SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934 (Amendment No. __)*
OCTuS, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
67574210
(CUSIP Number)
Joshua S. Kanter, Windy City, Inc., 333 West Wacker Drive, Suite 2700
Chicago, Illinois 60606 (312) 984-3120
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 24, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4), check
the following box |_|.
Check the following box if a fee is being paid with this statement |X|.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five
percent of the class of securities described in Item 1; and (2) has
filed no amendment subsequent to thereto reporting beneficial ownership
of less than five percent of such class. See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
<TABLE>
<CAPTION>
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CUSIP NO. 67574210 13D PAGE 2 OF 55 PAGES
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<S> <C> <C>
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Advanced Technologies International, Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
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7 SOLE VOTING POWER
3,000,000 shares(1)
NUMBER OF ---------------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY -0-
OWNED BY ---------------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 3,000,000 shares(1)
PERSON ---------------------------------------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
-0-
- -----------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,000,000 shares(1)
- -----------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
- -----------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
41.5%
- -----------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
</TABLE>
ITEM 1. SECURITY AND ISSUER.
This Schedule relates to the shares of Common Stock (the "Common
Stock") of OCTuS, Inc., a California corporation (the "Issuer"). The principal
executive offices of the Issuer are located at 9210 Sky Park Court, San Diego,
California 92123.
ITEM 2. IDENTITY AND BACKGROUND.
This Schedule is being filed by Advanced Technologies International
Limited, a Bahamian corporation ("ATI" or the "Reporting Person"). The principal
place of business and principal office of ATI is P.O. Box 1792, Anderson Square
Building, 5th Floor, George Town, Grand Cayman, Cayman Islands, B.W.I.
The names and business addresses of the officers and directors of the
Reporting Person, their place of citizenship and their present principal
occupations or employment, are listed on Exhibit A attached hereto. None of said
parties has any beneficial interest in any of the Issuer's securities nor has
sole or shared voting or investment control over any of said securities except
as said authority may arise in connection with their service as officers or
directors of the Reporting Person.
Neither the Reporting Person, nor any of the parties listed on Exhibit
A has, during the last five years, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws or fining any violation
with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Reporting Person acquired 250,000 shares of the Issuer's Series C
Preferred Stock (the "Preferred Stock") and a warrant to purchase up to
3,000,000 shares of the Issuer's Common Stock (the "Warrant") in consideration
of the payment of U.S. $151,000 which amount was paid out of the Reporting
Person's working capital.
ITEM 4. PURPOSE OF TRANSACTION.
The Preferred Stock and Warrant were purchased by the Reporting Person
for investment purposes. The Reporting Person has no present plan or proposal
which relates to or would result in:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of
its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) Any change in the present Board of Directors or management of
the Issuer, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the Board except for the Reporting Person's right to
appoint two directors to fill existing vacancies as
specifically described in the Stock and Warrant Purchase
Agreement attached hereto as Exhibit B;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the Issuer's business or
corporate structure;
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(A) AMOUNT BENEFICIALLY OWNED
(i) ATI 3,000,000 shares(1)
PERCENT OF CLASS
(i) ATI 41.5%
(B) NUMBER OF SHARES AS TO WHICH SUCH PERSON HAS:
(I) SOLE POWER TO VOTE OR TO DIRECT THE VOTE
(i) ATI 3,000,000 shares(1)
(II) SHARED POWER TO VOTE OR TO DIRECT THE VOTE
(i) ATI -0-
(III) SOLE POWER TO DISPOSE OR TO DIRECT THE DISPOSITION OF
(i) ATI 3,000,000 shares(1)
(IV) SHARED POWER TO DISPOSE OR TO DIRECT THE DISPOSITION OF
(i) ATI -0-
(C) DESCRIPTION OF TRANSACTIONS
Pursuant to a Stock and Warrant Purchase Agreement dated June 24, 1996,
ATI acquired 250,000 shares of the Issuer's Series C Preferred Stock (the
"Preferred Stock") and a warrant to purchase up to 3,000,000 shares of the
Issuer's common stock (the "Warrant"). Each share of Preferred Stock shall,
- --------
(1) Includes 3,000,000 shares of common stock underlying a common purchase
warrant. Does not include the right to vote 250,000 shares of the
Issuer's Series C Preferred Stock which is entitled to vote with the
Common Stock and is entitled to 10 votes per share.
among other things, (i) vote with the Issuer's common stock, (ii) be entitled to
ten votes, (iii) be entitled to a cumulative dividend of $0.036 payable in cash
when, as and if declared by the Issuer's board of directors, (iv) be redeemable
by the Issuer for $0.63 plus all accrued but unpaid dividends, provided that the
Issuer shall have no such redemption right prior to June 30, 1999 without the
written consent of the holders of the Preferred Stock. The Warrant is
immediately exercisable at an initial exercise price (subject to adjustment as
described therein) of $0.43 per share at any time on or prior to June 24, 2001.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
None.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Officers and Directors of the Reporting Person.
Exhibit B - Stock and Warrant Purchase Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
June 27, 1996
Date
/s/ Frances Petryshen
Signature
Advanced Technologies International Limited
Frances Petryshen, Vice President
Name/Title
EXHIBIT A
Ruth Ditto President; Director
3636 Edgemont Boulevard
North Vancouver V7R 287
Canada
Citizenship: Canada
Occupation: Accounting (retired)
Frances Petryshen Vice President and Secretary; Director
c/o Quadrant Business Park
8221 44th Avenue West, Suite A
Mukilteo, Washington 98275
Citizenship: Canada
Occupation: Accountant; Business Consultant
Ivan R. W. Burges Vice President and Assistant Secretary; Director
P.O. Box 1792
Anderson Square Building, 5th Floor
George Town, Grand Cayman
Cayman Islands, B.W.I.
Citizenship: United Kingdom
Occupation: Banking
EXHIBIT B
STOCK AND WARRANT PURCHASE AGREEMENT
STOCK AND WARRANT PURCHASE AGREEMENT
THIS STOCK AND WARRANT PURCHASE AGREEMENT ("Agreement") is made as of
this 24st day of June, 1996 by and between OCTuS, Inc., a California corporation
("Seller") and Advanced Technologies International, Ltd., a Bahamian corporation
("Purchaser").
RECITAL
A. Purchaser desires to purchase from Seller and Seller desires
to sell to Purchaser (i) 250,000 shares of Seller's authorized
but unissued no par value Series C preferred stock (the
"Preferred Stock"), and (ii) a warrant entitling the holder
thereof to purchase up to Three Million (3,000,000) shares of
Seller's no par value common stock (the "Common Stock"), all
on the terms and conditions more specifically set forth
herein.
B. The Preferred Stock shall be evidenced by one or more original
stock certificates issued by Seller (the "Preferred Stock
Certificates") and shall be subject to the terms of a certain
Designation of Preferred in the form attached hereto and made
a part hereof as Exhibit A (the "Designation"), which
Designation shall be filed with the Secretary of State of the
State of California prior to the Closing Date (as hereinafter
defined).
C. The Warrant shall be evidenced by one or more original warrant
certificates issued by Seller in the form attached hereto and
made a part hereof as Exhibit B.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1 PURCHASE AND SALE OF PREFERRED STOCK AND WARRANT.
1.1 Purchase and Sale. Subject to and upon the terms and
conditions hereinafter set forth, Purchaser hereby agrees to
purchase from Seller and Seller hereby agrees to sell,
transfer, convey and assign to Purchaser the Preferred Stock
and the Warrant for an aggregate purchase price of One Hundred
Fifty One Thousand and No/100 Dollars ($151,000.00) in
immediately avaiable funds (the "Purchase Price") which
Purchase Price shall be delivered at the direction of Seller
as follows:
1.1.1 Fifty Thousand and No/100 Dollars ($50,000.00) on the
Closing Date;
1.1.2 Fifty Thousand and No/100 Dollars ($50,000.00) on or
prior to June 28, 1996, provided that Purchaser shall
not be in default hereunder for failure to make the
payment required by this Paragraph 1.1.2 if Seller
receives such payment within five (5) business days
after the original due date provided herein; and
1.1.3 Fifty One Thousand and No/100 Dollars ($51,000.00) on
or prior to July 5, 1996, provided that Purchaser
shall not be in default hereunder for failure to make
the payment required by this Paragraph 1.1.3 if
Seller receives such payment within five (5) business
days after the original due date provided herein.
1.2 Closing Date. The date (the "Closing Date") of the sale (the
"Closing") of the Common Stock and the Warrant shall be June
24, 1996 or such other date as the parties shall mutually
agree.
2 CONDITIONS TO CLOSING.
2.1 Conditions to Purchaser's Obligation to Purchase. The
obligation of Purchaser to complete the purchase hereunder is
subject to the satisfaction of each of the following
conditions, unless waived in writing by Purchaser:
2.1.1 Acceptance of Agreement. Acceptance by Purchaser of
this Agreement for the purchase of the Preferred
Stock and the Warrant.
2.1.2 Performance. Seller shall have timely observed,
performed and complied with all covenants,
agreements, terms and conditions hereof on Seller's
part to be observed, performed and complied with.
2.1.3 Receipt of Documents. Seller shall have timely taken,
executed and delivered, or be prepared to take,
execute and deliver at the Closing all actions,
instruments and documents required for performance of
this Agreement and full effectuation of the
transactions provided for herein, or incidental
thereto, in form and content reasonably satisfactory
to Purchaser and otherwise as required herein,
including, without limitation, the receipt by
Purchaser of all of the following:
2.1.3.1 a fully executed original of this Agreement;
2.1.3.2 the original Preferred Stock Certificates;
2.1.3.3 the original Warrant;
2.1.3.4 an original certified copy of the
Designation as filed with the Secretary of
State of the State of California;
2.1.3.5 an original Certificate of Good Standing
issued by the Secretary of State of the
State of California evidencing Seller's good
standing in said State;
2.1.3.6 Seller's original Signature and Incumbency
Certificate in form and substance reasonably
satisfactory to Purchaser;
2.1.3.7 Seller's original Officer's Certificate in
the form attached hereto and made a part
hereof as Exhibit C; and
2.1.3.8 an original legal opinion from Latham &
Watkins in form and substance reasonably
satisfactory to Purchaser.
2.1.4 Representations and Warranties. All of Seller's
representations and warranties set forth herein shall
be true and complete in all material respects as of
the Closing Date, with the same force and effect as
if made on and as of the Closing Date.
2.1.5 No Default. Except for the potential suit (as
hereinafter defined), no event of default shall have
occurred and be continuing hereunder.
2.1.6 No Litigation. No litigation, arbitration or
governmental investigation or proceeding shall be
pending, or, to the knowledge of Seller, threatened,
against Seller, the Preferred Stock or the Warrant
which, if determined adversely to Seller would have a
material adverse effect on Seller or the sale and
purchase contemplated hereby.
2.2 Conditions to Seller's Obligation to Sell. The obligation of
Seller to complete the sale hereunder is subject to the
satisfaction of each of the following conditions, unless
waived in writing by Seller:
2.2.1 Acceptance of Agreement. Acceptance by Seller of this
Agreement for the sale of the Preferred Stock and the
Warrant.
2.2.2 Performance. Purchaser shall have timely observed,
performed and complied with all covenants,
agreements, terms and conditions hereof on
Purchaser's part to be observed, performed and
complied with.
2.2.3 Receipt of Documents. Purchaser shall have timely
taken, executed and delivered, or be prepared to
take, execute and deliver at the Closing, all
actions, instruments and documents required for
performance of this Agreement and full effectuation
of the transactions provided for herein, or
incidental thereto, in form and content reasonably
satisfactory to Seller and otherwise as required
herein, including, without limitation, the receipt by
Seller of all of the following:
2.2.3.1 a fully executed original of this Agreement;
and
2.2.3.2 payment of the Purchase Price, in accordance
with the terms hereof.
2.2.4 Representations and Warranties. All of Purchaser's
representations and warranties set forth herein shall
be true and complete in all material respects as of
the Closing Date, with the same force and effect as
if made on and as of the Closing Date.
2.2.5 No Default. No event of default shall have occurred
and be continuing hereunder.
3 REPRESENTATIONS, WARRANTIES AND COVENANTS.
3.1 Purchaser's Representations and Warranties. Purchaser hereby
represents, warrants and covenants to Seller as set forth
below with the express understanding that said
representations, warranties and covenants are material to and
are being relied upon by Seller. Said representations and
warranties are true as of the date hereof, shall be true as of
the Closing Date and shall, except as otherwise expressly set
forth herein, survive the Closing Date for a period of one (1)
year.
3.1.1 Execution, Delivery & Performance. The execution,
delivery, performance and consummation of this
Agreement by Purchaser has been duly authorized by
all requisite action. Purchaser has the full right,
power and authority to execute, deliver and
consummate this Agreement and the transactions
provided for herein, without the consent or approval
of, notice to or registration with any person,
association, entity or governmental authority, and
this Agreement represents the valid and binding
obligations of Purchaser, enforceable against
Purchaser and effective in accordance with its terms.
3.1.2 No Conflict. The execution, delivery, performance and
consummation of this Agreement and the transactions
provided for herein do not and will not violate: (a)
any contract, agreement or other commitment to which
Purchaser is a party, or by which Purchaser is bound;
(b) Purchaser's constituent documents; or (c) any
order, writ, injunction, decree, statute, ordinance,
rule or regulation applicable to Purchaser.
3.1.3 Representations and Warranties. No representation or
warranty of Purchaser contained herein or in any
document delivered in connection herewith contains or
will contain any untrue statement of material fact,
or omits or will omit to state any material fact or
any fact necessary to make the statements made not
materially misleading.
3.2 Seller's Representations, Warranties and Covenants. Seller
hereby represents, warrants and covenants to Purchaser as set
forth below with the express understanding that said
representations, warranties and covenants are material to and
are being relied upon by Purchaser. Said representations and
warranties are true as of the date hereof, shall be true as of
the Closing Date.
3.2.1 Execution, Delivery & Performance. The execution,
delivery and performance of this Agreement has been
duly authorized by all requisite action. Seller has
the full right, power and authority to execute,
deliver and consummate this Agreement and the
transactions provided for herein, without the consent
or approval of, notice to or registration with any
other person, association, entity or governmental
authority. This Agreement represents the valid and
binding obligation of Seller, enforceable against
Seller and effective in accordance with its terms.
3.2.2 No Conflict. The execution, delivery and performance
of this Agreement, and the consummation of the
transactions provided for herein, do not and will
not: (a) constitute a breach of or default under any
contract, agreement or other commitment to which
Seller is a party, or by which Seller, the Preferred
Stock or the Warrant is bound, or (b) violate any
order, writ, injunction, decree, statute, ordinance,
rule or regulation applicable to Seller, the
Preferred Stock or the Warrant.
3.2.3 Good Standing. Seller is a corporation duly
organized, validly existing and in good standing
pursuant to the laws of the State of California and
Seller is qualified to do business and is in good
standing in each other jurisdiction where the nature
of Seller's business requires such qualification.
3.2.4 Representations and Warranties. No representation or
warranty of Seller contained herein or in any
document delivered in connection herewith contains or
will contain any untrue statement of material fact,
or omits or will omit to state any material fact or
any fact necessary to make the statements made not
materially misleading.
3.2.5 Litigation. Except for litigation which has been
threatened (but, to the best of Seller's knowledge
and belief, not filed) against Seller by principals
and affiliates of RAS Securities and TAG Acquisition
Corp. in connection with the transaction contemplated
hereby (the "Potential Suit"), there is no action,
suit or proceeding at law or equity, or before or by
any federal, state, local or other governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending, or to
the knowledge of Seller threatened, against Seller,
the Preferred Stock or the Warrant which (i) if
determined adversely would have a material adverse
effect on the sale and purchase contemplated hereby,
and (ii) has not heretofore been disclosed in
Seller's publicly available periodic filings with the
United States Securities and Exchange Commission
(together with any exhibits or addenda thereto, the
"SEC Filings").
3.2.6 SEC Filings; Capitalization. The SEC Filings are
true, correct and complete in all material respects
and do not contain any untrue statement of material
fact or omit to state any material fact relating to
Seller or Seller's business. Seller has not issued
any securities other than those disclosed in Seller's
most recent SEC Filing filed prior to the date
hereof.
3.2.7 Preferred Stock. When issued pursuant hereto, the
Preferred Stock shall:
3.2.7.1 be fully paid and non-assessable and shall
be free of any and all restrictions except
those specifically set forth in the
Designation and those which arise pursuant
to State and federal securities laws,
including, without limitation, the
Securities Act of 1933, as amended (the
"Securities Act"); and
3.2.7.2 constitute all of Seller's issued preferred
stock of any class or series, or no class or
series, whatsoever, it being expressly
understood that all heretofore issued shares
of Seller's Series A and Series B preferred
stock have been converted into shares of
Seller's common stock or are otherwise no
longer issued or outstanding as of the date
hereof.
3.2.8 Warrant. When issued pursuant hereto, the Warrant
shall be fully paid and non-assessable and shall be
free of any and all restrictions except those which
arise pursuant to State and federal securities laws,
including, without limitation, the Securities Act.
3.2.9 Registration Rights. Except as provided hereby,
Seller has not granted any registration rights to any
party except pursuant to that certain
Representative's Warrant Agreement dated January 15,
1993 (the "Initial Registration Rights"). Seller's
granting of registration rights pursuant to the terms
hereof does not violate the terms of the Initial
Registration Rights or any other agreement or
obligation to which Seller is a party or by which
Seller is bound.
3.3 Use of Brokers. Each party represents and warrants to the
other that it has not dealt with any broker or finder in
connection with this Agreement or the transactions provided
for herein, and that no person or entity is entitled to any
brokerage or finder's fee, commission or other compensation on
account of any such dealings with the warranting party. The
provisions of this paragraph shall survive the Closing Date,
or the termination of this Agreement pursuant hereto.
3.4 Survival of Representations. Except as expressly set forth
herein, all representations and warranties contained in this
Article 3 shall survive for an undefined period after the
Closing Date, the delivery of the Preferred Stock, the Warrant
and the Purchase Price and any investigation at any time made
by or on behalf of Purchaser or Seller and shall not diminish
Purchaser's or Seller's right to rely thereon.
3.5 Seller's Covenants. Seller hereby covenants to Purchaser as
follows:
3.5.1 Board Compensation. Seller's Board (as hereinafter
defined) shall not take any action to change the cash
or non-cash compensation paid to any member of
Seller's Board without obtaining either (i) the
approval of a majority of Seller's stockholders, or
(ii) the approval of a majority of Seller's Board,
provided that said majority includes the affirmative
vote of at least one of the ATI Board Representatives
(as hereinafter defined).
3.5.2 Issuance of Securities; Forced Exercise of Warrant.
Without the prior written consent of Purchaser, which
consent may be withheld or denied for any reason or
no reason whatsoever, Seller shall not, until after
the second (2nd) anniversary of the date hereof (the
"Restricted Period"), issue, cause to be issued or
otherwise incur any obligation to issue, any
securities of any kind or nature whatsoever.
Notwithstanding the foregoing, in the event that
Seller's Board determines in good faith (as evidenced
by the resolution of a majority of the then members
of Seller's Board) that Seller has less than Sixty
Thousand and No/100 Dollars ($60,000.00) in available
cash or cash equivalents, and Seller is otherwise
unable to conduct Seller's business in the ordinary
course, Seller shall have the right, pursuant to the
terms of the Warrant, upon fifteen (15) business days
prior written notice, to demand that Purchaser
exercise the Warrant in a minimum amount sufficient
to provide Seller with gross proceeds resulting from
the exercise thereof in an amount of One Hundred
Thousand and No/100 Dollars ($100,000.00). It is
expressly understood that Seller's sole remedy in the
event of Purchaser's failure to so exercise the
Warrant pursuant to such a demand shall be the
termination of Seller's covenant pursuant to this
Paragraph 3.5.2 and such default shall have no other
effect on the rights or obligations of the parties
arising hereunder, pursuant to the Preferred Stock or
pursuant to the Warrant.
3.5.3 ATI Representatives to Seller's Board. Until such
time as the Preferred Stock is redeemed in accordance
with its terms, Seller's board of directors
("Seller's Board") and officers hereby agree to take
any and all action necessary to effectuate the
nomination, recommendation and election of two (2)
Purchaser designees to Seller's Board (the "ATI Board
Representatives"). It is further expressly understood
that each member of Seller's Board and each of
Seller's officers hereby agrees to vote any and all
of Seller's securities over which said parties have
voting control in favor of the election of the ATI
Board Representatives.
3.5.4 Registration Rights. Seller hereby grants to
Purchaser the registration rights described on
Exhibit D attached hereto and made a part hereof.
3.5.5 Defense of the Potential Suit; Indemnity. If the
Potential Suit (or any other action arising or
relating in any way to the transactions contemplated
hereby) is filed, Seller shall vigorously defend
against said action and shall engage counsel in
connection therewith satisfactory to Purchaser in
Purchaser's reasonable discretion. Seller shall
indemnify, defend and hold harmless Purchaser and
Purchaser's affiliates, officers, directors,
employees, stockholders and other representatives and
each of said parties respective successors and
assigns (each, an "Indemnified Party"), of, from and
against any and all loss, claim, damage, demand,
suit, action, cause of action, liability, penalty,
judgement, decree, cost and expense, (including,
without limitation, reasonable attorneys' fees and
costs) (collectively, "Damages") which may at any
time be asserted or recovered against or incurred by
any Indemnified Party arising from, in connection
with, on account of, or relating to, the transactions
contemplated hereby, including, without limitation,
arising in connection with the Potential Suit.
Without limitation of the foregoing, Seller shall pay
any Indemnified Party, upon demand, all claims,
judgements, damages, losses, costs and expenses
(including reasonable attorneys' fees and court
costs) incurred by such Indemnified Party as a result
of any legal or other action arising in connection
with the transactions contemplated hereby, including,
without limitation, arising in connection with the
Potential Suit.
3.5.6 Issuance of Preferred Stock. Notwithstanding the
provisions of Paragraph 3.5.2 hereof, without the
prior written consent of Purchaser, which consent may
be withheld or denied for any reason or no reason
whatsoever, for so long as any shares of the
Preferred Stock remain outstanding, Seller shall not
cause to be issued or incur any obligation to issue
any shares of Seller's preferred stock.
4 REMEDIES. Upon a default hereunder by Seller, Purchaser shall have any
and all rights and remedies available to Purchaser at law or in equity.
Purchaser shall have the right but not the obligation to pursue any one
or more of the remedies available to Purchaser concurrently or
successively, it being the intent hereof that all such remedies shall
be cumulative and that no such remedy shall be to the exclusion of any
other. No waiver of any breach or default hereunder shall constitute or
be construed as a waiver by Purchaser of any subsequent breach or
default or of any breach or default of any other provision of this
Agreement.
5 MISCELLANEOUS.
5.1 Amendment and Waiver. Neither this Agreement nor any provision
hereof may be amended, modified, waived, discharged, or
terminated orally, but only by an instrument in writing signed
by the party against whom enforcement of the amendment,
modification, waiver, discharge or termination is sought.
5.2 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law. If, however, any
provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such
provisions shall be ineffective to the extent of such
invalidity or unenforceability, without invalidating the
remainder of such provision or the remaining provisions of
this Agreement.
5.3 Headings. The headings of various paragraphs of this Agreement
have been inserted for reference only and shall not be a part
of this Agreement.
5.4 Notices. Any notice required or permitted to be given
hereunder shall be in writing, and shall be either (i)
personally delivered, (ii) sent by U.S. certified or
registered mail, return receipt requested, postage prepaid, or
(iii) sent by Federal Express or other reputable common
carrier guaranteeing next business day delivery, to the
respective addresses of the parties set forth below, or to
such other place as any party hereto may by notice given as
provided herein designate for receipt of notices hereunder.
Any such notice shall be deemed given and effective upon
receipt or refusal of receipt thereof by the primary party to
whom it is to be sent.
To Seller: OCTuS, Inc.
P.O. Box 232397
San Diego, CA 92198-2397
Attn: Mr. John C. Belden
with a required copy to: Latham & Watkins
701 B Street
Suite 2100
San Diego, CA 92101
Attn: Thomas A. Edwards, Esq.
To Purchaser: Advanced Technologies
International Ltd.
c/o Neal Gerber & Eisenberg
Two North LaSalle Street
Suite 2200
Chicago, IL 60602
Attn: Burton W. Kanter, Esq.
with a required copy to: Barack Ferrazzano Kirschbaum
& Perlman
333 West Wacker Drive
Suite 2700
Chicago, IL 60606
Attn: Joshua S. Kanter, Esq.
5.5 Governing Law. This Agreement has been negotiated and
delivered at Chicago, Illinois, and shall be governed by and
construed in accordance with the internal laws of the State of
Illinois without reference to (i) its judicially or
statutorily pronounced rules regarding conflict of laws or
choice of law; (ii) where any instrument is executed or
delivered; (iii) where any payment or other performance
required by any such instrument is made or required to be
made; (iv) where any breach of any provision of any such
instrument occurs, or any cause of action otherwise accrues;
(v) where any action or other proceeding is instituted or
pending; (vi) the nationality, citizenship, domicile,
principal place of business, or jurisdiction or organization
or domestication of any party; (vii) whether the laws of the
form jurisdiction otherwise would apply the laws of a
jurisdiction other than the State of Illinois; or (viii) any
combination of the foregoing.
5.6 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
5.7 Recitals and Exhibits Incorporated. The recitals and exhibits
to this Agreement are incorporated into and constitute an
integral part of this Agreement.
5.8 Entire Agreement. This Agreement constitutes the entire
agreement and understanding among the parties with regard to
the subject matter hereof, and there are no other prior or
contemporaneous written or oral agreements, undertakings,
promises, warranties, or covenants respecting such subject
matter not expressly set forth herein.
5.9 Additional Documentation. At the request of any party from
time to time on and after the Closing Date, the other party
shall, without further consideration, execute and/or deliver
to the requesting party such documents and instruments, and
take such other action, as the requesting party may reasonably
request in order to consummate more effectively the
transactions provided for herein. The provisions of this
paragraph shall survive the Closing Date.
5.10 Counterparts. This Agreement may be executed in any number of
identical counterparts, any of which may contain the
signatures of less than all parties, and all of which together
shall constitute a single agreement.
5.11 Litigation. If any party commences an action against any other
party to enforce any of the terms hereof, the losing party
shall pay to the prevailing party the reasonable attorneys'
fees and costs of the prevailing party incurred in connection
with the prosecution or defense of such action or any appeal
therefrom.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
Purchaser: Advanced Technologies International, Ltd.
By:
Its:
Seller: OCTuS, Inc.
By:
Its:
EXHIBIT A
DESIGNATION OF PREFERRED STOCK
CERTIFICATE OF DETERMINATION OF PREFERENCES
OF
SERIES C PREFERRED STOCK
OF
OCTUS, INC.
(Pursuant to Section 401 of the General Corporation Law
of the State of California)
1. They are the duly elected and acting President and Assistant
Secretary, respectively, of the corporation.
2. Pursuant to authority given by the Articles of Incorporation of
OCTuS, Inc. (the "Corporation") the Board of Directors of the Corporation has
duly adopted the following recitals and resolutions:
WHEREAS, the Articles of Incorporation of the Corporation
provide for a class of shares known as Preferred Stock, issuable from
time to time in one or more series; and
WHEREAS, the Board of Directors of the Corporation is
authorized to determine or alter the rights, preferences, privileges,
and restrictions granted to or imposed upon any wholly unissued series
of Preferred Stock, to fix the number of shares constituting any such
series, and to determine the designation thereof, or any of them; and
WHEREAS, the Corporation does not have any shares of Preferred
Stock outstanding, and the Board of Directors of the Corporation
desires, pursuant to its authority, to determine and fix the rights,
preferences, privileges, and restrictions relating to, a series of
Preferred Stock as follows:
1. The series of Preferred Stock shall be designated "Series C
Preferred Stock."
2. The number of shares constituting the Series C Preferred Stock
shall be 250,000 shares.
3. Intended Preference and Priority. The Series C Preferred Stock
shall be senior in preference and priority in all matters
whatsoever to (i) the Corporation's no par value common stock
(the "Common Stock"), (ii) any and all classes or series of
the Corporation's preferred stock other than the Series C
Preferred Stock, whether now or hereafter designated or
outstanding (the "Junior Preferred Stock"), and (iii) any
other class or series of capital stock of the Corporation,
whether now or hereafter designated or outstanding (the
"Junior Capital Stock"). The Common Stock, the Junior
Preferred Stock and the Junior Capital Stock are hereinafter
collectively referred to as the "Junior Securities").
4. Dividends. The holders of record of the then outstanding
shares of Series C Preferred Stock shall be entitled to
receive cumulative dividends at the annual rate of $0.036 per
share payable in cash when, as and if declared by the Board
out of any funds legally available therefor. Such dividends
shall accrue on a cumulative basis on each share of Series C
Preferred Stock from day to day, whether or not declared or
paid. If not theretofore paid, the Corporation shall be
obligated to pay any and all dividends accrued with respect to
the Series C Preferred Stock at the time of the redemption of
the Series C Preferred Stock. No dividends or distributions
shall be declared, paid or set aside for payment in respect of
any Junior Securities unless and until any and all accrued
dividends shall have been declared and paid with respect to
the Series C Preferred Stock.
5. Conversion. The shares of Series C Preferred Stock shall not
be convertible into Common Stock or any other of the
Corporation's securities.
6. Voting Rights. The holder of each share of Series C Preferred
Stock shall be entitled to 10 votes per share, entitled to
vote on all matters which come before the Corporation's
stockholders for which a vote is taken or any written consent
of the Corporation's stockholders is solicited, such votes to
be counted together with all other shares of the Corporation's
securities having general voting power and not separately as a
class. Each holder of Series C Preferred Stock shall be
entitled to notice of any such proposed stockholder action at
the earliest time as such notice is provided to the holders of
any other series, class or designation of the Corporation's
capital stock and otherwise in accordance with the terms of
the Corporation's bylaws.
7. Redemption Rights. The Corporation shall have the right to
call and redeem all (but not less than all) of the outstanding
shares of Series C Preferred Stock for an aggregate price (the
"Redemption Value") equal to (i) Sixty Three Cents ($0.63) per
share of Series C Preferred Stock, plus (ii) any and all then
accrued but unpaid dividends; provided, however, that the
Corporation shall have no right to call or redeem any shares
of Series C Preferred Stock prior to June 30, 1999 without the
express prior written consent of the holders of One Hundred
Percent (100%) of the then outstanding shares of the Series C
Preferred Stock, which consent may be withheld or denied in
the sole and absolute discretion of the holders of the Series
C Preferred Stock for any reason or no reason whatsoever.
8. Liquidation. Upon the dissolution, liquidation or winding up
of the Corporation, whether voluntary or involuntary, the
holders of the Series C Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for
distribution to shareholders, an amount equal to the
Redemption Value before any payment or distribution shall be
made to the holders of Junior Securities. In the event the
assets of the Corporation available for distribution to the
holders of shares of the Series C Preferred Stock upon any
dissolution, liquidation or winding up of the Corporation
shall be insufficient to pay in full all amounts to which such
holders are entitled pursuant to this paragraph, then all of
the assets of the Corporation to be distributed shall be
distributed ratably to the holders of Series C Preferred
Stock. After the payment to the holders of the shares of the
Series C Preferred Stock of the full amounts provided for in
this paragraph, the holders of the Series C Preferred Stock as
such shall have no right or claim to any of the remaining
assets of the Corporation.
9. Exclusion of Other Rights. Except as may otherwise be required
by law, the shares of Series C Preferred Stock shall not have
any voting powers, preferences and relative, participating,
optional or other special rights, other than those
specifically set forth in this resolution (as such resolution
may be amended from time to time) and in the Articles of
Incorporation. The shares of Series C Preferred Stock shall
have no preemptive or subscription rights.
10. Headings of Subdivisions. The headings of the various
subdivisions hereof are for convenience of reference only and
shall not affect the interpretation of any of the provisions
hereof.
11. Severability of Provisions. If any voting powers, preferences
and relative, participating, optional and other special rights
of the Series C Preferred Stock and qualifications,
limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to
time) is invalid, unlawful or incapable of being enforced by
reason of any rule of law or public policy, all other voting
powers, preferences and relative, participating, optional and
other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof set forth
in this resolution (as so amended) which can be given effect
without the invalid, unlawful or unenforceable voting powers,
preferences and relative, participating, optional and other
special rights of Series C Preferred Stock and qualifications,
limitations and restrictions thereof shall, nevertheless,
remain in full force and effect, and no voting powers,
preferences and relative, participating, optional or other
special rights of Series C Preferred Stock and qualifications,
limitations and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers,
preferences and relative, participating, optional or other
special rights of Series C Preferred Stock and qualifications,
limitations and restrictions thereof unless so expressed
herein.
RESOLVED, FURTHER, that the Chairman of the Board, the
President or any Vice President, and the Secretary, the chief financial
officer, the Treasurer, or any Assistant Secretary or Assistant
Treasurer of the Corporation are each authorized to execute, verify and
file a certificate of determination of preferences in accordance with
California law.
3. The authorized number of shares of Preferred Stock of the
Corporation is 2,000,000 and the number of shares constituting Series C
Preferred Stock, none of which has been issued, is 250,000.
IN WITNESS WHEREOF, the undersigned have executed this certificate on
June 24, 1996.
-----------------------------------------
John C. Belden, President
Attest:
- -----------------------------------
Robert Freeman, Assistant Secretary
EXHIBIT B
FORM OF WARRANT CERTIFICATE
VOID AFTER 5:00 P.M. NEW YORK TIME, ON JUNE 24, 2001
WARRANT TO PURCHASE 3,000,000 SHARES OF COMMON STOCK
WARRANT TO PURCHASE COMMON STOCK
OF
OCTUS, INC.
This is to Certify That, FOR VALUE RECEIVED, Advanced Technologies
International, Ltd., a Bahamian corporation ("ATI") or assigns ("Holder"), is
entitled to purchase, subject to the provisions of this Warrant, from Octus,
Inc., a California corporation ("Company"), 3,000,000 fully paid, validly issued
and nonassessable shares of Common Stock, no par value per share, of the Company
("Common Stock") at a price of $0.43 per share, subject to adjustment as
provided herein (as so adjusted from time to time, the "Base Exercise Price").
After June 24, 1997, this Warrant may be exercised with respect to 1,000,000
Warrant Shares at the Base Exercise Price and with respect to 2,000,000 Warrant
Shares at the lesser of (i) the Base Exercise Price on June 24, 1997 multiplied
by two (2), or (ii) $0.50 (the "First Adjusted Exercise Price"). After June 24,
1998, this Warrant may be exercised with respect to 1,000,000 Warrant Shares at
the Base Exercise Price, with respect to 1,000,000 Warrant Shares at the First
Adjusted Exercise Price and with respect to 1,000,000 Warrant Shares at the
lesser of (i) the Base Exercise Price on June 24, 1998 multiplied by three (3),
or (ii) $0.75 (the "Second Adjusted Exercise Price"). The Base Exercise Price,
the First Adjusted Exercise Price and the Second Adjusted Exercise Price, as
applicable and as adjusted from time to time is hereinafter referred to as the
"Exercise Price." The number of shares of Common Stock to be received upon the
exercise of this Warrant and the price to be paid for each share of Common Stock
may be further adjusted from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise, and as adjusted from time to
time, are hereinafter sometimes referred to as "Warrant Shares" and the exercise
price for a share of Common Stock in effect at any time and as adjusted from
time to time is hereinafter sometimes referred to as the "Exercise Price".
(a) EXERCISE OF WARRANT
This Warrant may be exercised in whole or in part at any time
or from time to time on or after the date hereof and until 5:00 p.m. (New York
time) June 24, 2001 (the "Exercise Period"); provided, however, that if either
such day is a holiday or a day on which banking institutions in the State of New
York are authorized by law to close, then 5:00 p.m. (New York time) on the next
succeeding day which shall not be such a day. This Warrant may be exercised by
presentation and surrender hereof to the Company at its principal office, or at
the office of its stock transfer agent, if any, with the Purchase Form annexed
hereto duly executed and accompanied by payment of the Exercise Price for the
number of Warrant Shares specified in such form. As soon as practicable after
each such exercise of this Warrant, but not later than seven (7) days from the
date of such exercise, the Company shall issue and deliver to the Holder a
certificate or certificate for the Warrant Shares issuable upon such exercise,
registered in the name of the Holder or its designee. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
thereunder. Upon receipt by the Company of this Warrant at its office, or by the
stock transfer agent of the Company at its office, in proper form for exercise,
the Holder shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be physically delivered to the Holder. The
Company shall pay all documentary, stamp or similar taxes and other governmental
charges that may be imposed with respect to the issuance of this Warrant, or the
issuance or delivery of any shares of Common Stock upon exercise of this
Warrant; provided, however, that if shares of Common Stock are to be delivered
in a name other than the name of the registered holder of the Warrant being
exercised, then no such delivery shall be made unless the person requesting the
same has paid to the Company the amount of transfer taxes or charges incident
thereto, if any.
(b) RESERVATION OF SHARES; FULLY PAID AND NON-ASSESSABLE; ETC. The
Company shall at all times reserve for issuance and/or delivery upon exercise of
this Warrant such number of shares of its Common Stock as shall be required for
issuance and delivery upon exercise of the Warrants. Upon such issuance the
Warrant Shares shall be fully paid and non-assessable, free and clear of all
liens, claims, taxes, encumbrances and charges whatsoever with respect to the
issue thereof and free from all preemptive or similar rights.
(c) FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:
(1) If the Common Stock is listed on a securities exchange or
admitted to unlisted trading privileges on such exchange or listed for trading
on the Nasdaq National Market or the Nasdaq SmallCap Market, the current market
value shall be the last reported sale price or the average of the means of the
last reported bid and asked prices, respectively, of the Common Stock on such
exchange or market on the last business day prior to the date of exercise of
this Warrant; or
(2) If the Common Stock is not so listed or admitted to
unlisted trading privileges, the current market value shall be the average of
the means of the last reported bid and asked prices of the Common Stock on the
last business day prior to the date of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current market value shall be an amount, not less than book value thereof
determined in accordance with generally accepted accounting principles as at the
end of the most recent fiscal quarter of the Company ending prior to the date of
the exercise of the Warrant, determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Upon surrender of this Warrant to the Company at
its principal office or at the office of its stock transfer agent, if any, with
the Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be cancelled. This Warrant may be divided or
combined with other warrants which carry the same rights upon presentation
hereof at the principal office of the Company or at the office of its stock
transfer agent, if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof. The term "Warrant" as used herein includes any Warrants into which this
Warrant may be divided or exchanged. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time
and the number and kind of securities purchasable upon the exercise of the
Warrants shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Exercise Price in
effect at the time of the record date for such dividend or distribution or of
the effective date of such subdivision, combination or reclassification shall be
adjusted so that it shall equal the price determined by multiplying the Exercise
Price by a fraction, the denominator of which shall be the number of shares of
Common Stock outstanding after giving effect to such action, and the numerator
of which shall be the number of shares of Common Stock outstanding
immediately prior to such action. Such adjustment shall be made successively
whenever any event listed above shall occur.
(2) In case the Company shall fix a record date for the
issuance of rights or warrants to all holders of its Common Stock entitling them
to subscribe for or purchase shares of Common Stock (or securities convertible
into Common Stock) at a price (the "Subscription Price") (or having a conversion
price per share) less than the current market price of the Common Stock (as
defined in Subsection (8) below) on the record date mentioned below, the
Exercise Price shall be adjusted so that the same shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
date of such issuance by a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on the record date mentioned
below and the number of additional shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered (or the
aggregate conversion price of the convertible securities so offered) would
purchase at such current market price per share of the Common Stock, and the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding on such record date and the number of additional shares of Common
Stock offered for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall be made
successively whenever such rights or warrants are issued and shall become
effective immediately. After the expiration of such rights or warrants the
Exercise Price shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made upon the basis of delivery of only the number of shares of Common
Stock (or securities convertible into Common Stock) actually delivered.
(3) In case the Company shall hereafter distribute to the
holders of its Common Stock evidences of its indebtedness or assets (excluding
cash dividends or distributions and dividends or distributions referred to in
Subsection (1) above) or subscription rights or warrants (excluding those
referred to in Subsection (2) above), then in each such case the Exercise Price
in effect thereafter shall be determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator of which shall be
the total number of shares of Common Stock outstanding multiplied by the current
market price per share of Common Stock (as defined in Subsection (8) below),
less the fair market value (as determined by the Company's Board of Directors)
of said assets or evidences of indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such current market price per share of
Common Stock. Such adjustment shall be made successively whenever such a record
date is fixed. Such adjustment shall be made whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution.
(4) In case the Company shall issue shares of its Common Stock
excluding shares issued (i) in any of the transactions described in Subsection
(1) above, (ii) upon exercise of options granted to the Company's employees
under a plan or plans adopted by the Company's Board of Directors and approved
by its shareholders, if such shares would otherwise be included in this
Subsection (4), (but only to the extent that the aggregate number of shares
excluded hereby and issued after the date hereof shall not exceed 10% of the
Company's Common Stock outstanding at the time of any issuance and provided
further that the exercise price per share of such options is not less than the
current market price per share of Common Stock (as defined in Subsection (8)
below) on the date of grant), (iii) upon exercise of options and warrants
outstanding at June 24, 1996, (iv) to shareholders of any corporation which
merges into the Company in proportion to their stock holdings of such
corporation immediately prior to such merger, upon such merger, (v) pursuant to
the Stock and Warrant Purchase Agreement dated June 24, 1996 between the Company
and ATI (the "Stock and Warrant Purchase Agreement"), or (vi) issued in a bona
fide public offering pursuant to a firm commitment underwriting where the
offering price per share of Common Stock offered is not less than the current
market price per share of Common Stock (as defined in Subsection (8) below on
the date of such issuance, but only if no adjustment is required pursuant to any
other specific subsection of this Section (f) (without regard to Subsection (9)
below) with respect to the transaction giving rise to such rights, for a
consideration per share (the "Offering Price") less than the current market
price per share as defined in Subsection (8) below on the date the Company fixes
the offering price of such additional shares, the Exercise Price shall be
adjusted immediately thereafter so that it shall equal the price determined by
multiplying the Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to the issuance of such additional
shares and the number of shares of Common Stock which the aggregate
consideration received determined as provided in Subsection (7) below for the
issuance of such additional shares would purchase at such current market price
per share of Common Stock, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after the issuance of such
additional shares.
(5) In case the Company shall issue any securities convertible
into or exchangeable for its Common Stock (including warrants or options to
purchase Common Stock) excluding securities issued in transactions described in
Subsections (2) and (3) above for a consideration per share of Common Stock (the
"Conversion Price") initially deliverable upon conversion or exchange of such
securities determined as provided in Subsection (7) below less than the current
market price per share as defined in Subsection (8) below in effect immediately
prior to the issuance of such securities, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the price determined by
multiplying the Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to the issuance of such securities
and the number of shares of Common Stock which the aggregate consideration
received determined as provided in Subsection (7) below for such securities
would purchase at such current market price per share of Common Stock, and the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding immediately prior to such issuance and the maximum number of shares
of Common Stock of the Company deliverable upon conversion of or in exchange for
such securities at the initial conversion or exchange price or rate.
(6) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsections (1), (2), (3), (4), and (5) above,
the number of Shares purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Shares then issuable
upon exercise of this Warrant by the Exercise Price then in effect and dividing
the product so obtained by the Exercise Price, as adjusted.
(7) For purposes of any computation respecting consideration
received pursuant to Subsections (4) and (5) above, the following shall apply:
(A) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
(B) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors of the Company (irrespective
of the accounting treatment thereof) on the basis of a record of values of
similar property or services; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of Common Stock, the aggregate
consideration received therefor shall be deemed to be the consideration received
by the Company for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the conversion or
exchange thereof the consideration in each case to be determined in the same
manner as provided in clauses (A) and (B) of this Subsection (7).
(8) For the purpose of any computation under Subsections (2),
(3), (4) and (5) above, the current market price per share of Common Stock at
any date shall be deemed to be the lower of (i) the average of the daily closing
prices for 30 consecutive business days before such date or (ii) the closing
price on the business day immediately preceding such date. The closing price for
each day shall be the last sale price regular way or, in case no such reported
sale takes place on such day, the average of the means of the last reported bid
and asked prices regular way, in either case on the principal national
securities exchange or the Nasdaq Stock Market on which the Common Stock is
admitted to trading or listed, or if not listed or admitted to trading on such
exchange or market, the average of the highest reported bid and lowest reported
asked prices of the Common Stock, or if not so available, the fair market price
as determined in good faith by the Board of Directors but in no event less then
the per share book value of the Company as determined in accordance with
generally accepted accounting principles as of the end of the last fiscal
quarter prior to such determination.
(9) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least one
cent ($0.01) in such price; provided, however, that any adjustments which by
reason of this Subsection (9) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment required to be made
hereunder. All calculations under this Section (f) shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be. Anything in
this Section (f) to the contrary notwithstanding, the Company shall be entitled,
but shall not be required, to make such changes in the Exercise Price, in
addition to those required by this Section (f), as it shall determine, in its
sole discretion, to be advisable in order that any dividend or distribution in
shares of Common Stock, or any subdivision, reclassification or combination of
Common Stock, hereafter made by the Company shall not result in any Federal
Income tax liability to the holders of Common Stock or securities convertible
into Common Stock (including this Warrant).
(10) Whenever the Exercise Price is adjusted, as herein
provided, the Company shall promptly but no later than 10 days after any request
for such an adjustment by the Holder, cause a notice setting forth the adjusted
Exercise Price and adjusted number of Shares issuable upon exercise of each
Warrant, and if requested, information describing the transactions giving rest
to such adjustments, to be mailed to the Holders at their last addresses
appearing in the Warrant Register, and shall cause a certified copy thereof to
be mailed to its transfer agent, if any. In the event the Company does not
provide the Holder with such notice and information within 10 days of a request
by the Holder, then notwithstanding the provisions of this Section (f), the
Exercise Price shall be immediately adjusted to equal the lowest Offering Price,
Subscription Price or Conversion Price, as applicable, since the date of this
Warrant, and the number of shares issuable upon exercise of this Warrant shall
be adjusted accordingly. The Company may retain a firm of independent certified
public accountants selected by the Board of Directors (who may be the regular
accountants employed by the Company) to make any computation required by this
Section (f), and a certificate signed by such firm shall be conclusive evidence
of the correctness of such adjustment.
(11) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the Holder of this Warrant
thereafter shall become entitled to receive any shares of the Company, other
than Common Stock, thereafter the number of such other shares so receivable upon
exercise of this Warrant shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Subsections (1) to (9), inclusive
above.
(12) Irrespective of any adjustments in the Exercise Price or
the number or kind of shares purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Agreement.
(13) Notwithstanding the foregoing, in no event shall the
Exercise Price be adjusted pursuant to this Section (f) to an amount in excess
of the Exercise Price then in effect, except in the case of a reverse-split or
other combination of the outstanding shares of Common Stock.
(g) OFFICERS CERTIFICATE. Whenever the Exercise Price shall be adjusted
as required by the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the
holder or any holder of a Warrant executed and delivered pursuant to Section (a)
and the Company shall, forthwith after each such adjustment, mail a copy by
certified mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock, or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any share of any class or any
other rights, or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, or (iv) if action is to be taken by holders of
the Company's Common Stock at a meeting or by written consent, then in any such
case, the Company shall cause to be mailed by certified mail to the Holder, at
least fifteen days prior the date specified in (x), (y) or (z) below or, if
earlier, the date a notice is sent to the holders of the Company's Common Stock
with respect to such action, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up or (z) the shareholder action whether at a meeting or by written
consent is to take place.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another entity of the
property of the Company as an entirety or substantially as an entirety, the
Company or such successor, leasing or purchasing entity, as the case may be,
shall as a condition precedent to such transaction, cause effective provisions
to be made so that the Holder shall have the right thereafter by exercising this
Warrant at any time prior to the expiration of the Warrant, to purchase the kind
and amount of shares of stock and other securities and property receivable upon
such reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section (i) shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with any such capital reorganization or
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for a security of the Company other than Common
Stock, any such issue shall be treated as an issue of Common Stock covered by
the provisions of Subsection (1) of Section (f) hereof.
(j) Pursuant to the Stock and Warrant Purchase Agreement, ATI
acknowledges and agrees that the Company may require ATI to exercise a certain
portion of this Warrant solely in accordance with Section 3.5.2 of the Stock and
Warrant Purchase Agreement, to the extent applicable. It is expressly understood
that the Company's sole remedy in connection with ATI's breach of this Section
(j) or Section 3.5.2 of the Stock and Warrant Purchase Agreement shall be as set
forth in said Section 3.5.2 of the Stock and Warrant Purchase Agreement.
OCTUS, INC.
By:
John C. Belden
President
Dated: June __, 1996
Attest:
___________________
Robert Freeman
Assistant Secretary
PURCHASE FORM
Dated ___________, 19___
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing ____________ shares of Common Stock and
hereby makes payment of __________________ in payment of the actual exercise
price thereof.
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________hereby sells, assigns and
transfers unto
Name __________________
(Please typewrite or print in block letters)
Address __________________
the right to purchase Common Stock represented by this Warrant to the extent of
__________________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint __________________ Attorney, to transfer the
same on the books of the Company with full power of substitution in the
premises.
Date __________________ , 19 __
Signature __________________
EXHIBIT C
FORM OF OFFICER'S CERTIFICATE
OFFICER'S CERTIFICATE
I, John C. Belden, do hereby certify to Advanced Technologies
International, Ltd. that:
1. I am the President of OCTuS, Inc., a California corporation
(the "Corporation"), duly elected to such office in accordance
with the Corporation's bylaws and other constituent documents
and the laws of the State of California.
2. Attached hereto and made a part hereof as Exhibit A is a true,
correct and complete original copy of the Corporation's
Articles of Incorporation, together with any and all
amendments thereto, as certified by the Secretary of State of
the State of California on June 12, 1996, and the same has not
been otherwise amended, rescinded or repealed and is in full
force and effect as of the date hereof.
3. Attached hereto and made a part hereof as Exhibit B is a true,
correct and complete copy of the Corporation's bylaws,
together with any and all amendments thereto, and the same has
not been otherwise amended, rescinded or repealed and is in
full force and effect as of the date hereof.
4. Attached hereto and made a part hereof as Exhibit C are true,
correct and complete copies of certain resolutions of the
Corporation's Board of Directors, adopted on June 24, 1996,
and the same have not been otherwise amended, rescinded or
repealed and are in full force and effect as of the date
hereof.
Dated: June 24, 1996
__________________
John C. Belden
EXHIBIT D
REGISTRATION RIGHTS
REGISTRATION RIGHTS
1. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
a. "Agreement" shall mean the registration rights provided
hereby.
b. "ATI" shall mean Advanced Technologies International, Ltd.,
together with its successors and assigns.
c. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and all rules and regulations promulgated
thereunder.
d. "Common Stock" shall mean the Company's no par value common
stock.
e. "OCTuS" shall mean OCTuS, Inc., together with its successors
and assigns.
f. "Registrable Securities" shall mean the Warrant Shares and any
Common Stock issued or issuable with respect to the Warrant
Shares by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization.
As to any particular Registrable Securities, such securities
will cease to be Registrable Securities when they have (a)
been effectively registered under the Securities Act and
disposed of in accordance with the Registration Statement
covering them, (b) been sold to the public in accordance with
Rule 144 (or any similar provision then in force) under the
Securities Act, or (c) been otherwise transferred and new
certificates for them not bearing a Securities Act restrictive
legend have been delivered by OCTuS. Whenever any particular
securities cease to be Registrable Securities, the holder
thereof will be entitled to receive from OCTuS, without
expense, new securities of like tenor not bearing a
restrictive legend.
g. "Registration Expenses" shall mean all expenses incident to
OCTuS' performance of or compliance with this Agreement,
including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue
sky laws, printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for OCTuS and all
independent certified public accountants, underwriters
(excluding discounts and commissions) and other person or
entity retained by OCTuS.
h. "Registration Statement" shall mean a registration statement
filed pursuant to the Securities Act on Form S-1, S-2, S-3 or
any similar registration statement pursuant to which the
Registrable Securities may be registered.
i. "Securities Act" shall mean the Securities Act of 1933, as
amended, and all rules and regulations promulgated thereunder.
j. "Stock and Warrant Purchase Agreement" shall mean that certain
Stock and Warrant Purchase Agreement to which this Exhibit
forms a part by and between ATI and OCTuS.
k. "Warrant" shall have the meaning ascribed thereto in the Stock
and Warrant Purchase Agreement.
l. "Warrant Shares" shall mean all shares of Common Stock
underlying the Warrant prior to the exercise thereof and all
shares of Common Stock issuable from time to time to ATI upon
the full exercise of the Warrant.
2. PIGGYBACK REGISTRATIONS.
a. RIGHT TO PIGGYBACK. Whenever OCTuS proposes to register any of
its securities under the Securities Act [other than pursuant
to a Demand Registration (as hereinafter defined)] and the
registration form to be used may be used for the registration
of any Registrable Securities (a "Piggyback Registration"),
OCTuS will (i) give prompt written notice to ATI of its
intention to effect such a registration, and (ii) include in
such registration all Registrable Securities in accordance
with the priorities set forth in Paragraphs 2.c. and 2.d.
below with respect to which OCTuS has received ATI's written
request for inclusion therein within fifteen (15) days after
ATI's receipt of OCTuS' notice.
b. PIGGYBACK EXPENSES. All Registration Expenses incurred by
OCTuS in connection with any Piggyback Registration will be
paid by OCTuS.
c. PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration
is an underwritten primary registration on behalf of OCTuS and
the managing underwriters advise OCTuS in writing that in
their opinion the number of securities requested to be
included in such registration exceeds the number which can be
sold in such offering, OCTuS will include in such registration
(i) first, the securities that OCTuS proposes to sell, (ii)
second, the securities registrable pursuant to the Initial
Registration Rights, (iii) third, the Registrable Securities
requested to be included in such registration, and (iv)
fourth, any other securities requested to be included in such
registration.
d. PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on
behalf of holders of OCTuS' securities and the managing
underwriters advise OCTuS in writing that in their opinion the
number of securities requested to be included in such
registration exceeds the number which can be sold in such
offering, OCTuS will include in such registration (i) first,
the securities requested to be included therein by the holders
requesting such registration, (ii) second, the securities
registrable pursuant to the Initial Registration Rights, (iii)
third, the Registrable Securities, and (iv) fourth, any other
securities requested to be included in such registration.
e. OTHER REGISTRATIONS. If OCTuS has previously filed a
registration statement with respect to Registrable Securities
pursuant to Paragraph 3 hereof or pursuant to this Paragraph
2, and if such previous registration has not been withdrawn or
abandoned, OCTuS will not file or cause to be effected any
other registration of any of its equity securities or
securities convertible or exchangeable into or exercisable for
its equity securities under the Securities Act (except on Form
S-8 or any successor form), whether on its own behalf or at
the request of any holder or holders of such securities, until
a period of at least six (6) months has elapsed from the
effective date of such previous registration except with
respect to any Demand Registration which is required due to
the inability of ATI to register all of the Registrable
Securities required to be included in any Piggyback
Registration.
3. DEMAND REGISTRATIONS.
a. REQUESTS FOR REGISTRATION. ATI may, at any time within five
(5) years from the date of the Stock and Warrant Purchase
Agreement, demand that OCTuS file a Registration Statement
with respect to all or part of the Registrable Securities. A
registration requested pursuant to this Paragraph 3 is
referred to herein as "Demand Registration".
b. NUMBER OF DEMAND REGISTRATIONS. ATI will be entitled to
request one (1) Demand Registration pursuant to which the
Registrable Securities shall be registered. A registration
will not count as the permitted Demand Registration (i) until
it has become effective (unless such Demand Registration has
not become effective due solely to the fault of ATI), and (ii)
unless ATI is able to register one hundred percent (100%) of
the Registrable Securities requested to be included in such
registration (unless ATI is not so able to register such
amount of the Registrable Securities due solely to the fault
of ATI).
c. PRIORITY ON DEMAND REGISTRATIONS. If securities other than
Registrable Securities are to be included in a Demand
Registration which is an underwritten offering and the
managing underwriters advise OCTuS in writing that in their
opinion the number of Registrable Securities and other
securities requested to be included exceeds the number of
Registrable Securities and other securities which can be sold
in such offering, OCTuS will include in such registration,
prior to the inclusion of any securities which are not
Registrable Securities, the number of Registrable Securities
requested to be included which in the opinion of such
underwriters can be sold.
d. DEMAND EXPENSES. All Registration Expenses incurred by OCTuS
in connection with any Demand Registration will be paid by
OCTuS, provided that OCTuS shall not be obligated to incur
legal fees (exclusive of costs and expenses) in excess of Ten
Thousand and No/100 Dollars ($10,000.00) attributable solely
to the preparation and filing of the subject Registration
Statement.
e. SELECTION OF UNDERWRITERS. ATI shall have the right to select
one or more, if any, investment bankers and managers to
administer the offering.
4. REGISTRATION OF REGISTRABLE SECURITIES PRIOR TO EXERCISE OF WARRANT. It
is expressly understood that, without limitation of any other provision
hereof, the term "Registrable Securities" shall include the shares of
Common Stock underlying the warrant prior to the exercise thereof as
well as the shares of Common Stock issuable from time to time upon the
full or partial exercise thereof. It is further expressly understood
that ATI may request the inclusion of the Registrable Securities in a
Piggyback Registration or may demand a Demand Registration with respect
to the Registrable Securities, at any time, in accordance with the
terms hereof, whether or not ATI has theretofore exercised the warrant
in whole or in part. Notwithstanding anything to the contrary contained
herein, it is expressly understood that OCTuS shall have no obligation
to register the Warrant.
5. HOLDBACK AGREEMENTS.
a. In connection with any underwritten Piggyback Registration,
ATI agrees not to effect any public sale or distribution of
equity securities of OCTuS, or any securities convertible into
or exchangeable or exercisable for such securities, during the
seven (7) days prior to and the ninety (90)-day period
beginning on the effective date of any such underwritten
Piggyback Registration in which Registrable Securities are
included on behalf of ATI, unless the underwriters managing
the registered public offering otherwise agree and such sale
or distribution otherwise complies with Regulationss.240.10b-6
of the Exchange Act; provided, however, that ATI may elect, at
its option, to not have the underwriter sell the Registrable
Securities which ATI have registered and to otherwise
determine the method and timing of the sale of the securities
so registered without regard to the holdback provisions
hereof.
b. OCTuS agrees (i) not to effect any public sale or distribution
of its equity securities, or any securities convertible into
or exchangeable or exercisable for such securities, during the
seven (7) days prior and the ninety (90)-day period beginning
on the effective date of any underwritten Demand Registration,
unless the underwriters managing the registered public
offering otherwise agree, and (ii) to cause each holder of its
equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, purchased
from OCTuS (other than in a registered public offering) to
agree not to effect any public sale or distribution of any
such securities during such period (except as part of such
underwritten registration, if otherwise permitted, or except
as permitted in Paragraph 5.a. hereof, unless the underwriters
managing the registered public offering otherwise agree.
6. REGISTRATION PROCEDURES. Whenever ATI has requested that any
Registrable Securities be registered pursuant to this Agreement, OCTuS
will use its reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto, OCTuS will as
expeditiously as possible:
a. prepare and file with the Securities and Exchange Commission a
Registration Statement with respect to such Registrable
Securities and use its best efforts to cause such Registration
Statement to become effective (provided that, before filing a
Registration Statement or prospectus or any amendments or
supplements thereto, OCTuS will furnish to ATI's counsel
copies of all such documents proposed to be filed);
b. prepare and file with the Securities and Exchange Commission
such amendments and supplements to such Registration Statement
and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a
period of not less than twelve (12) months and comply with the
provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration
Statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in
such Registration Statement;
c. furnish to ATI such number of copies of such Registration
Statement, each amendment and supplement thereto, the
prospectus included in such Registration Statement (including
each preliminary prospectus) and such other documents as ATI
may reasonably request in order to facilitate the disposition
of the Registrable Securities;
d. use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky
laws of such jurisdictions as ATI reasonably requests and do
any and all other acts and things which may be reasonably
necessary or advisable to enable ATI to consummate the
disposition in such jurisdictions of Registrable Securities
owned by ATI;
e. notify ATI, at any time when a prospectus relating to
Registrable Securities is required to be delivered under the
Securities Act, of the happening of any event as a result of
which the prospectus included in such Registration Statement
contains an untrue statement of a material fact or omits any
fact necessary to make the statements therein not misleading,
and, at the request of ATI, OCTuS will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material
fact or omit to state any fact necessary to make the
statements therein not misleading;
f. cause all such Registrable Securities to be listed on each
securities exchange, inter-dealer quotation system or other
market or reporting service on which similar securities issued
by OCTuS are then listed, if any;
g. provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of
such Registration Statement;
h. enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions
as ATI, or the underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation,
effecting a stock split or a combination of shares); and
i. make available for inspection during normal business hours by
ATI, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney, accountant
or other agent retained by ATI or underwriter, all financial
and other records, pertinent corporate documents and
properties of OCTuS, and cause OCTuS' officers, directors,
employees and independent accountants to supply all
information reasonably requested by ATI, underwriter,
attorney, accountant or agent in connection with such
Registration Statement.
7. INDEMNIFICATION.
a. OCTuS agrees to indemnify, to the extent permitted by law,
ATI, its officers and directors and each person or entity who
controls ATI (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material
fact contained in any Registration Statement, prospectus or
preliminary prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact
required to be stated therein, except insofar as the same are
caused by or contained in any information furnished to OCTuS
by ATI expressly for use therein or which ATI failed to
provide after being so requested or by ATI's failure to
deliver a copy of the Registration Statement or prospectus or
any amendments or supplements thereto after OCTuS has
furnished ATI with a sufficient number of copies of the same
or which is otherwise attributable of the negligence or
willful misconduct of ATI. In connection with an underwritten
offering, OCTuS will indemnify such underwriters, their
officers and directors and each person or entity who controls
such underwriters (within the meaning of the Securities Act)
to the same extent as provided above with respect to the
indemnification of ATI.
b. In connection with any Registration Statement in which ATI is
participating, ATI will furnish to OCTuS in writing, within
fifteen (15) days after request therefor, such information and
affidavits as OCTuS reasonably requests for use in connection
with any such Registration Statement or prospectus and, to the
extent permitted by law, will indemnify OCTuS, its directors
and officers, each person or entity who controls OCTuS (within
the meaning of the Securities Act), against any losses,
claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained
or required to be contained in the Registration Statement,
prospectus or preliminary prospectus or any amendment thereof
or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained or
required to be contained in any information or affidavit so
furnished or required to be so furnished in writing by ATI.
c. Any person or entity entitled to indemnification hereunder
will (i) give prompt written notice to the indemnifying party
of any claim with respect to which it seeks indemnification,
and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such
claim, with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party will
not be subject to any liability for any settlement made by the
indemnified party without the indemnifying party's consent
(but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties
with respect to such claim.
d. The indemnification provided for under this Agreement will
remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or
any officer, director or controlling person or entity of such
indemnified party and will survive the transfer of securities.
OCTuS also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such
party in the event OCTuS' indemnification is unavailable for
any reason.
8. OTHER REGISTRATION RIGHTS. OCTuS will not grant to any person or entity
the right to request or require OCTuS to register any equity securities
of OCTuS, or any securities convertible or exchangeable into or
exercisable for such securities, without the prior written consent of
ATI.
9. CURRENT PUBLIC INFORMATION. At all times after OCTuS has filed a
Registration Statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the
Exchange Act and such Registration Statement has been declared
effective, OCTuS will file all reports required to be filed by it
pursuant to the Securities Act or the Exchange Act, and will take such
further action as ATI may reasonably request, all to the extent
required to enable ATI to sell Registrable Securities pursuant to (i)
Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act (as such rule may be amended from time to time) or any
similar rule or regulation hereafter adopted by the Securities and
Exchange Commission, or (ii) a Registration Statement. Upon request,
OCTuS will deliver to ATI a written statement as to whether it has
complied with such requirements.
10. NO INCONSISTENT AGREEMENTS. OCTuS will not hereafter enter into any
agreement with respect to its securities which is inconsistent with the
rights granted to ATI in this Agreement.
11. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. OCTuS will not take any
action or permit any change to occur with respect to its securities
which would materially and adversely affect the ability of ATI to
include the Registrable Securities in a registration undertaken
pursuant to this Agreement or which would materially and adversely
affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or
a combination of shares).
12. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Agreement
by or on behalf of any of the parties hereto will bind and inure to the
benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are
for the benefit of purchasers or holders of Registrable Securities are
also for the benefit of, and enforceable by, any subsequent holder of
Registrable Securities.
