement shall be binding upon and inure to the
benefit of Employer and its successors and assigns and Executive and
his personal representatives, heirs, legatees and beneficiaries, but
shall not be assignable by Executive.
c. APPLICABLE LAW This Agreement shall be deemed to have been made in
Illinois, regardless of the order in which the signatures of the
parties shall be affixed hereto, and shall be interpreted, and the
rights and liabilities of the parties determined, in accordance with
the laws of the State of Illinois. As part of the consideration for
the execution of this Agreement, it is hereby agreed that all actions
or proceedings arising directly or indirectly from this Agreement
shall be litigated only in the courts of the State of Illinois or
United States courts located therein, and all parties to this
Agreement hereby consent to the jurisdiction of any local, state or
federal court located within the State of Illinois.
d. HEADINGS Sections headings and numbers herein are included for
convenience of reference only and this Agreement is not to be
construed with reference thereto. If there be any conflict between
such numbers and headings and the text hereof, the text shall control.
e. SEVERABILITY If for any reason any portion of this Agreement shall be
held invalid or unenforceable, it is agreed that the same shall not
affect the validity or enforceability of the remainder hereof.
f. ENTIRE AGREEMENT This Agreement, and its attachments, contains the
entire agreement of the parties with respect to its subject matter and
supersedes all previous agreements, oral or written, between the
parties, including the Employment Offer Letter dated September 3, 1996
by Employer to Executive. No officer, employee or representative of
Employer has any authority to make any representation or promise in
connection with this Agreement or the subject matter hereof that is
not contained herein, and the Employee represents and warrants he has
not executed this Agreement in reliance upon any such representation
or promise. No modification of this Agreement shall be valid unless
made in writing and signed by the parties hereto.
g. WAIVER OF BREACH The waiver by Employer of a breach of any provision
of this Agreement by Executive shall not operate or be construed as a
waiver of any subsequent breach by Executive.
h. COUNTERPARTS This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one agreement.
7
<PAGE>
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed by its
duly authorized officer and its corporate seal to be affixed hereunto and
Executive has signed this Agreement all on the day and year first above written.
ACCUMED INTERNATIONAL, INC. EXECUTIVE:
By /s/ Peter P. Gombrich By /s/ Leonard R. Prange
------------------------------- ------------------------------
Peter P. Gombrich, Leonard R. Prange
Its: Chief Executive Officer
Address: 900 N. Franklin ~ #401 Address 1010 Willowcreek Road
Chicago, IL 60610 West Chicago, IL 60185
SEAL
8
<PAGE>
COMMERCIAL GUARANTY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$500,000.00 07-22-1996 07-31-1997 23620
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Borrower: AccuMed International, Inc. Lender: THE NORTHERN TRUST COMPANY
920 N. Franklin, Suite 402 50 S. LaSalle Street
Chicago, IL 60610 Chicago, IL 60676
Guarantor:Peter F. Gombrich
1705 North Dayton
Chicago IL 60614
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMOUNT OF GUARANTY. The principal amount of this Guaranty is Two Hundred
Thousand and 00/100 Dollars ($200,000.00)
GUARANTY. For good and valuable consideration, Peter P. Gombrich ("Guarantor")
absolutely and unconditionally guarantees and promises to pay to the NORTHERN
TRUST COMPANY ("Lender") or its order, in legal tender of the United States of
America, the Indebtedness (as that term is defined below) of AccuMed
International, Inc. ("Borrower") to Lender on the terms and conditions set forth
in this Guaranty.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
BORROWER. The word "Borrower" means AccuMed International, Inc.
GUARANTOR. The word "Guarantor" means Peter P. Gombrich.
GUARANTY. The word "Guaranty" means this Guaranty made by Guarantor for the
benefit of Lender dated July 22, 1996.
INDEBTEDNESS. The word "Indebtedness" means the Note, including (a) all
principal, (b) all interest, (c) all late charges, (d) all loan fees and loan
charges, and (e) all collection costs and expenses relating to the Note or to
any collateral for the Note. Collection costs and expenses include without
limitation all of Lender's attorneys' fees and Lenders legal expenses, whether
or not suit is instituted, and attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
LENDER. The word "Lender" means THE NORTHERN TRUST COMPANY, and its successors
and assigns.
NOTE. The word "Note" means the promissory note or credit agreement dated July
22, 1996, in the original principal amount of $500,000.00 from Borrower to
Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the promissory note or
agreement. NOTICE TO GUARANTOR: THE NOTE EVIDENCES A REVOLVING LINE OF CREDIT
FROM LENDER TO BORROWER.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall
not exceed at any one time the sum of the principal amount of $200,000.00 plus
all interest thereon, plus all of Lender's costs, expenses, and attorney's fees
incurred in connection with or relating to (a) the collection of the
Indebtedness, (b) the collection and sale of any collateral for the Indebtedness
or this Guaranty, or (c) the enforcement of this Guaranty. Attorneys' fees
include, without limitation, attorneys' fees whether or not there is a lawsuit,
and if there is a lawsuit, any fees and costs for trial and appeals.
The above limitation on liability is not a restriction on the amount of the
Indebtedness of Borrower to Lender either in the aggregate or at any one time.
If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from guarantor, the rights of Lender under all guaranties
shall be cumulative. This Guaranty shall not (unless specifically provided
below to the contrary) affect or invalidate any such other guaranties. The
liability of Guarantor will be the aggregate liability of Guarantor under the
terms of this Guaranty and any such other unterminated guaranties.
NATURE OF GUARANTY. Guarantor intends to guarantee at all times that
performance and prompt payment when due, whether at maturity or earlier by
reason of acceleration or otherwise, of all Indebtedness within the limits set
forth in the preceding section of this Guaranty. This Guaranty covers a
revolving line of credit and Guarantor understands and agrees that this
guarantee shall be open and continuous until the line of credit is terminated
and the Indebtedness is paid in full, as provided below.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness shall have
been fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full. Release of any other
guarantor or termination of any other guaranty of the Indebtedness shall not
affect the liability of Guarantor under this Guaranty. A revocation received by
Lender from any one or more Guarantors shall not affect the liability of any
remaining Guarantors under this Guaranty. This Guaranty covers a revolving line
of credit and it is specifically anticipated that fluctuations will occur in the
aggregate amount of Indebtedness owing from Borrower to Lender. Grantor
specifically acknowledges and agrees that fluctuations in the amount of
Indebtedness, even to zero dollars ($0.00), shall not constitute a termination
of this Guaranty. Guarantor's liability under this Guaranty shall terminate
only upon (a) termination in writing by Borrower and Lender of the line of
credit, (b) payment of the Indebtedness in full in legal tender, and (c) payment
in full in legal tender of all other obligations of Guarantor under this
Guaranty.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without
notice or demand and without lessening Guarantor's liability under this
Guaranty, from time to time: (a) to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (b) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the Indebtedness or any part of the Indebtedness,
including increases and decreases of the rate of interest on the Indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(c) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (d) to release, substitute, agree not to sue, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (e) to determine how, when and what application
of payments and credits shall be made on the Indebtedness; (f) to apply such
security and direct toe order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed or trust, as Lender in its discretion may determine;
(g) to sell, transfer, assign, or grant participations in all or any part of the
Indebtedness; and (h) to assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants
to Lender that (a) no representations or agreements of any kind have been made
to Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
the Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any collateral held by
Lender from Borrower, any other guarantor, or any other person; (e) to give
notice of the terms, time, and place of any public or private sale of personal
property security held by Lender from Borrower or to comply with any other
applicable provision of the Uniform Commercial Code; (f) to pursue any other
remedy within Lender's power; or (g) to commit any act or omission of any kind,
or at any time, with respect to any matter whatsoever.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
<PAGE>
07-22-1966 COMMERCIAL GUARANTY Page 2
Loan No
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by reason of (a)
any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from bringing any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, either judicially or by exercise of a power of sale; (b) any
election of remedies by Lender which destroy or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower
for reimbursement, including without limitation, any loss of rights Guarantor
may suffer by reason of any law limiting, qualifying, or discharging the
Indebtedness; (c) any disability or other defense of Borrower, of any other
Guarantor, or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal tender,
of the Indebtedness; (d) any right to claim discharge of the Indebtedness on the
basis of unjustified impairment of any collateral for the Indebtedness; (e) any
statute of limitations, if at any time any action or suit brought by Lender
against Guarantor is commenced there is outstanding Indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or (f) any
defenses given to guarantors at law or in equity other than actual payment and
performance of the Indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by Guarantor or by any third party, on the
Indebtedness and thereafter Lender is forced to remit the amount of that payment
(a) to Borrower's trustee in bankruptcy or to any similar person under any
federal or state bankruptcy law or law for the relief of debtors, (b) by reason
of any judgment, decree or order of any court or administrative body having
jurisdiction over Lender or any of Lender's property, or (c) by reason of any
settlement or compromise of any claim made by Lender with any claimant
(including without limitation Borrower or Guarantor), the Indebtedness shall be
considered unpaid for the purpose of enforcement of this Guaranty and this
Guaranty shall continue to be effective or shall be reinstated, as the case may
be, notwithstanding any cancellation of this Guaranty and this Guaranty shall
continue to be effective or shall be reinstated, as the case may be,
notwithstanding any cancellation of this Guaranty or of any note or other
instrument or agreement evidencing the Indebtedness and Guarantor shall remain
liable for the amount repaid or recovered to the same extent as if that amount
never had been originally received by Lender, and Guarantor shall be bound by
any judgment, decree, order, settlement or compromise relating to the
Indebtedness or to this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public policy or
law. If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by
law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Guarantor hereby
assigns, conveys, delivers, pledges, and transfers to Lender all of Guarantor's
right, title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay in so
doing. Every right of setoff and security interest shall continue in full force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
borrower. In the event of insolvency and consequent liquidation of the assets
of Borrower, through bankruptcy, by an assignment for the benefit of creditors,
by voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
AMENDMENTS. This Guaranty, together with any Related documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this guaranty. No alternation of or amendment to this
Guaranty shall be effective unless given in writing and signed by the party
or parties sought to be charged or bound by the alternation or amendment.
APPLICABLE LAW. This Guaranty has been delivered to Lender and accepted by
Lender in the State of Illinois. If there is a lawsuit, Guarantor agrees
upon Lender's request to submit to the jurisdiction of the courts of Cook
County, State of Illinois. Lender and Guarantor hereby waive the right to
any jury trial in any action, proceeding, or counterclaim brought by either
Lender or Guarantor against the other. This Guaranty shall be governed by
and construed in accordance with the laws of the State of Illinois.
ATTORNEY'S FEES; EXPENSES. Guarantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Guaranty.
Lender may pay someone else to help enforce this Guaranty, and Guarantor
shall pay the costs and expenses of such enforcement. Costs and expenses
include Lender's attorneys' fees and legal expenses whether or not there is
a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (and including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated cost-judgment collection
services. Guarantor also shall pay all court costs and such additional
fees as may be directed by the court.
NOTICES. All notices required to be given by either party to the other
under this Guaranty shall be in writing, may be sent by telefacsimile, and
shall be effective when actually delivered or when deposited with a
nationally recognized overnight courier, or when deposited in the United
States mail, first class postage prepaid, addressed to the party to whom
the notice is to be given at the address shown above or to such other
addresses as either party may designate to the other in writing. If there
is more than one Guarantor, notice to any Guarantor will constitute notice
to all Guarantors. For notice purposes, Guarantor agrees to keep Lender
informed at all times of Guarantor's current address.
INTERPRETATION. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and construction
so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the
words "Borrower" and "Guarantor" respectively shall mean all and any one or
more of them. The words "Guarantor," "Borrower," and "Lender" include the
heirs, successors, assigns, and transferees of each of them. Caption
headings in this Guaranty are for convenience purposes only and are not to
be used to interpret or define the provisions of this Guaranty. If a court
of competent jurisdiction finds any provisions of this Guaranty to be
invalid or unenforceable as to any person or circumstance, such finding
shall not render that provisions invalid or unenforceable as to any other
persons or circumstances, and all provisions of this guaranty in all other
respects shall remain valid and enforceable. If any one or more of
Borrower or Guarantor are corporations or partnerships, it is not necessary
for Lender to inquire into the powers of Borrower or Guarantor or of the
officers, directors, partners, or agents acting or purporting to act on
their behalf, and any Indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.
WAIVER. Lender shall not be deemed to have waived any rights under this
Guaranty unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender
of a provisions of this Guaranty shall not prejudice or constitute a waiver
of Lender's right otherwise to demand strict compliance with that provision
or any other provision of this Guaranty. No prior waiver by Lender, nor
any course of dealing between Lender and Guarantor, shall constitute a
waiver of any of Lender's rights or of any of Guarantor's obligations as to
any future transactions. Whenever the consent of Lender is required under
this Guaranty, the granting of such consent by Lender in any instance shall
not constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
POWER OF ATTORNEY - FILLING IN BLANKS, ETC. Lender is hereby authorized by
Guarantor without notice to Guarantor to fill in any blank spaces and dates and
strike inapplicable terms herein or in any related document or instrument to
conform to the terms of the transaction and/or understanding evidences hereby,
for which purpose Lender shall be deemed to have been granted an irrevocable
power of attorney coupled with an interest.
<PAGE>
07-22-1966 COMMERCIAL GUARANTY Page 3
Loan No
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EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS
GUARANTY IS DATED JULY 22, 1996.
GUARANTOR:
X /s/ Peter P. Gombrich
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PETER P. GOMBRICH
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INDIVIDUAL ACKNOWLEDGMENT
STATE OF )
----------------------------
) SS
COUNTY OF )
----------------------------
On this day before me, the undersigned Notary Public, personally appeared Peter
P. Gombrich, to me known to be in the individual described in and who executed
the Commercial Guaranty, and acknowledged that he or she signed the Guaranty as
his or her free and voluntary act and deed, for the uses and purposes therein
mentioned.
GIVEN UNDER MY HAND AND OFFICIAL SEAL THIS DAY OF , 1996.
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BY RESIDING AT
----------------------------------------- ------------------------
NOTARY PUBLIC IN AND FOR THE STATE OF
-------------------------------------------
MY COMMISSION EXPIRES
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LASERPRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.22(c) 1996 CFI ProServices, Inc.
All rights reserved. (IL-D20 AMILLN C22.OVL)
<PAGE>
THE NORTHERN TRUST COMPANY
ASSIGNMENT OF DEPOSIT ACCOUNT
<TABLE>
<CAPTION>
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- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$500,000.00 07-22-1996 07-31-1997 23620
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- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
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- --------------------------------------------------------------------------------
Borrower: AccuMed International, Inc. Lender: THE NORTHERN TRUST COMPANY
920 N. Franklin, Suite 402 50 S. LaSalle Street
Chicago, IL 60610 Chicago, IL 60676
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THIS ASSIGNMENT OF DEPOSIT ACCOUNT IS ENTERED INTO BETWEEN ACCUMED
INTERNATIONAL, INC. (REFERRED TO BELOW AS "GRANTOR"); AND THE NORTHERN TRUST
COMPANY (REFERRED TO BELOW AS "LENDER").
ASSIGNMENT. For valuable consideration, Grantor assigns and grants to Lender a
security interest in the Collateral, including without limitation the deposit
accounts described below, to secure the Indebtedness and agrees that lender
shall have the rights stated in this Agreement with respect to the collateral,
in addition to all other rights which Lender may have by law.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
ACCOUNT. The word "Account" means the deposit account described below
in the definition for "Collateral."
AGREEMENT. The word "Agreement" means this Assignment of Deposit
Account, as this Assignment of Deposit Account may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Assignment of Deposit Account from time to time.
COLLATERAL. The word "Collateral" means the following described
deposit account:
CERTIFICATE OF DEPOSIT #5593018 ISSUED BY LENDER IN AN AMOUNT NOT LESS
THAN $300,000.00
together with (a) all interest, whether now accrued or hereafter accruing;
(b) all additional deposits hereafter made to the Account; (c) any and all
proceeds from the Account; and (d) all renewals, replacements and
substitutions for any of the foregoing.
In addition, the word "Collateral" includes all property of Grantor (however
owned if owned by more than one person), in the possession of Lender (or in
the possession of a third party subject to the control of Lender), whether
existing now or later and whether tangible or intangible in character,
including without limitation each and all of the following:
(a) ALL PROPERTY TO WHICH LENDER ACQUIRES TITLE OR DOCUMENTS OF TITLE.
(b) ALL PROPERTY ASSIGNED TO LENDER.
(c) ALL PROMISSORY NOTES, BILLS OF EXCHANGE, STOCK CERTIFICATES, BONDS,
SAVINGS PASSBOOKS, TIME CERTIFICATES OF DEPOSIT, INSURANCE POLICIES, AND
ALL OTHER INSTRUMENTS AND EVIDENCES OF AN OBLIGATION.
(d) ALL RECORDS RELATING TO ANY OF THE PROPERTY DESCRIBED IN THIS
COLLATERAL SECTION, WHETHER IN THE FORM OF WRITING, MICROFILM, MICROFICHE,
OR ELECTRONIC MEDIA.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section titled
"Events of Default."
GRANTOR. The word "Grantor" means AccuMed International, Inc., its
successors and assigns
GUARANTOR. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in connetion
with the Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means the Indebtedness evidenced by
the Note, including all principal and interest, together with all other
Indebtedness and costs and expenses for which Grantor is responsible under
this Agreement or Under any of the Related Documents. In addition, the word
"Indebtedness" includes all other obligations, debts and liabilities, plus
interest thereon, of Grantor, or any one or more of them, to Lender, as well
as all claims by Lender against Grantor, or any one or more of them, whether
existing now or later; whether they are voluntary or involuntary, due or not
due, direct or indirect, absolute or contingent, liquidated or unliquidated;
whether Grantor may be liable individually or jointly with others; whether
Grantor may be obligated as guarantor, surety, accommodation party or
otherwise; whether recovery upon such Indebtedness may be or hereafter may
become barred by any statute of limitations; and whether such Indebtedness
may be or hereafter may become otherwise unenforceable.
LENDER. The word "Lender means AccuMed International,Inc., its successors
and assigns
NOTE. the word "Note" means the note or credit agreement dated July 22,
1996, in the principal amount of $500,000.00 from AccuMed International, Inc.
to Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of and substitutions for the note or credit
agreement.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor represents and warrants to Lender that:
OWNERSHIP. Grantor is the lawful owner of the Collateral free and clear of
all loans, liens, encumbrances, and claims except as disclosed to and
accepted by Lender in writing
RIGHT TO GRANT SECURITY INTEREST. Grantor has the full right, power, and
authority to enter into this Agreement and to assign the Collateral to
Lender.
NO FURTHER TRANSFER. Grantor will not sell, assign, encumber, or otherwise
dispose of any of Grantor's rights in the Collateral except as provided in
this Agreement.
NO DEFAULTS. There are no defaults relating to the Collateral, and there are
no offsets or counterclaims to the same. Grantor will strictly and promptly
do everything required of Grantor under the terms, conditions, promises, and
agreements contained in or relating to the Collateral.
PROCEEDS. Any and all replacement or renewal certificates, instruments, or
other benefits or proceeds related to the Collateral that are received by
Grantor shall be held by Grantor in trust for Lender and immediately shall be
delivered by Grantor to Lender to be held as part of the Collateral.
LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL. While this
Agreement is in effect, Lender may retain the rights to possession of the
Collateral, together with any and all evidence of the Collateral, such as
certificates or passbooks. This Agreement will remain in effect until (a) there
no longer is any Indebtedness owing to Lender; (b) all other obligations secured
by this Agreement have been fulfilled; and (c) Grantor in writing, has requested
from Lender a release of this Agreement.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Grantor. All such
expenses shall become a part of the Indebtedness and, at Lender's option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will be
due and payable at the Note's maturity. This Agreement also will ensure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.
LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care
in the physical preservation and custody of any certificate or passbook for the
Collateral but shall have no other obligation to protect the Collateral or its
value. In particular, but without limitation, Lender shall have no
responsibility (a) fora the collection or protection of any income on the
Collateral, (b) for the preservation of rights against issuers of the Collateral
or against third persons; (c) for ascertaining any maturities, conversions,
exchanges, offers, tenders, or similar matters relating to the Collateral; nor
(d) for informing the Grantor about any of the above, whether or not Lender has
or is deemed to have knowledge of such matters.
REINSTATEMENT OF SECURITY INTEREST. If payment is made by Grantor, whether
voluntarily or otherwise, or by guarantor or by any third party,
<PAGE>
07-22-1996 ASSIGNMENT OF DEPOSIT ACCOUNT Page 2
Loan No (Continued)
on the Indebtedness and thereafter Lender is forced to remit the amount of that
payment (a) to Grantor's trustee in bankruptcy or to any similar person under
any federal or state bankruptcy law or law for the relief of debtors, (b) by
reason of any judgment, decree or order of any court or administrative body
having jurisdiction over Lender or any of Lender's property, or (c) by reason of
any settlement or compromise of any claim made by Lender with any claimant
(including without limitation Grantor), the Indebtedness shall be considered
unpaid for the purpose of enforcement of this Agreement and this Agreement shall
continue to be effective or shall be reinstated, as the case may be,
notwithstanding any cancellation of this Agreement or of any note or other
instrument or agreement evidencing the Indebtedness and the Collateral will
continue to secure the amount repaid or recovered to the same extent as if that
amount never had been originally received by Lender, and Grantor shall be bound
by any judgment, decree, order, settlement or compromise relating to the
Indebtedness or to this Agreement.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement.
DEFAULT OF INDEBTEDNESS. Failure of Grantor to make any payment when due on
the Indebtedness.
OTHER DEFAULTS. Failure of Grantor to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or in any
of the Related Documents or in any other agreement between Lender or Grantor.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Agreement, the Note
or the Related Documents is false or misleading in any material respect,
either nor or at the time made or furnished.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security interest or lien) at any
time and for any reason.
INSOLVENCY. The dissolution or termination of Grantor's existence as a going
business, the insolvency of Grantor, the appointment of a receiver for any
part of Grantor's property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor or Grantor or by any governmental agency
against the Collateral or any other collateral securing the Indebtedness.
This includes a garnishment of any of Grantor's accounts, including deposit
accounts, with Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or such Guarantor dies or becomes
incompetent.
ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
INSECURITY. Lender, in good faith, deems itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default, or
at any time thereafter, Lender may exercise any one or more of the following
rights and remedies, in addition to any rights or remedies that may be available
at law, in equity, or otherwise:
ACCELERATE INDEBTEDNESS. Lender may declare all Indebtedness of Grantor to
Lender immediately due and payable, without notice of any kind to Grantor.
APPLICATION OF ACCOUNT PROCEEDS. Lender may obtain all funds in the Account
from the issuer of the Account and apply them to the Indebtedness in the same
manner as if the Account had been issued by Lender. If the Account is
subject to an early withdrawal penalty, that penalty shall be deducted from
the Account before its application to the Indebtedness, whether the Account
is with Lender or some other institution. Any excess funds remaining after
application of the Account proceeds to the Indebtedness will be paid to
Grantor as the interests of Grantor may appear. Grantor agrees, to the
extent permitted by law, to pay any deficiency after application of the
proceeds of the Account to the Indebtedness. Lender also shall have all the
rights of a secured party under the Illinois Uniform Commercial Code, even if
the Account is not otherwise subject to such Code concerning security
interests, and the parties to this Agreement agree that the provisions of the
Code giving rights to a secured party shall nonetheless be a part of this
Agreement.
COLLECT THE COLLATERAL. Lender may collect any of the Collateral and, at
Lender's option and to the extent permitted by applicable law, may retain
possession of the Collateral while suing on the Indebtedness.
SELL THE COLLATERAL. Lender may sell the Collateral, at Lender's discretion,
as a unit or in parcels, at one or more public or private sales. Unless the
Collateral is perishable or threatens to decline speedily in value, Lender
shall give or mail to Grantor, or any of them, notice at least ten (10) days
in advance of the time and place of public sale, or of the date after which
private sale may be made. Grantor agrees that any requirement of reasonable
notice is satisfied if Lender mails notice by ordinary mail addressed to
Grantor, or any of them, at the last adddress Grantor has given Lender in
writing. If public sale is held, there shall be sufficient compliance with
all requirements of notice to the public by a single publication in any
newspaper of general circulation in the county where the Collateral is
located, setting forth the time and place of sale and a brief description of
the property to be sold. Lender may be a purchaser at any public sale.
REGISTER SECURITIES. Lender may register any securities included in the
Collateral in Lender's name and exercise any rights normally incident to the
ownership of securities.
SELL SECURITIES. Lender may sell any securities included in the Collateral
in a manner consistent with applicable federal and state securities laws,
notwithstanding any other provision of this or any other agreement. If,
because of restrictions under such laws, Lender is or believes it is unable
to sell the securities in an open market transaction, Grantor agrees that (a)
Lender shall have no obligation to delay sale until the securities can be
registered, (b) Lender may make a private sale to a single person or
restricted group of persons, even though such sale may result in a price that
is less favorable than might be obtained in an open market transaction, and
(c) such a sale shall be considered commercially reasonable. If any
securities held as Collateral are "restricted securities" as defined in the
Rules of the Securities and Exchange Commission (such as Regulation D or Rule
144) or state securities departments under state "Blue Sky" laws, or if
Grantor, or any of them (if more than one), is an affiliate of the issuer of
the securities, Grantor agrees that Grantor will neither sell nor dispose of
any securities of such issuer without obtaining Lender's prior written
consent.
TRANSFER TITLE. Lender may effect transfer of title upon sale of all or part
of the Collateral. For this purpose, Grantor irrevocable appoints Lender as
its attorney-in-fact to execute endorsements, assignments and instruments in
the name of Grantor and each of them (if more than one) as shall be necessary
or reasonable.
APPLICATION OF PROCEEDS. Lender may apply any cash which is part of the
Collateral, or which is received from the collection or sale of the
Collateral, to (a) reimbursement of any expenses, including any costs of any
securities registration, commissions incurred in connection with a sale,
attorney fees as provided below and court costs, whether or not there is a
lawsuit and including any fees on appeal, incurred by Lender in connection
with the collection and sale of such Collateral, and (b) to the payment of
the Indebtedness of Grantor to Lender, with any excess funds to be paid to
Grantor as the interests of Grantor may appear.
OTHER RIGHTS AND REMEDIES. Lender shall have and may exercise any or all of
the rights and remedies of a secured creditor under the provisions of the
Illinois Uniform Commercial Code, at law, in equity, or otherwise.
DEFICIENCY JUDGMENT. If permitted by applicable law, Lender may obtain a
judgment for any deficiency remaining in the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights provided
in this section.
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced
by this Agreement or by any other writing, shall be cumulative and may be
exercised singularly or concurrently. Election by Lender to pursue any
remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor under this
Agreement, after Grantor's failure to perform, shall not affect Lender's
right to declare a default and to exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This agreement, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Agreement. No alteration of or amendment to this Agreement
shall be effective unless given in writing and signed by the party or parties
sought to be charged or bound by the alteration or amendment.
APPLICABLE LAW. This Agreement has been delivered to Lender and accepted by
Lender in the State of Illinois. If there is a lawsuit, Grantor agrees upon
Lender's request to submit to the jurisdiction of the courts of Cook county,
State of Illinois. Lender and Grantor hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by either Lender or
Grantor against the other. This agreement shall be governed by and construed
in accordance with the laws of the State of Illinois.
ATTORNEY'S FEES; EXPENSES. Grantor agrees to pay upon demand all of Lender's
costs and expenses, including attorneys' fees and Lender's legal expenses,
incurred in connection with the enforcement of this Agreement. Lender may
pay someone else to help enforce this Agreement, and Grantor shall pay the
costs and expenses of such enforcement. Costs and expenses of such
enforcement. Costs and expenses include Lender's attorney's fees and legal
expenses whether or not there is a lawsuit, including attorneys' fees and
legal expenses for bankruptcy proceedings (and including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated post-
judgment collection services. Grantor also shall pay all court costs and
such additional fees as may be directed by the court.
<PAGE>
07-22-1996 ASSIGNMENT OF DEPOSIT ACCOUNT Page 3
Loan No (Continued)
NOTICES. All notices required to be given under this Agreement shall be
given in writing, may be sent to telefacsimile, and shall be effective when
actually delivered or when deposited with a nationally recognized overnight
courier or deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the address shown
above. Any party may change its address for notices under this Agreement by
giving formal written notice to the other parties, specifying that the
purpose of the notice is to change the party's address. To the extent
permitted by applicable law, if there is more than one Grantor, notice to any
Grantor will constitute notice to all Grantors. For notice purposes, Grantor
will keep Lender informed at all times of Grantor's current address(es).
POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
attorney-in-fact, irrevocable, with full power of substitution to do the
following: (a) to demand, collect, receive, receipt for, sue and recover all
sums of money or other property which may now or hereafter become due, owing
or payable form the Collateral; (b) to execute, sign and endorse any and all
claims, instruments, receipts, checks, drafts or warrants issued in payment
for the Collateral; (c) to settle or compromise any and all claims arising
under the Collateral, and, in the place and stead Grantor, to execute and
deliver its release and settlement for the claim; and (d) to file any claim
or claims or to take any action or institute or take part in any proceedings,
either in its own name or in the name of Grantor, or otherwise, which in the
discretion of Lender may seem to be necessary or advisable. this power is
given as security of the Indebtedness, and the authority hereby conferred is
and shall be irrevocable and shall remain in full force and effect until
renounced by Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of this
Agreement in all other respects shall remain valid and enforceable.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on transfer
of the Collateral, this Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate
as a waiver of such right or any other right. a waiver by Lender of a
provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and grantor, shall constitute a waiver of
any of Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the sole
discretion of Lender.
POWER OF ATTORNEY - FILLING IN BLANKS, ETC. Lender is hereby authorized by
Borrower and Grantor without notice to Borrower and Grantor to fill in any blank
spaces and dates and strike inapplicable terms herein or in any related document
or instrument to conform to the terms of the transaction and/or understanding
evidenced hereby, for which purpose Lender shall be deemed to have been granted
an irrevocable power of attorney coupled with an interest.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT OF
DEPOSIT ACCOUNT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JULY 22, 1996.
GRANTOR:
ACCUMED INTERNATIONAL, INC.
BY:
-------------------------------------------
PETER P. GOMBRICK, PRESIDENT/CEO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.22(c) 1998 CFI Pro Services, Inc.
All rights reserved (IL-E90AMll.LN C22.OVL)
<PAGE>
THE NORTHERN TRUST COMPANY
DISBURSEMENT REQUEST AND AUTHORIZATION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$500,000.00 07-22-1996 07-31-1997 23620
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BORROWER: ACCUMED INTERNATIONAL, INC. LENDER: THE NORTHERN TRUST COMPANY
920 N. FRANKLIN, SUITE 402 50 S. LASALLE STREET
CHICAGO, IL 60610 CHICAGO, IL 60676
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN TYPE. This is a Variable Rate (at The Northern Trust Company's "Prime
Rate" which means that rate of interest per year announced from time to time by
Lender called its Prime Rate, which rate may or may not be the lowest rate
charged by Lender, making an initial rate of 8.250%), Revolving Line of Credit
Loan to a Corporation for $500,000.00 due on July 31, 1997.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR PERSONAL INVESTMENT.
---
X BUSINESS.
---
SPECIFIC PURPOSE. The specific Purpose of this loan is : working capital
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $500,000.00 as follows:
Undisbursed Funds: $500,000.00
Amount paid to others on Borrower's behalf: 0.00
-----------
Note Principal: $500,000.00
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED JULY 22, 1996.
BORROWER:
ACCUMED INTERNATIONAL, INC.
BY:
------------------------------------------------------
PETER P. GOMBRICK, PRESIDENT/CEO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Variable Rate. Line of Credit. LASER PRO, Reg. U.S. Pat.& T.M. Off.,
Ver. 3.22(c) 1996 CFI ProServices, Inc. All rights reserved.[IL-120 AMll.LN
C22OVL]
<PAGE>
THE NORTHERN TRUST COMPANY
PROMISSORY NOTE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$500,000.00 07-22-1996 07-31-1997 23620
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Borrower: AccuMed International, Inc. Lender: THE NORTHERN TRUSTCOMPANY
920 N. Franklin, Suite 402 50 S. LaSalle Street
Chicago, IL 60610 Chicago, IL 60676
- --------------------------------------------------------------------------------
Principal Amount: $500,000.000 Initial Rate: 8.250% Date of Note: July 22, 1996
PROMISE TO PAY. ACCUMED INTERNATIONAL, INC. ("BORROWER") PROMISES TO PAY TO THE
NORTHERN TRUST COMPANY ("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED
STATES OF AMERICA, THE PRINCIPAL AMOUNT OF FIVE HUNDRED THOUSAND & NO/100
DOLLARS ($500,000.00) OR SO MUCH AS MAY BE OUTSTANDING, TOGETHER WITH INTEREST
ON THE UNPAID OUTSTANDING PRINCIPAL BALANCE OF EACH ADVANCE. INTEREST SHALL BE
CALCULATED FROM THE DATE OF EACH ADVANCE UNTIL REPAYMENT OF EACH ADVANCE.
PAYMENT. BORROWER WILL PAY THIS LOAN IN ONE PAYMENT OF ALL OUTSTANDING
PRINCIPAL PLUS ALL ACCRUED UNPAID INTEREST ON JULY 31, 1997. IN ADDITION,
BORROWER WILL PAY REGULAR MONTHLY PAYMENTS OF ACCRUED UNPAID INTEREST BEGINNING
AUGUST 22, 1996, AND ALL SUBSEQUENT INTEREST PAYMENTS ARE DUE ON THE SAME DAY
OF EACH MONTH AFTER THAT. Interest on this Note is computed on a 365/360 simple
interest basis; that is, by applying the ratio of the annual interest rate over
a year of 360 days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding. Borrower
will pay Lender at Lender's address shown above or at such other place as Lender
may designate in writing. Unless otherwise agreed or required by applicable
law, payments will be applied first to accrued unpaid interest, then to
principal, and any remaining amount to any unpaid collection costs and late
charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an Index which is Lender's Prime Rate (the
"Index"). This is the rate Lender charges, or would charge, on 90-day unsecured
loans to the most creditworthy corporate customers. This rate may or may not be
the lowest rate available from Lender at any given time. Lender will tell
Borrower the current Index rate upon Borrower's request. Borrower understands
that Lender may make loans based on other rates as well. The interest rate
change will not occur more often than each day. THE INDEX CURRENTLY IS 8.250%
PER ANNUM. THE INTEREST RATE TO BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF
THIS NOTE WILL BE AT A RATE EQUAL TO THE INDEX, RESULTING IN AN INITIAL RATE OF
8.250% PER ANNUM. NOTICE: Under no circumstances will the interest rate on
this Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to make
payments of accrued unpaid interest. Rather, they will reduce the principal
balance due.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Any representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf is false or misleading in any
material respect either now or at the time made or furnished. (d) Borrower
becomes insolvent, a receiver is appointed for any part of Borrower's property,
Borrower makes an assignment for the benefit of creditors, or any proceeding is
commenced either by Borrower or against Borrower under any bankruptcy or
insolvency laws. (e) Any creditor tries to take any of Borrower's property on
or in which Lender has a lien or security interest. This includes a garnishment
of any of Borrower's accounts, including deposit accounts, with Lender. (f) Any
guarantor dies or any of the other events described in this default section
occurs with respect to any guarantor of this Note. (g) A material adverse
change occurs in Borrower's financial condition, or Lender believes the prospect
of payment or performance of the Indebtedness is impaired. (h) Lender in good
faith deems itself insecure.
LENDERS RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 2,000
percentage points over the Index. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. THIS NOTE HAS BEEN DELIVERED TO
LENDER AND ACCEPTED BY LENDER IN THE STATE OF ILLINOIS. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE
COURTS OF COOK COUNTY, THE STATE OF ILLINOIS. LENDER AND BORROWER HEREBY WAIVE
THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT
BY EITHER LENDER OR BORROWER AGAINST THE OTHER. THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
COLLATERAL. This Note is secured by an Assignment of Deposit Account dated July
22, 1996 as amended, modified, renewed, restated or replaced from time to time.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note, as well as directions for payment from Borrower's accounts, may be
requested orally or in writing by Borrower or by an authorized person. Lender
may, but need not, require that all oral requests be confirmed in writing. The
following party or parties are authorized to request advances under the line of
credit until Lender receives from Borrower at Lenders address shown above
written notice of revocation of their authority: PETER P. GOMBRICK,
PRESIDENT/CEO. Borrower agrees to be liable for all sums either: (a) advanced
in accordance with the instructions of an authorized person or (b) credited to
any of Borrower's accounts with Lender. The unpaid principal balance owing on
this Note at any time may be evidenced by endorsements on this Note or by
Lender's internal records, including daily computer print-outs. Lender will
have no obligation to advance funds under this Note if: (a) Borrower or any
guarantor is in default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (b) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan with Lender; (d) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender; or (e) Lender in
good faith deems itself insecure under this Note or any other agreement between
Lender and Borrower.
POWER OF ATTORNEY - FILLING IN BLANKS, ETC. Lender is hereby authorized by
Borrower without notice to Borrower to fill in any blank spaces and dates and
strike inapplicable terms herein or in any related document or instrument to
conform to the terms of the transaction and/or understanding evidenced hereby,
for which purpose Lender shall be deemed to have been granted an irrevocable
power of attorney coupled with an interest.
NOTICE - PRIME RATE CHANGES. (APPLICABLE IF INDEX IS PRIME RATE OR WALL STREET
JOURNAL PRIME RATE.) THE INDEX INDICATED ABOVE AS THE "CURRENT" INDEX WAS THE
INDEX ON THE DATE THIS NOTE WAS PREPARED; THE INDEX, AND THEREFORE ALSO THE
INITIAL RATE, MAY HAVE INCREASED OR DECREASED AS OF THE DATE OF THIS NOTE.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan, or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender's security interest in the collateral;
and take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made.
<PAGE>
07-22-96 PROMISSORY NOTE PAGE 2
LOAN NO (CONTINUED)
- --------------------------------------------------------------------------------
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
Borrower:
AccuMed International, Inc.
By: /s/ Peter P. Gombrich
------------------------------------
Peter P. Gombrick, President/CEO
- --------------------------------------------------------------------------------
Variable Rate. Line of Credit. LASERPRO, Reg. U.S. Pat. & T.M. Off.,
Ver. 3.22(c) 1996 CFI ProServices, Inc.
All rights reserved. (IL-D20 AMILLN
C22.OVL)
