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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 4
BIOFIELD CORPORATION
- -------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
- -------------------------------------------------------------------------------
(Title of Class of Securities)
090591108
-------------------------------------------------------
(CUSIP Number)
DAVID J. GREENWALD, ESQ.
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 902-1000
---------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
DECEMBER 17, 1997
----------------------------------------------------------
(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 [].
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).
SCHEDULE 13D
CUSIP No. 090591108 Page 2 of 55 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
THE GOLDMAN SACHS GROUP, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF-00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 9,166
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 2,246,131
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 9,166
10 SHARED DISPOSITIVE POWER
2,246,131
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,255,297
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.5%
14 TYPE OF REPORTING PERSON*
HC-PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP No. 090591108 Page 3 of 55 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
THE GOLDMAN SACHS GROUP, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [X]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 2,246,131
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
10 SHARED DISPOSITIVE POWER
2,246,131
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,246,131
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.4%
14 TYPE OF REPORTING PERSON*
BD-PN-IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP No. 090591108 Page 4 of 55 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GS CAPITAL PARTNERS, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 2,021,523
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
10 SHARED DISPOSITIVE POWER
2,021,523
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,021,523
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.2%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP No. 090591108 Page 5 of 55 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
GS ADVISORS, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 2,021,523
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
10 SHARED DISPOSITIVE POWER
2,021,523
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.2%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
AMENDMENT NO. 4 TO SCHEDULE 13D
RELATING TO THE COMMON STOCK OF
BIOFIELD CORP.
GS Capital Partners, L.P. ("GSCP"), GS Advisors, L.P. ("GS
Advisors, L.P."), Goldman, Sachs & Co. ("Goldman Sachs") and The
Goldman Sachs Group, L.P. ("GS Group" and, together with GSCP, GS
Advisors, L.P. and Goldman Sachs, the "Filing Persons")(FN*) hereby amend
the statement on Schedule 13D (as amended, the "Schedule 13D"), dated
March 19, 1996, as amended by Amendment No. 1 to Schedule 13D, dated
June 30, 1996, as amended by Amendment No. 2 to Schedule 13D dated
October 17, 1997, and as amended by Amendment No. 3 to Schedule 13D
dated October 9, 1997 filed with respect to the common stock, par
value $.001 per share (the "Common Stock"), of Biofield Corp., a
Delaware corporation (the "Company"). Unless otherwise indicated, all
capitalized terms not otherwise defined herein shall have the same
meanings as those set forth in the Schedule 13D.
ITEM 2. IDENTITY AND BACKGROUND.
-----------------------
Item 2 is hereby amended by deleting Schedule II-B thereto
and substituting Schedule II-B hereto in lieu thereof.
ITEM 3. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATIONS.
---------------------------------------------------
Item 3 is hereby amended by deleting the third paragraph
of such item in its entirety and substituting the following in lieu
thereof.
Pursuant to a Subscription Agreement, dated as of December
17, 1997 (the "Subscription Agreement"), by and among the Company and
GSCP, on behalf of the Limited Partnerships, on December 17, 1997, the
Limited Partnerships purchased 730,157 shares of Common Stock from the
Company in a private placement (the "Offering"). The total
consideration for the purchase of Common Stock in the Offering was
$2,300,000. A copy of the Subscription Agreement is filed as Exhibit 7
and incorporated herein by reference.
* Neither the present filing nor anything contained herein shall
be construed as an admission that any Filing Person constitutes
a "person" for any purpose other than Section 13(d) of the
Securities Exchange Act of 1934.
In connection with the Offering, the Company offered to
exchange its outstanding warrants to purchase up to 1,785,994 shares
of Common Stock for 730,651 shares of Common Stock (the "Warrant
Exchange"). Pursuant to a Warrant Exchange Agreement, dated as of
December 17, 1997 (the "Warrant Exchange Agreement") by and among the
Company and each of the Limited Partnerships, on December 17, 1997,
the Limited Partnerships acquired 444,510 shares of Common Stock from
the Company in exchange for Warrants to purchase 1,089,329 shares of
Common Stock. All of the Warrants held by the Limited Partnerships
were exchanged for shares of Common Stock in the Warrant Exchange. A
copy of the form of the Warrant Exchange Agreement is attached as
Exhibit 8 and incorporated herein by reference.
The funds used by the Limited Partnerships to purchase the
Securities Units and the Common Stock as described above were obtained
from capital contributions by the Limited Partnerships' respective
partners and from the Limited Partnerships' available funds. The
Warrants exchanged by the Limited Partnerships in the Warrant Exchange
were obtained by the Limited Partnerships on March 3, 1995 pursuant to
the Purchase Agreement.
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
Item 4 is hereby amended by deleting the second to last
paragraph and inserting the following in lieu thereof.
As further described in Item 6, the Limited Partnerships
intend to register all of the shares of Common Stock received by them
in the Offering in a shelf registration statement on Form S-3 to be
filed by the Company in accordance with the terms of the Offering
Registration Rights Agreement (as defined below), covering resales of
the shares of Common Stock issued by the Company in the Offering.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------
Item 5(a) is hereby amended and restated in its entirety
as follows:
(a) As described in Item 3, the Limited Partnerships
purchased Securities Units consisting of an aggregate of 1,777,778
shares of Series C Preferred Stock, 888,891 Series D Warrants and
888,887 Adjustable Warrants pursuant to the Purchase Agreement and
200,000 shares of Common Stock in the IPO. The Company effected a
2.04-for-one reverse stock split as of February 26, 1996. Upon the
completion of the IPO: (i) each share of Series C Preferred Stock
automatically converted into 0.4902 shares of Common Stock and (ii)
each Warrant automatically became exercisable for 0.4902 shares of
Common Stock. Under the Purchase Agreement, the Limited Partnerships
had the right, upon the occurrence of certain events, to receive
warrants to purchase an aggregate of 217,865 shares of Common Stock at
an exercise price of $9.18 per share (the "Additional Adjustable
Warrants", and the term "Adjustable Warrants" includes such Additional
Adjustable Warrants). One of those events occurred on June 30, 1996,
and accordingly, the Limited Partnerships acquired the 217,865
Additional Adjustable Warrants as of that date. As further described
in Item 3, on December 17, 1997, the Limited Partnerships (i)
purchased 730,157 shares of Common Stock in the Offering and (ii)
exchanged Warrants to purchase 1,089,329 for 444,510 shares of Common
Stock. As a result, on December 17, 1997 (after giving effect to the
Offering and the Warrant Exchange), GSCP beneficially owned 2,021,523
shares of Common Stock and no Warrants. The Company has informed the
Filing Persons that as of December 17, 1997, after giving effect to
the Offering and the Warrant Exchange, 10,029,609 shares of Common
Stock were outstanding and warrants to purchase 396,762 shares of
Common Stock were outstanding. Based on that number of outstanding
shares, the number of shares owned by GSCP (assuming that none of the
outstanding Warrants and none of the Directors Options (as hereinafter
defined) are exercised) represent approximately 20.2% of the
outstanding shares of Common Stock. Assuming that all of the
outstanding Warrants are exercised, GSCP would own approximately 19.4%
of the outstanding shares of Common Stock.
Goldman Sachs may be deemed to hold through the Limited
Partnerships, for purposes of this Statement, the beneficial ownership
of 2,246,131 shares of Common Stock. Such number of shares of Common
Stock (assuming that none of the outstanding Warrants and none of the
Directors Options are exercised) represent approximately 22.4% of the
outstanding shares of Common Stock. Assuming that all of the
outstanding Warrants are exercised, Goldman Sachs would beneficially
own approximately 21.5% of the outstanding shares of Common Stock.
On June 20, 1996, a managing director of Goldman Sachs in
his capacity as GSCP's designee to the Board of Directors, received
options to purchase 10,000 shares of Common Stock pursuant to the
Company's 1996 Stock Option Plan for Non-Employee Directors (the
"Non-Employee Director Stock Plan") at an exercise price of $11.00 per
share (the "Initial Directors Options"). In addition, on June 5, 1997,
such managing director received options to purchase an additional
2,500 shares of Common Stock under the Non-Employee Directors Stock
Plan at an exercise price of $4.69 per share (the "Additional
Directors Options" and together with the Initial Directors Options,
the "Directors Options"). Such managing director has an agreement with
GS Group pursuant to which he holds these Directors Options for the
benefit of GS Group. None of the Directors Options has been exercised.
Of the 12,500 Directors Options issued to the GSCP designee to the
Board of Directors, 9,166 of such options are currently exercisable
or will be exercisable within 60 days of the date hereof.
GS Group may be deemed to hold through the Limited
Partnerships, for purposes of this Statement, the beneficial ownership
of 2,246,131 shares of Common Stock. GS Group may also be deemed to
beneficially own Initial Directors Options to purchase 6,666 shares of
Common Stock at an exercise price of $11.00 per share and Additional
Directors Options to purchase 2,500 shares of Common Stock at an
exercise price of $4.69 per share. Such number of shares of Common
Stock (assuming that none of the outstanding Warrants and none of the
Directors Options are exercised) represent approximately 22.4% of the
outstanding shares of Common Stock. Assuming that none of the
outstanding Warrants are exercised, and all of the 9,166 Directors
Options beneficially owned by GS Group are exercised, GS Group would
beneficially own approximately 22.5% of the outstanding shares of
Common Stock (approximately 22.5% assuming all of the 12,500 Directors
Options are exercised). Assuming that all of the outstanding Warrants
are exercised and all of the 9,166 Directors Options beneficially
owned by GS Group are exercised, GS Group would beneficially own
approximately 21.6% of the outstanding shares of Common Stock
(approximately 21.6% assuming all of the 12,500 Directors Options are
exercised).
As described in Item 4, under the Purchase Agreement the
Other Investors have agreed to vote all of the shares of Common Stock
of the Company owned by them for the election of GSCP's nominee for
Board Member. The Filing Persons have no information regarding the
current holdings of the Other Investors.
None of the Filing Persons, and to the knowledge of each
of the Filing Persons, none of the Limited Partnerships that is not a
Filing Person or any of the persons listed on Schedule I or Schedule
II-A or II-B hereto, beneficially owns any shares of Common Stock
other than as set forth herein.
Item 5(b) is hereby amended and restated in its entirety
as follows:
(b) Except with respect to the shares of Common Stock
issuable upon exercise of the Directors Options, as to which GS Group
has the sole power to vote and to dispose of such shares of Common
Stock, each Filing Person shares the power to vote or direct the vote
and to dispose or to direct the disposition of shares of Common Stock
beneficially owned by such Filing Person as indicated in pages 2
through 5 above.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
-------------------------------------------------------------
Item 6 is hereby amended by deleting the paragraph with
the heading "Options", the paragraph with the heading "Private
Placement", the paragraph with the heading "Warrant Exchange", and the
paragraph following such paragraph and inserting the following in lieu
thereof:
Options. The Initial Directors Options, which were deemed
granted as of January 29, 1996, were granted pursuant to a Stock
Option Letter Agreement for Non-Employee Directors, dated January 29,
1996. The Initial Directors Options vest in three equal installments on
the first, second and third anniversaries of the date of grant and are
immediately exercisable upon vesting. Accordingly, options to purchase
6,666 shares of Common Stock are currently exercisable. The Initial
Directors Options expire on the earlier of the tenth anniversary of
the date of grant or one year from cessation of service as a director.
The Additional Directors Options were granted on June 5,
1997 pursuant to a Stock Option Letter Agreement for Non-Employee
Directors, dated June 5, 1997 (the option agreements relating to the
Initial Directors Options and the Additional Directors Options,
collectively the "Option Agreement"). The Additional Directors
Options are currently vested and are currently exercisable. The
Additional Directors Options expire on the earlier of the tenth
anniversary of the date of grant or one year from cessation of
service as a director. A copy of the Option Agreement and the
Non-Employee Director Stock Plan is attached as Exhibit 5 and
incorporated herein by reference.
Private Placement. As described above, on December 17,
1997, the Company consummated the private placement of 2,867,670
shares of Common Stock. Pursuant to the Subscription Agreement, the
Limited Partnerships purchased 730,157 shares of Common Stock for an
aggregate purchase price of $2.3 million. The shares of Common Stock
purchased by the Limited Partnership in the Offering are restricted
securities. In connection with the Offering, the Company and the
purchasers in the Offering (including the Limited Partnerships)
entered into a registration rights agreement, a copy of which is filed
as Exhibit 9 hereto, and incorporated herein by reference (the
"Offering Registration Rights Agreement"). Under the Offering
Registration Rights Agreement, the Company is obligated to file as
soon as reasonably practicable after the closing of the Offering, a
registration statement on Form S-3 covering resales of shares of
Common Stock sold in the Offering and to maintain the effectiveness of
such registration statement with respect to each investor until the
securities registered therein by such investor are sold or are
eligible to be sold pursuant to Rule 144(k) or are sold in compliance
with Rule 144. In accordance with the terms of the Offering
Registration Rights Agreement, the Limited Partnerships have the right
to "piggyback" all of the shares of Common Stock purchased under the
Purchase Agreement (including the shares of Common Stock issued in the
Warrant Exchange) in the contemplated S-3 Registration. The Limited
Partnerships intend to register in the S-3 Registration only the
shares of Common Stock purchased by them in the Offering and do not
intend to register any other shares of Common Stock held by them in
such registration. In connection with the Offering, each of the
Limited Partnerships entered into a "lock-up" agreement, a copy of the
form agreement executed by the Limited Partnerships is attached as
Exhibit 11 and incorporated herein by reference (each an "Offering
Lock-Up Agreement"). Under the Offering Lock-Up Agreement, the Limited
Partnerships have agreed that they will not, without the prior written
consent of the underwriters, offer, sell or otherwise dispose of any
shares of Common Stock or other securities exchangeable for or
convertible into shares of Common Stock, options or warrants to
acquire shares of Common Stock or securities exchangeable for or
convertible into shares of Common Stock owned by them until the
earlier of (a) the 90th day after the date on which the Securities and
Exchange Commission declares effective the Form S-3 registration
statement registering for resale the Common Stock purchased by the
investors in the Offering or (b) December 17, 1998.
Warrant Exchange. Concurrent with the completion of the
Offering, the Company offered to exchange its outstanding Warrants to
purchase up to 1,785,994 shares of Common Stock for 730,651 shares of
Common Stock. In connection with such exchange, the Limited
Partnerships exchanged all of their 1,089,329 Warrants for 444,510
shares of Common Stock. The shares of Common Stock issued to the
Limited Partnership in connection with the Warrant Exchange are
restricted securities but are entitled to registration rights under
the Registration Rights Agreement. In connection with the Warrant
Exchange, the Company and the Limited Partnerships entered into an
amendment (the "Registration Rights Amendment") to the Registration
Rights Agreement to clarify that the shares of Common Stock received
by the Limited Partnerships in the Warrant Exchange are entitled to
the rights and benefits of the Registration Rights Agreement. A copy
of such amendment is attached as Exhibit 10 and incorporated herein by
reference. In connection with the Warrant Exchange, each of the
Limited Partnerships also entered into a "lock-up" agreement (the
"Warrant Exchange Lock-Up Agreement"). A form of the Warrant Exchange
Lock-Up Agreement is attached as Exhibit 12 and incorporated herein by
reference. Under the Warrant Exchange Lock-Up Agreement, the Limited
Partnerships have agreed that they will not, during the period from
December 17, 1997 to and including December 17, 1998, directly or
indirectly, offer, sell, offer to sell, grant options to purchase or
otherwise sell or dispose of any shares of Common Stock received upon
conversion of the Warrants in the Warrant Exchange.
The foregoing descriptions of the Purchase Agreement, the
letter from the Company to GSCP, dated March 18, 1996, the
Registration Rights Agreement, the Lock-up Agreement, the Option
Agreement, the Non-Employee Director Stock Plan, the Subscription
Agreement, the Warrant Exchange Agreement, the Offering Registration
Rights Agreement, the Registration Rights Amendment, and the "lock-up"
agreements executed in connection with the Offering and the Warrant
Exchange in this Statement are qualified in their entirety by
reference to the Purchase Agreement, such letter, the Registration
Rights Agreement, the Lock-up Agreement, the Option Agreement, the
Non-Employee Director Stock Plan, the Subscription Agreement, the
Warrant Exchange Agreement, the Offering Registration Rights
Agreement, the Registration Rights Amendment and the "lock-up"
agreements executed in connection with the Offering and the Warrant
Exchange, copies of which are filed as Exhibits (1), (2), (3), (4),
(5), (7), (8), (9), (10), (11) and (12) respectively, and are
incorporated by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------
Item 7 is hereby amended and restated in its entirety as
follows:
(1) Preferred Stock and Warrant Purchase Agreement by and
among the Company and the purchasers of Securities Units,
dated as of March 3, 1995, as amended (incorporated herein
by reference to Exhibits 10.10 and 10.11 to the Company's
Registration Statement on Form S-1 No. 333-0796)
(2) Letter from the Company to GSCP, dated March 18, 1996
(3) Registration Rights Agreement by and among the Company and
the purchasers of Securities Units, dated as of March 3,
1995, as amended (incorporated herein by reference to
Exhibits 10.12 and 10.13 to the Company's Registration
Statement on Form S-1 No.
333-0796)
(4) Lock-up Agreement
(5) Stock Option Letter Agreements for Non-Employee Directors;
Biofield Corp. 1996 Stock Option Plan for Non-Employee Directors
(6) Joint Filing Agreement
(7) Subscription Agreement by and among the Company and the
Limited Partnerships, dated December 17, 1997.
(8) Form of Warrant Exchange Agreement, by and among the
Company and the Limited Partnerships.
(9) Form of Registration Rights Agreement, by and among the
Company, the Limited Partnerships, and the purchasers in
the Offering.
(10) Second Amendment, dated December 17, 1997, to the
Registration Rights Agreement by and among the Company and
the purchasers of Securities Units, dated as of March 3,
1995, as amended.
(11) Form of Lock-up Agreement, by and among the Company and
the Limited Partnerships, with regard to shares of Common
Stock acquired in the Offering.
(12) Form of Lock-up Agreement, by and among the Company and
the Limited Partnerships, with regard to shares of Common
Stock acquired in the Warrant Exchange.
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.
December 24, 1997
GOLDMAN, SACHS & CO.
By: /s/ Richard A. Friedman
------------------------------------------------
Name: Richard A. Friedman
Title: Managing Director
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
its general partner
By: /s/ Richard A. Friedman
------------------------------------------------
Name: Richard A. Friedman
Title: Executive Vice President
GS ADVISORS, L.P.
By: GS Advisors, Inc., its general partner
By: /s/ Richard A. Friedman
------------------------------------------------
Name: Richard A. Friedman
Title: Presidentt
GS CAPITAL PARTNERS, L.P.
By: GS Advisors, L.P., its general partner
By: GS Advisors, Inc., its general partner
By: /s/ Richard A. Friedman
------------------------------------------------
Name: Richard A. Friedman
Title: President
SCHEDULE II-B
The name, position and present principal occupation of
each director and executive officer of GS Advisors, Inc., the sole
general partner of GS Advisors, L.P., which is the sole general
partner of GS Capital Partners, L.P., are set forth below.
The business address for all the executive officers and
directors listed below except Henry Cornell is 85 Broad Street, New
York, New York 10004. The business address of Henry Cornell is 3
Garden Road, Hong Kong.
All executive officers and directors listed below are
United States citizens.
Name Position Present Principal Occupation
- ---- -------- ----------------------------
Richard A. Friedman Director/President Managing Director of Goldman,
Sachs & Co.
Terence M. O'Toole Director/Vice Managing Director of Goldman,
President Sachs & Co
Elizabeth S. Cogan Treasurer Managing Director of Goldman,
Sachs & Co.
Joseph H. Gleberman Director/Vice Managing Director of Goldman,
President Sachs & Co
Henry Cornell Vice President Managing Director of Goldman,
(Asia) L.L.C.
Barry S. Volpert Director/Vice Managing Director of Goldman,
President Sachs & Co
Eve M. Gerriets Vice President/ Vice President of Goldman,
Secretary Sachs & Co
David J. Greenwald Assistant Secretary Vice President of Goldman,
Sachs & Co.
C. Douglas Fuge Assistant Treasurer Managing Director of Goldman,
Sachs & Co.
Katherine B. Vice President Vice President of Goldman,
Enquist Sachs & Co
INDEX OF EXHIBITS
(1) Preferred Stock and Warrant Purchase Agreement by and
among the Company and the purchasers of Securities Units,
dated as of March 3, 1995, as amended (incorporated herein
by reference to Exhibits 10.10 and 10.11 to the Company's
Registration Statement on Form S-1 No. 333-0796)
(2) Letter from the Company to GSCP, dated March 18, 1996
(3) Registration Rights Agreement by and among the Company and
the purchasers of Securities Units, dated as of March 3,
1995, as amended (incorporated herein by reference to
Exhibits 10.12 and 10.13 to the Company's Registration
Statement on Form S-1 No.
333-0796)
(4) Lock-up Agreement
(5) Stock Option Letter Agreements for Non-Employee Directors;
Biofield Corp. 1996 Stock Option Plan for Non-Employee Directors
(6) Joint Filing Agreement
(7) Subscription Agreement by and among the Company and the
Limited Partnerships, dated December 17, 1997.
(8) Form of Warrant Exchange Agreement, by and among the
Company and the Limited Partnerships.
(9) Form of Registration Rights Agreement, by and among the
Company, the Limited Partnerships, and the purchasers in
the Offering.
(10) Second Amendment, dated December 17, 1997, to the
Registration Rights Agreement by and among the Company and
the purchasers of Securities Units, dated as of March 3,
1995, as amended.
(11) Form of Lock-up Agreement, by and among the Company and
the Limited Partnerships, with regard to shares of Common
Stock acquired in the Offering.
(12) Form of Lock-up Agreement, by and among the Company and
the Limited Partnerships, with regard to shares of Common
Stock acquired in the Warrant Exchange.
Exhibit 5
BIOFIELD CORP.
STOCK OPTION LETTER AGREEMENT FOR NON-EMPLOYEE DIRECTORS
TO: JOSEPH H. GLEBERMAN
Pursuant to the Biofield Corp. (the "Company") 1996 Stock
Option Plan for Non-Employee Directors (the "Plan") this Letter
Agreement represents the nonqualified option for the purchase of
10,000 shares (post 2.04 for one reverse stock split effective
February 26, 1996) of the Company's common stock, $.001 par value, at
a post-split exercise price of $11 per share (the "exercise price"). A
copy of the Plan is attached and the provisions thereof, including,
without limitation, those relating to withholding taxes, are
incorporated into this Agreement by reference.
The terms of the option are as set forth in the Plan and in
this Agreement. The most important of the terms set forth in the Plan
are summarized as follows:
Term. The term of the option is ten years from date of
grant, unless sooner terminated.
Exercise. During your lifetime only you can exercise the
option. The Plan also provides for exercise of the option by the
personal representative of your estate or the beneficiary thereof
following your death. You may use the Notice of Exercise in the form
attached to this Agreement when you exercise the option.
Payment for Shares. The option may be exercised by the
delivery of cash or bank certified or cashier's checks.
Termination. The option will terminate upon the earlier of
ten years from the Date of Grant or one year from cessation of service
as a Director.
Transfer of Option. The option is not transferable except by
will or by the applicable laws of descent and distribution or pursuant
to a qualified domestic relations order.
Vesting. The option is vested according to the following
schedule:
Period of Optionee's Continuous
Relationship With the Company or
Affiliate From the Date the Portion of Total Option Which is
Option is Granted Exercisable
1 year 33%
2 years 33%
3 years 34%
Date of Grant. The date of grant of the option is as of
January 29, 1996.
YOUR PARTICULAR ATTENTION IS DIRECTED TO PARAGRAPH 5(d)(vi)
OF THE PLAN WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO
FEDERAL AND STATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE
OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY SHARES TO
YOU. THE COMPANY HAS NO OBLIGATION TO REGISTER THE SHARES THAT WOULD
BE ISSUED UPON THE EXERCISE OF YOUR OPTION, AND IF IT NEVER REGISTERS
THE SHARES, YOU WILL NOT BE ABLE TO EXERCISE THE OPTION UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. AT THE PRESENT TIME,
EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES LAWS
ARE VERY LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR TO THE
EXPIRATION OF THE OPTION. CONSEQUENTLY, YOU MIGHT HAVE NO OPPORTUNITY
TO EXERCISE THE OPTION AND TO RECEIVE SHARES UPON SUCH EXERCISE. IN
ADDITION, YOU SHOULD CONSULT WITH YOUR TAX ADVISOR CONCERNING THE
RAMIFICATIONS TO YOU OF HOLDING OR EXERCISING YOUR OPTIONS OR HOLDING
OR SELLING THE SHARES UNDERLYING SUCH OPTIONS.
You understand that, during any period in which the shares
which may be acquired pursuant to your option are subject to the
provisions of Section 16 of the Securities Exchange Act of 1934, as
amended (and you yourself are also so subject), in order for your
transactions under the Plan to qualify for the exemption from Section
16(b) provided by Rule 16b-3, a total of six months must elapse
between the grant of the option and the sale of shares underlying the
option.
Please execute the Acceptance and Acknowledgment set forth
below on the enclosed copy of this Agreement and return it to the
undersigned.
Very truly yours,
Biofield Corp.
By: /s/ Michael R. Gavenchak
Name: Michael R. Gavenchak
Title: Executive Vice President
General Counsel
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of ____________, accept the stock
option described above granted under the Biofield Corp. 1996 Stock
Option Plan for Non-Employee Directors, and acknowledge receipt of a
copy of this Agreement, including a copy of the Plan. I have read and
understand the Plan, including the provisions of Paragraph 5(d)(vi)
thereof.
Dated: ___________________
/s/ Joseph H. Gleberman
- -------------------------- ----------------------------------------
Taxpayer I.D. Number Signature
By his or her signature below, the spouse of the Optionee,
if such Optionee is legally married as of the date of such Optionee's
execution of this Agreement, acknowledges that he or she has read this
Agreement and the Plan and is familiar with the terms and provisions
thereof, and agrees to be bound by all the terms and conditions of
this Agreement and the Plan.
Dated: ___________________
-----------------------------------------
Spouse's Signature
-----------------------------------------
Printed Name
NOTICE OF EXERCISE
The undersigned, pursuant to a nonqualified Stock Option Letter
Agreement for Non-Employee Directors (the "Agreement") between the
undersigned and Biofield Corp. (the "Company"), hereby irrevocably
elects to exercise purchase rights represented by the Agreement, and
to purchase thereunder shares (the "Shares") of the Company's common
stock, $.001 par value ("Common Stock"), covered by the Agreement and
herewith makes payment in full therefor.
1. If the sale of the Shares and the resale thereof has not,
prior to the date hereof, been registered pursuant to a registration
statement filed and declared effective under the Securities Act of
1933, as amended (the "Act"), the undersigned hereby agrees,
represents, and warrants that:
(a) the undersigned is acquiring the Shares for his or her
own account (and not for the account of others), for investment and
not with a view to the distribution or resale thereof;
(b) By virtue of his or her position, the undersigned has
access to the same kind of information which would be available in a
registration statement filed under the Act;
(c) the undersigned is a sophisticated investor;
(d) the undersigned understands that he or she may not sell
or otherwise dispose of the Shares in the absence of either (i) a
registration statement filed under the Act or (ii) an exemption from
the registration provisions thereof; and
(e) The certificates representing the Shares may contain a
legend to the effect of subsection (d) of this Section 1.
2. If the sale of the Shares and the resale thereof has been
registered pursuant to a registration statement filed and declared
effective under the Act, the undersigned hereby represents and
warrants that he or she has received the applicable prospectus and a
copy of the most recent annual report, as well as all other material
sent to stockholders generally.
3. The undersigned acknowledges that the number of shares of
Common Stock subject to the Agreement is hereafter reduced by the
number of shares of Common Stock represented by the Shares.
Very truly yours,
---------------------------------
(type name under signature line)
Social Security No.:
------------
Address:
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---------------------------------
BIOFIELD CORP.
FORM OF STOCK OPTION LETTER AGREEMENT FOR NON-EMPLOYEE DIRECTORS
TO: Joseph Gleberman
Pursuant to the Biofield Corp. (the "Company") 1996 Stock
Option Plan for Non-Employee Directors (the "Plan") this Letter
Agreement represents the nonqualified option for the purchase of 2,500
shares of the Company's common stock, $0.01 par value, at a post-split
exercise price of $4.69 per share (the "exercise price"). A copy of
the Plan is attached and the provisions thereof, including, without
limitation, those relating to withholding taxes, are incorporated into
this Agreement by reference.
The terms of the option are as set forth in the Plan and
in this Agreement. The most important of the terms set forth in the
Plan are summarized as follows:
Term. The term of the option is ten years from date of grant,
unless sooner terminated.
Exercise. During your lifetime only you can exercise the
option. The Plan also provides for exercise of the option by the
personal representative of your estate or the beneficiary thereof
following your death. You may use the Notice of Exercise in the form
attached to this Agreement when you exercise the option.
Payment for Shares. The option may be exercised by the delivery
of cash or bank certified or cashier's checks.
Termination. The option will terminate upon the earlier of ten
years from the Date of Grant or one year from cessation of service as a
Director.
Transfer of Option. The option is not transferable except
by will or by the applicable laws of descent and distribution or
pursuant to a qualified domestic relations order.
Vesting. The option is fully vested as of the date hereof.
Date of Grant. The date of grant of the option is June 4, 1997.
YOUR PARTICULAR ATTENTION IS DIRECTED TO PARAGRAPH
5(D)(VI) OF THE PLAN WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS
RELATING TO FEDERAL AND STATE SECURITIES LAWS THAT MUST BE SATISFIED
BEFORE THE OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE
ANY SHARES TO YOU. THE COMPANY HAS NO OBLIGATION TO REGISTER THE
SHARES THAT WOULD BE ISSUED UPON THE EXERCISE OF YOUR OPTION, AND IF
IT NEVER REGISTERS THE SHARES, YOU WILL NOT BE ABLE TO EXERCISE THE
OPTION UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. AT THE
PRESENT TIME, EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE
SECURITIES LAWS ARE VERY LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR
TO THE EXPIRATION OF THE OPTION. CONSEQUENTLY, YOU MIGHT HAVE NO
OPPORTUNITY TO EXERCISE THE OPTION AND TO RECEIVE SHARES UPON SUCH
EXERCISE. IN ADDITION, YOU SHOULD CONSULT WITH YOUR TAX ADVISOR
CONCERNING THE RAMIFICATIONS TO YOU OF HOLDING OR EXERCISING YOUR
OPTIONS OR HOLDING OR SELLING THE SHARES UNDERLYING SUCH OPTIONS.
You understand that, during any period in which the
shares which may be acquired pursuant to your option are subject to
the provisions of Section 16 of the Securities Exchange Act of 1934,
as amended (and you yourself are also so subject), in order for your
transactions under the Plan to qualify for the exemption from Section
16(b) provided by Rule 16b-3, a total of six months must elapse
between the grant of the option and the sale of shares underlying the
option.
Please execute the Acceptance and Acknowledgment set forth
below on the enclosed copy of this Agreement and return it to the
undersigned.
Very truly yours,
BIOFIELD CORP.
BY:----------------------------------
MICHAEL R. GAVENCHAK
EXECUTIVE VICE PRESIDENT
GENERAL COUNSEL
BIOFIELD CORP.
1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Adopted January 29, 1996
1. Purpose
The purpose of the Biofield Corp. 1996 Stock Option Plan for
Non-Employee Directors (the "Plan") is to promote the interests of
Biofield Corp. (the "Company") and its stockholders by increasing the
proprietary and vested interest of non-employee directors in the
growth and performance of the Company by granting such directors
options to purchase shares of Common Stock, par value $.001 per share
(the "Shares"), of the Company.
2. Administration
The Plan shall be administered by the Company's Board of
Directors (the "Board"). Subject to the provisions of the Plan, the
Board shall be authorized to interpret the Plan, to establish, amend,
and rescind any rules and regulations relating to the Plan and to make
all other determinations necessary or advisable for the administration
of the Plan; provided, however, that the Board shall have no
discretion with respect to the selection of directors to receive
options, the number of Shares subject to any such options, the
purchase price thereunder or the timing of grants of options under the
Plan. The determinations of the Board in the administration of the
Plan, as described herein, shall be final and conclusive. The
Secretary of the Company shall be authorized to implement the Plan in
accordance with its terms and to take such actions of a ministerial
nature as shall be necessary to effectuate the intent and purposes
thereof. The validity, construction and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware.
It is the intention of the Company that the Plan comply in
all respects with Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), to the extent applicable, and
in all events the Plan shall be construed in favor of its meeting the
requirements of Rule 16b-3. If any Plan provision is later found not
to be in compliance with such Rule, such provision shall be deemed
null and void. From and after the date that the Company first
registers a class of equity securities under Section 12 of the
Exchange Act, no director subject to Section 16 of the Exchange Act
may sell shares received upon the exercise of an option during the six
month period immediately following the grant of the option.
3. Eligibility
The class of individuals eligible to receive grants of
options under the Plan shall be directors of the Company who are not
employees of the Company or its affiliates and who have not, within
one year immediately preceding the determination of such director's
eligibility, received any award under any other plan of the Company or
its affiliates that entitles the participants therein to acquire
stock, stock options or stock appreciation rights of the Company or
its affiliates (other than any other plan under which participants'
entitlements are governed by provisions meeting the requirements of
Rule 16b-3(c)(2)(ii) promulgated under the Securities Exchange Act of
1934) ("Eligible Directors"). Any holder of an option granted
hereunder shall hereinafter be referred to as a "Participant."
4. Shares Subject to the Plan
Subject to adjustment as provided in Section 6, an aggregate
of 306,000 Shares shall be available for issuance upon the exercise of
options granted under the Plan. The Shares deliverable upon the
exercise of options may be made available from authorized but unissued
Shares or treasury Shares. If any option granted under the Plan shall
terminate for any reason without having been exercised, the Shares
subject to, but not delivered under, such option shall be available
for other options.
5. Grant, Terms and Conditions of Options
(a) Effective January 29, 1996, subject to approval of the
Plan by the stockholders of the Company, each Eligible Director has
been granted an option hereunder to purchase 20,400 Shares. The
options granted to such Eligible Directors shall be subject to vesting
in three equal annual installments on the first three anniversary
dates of the date of grant; provided, that only whole shares may be
issued pursuant to the exercise of any option.
(b) Upon first election or appointment to the Board, each
newly elected Eligible Director will be granted an option to purchase
20,400 Shares. Any such options granted to newly elected Eligible
Directors shall be subject to vesting in three equal annual
installments on the first three anniversary dates of the election of
such Eligible Director to the Board; provided, that only whole shares
may be issued pursuant to the exercise of any option.
(c) Immediately following each Annual Stockholders Meeting,
commencing with the meeting following the close of fiscal year 1996,
each Eligible Director, other than an Eligible Director first elected
to the Board within the 12 months immediately preceding and including
such meeting, will be granted an option to purchase 5,100 Shares as of
the date of such meeting.
(d) The options granted will be nonstatutory stock options
not intended to qualify under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code"), and shall have the
following terms and conditions:
(i) Price. The purchase price per Share deliverable upon the
exercise of each option shall be 100% of the Fair Market Value
per Share on the date the option is granted. For purposes of this
Plan, Fair Market Value shall be the closing sales price as
reported on the NASDAQ National Market on the date in question,
or, if the Shares shall not have traded on such date, the closing
sales price on the first date prior thereto on which the Shares
were so traded.
(ii) Payment. Payment of the purchase price shall be made in
full at the time the notice of exercise of the option is
delivered to the Company and shall be in cash, bank certified or
cashier's check for the Shares being purchased.
(iii) Exercisability and Terms of Options. Subject to any
vesting requirements, options shall be exercisable in whole or in
part at all times during the period beginning on the date of
grant until the earlier of ten years from the date of grant and
the expiration of the one year period provided in paragraph (iv)
below.
(iv) Termination of Service as Eligible Director. Upon
termination of a Participant's service as a Director for any
reason, all outstanding options which have become vested as of
the date of termination shall be exercisable in whole or in part
for a period of one year from the date upon which the Participant
ceases to be a Director, provided that in no event shall the
options be exercisable beyond the period provided for in
paragraph (iii) above.
(v) Nontransferability of Options. No option may be
assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant otherwise than by will
or the laws of descent and distribution, and during the lifetime
of the Participant to whom an option is granted it may be
exercised only by the Participant or by the Participant's
guardian or legal representative. Notwithstanding the foregoing,
options may be transferred pursuant to a qualified domestic
relations order.
(vi) Listing and Registration. Each option shall be subject
to the requirement that if at any time the Board shall determine,
in its discretion, that the listing, registration or
qualification of the Shares subject to such option upon any
securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the granting of such option or the issue or purchase of Shares
thereunder, no such option may be exercised in whole or in part
unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any
condition not acceptable to the Board.
(vii) Option Agreement. Each option granted hereunder shall
be evidenced by an agreement with the Company which shall contain
the terms and provisions set forth herein and shall otherwise be
consistent with the provisions of the Plan.
6. Adjustment of and Changes in Shares
In the event of a stock split, stock dividend, subdivision
or combination of the Shares or other change in corporate structure
affecting the Shares, the number of Shares authorized by the Plan
shall be increased or decreased proportionately, as the case may be,
and the number of Shares subject to any outstanding option shall be
increased or decreased proportionately, as the case may be, with
appropriate corresponding adjustment in the purchase price per Share
thereunder.
7. No Rights of Stockholders
Neither a Participant nor a Participant's legal
representative shall be, or have any of the rights and privileges of,
a shareholder of the Company in respect of any Shares purchasable upon
the exercise of any option, in whole or in part, unless and until
certificates for such Shares shall have been issued.
8. Plan Amendments
The Plan may be amended by the Board, as it shall deem
advisable or to conform to any change in any law or regulation
applicable thereto; provided, that the Board may not, without the
authorization and approval of stockholders of the Company: (i)
increase the number of Shares which may be purchased pursuant to
options hereunder, either individually or in the aggregate, except as
permitted by Section 6, (ii) change the requirement of Section 5(d)
that option grants be priced at Fair Market Value, except as permitted
by Section 6, (iii) modify in any respect the class of individuals who
constitute Eligible Directors or (iv) materially increase the benefits
accruing to Participants hereunder. The provisions of Sections 3
and/or 5 may not be amended more often than once every six months,
other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules under either
such statute.
9. Effective Date and Duration of Plan
The Plan shall become effective upon adoption by the Board
so long as it is approved by the holders of a majority of the
Company's outstanding shares of voting capital stock at any time
within 12 months before or after the adoption of the Plan by the
Board. Unless sooner terminated by the Board, the Plan shall terminate
ten years from the earlier of (a) the date on which the Plan is
adopted by the Board or (b) the date on which the Plan is approved by
the stockholders of the Company. No option may be granted after such
termination or during any suspension of the Plan. The amendment or
termination of the Plan shall not, without the consent of the option
holder, alter or impair any rights or obligations under any option
theretofore granted under the Plan.
EXHIBIT 7
SUBSCRIPTION AGREEMENT
AS INDICATED ON THE SIGNATURE PAGE TO THIS SUBSCRIPTION AGREEMENT, THE
EXECUTION OF THIS SUBSCRIPTION AGREEMENT BY AN INVESTOR SHALL ALSO
SERVE AS A COUNTERPART SIGNATURE TO THE REGISTRATION RIGHTS AGREEMENT
CONTAINED IN APPENDIX C TO THE PRIVATE PLACEMENT MEMORANDUM OF WHICH
THIS SUBSCRIPTION AGREEMENT IS A PART.
THE SECURITIES ACQUIRED PURSUANT TO THIS SUBSCRIPTION
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS, NOR HAVE THE
SECURITIES BEEN REGISTERED WITH ANY STATE SECURITIES
COMMISSION. THE REPRESENTATIONS MADE HEREIN WILL BE RELIED
UPON BY THE COMPANY IN COMPLYING WITH ITS OBLIGATIONS UNDER
APPLICABLE SECURITIES LAWS. THE SECURITIES MAY NOT BE
TRANSFERRED OR SOLD OR OFFERED FOR SALE OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED IN ABSENCE OF SUCH
REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS.
. Subscription. Biofield Corp. (the "Company") is offering
(the "Offering") shares of its Common Stock, par value $.001 per share
(the "Common Stock"), to accredited investors on the terms and
conditions described in the Confidential Private Placement Memorandum,
dated October 24, 1997, including the appendices thereto, as it may be
supplemented and amended from time to time (the "Memorandum"). The
undersigned, on behalf of itself and certain affiliates of the Goldman
Sachs Group, L.P. (together with the undersigned, the "GS Parties"),
hereby agrees to invest, in the aggregate, not less than $1 million in
the Offering if at least $6 million is invested in the Offering by
other investors, and agrees to invest, in the aggregate, not less than
$1.5 million in the Offering if at least $7 million is invested in the
Offering by other investors and not less than $2 million in the
Offering if at least $8 million is invested in the Offering by other
investors. The GS Parties hereby, jointly and severally, subscribe for
an aggregate of 730,157 shares of Common Stock at a price of $3.15 per
share.
Payment in full to the Company is tendered with this subscription
by wire transfer for the full purchase price of the Shares delivered
to the Company. Upon receipt, the Company will promptly forward all
subscription proceeds to an escrow account. All subscription proceeds
will be deposited and held in such account pending the closing of the
purchase. Upon receipt of notice from the Company that the closing is
being held, The Chase Manhattan Bank (the "Escrow Agent") will release
the subscription funds to the Company. If subscriptions for a minimum
of $7,000,000 of aggregate gross proceeds from the Offering are not
delivered on or before December 31, 1997 (subject to extension for up
to 30 days) or if the Offering is otherwise terminated or withdrawn,
the Company will promptly return to the GS Parties such subscription
proceeds held by the Escrow Agent in the escrow account, without
interest. The GS Parties acknowledge that this subscription shall not
become effective until it has been properly executed by the
undersigned and accepted by the Company.
THE COMPANY MAY REJECT THIS SUBSCRIPTION IN WHOLE OR IN PART FOR
ANY REASON AND AT ANY TIME PRIOR TO ACCEPTANCE. IN THE EVENT THE
COMPANY REJECTS THIS SUBSCRIPTION IN WHOLE OR IF A CLOSING IS NOT HELD
ON OR BEFORE DECEMBER 31, 1997 (SUBJECT TO EXTENSION FOR UP TO 30
DAYS), ALL OF THE OBLIGATIONS OF THE UNDERSIGNED AND THE COMPANY UNDER
THIS AGREEMENT SHALL TERMINATE.
. Confidential Private Placement Memorandum and SEC Filings.
The undersigned acknowledges receipt of the Memorandum and the
publicly filed reports (the "Public Filings") of the Company attached
as Appendix A thereto. The undersigned has received no offering
materials other than the Memorandum and the Public Filings. The
undersigned further acknowledges that it or its representative has
read carefully and is familiar with the Memorandum and the Public
Filings and has had a reasonable opportunity to ask questions and,
prior to its execution of this Agreement, was given full access to all
information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the
accuracy of information furnished to the undersigned, and all such
questions, if asked, have been answered satisfactorily and such
documents, if examined, have been found to be fully satisfactory. The
undersigned further acknowledges that, in making its investment
decision, it is relying upon its own investment judgment and the
Memorandum and Public Filings. No other representations have been made
to, or authorized to be made to, the undersigned.
. Representations and Warranties of the Undersigned. The
undersigned, on behalf of itself and the other GS Parties, hereby
represents and warrants to the Company as follows:
() The Shares are being subscribed for by the undersigned,
and each of the other GS Parties, each for its own account, for
investment only and not presently with a view toward resale or
distribution in a manner which would require registration of the
Shares under the Securities Act and will not be transferred by the
undersigned, or any of the other GS Parties, in violation of the
Securities Act and the rules and regulations promulgated thereunder or
applicable state securities laws.
() The undersigned, and each of the other GS Parties, if a
corporation, partnership, trust or other form of business entity, is
authorized and otherwise duly qualified to purchase and hold the
Shares. Such entity's principal place of business is as set forth on
the signature page hereof and if such entity has been formed for the
specific purpose of acquiring the Shares subscribed to hereunder, it
hereby agrees to supply any additional written information that may be
required by the Company.
() The undersigned, and each of the other GS Parties, is
an "Accredited Investor" as that term is defined in Rule 501 under the
Securities Act. The particular category or categories within which the
undersigned, and each of the other GS Parties, falls is marked with an
(X) in each of the applicable spaces provided.
____ (i) A bank as defined in Section 3(a)(2) of the
Securities Act, or a savings and loan
association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether
acting in its individual or fiduciary capacity;
____ (ii) A broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of
1934, as amended;
____ (iii) An insurance company as defined in Section
2(13) of the Securities Act;
____ (iv) An investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in Section
2(a)(48) of that Act;
____ (v) A Small Business Investment Company licensed
by the United States Small Business
Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958;
____ (vi) A plan established and maintained by a
state, its political subdivisions, or any agency
or instrumentality of a state or its political
subdivisions for the benefit of its employees,
if such plan has total assets in excess of
$5,000,000;
____ (vii) An employee benefit plan within the
meaning of the Employee Retirement Income
Security Act of 1974, as amended, if the
investment decision is made by a plan fiduciary,
as defined in Section 3(21) of such Act, which
is either a bank, savings and loan association,
insurance company or registered investment
adviser, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions
made solely by persons that are Accredited
Investors;
____ (viii) A private business development company as
defined in Section 202(a)(22) of the Investment
Advisors Act of 1940;
____ (ix) An organization described in Section
501(c)(3) of the Internal Revenue Code of 1986,
as amended, corporation, Massachusetts or
similar business trust, or partnership, not
formed for the specific purpose of acquiring the
securities offered, with total assets in excess
of $5,000,000;
____ (x) A director, executive officer, or general
partner of the issuer of the securities being
offered or sold, or director, executive officer,
or general partner of a general partner of that
issuer;
____ (xi) A natural person whose individual net
worth, or joint net worth with that person's
spouse, at the time of his purchase exceeds
$1,000,000;
____ (xii) A natural person who had an individual
income in excess of $200,000 in each of the two
most recent years or joint income with that
person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of
reaching the same income level in the current
year;
____ (xiii) A trust, with total assets in excess of
$5,000,000, not formed for the specific purpose
of acquiring the securities offered, whose
purchase is directed by a sophisticated person
who has such knowledge and experience in
financial and business matters that such person
is capable of evaluating the risks and merits of
an investment in the Shares (as described in
ss.230.506(b)(2)(ii) promulgated under the
Securities Act); or
____ (xiv) An entity in which all of the equity owners
are Accredited Investors.
() The undersigned, and each of the other GS Parties,
understands that the Shares have not been registered under the
Securities Act. The undersigned, and each of the other GS Parties, is
fully aware of the restrictions on sale, transferability and
assignment of the Shares as set forth in the certificates of such
Shares, that the undersigned must bear the economic risk of the
undersigned's investment in the Company and that the Shares cannot be
offered or sold unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
The undersigned, and each of the other GS Parties, further understands
that the Shares will bear an appropriate legend to this effect.
() The undersigned, and each of the other GS Parties, is
aware of the following:
() The Shares are speculative investments which
involve a high degree of risk; and
() There are substantial restrictions on the
transferability of the Shares and the
undersigned agrees to be responsible for
compliance with all conditions on transfer
imposed by any state blue sky or securities law.
The foregoing representations and warranties are true and
accurate as of the date of delivery of the funds to the Company and
shall survive such delivery. If, in any respect, such representations
and warranties shall not be true and accurate prior to delivery of
funds, the undersigned shall give written notice of such fact to the
Company, specifying which representations and warranties are not true
and accurate and the reasons therefore.
. Representations and Warranties of the Company. The Company
hereby represents and warrants to the undersigned that the Shares,
when issued and delivered to and paid for by the undersigned, and/or
the other GS Parties, as provided herein, will have been duly
authorized and will be validly issued, fully paid and nonassessable.
. Transferability. Neither the undersigned, nor any of the
other GS Parties, will transfer or assign this Agreement, or any
interest of the undersigned, or of the other GS Parties, herein.
. Revocation. The undersigned will not cancel, terminate or
revoke this Agreement or any agreement made by the undersigned
hereunder and this Agreement shall survive the death or disability of
the undersigned, except as provided herein.
. High Risk. The undersigned, on behalf of itself and the
other GS Parties, warrants and represents that it, and each of the
other GS Parties, has such knowledge and experience in financial and
business matters, that it is capable of evaluating the merits and
risks of an investment in the Company, and that the undersigned, and
each of the other GS Parties, is able to bear the economic risks of
the investment for an indefinite period of time and at the present
time could afford a complete loss of such investment.
. Registration Rights. Upon the terms and subject to the
conditions of the Registration Rights Agreement (as defined in the
Memorandum) which has been provided to the Subscriber, the Company
shall prepare and file with the Securities and Exchange Commission as
soon as reasonably practicable after the closing of the Offering, a
registration statement on Form S-3 covering resale of the Shares, and
the Company shall use its best efforts to cause such registration
statement to become effective as soon as reasonably practicable and,
in any event, within seventy-five (75) days following such closing.
. Miscellaneous.
() All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by
registered or certified mail, return receipt requested, postage
prepaid, to the undersigned or the other GS Parties, at the address
set forth on the signature page hereto and to the Company at:
Biofield Corp.
1225 Northmeadow Parkway
Suite 120
Roswell, Georgia 30076
Attention:Michael R. Gavenchak
() This Agreement shall be governed by and construed in
accordance with the substantive law of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
() This Agreement together with the Registration Rights
Agreement and the Memorandum constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and may
be amended only by writings executed by all parties.
. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall constitute an original but all of
which taken together shall constitute one agreement.
. Third Party Beneficiary. The undersigned, on behalf of
itself and the other GS Parties, understands and agrees that Hambrecht
& Quist LLC, as placement agent for the Offering (the "Placement
Agent"), is intended to be a third party beneficiary of the
representations and warranties of the undersigned, on behalf of itself
and the other GS Parties, contained in this Subscription Agreement,
that the Placement Agent shall be entitled to rely upon such
representations and warranties in connection with the Offering and
that such representations and warranties shall survive the closing of
the Offering.
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
The undersigned hereby executes this Agreement as of the date set
forth below. The undersigned's execution of this Agreement shall also
serve as a counterpart signature to the Registration Rights Agreement
contained in Appendix C to the Memorandum.
GS CAPITAL PARTNERS, L.P.
By: GS Advisors L.P., its general partner
Dated December 17, 1997 By: GS Advisors, Inc., its general partner
By: /s/ Katherine B. Enquist
Name: Katherine B. Enquist
Title: Vice President
ADDRESS: 85 Broad Street
New York, NY 10004
ACCEPTED:
By: /s/ Michael R. Gavenchak
Name: Michael R. Gavenchak
Title: Executive Vice President
Dated: December 17, 1997
EXHIBIT 8
November 4, 1997
BIOFIELD CORP.
To: Holders of Biofield Corp. Warrants Issued
in 1995 Securities Units Offering
Biofield Corp. (the "Company") is offering shares of Common
Stock, par value $.001 per share (the "Common Stock"), to accredited
investors in a private placement (the "Offering") intended to yield
gross proceeds to the Company of at least $7,000,000 and up to
$15,000,000. The Offering is being made pursuant to, and on the terms
and conditions described in, the Confidential Private Placement
Memorandum, dated October 24, 1997, including the appendices thereto,
as it may be supplemented and amended from time to time (the
"Memorandum"). A copy of the Memorandum is enclosed herewith.
In conjunction with the Offering, the Company is offering to
issue, upon the consummation of the Offering, shares of Common Stock
("Exchange Shares") in exchange (the "Warrant Exchange") for the
outstanding warrants (the "Warrants") issued to investors in the
Company's 1995 private placement of securities units (the "1995 Units
Offering"). The terms of the Warrant Exchange were established as a
result of negotiations between the Company and Goldman Sachs, L.P.
("Goldman"), taking into account an analytical valuation model as well
as other considerations. The exchange ratio was designed so that the
shares of Common Stock issued in connection with the Warrant Exchange
are equivalent in value to the Warrants exchanged for such shares. As
discussed below, the Company agreed to undertake the Warrant Exchange
upon receipt of a commitment from Goldman to invest concurrently in
the Offering. Accordingly, the Warrant Exchange is conditioned upon
the consummation of the Offering. Hambrecht & Quist LLC, the placement
agent for the Offering, did not act as an advisor to the Company in
connection with the Warrant Exchange.
In order to participate in the Warrant Exchange, the terms of
which are described on page 6 of the Memorandum, holders of the
Warrants must commit to invest in the Offering. In connection with the
Warrant Exchange, certain affiliates of Goldman (collectively, the "GS
Parties") have agreed to invest not less than $1 million in the
Offering if at least $6 million is invested in the Offering by other
investors, and have agreed to invest not less than $1.5 million in the
Offering if at least $7 million is invested in the Offering by other
investors and not less than $2 million in the Offering if at least $8
million is invested in the Offering by other investors. In order for
holders of the Warrants other than the GS Parties to exchange their
Warrants pursuant to the Warrant Exchange, such holders must purchase
shares of Common Stock in the Offering with an aggregate purchase
price proportional to the GS Parties' investment, based upon the ratio
between the number of Warrants held by each such other holder and the
aggregate number of Warrants held by the GS Parties.
In addition, the holders of the Warrants will be required to
agree, as part of the Warrant Exchange, not to, directly or
indirectly, offer, sell, offer to sell, grant any option to purchase
or otherwise sell or dispose of any Exchange Shares during the
one-year period following the closing of the Offering (the "Lock-Up
Agreements").
Background
Pursuant to the 1995 Units Offering, in March, April and June
1995, the Company sold an aggregate of 2,914,771 securities units,
consisting of (i) an aggregate of 2,914,771 shares of Series C
Preferred Stock (the outstanding shares of Series C Preferred Stock
were automatically converted into approximately 1,428,802 shares of
Common Stock upon completion of the Company's initial public
offering); (ii) 1,457,385 warrants (the "Series D Warrants") to
purchase shares of Series D Convertible Preferred Stock, at an initial
exercise price of $6.00 per share; (iii) 1,457,385 warrants (the
"Series D Warrants") to purchase shares of Series D Preferred Stock at
an exercise price of $6.00 per share, or upon the occurrence of
certain events, shares of Series C Preferred Stock at an exercise
price of $4.50 per share (which events subsequently occurred); and
(iv) the right, upon the occurrence of certain events, to receive an
aggregate of 357,192 warrants (the "Common Warrants") to purchase an
aggregate of 357,192 shares of Common Stock at an exercise price of
$9.18 per share. On June 30, 1996, the Company issued the Common
Warrants to the investors in the 1995 Units Offering. Upon the
completion of the Company's initial public offering, the Series D
Warrants automatically became exercisable to purchase .4902 shares of
Common Stock at an exercise price of $12.24 per share and the Series C
Warrants automatically became exercisable to purchase .4902 shares of
Common Stock at an exercise price of $9.18 per share.
The Warrants subject to the Warrant Exchange consist of the
Series D Warrants, the Series C Warrants and the Common Warrants
issued to investors in the 1995 Units Offering. The outstanding
Warrants are currently exercisable for an aggregate of 1,785,994
shares of Common Stock at a weighted average exercise price of $10.40
per share. Pursuant to the Warrant Exchange, the Warrants will be
exchangeable for an aggregate of 730,651 Exchange Shares. The GS
Parties hold an aggregate of 1,089,329 Warrants, which will be
exchangeable for 444,512 Exchange Shares pursuant to the Warrant
Exchange. The number of Exchange Shares issuable for each Warrant has
been determined using the analytical pricing model referred to above,
based on the exercise price of the Warrant and the expiration date
thereof. Enclosed herewith for each Warrant holder, as Annex A hereto,
is a schedule prepared by the Company listing the Warrants held by
such Warrant holder, the number of Exchange Shares which will be
issuable to such Warrant holder upon the consummation of the Warrant
Exchange, and the minimum investment in the Offering required by such
Warrant holder in order to participate in the Warrant Exchange.
Warrant Exchange Procedures
To participate in the Warrant Exchange and purchase shares of
Common Stock in the Offering, the Warrant holder must send the
Warrants to be surrendered and exchanged to the Company at its
principal offices at 1225 Northmeadow Parkway, Suite 120, Roswell,
Georgia 30076, Attention: Timothy G. Roche, Vice President, Finance,
along with the enclosed Election to Participate in Warrant Exchange,
Subscription Agreement and Lock-Up Agreement, all duly executed, and
accompanied by payment by wire transfer or a check of the full
purchase price for the number of shares which the Warrant holder is
obligated to purchase in the Offering based on the $1 million minimum
GS Parties' investment under the terms of the Warrant Exchange.
If the GS Parties are required to invest more than $1 million in
the Offering, the other Warrant holders participating in the Warrant
Exchange will be obligated to deliver an additional Subscription
Agreement duly executed and accompanied by wire transfer or a check of
the full purchase price for the number of additional shares of Common
Stock that such holder is obligated to purchase in the Offering under
the terms of the Warrant Exchange. If a Warrant holder does not
subscribe for the required number of additional shares, such holder
may not participate in the Warrant Exchange and its Election to
Participate in the Warrant Exchange and original Subscription
Agreement will be canceled and the original Warrant and all funds
previously paid will be returned.
At the closing of the Offering, and upon receipt of the Warrant,
Election to Participate in Warrant Exchange, Subscription Agreement,
any additional Subscription Agreement, Lock-Up Agreement and
payment(s) from the Warrant holder, the Company shall cause to be
issued certificates for the total number of Exchange Shares issuable
to the Warrant holder as determined by the terms of the Warrant
Exchange, registered in the name of the Warrant holder or its nominee,
and the Company shall thereupon promptly deliver such certificates to
such holder.
The Warrant Exchange, which may be independently withdrawn by the
Company, is conditioned upon the consummation of the Offering. If the
Offering is terminated or withdrawn, the Warrant Exchange will not be
completed and therefore, the Election to Participate in Warrant
Exchange and Subscription Agreements received from Warrant Holders
will be canceled, all subscription proceeds and the original Warrant
will be returned and the terms of the Warrant holder's original
Warrant will remain in effect.
THIS DOCUMENT AND THE MEMORANDUM ARE SUBMITTED ON A CONFIDENTIAL
BASIS TO THE HOLDERS OF THE COMPANY'S WARRANTS ISSUED IN THE 1995
UNITS OFFERING FOR INFORMATIONAL USE SOLELY IN CONNECTION WITH THEIR
CONSIDERATION OF THE WARRANT EXCHANGE AND THE OFFERING. THIS DOCUMENT
AND THE MEMORANDUM MAY NOT BE COPIED OR REPRODUCED IN WHOLE OR IN PART
NOR MAY THEY BE DISTRIBUTED OR ANY OF THEIR CONTENTS BE DISCLOSED TO
ANYONE OTHER THAN THE PERSONS TO WHOM THEY ARE SUBMITTED AND THEIR
ADVISORS (WHO SHALL BE INSTRUCTED AS TO THE CONFIDENTIAL NATURE OF
THESE DOCUMENTS).
IN MAKING A DECISION WHETHER OR NOT TO PARTICIPATE IN THE WARRANT
EXCHANGE AND THE OFFERING, WARRANT HOLDERS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE WARRANT EXCHANGE AND
THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. WARRANT HOLDERS
SHOULD NOT CONSTRUE THE CONTENTS OF THE MEMORANDUM, THE OTHER
DOCUMENTS DELIVERED THEREWITH OR ANY OTHER COMMUNICATION FROM THE
COMPANY OR ITS REPRESENTATIVES AS INVESTMENT, LEGAL OR TAX ADVICE. THE
TERMS OF THE WARRANT EXCHANGE, THE MEMORANDUM, THE OTHER DOCUMENTS
DELIVERED THEREWITH AND ANY SUCH OTHER MATERIALS, AS WELL AS THE
NATURE OF AN INVESTMENT IN THE OFFERING, SHOULD BE REVIEWED BY THE
WARRANT HOLDER AND SUCH WARRANT HOLDER'S INVESTMENT, TAX, LEGAL,
ACCOUNTING AND OTHER ADVISORS.
If you have any questions about the enclosed documents, the
Warrant Exchange, the Offering or the Company, please contact Timothy
G. Roche, Vice President, Finance of the Company at (770) 740-8180.
ANNEX A
Name of Holder:__________________________________
Number of Warrants Held of Record:
Series D Warrants:__________________________
Series C Warrants:__________________________
Common Warrants:____________________________
Total Number of Warrants Held of Record:_______________
Number of Exchange Shares Issuable:
for Series D Warrants:_________________
for Series C Warrants:_________________
for Common Warrants:___________________
Total Number of Shares Issuable:__________________
Minimum required investment by Holder in the Offering if the GS
Parties are required to invest at least $1 million:
$_________________
Minimum required investment by Holder in the Offering if the GS
Parties are required to invest at least $1.5 million:
$_________________
Minimum required investment by Holder in the Offering if the GS
Parties are required to invest at least $2 million:
$_________________
ELECTION TO PARTICIPATE IN WARRANT EXCHANGE
[TO BE EXECUTED ONLY IF WARRANT HOLDER ELECTS TO
PARTICIPATE IN THE WARRANT EXCHANGE AND THE OFFERING]
BIOFIELD CORP.
1225 Northmeadow Parkway
Suite 120
Roswell, Georgia 30076
The undersigned registered holder of ___________ Warrants
represented by Warrant Certificate No.(s) _______________ hereby
irrevocably elects to participate in the Warrant Exchange on the terms
and conditions described above and in the Memorandum. The undersigned
acknowledges that in order to participate in the Warrant Exchange,
holders of the Warrants must commit to invest in the Offering on such
terms and conditions.
Dated: __________________, 1997 ___________________________________
(Signature must conform in all
respects to name holder as
specified on face of Warrant)
Print name and address:
___________________________________
(Name)
___________________________________
(Street Address)
___________________________________
(City) (State) (Zip Code)
Accepted:
BIOFIELD CORP.
By:_______________________________
Name:
Title:
Dated:______________________, 1997
EXHIBIT 9
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
December __, 1997, by and among Biofield Corp., a Delaware
corporation, with headquarters located at 1225 Northmeadow Parkway,
Suite 120, Roswell, Georgia 30076 (the "COMPANY"), and each of the
investors set forth on the signature pages hereto (the "INITIAL
INVESTORS").
WHEREAS:
. In connection with the several Subscription Agreements of
even date herewith by and between each of the Initial Investors and
the Company (collectively, the "SUBSCRIPTION AGREEMENTS"), the Company
has agreed, upon the terms and subject to the conditions contained
therein, to issue and sell to each of the Initial Investors shares of
the Company's common stock, par value $.001 per share (the "COMMON
STOCK").
. To induce each of the Initial Investors to execute and
deliver the Subscription Agreements, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "1933 ACT"), and applicable state
securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
. DEFINITIONS.
. As used in this Agreement, the following terms shall
have the following meanings:
() "INVESTORS" means either Initial Investors or
their transferees or assignees who agree to be bound by the provisions
of this Agreement in accordance with Section 9 hereof.
() "REGISTER," "REGISTERED," and "REGISTRATION" refer
to a registration effected by preparing and filing a Registration
Statement in compliance with the 1933 Act and pursuant to Rule 415
under the 1933 Act or any successor rule providing for offering
securities on a continuous basis ("RULE 415"), and the declaration or
ordering of effectiveness of such Registration Statement by the United
States Securities and Exchange Commission (the "SEC").
() "REGISTRABLE SECURITIES" means the shares of
Common Stock issued or issuable pursuant to the Subscription
Agreements or Section 2(c) hereof, or as a dividend on or in exchange
for or otherwise with respect to any of the foregoing which are held
by an Investor. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities when they have been
distributed to the public pursuant to an offering registered under the
1933 Act or are eligible to be sold by the holder thereof pursuant to
Rule 144(k) under the 1933 Act (or any similar rule then in force) or
are sold in compliance with Rule 144.
() "REGISTRATION STATEMENT" means a registration
statement of the Company under the 1933 Act filed pursuant to Section
2(a) hereof.
. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the
Subscription Agreements.
. REGISTRATION.
------------
. Mandatory Registration. The Company shall prepare and
file with the SEC as soon as reasonably practicable after the date of
this Agreement a Registration Statement on Form S-3 (or, if Form S-3
is not then available, on such form of Registration Statement as is
then available to effect a registration of the Registrable Securities)
covering the resale of the Registrable Securities and thereafter use
its best efforts to cause such Registration Statement to become
effective as soon as reasonably practicable and, in any event, within
seventy five (75) days following the date of this Agreement.
. Underwritten Offering. Investors holding a
majority-in-interest of the Registrable Securities being registered
pursuant to Section 2(a) hereof may determine to engage the services
of an underwriter in connection with such offering. If such offering
is an underwritten offering, the Investors who hold a
majority-in-interest of the Registrable Securities subject to such
underwritten offering shall have the right to select one legal counsel
and an investment banker or bankers and manager or managers to
administer the offering, which investment banker or bankers or manager
or managers shall be reasonably satisfactory to the Company.
. Payments by the Company. If the Registration Statement
is not declared effective by the SEC within seventy five (75) days
after the date of this Agreement (THE "PRE-REGISTRATION PERIOD") or
if, at any time after the Registration Statement has been declared
effective by the SEC, sales cannot be made pursuant to the
Registration Statement because of the issuance of a stop order or
other suspension of effectiveness of the Registration Statement, or if
the Investors are not permitted under Section 4(c) hereof to sell
Registrable Securities for a period of more than ten (10) consecutive
business days, or the Common Stock is not listed or included for
quotation on the Nasdaq National Market ("NASDAQ"), the New York Stock
Exchange (the "NYSE") or the American Stock Exchange (the "AMEX"),
then the Company shall issue additional shares of Common Stock to the
Investors in such amounts and at such times as shall be determined
pursuant to this Section 2(c) as partial relief for the damages to the
Investors by reason of any such delay in or reduction of their ability
to sell the Registrable Securities (which remedy shall not be
exclusive of any other remedies that may otherwise be available at law
or in equity). The number of shares of Common Stock the Company shall
issue pursuant to the preceding sentence shall be equal to the product
of (i) the number of shares of Registrable Securities held by such
Investor to be covered by the Registration Statement; (ii) either (a)
two hundredths (.02) if such penalty relates to the one-hundred eighty
(180) day period (THE "FIRST PAYMENT PERIOD") commencing immediately
upon the expiration of the Pre-registration Period, or (b) one
hundredth (.01) if such penalty relates to the period after the
expiration of the First Payment Period; and (iii) the sum of the
following, provided, however, that the total number of months under
this subsection (iii) shall not exceed nine and one-half months: (x)
the number of months (prorated for partial months) after the end of
the Pre-registration Period and prior to the date the Registration
Statement is declared effective by the SEC (the "EFFECTIVE DATE");
provided, however, that there shall be excluded from such period any
delays which are solely attributable to changes required by the
Investors in the Registration Statement with respect to information
relating to the Investors, including, without limitation, changes to
the plan of distribution, or to the failure of the Investors to
conduct their review of the Registration Statement pursuant to Section
3(g) below in a reasonably prompt manner; (y) the number of months
(prorated for partial months) that sales cannot be made pursuant to
the Registration Statement during the Registration Period (as
hereinafter defined) because of the issuance of a stop order or other
suspension of effectiveness of the Registration Statement, or if the
Investors are not permitted under Section 4(c) hereof to sell
Registrable Securities for a period of more than ten (10) consecutive
business days; and (z) the number of months (prorated for partial
months) that the Common Stock is not listed or included for quotation
on the Nasdaq, NYSE or AMEX or that trading of the Common Stock
thereon is halted during the Registration Period (unless all trading
on the Nasdaq, NYSE or AMEX, as the case may be, is halted). (For
example, if the Registration Statement becomes effective one (1) month
after the end of the Pre-registration Period, the Company would be
required to issue 2,000 additional shares of Common Stock to the
Investors for each 100,000 shares of Common Stock issued pursuant to
the Subscription Agreements. If thereafter, sales could not be made
pursuant to the Registration Statement for an additional period of
fifteen (15) days subsequent to the First Payment Period, the Company
would be required to issue an additional 500 shares of Common Stock to
the Investors for each 100,000 shares of Common Stock issued pursuant
to the Subscription Agreements). Any shares of Common Stock issued
pursuant to this Section 2(c) shall be Registrable Securities. The
additional shares of Common Stock to be issued pursuant to this
Section 2(c) shall be issued to the Investors within five (5) days
after the end of each period that gives rise to such obligation;
provided that if any such period extends for more than thirty (30)
days, interim issuances of Common Stock shall be made for each such
30-day period. If the provisions of this Section 2(c) would otherwise
result in the issuance of fractional shares of Common Stock to an
Investor, the Company shall round the number of shares to be issued to
such Investor to the nearest whole share.
. Eligibility for Form S-3. The Company represents and
warrants that, as of the date hereof, it meets the registrant
eligibility and transaction requirements for the use of Form S-3 for
registration of the sale of the Registrable Securities by the
Investors, and the Company shall file all reports required to be filed
by the Company with the SEC in a timely manner so as to maintain such
eligibility for the use of Form S-3.
. OBLIGATIONS OF THE COMPANY.
--------------------------
In connection with the registration of the Registrable
Securities, the Company shall have the following obligations:
. The Company shall prepare and file a Registration
Statement and use its best efforts to cause such Registration
Statement to become effective, all as provided in Section 2(a) hereof,
and keep the Registration Statement effective pursuant to Rule 415 at
all times until such date as is the earlier of (i) the date on which
all of the Registrable Securities covered by the Registration
Statement have been sold by the Investors, or (ii) the date on which
all of the shares of Common Stock issued pursuant to the Subscription
Agreements or Section 2(c) hereof, or as a dividend on or in exchange
for or otherwise with respect to any of the foregoing, have ceased to
be Registrable Securities. The period from the filing of the
Registration Statement until the earlier of (i) or (ii) above shall be
referred to herein as the "REGISTRATION PERIOD".
. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to
the Registration Statement and the prospectus used in connection with
the Registration Statement as may be necessary to keep the
Registration Statement effective at all times during the Registration
Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities
of the Company covered by the Registration Statement until such time
as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in the Registration Statement.
. The Company shall furnish to each Investor (and the
firm of legal counsel designated pursuant to Section 3(g)) whose
Registrable Securities are included in the Registration Statement (i)
promptly after the same is prepared and publicly distributed and filed
with the SEC, one copy of the Registration Statement and any amendment
thereto, each preliminary prospectus and prospectus and each amendment
and supplement thereto, and (ii) such number of copies of a prospectus
and all amendments and supplements thereto and such other documents as
such Investor may reasonably request in order to facilitate the
disposition of the Registrable Securities covered by the Registration
Statement and owned by such Investor. The Company shall immediately
notify each Investor by facsimile of the effectiveness of the
Registration Statement or any post-effective amendment.
. The Company shall use reasonable efforts to (i)
register and qualify the Registrable Securities covered by the
Registration Statement under such other securities or "blue sky" laws
of such jurisdictions in the United States as the Investors who hold a
majority-in-interest of the Registrable Securities being offered
reasonably request, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to
such registrations and qualifications as may be necessary to maintain
the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration
Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (a)
qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (b)
subject itself to general taxation in any such jurisdiction, or (c)
file a general consent to service of process in any such jurisdiction.
. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor of the happening of any
event of which the Company has knowledge as a result of which the
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, and the Company shall use its best efforts
to promptly prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver
such number of copies of such supplement or amendment to each Investor
as such Investor may reasonably request.
. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of the
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify
each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the
issuance of such order and the resolution thereof.
. The Company shall permit a single firm of legal counsel
designated by the Investors holding a majority-in-interest of the
Registrable Securities included in the Registration Statement to
review the Registration Statement and all amendments and supplements
thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the
SEC, and shall not file any document in a form to which such counsel
reasonably objects and will not request acceleration of the
Registration Statement without prior notice to such counsel. The
sections of the Registration Statement covering information with
respect to the Investors, the Investors' beneficial ownership of
securities of the Company or the Investors' intended method of
disposition of Registrable Securities shall conform to the information
provided to the Company by each of the Investors.
. The Company shall otherwise use its best efforts to
comply with all applicable rules and regulations of the SEC, and make
generally available to its security holders as soon as practical, but
not later than ninety (90) days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions
of Section 11(a) and Rule 158 under the 1933 Act) covering a period of
at least twelve-months beginning with the first day of the Company's
first full calendar quarter following the Effective Date.
. The Company shall make available for inspection, at the
offices where normally kept and during reasonable business hours, by
(i) any Investor, (ii) any underwriter participating in any
disposition pursuant to the Registration Statement, (iii) any firm of
legal counsel and any firm of accountants or other agents retained by
any Investors holding Registrable Securities included in such
Registration Statement, and (iv) one firm of legal counsel retained by
all such underwriters (collectively, the "INSPECTORS"), all pertinent
financial and other records, corporate documents and properties of the
Company (collectively, the "RECORDS"), as shall be reasonably
requested by such person in connection with such Registration
Statement, and cause the Company's officers, directors and employees
to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided, however, that each
Inspector shall hold in confidence and shall not make any disclosure
(except to an Investor or agents of the Company) of any Record or
other information obtained in connection with any such inspection,
unless (a) the disclosure of such Records is necessary in connection
with the Inspectors' or Investors' assertion of any claims or actions
or with their establishment of any defense in any pending
administrative or judicial action or proceeding, (b) the release of
such Records is ordered pursuant to a subpoena or other order from a
court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other
agreement. Each Investor agrees that it shall, and shall cause each of
its Inspectors to, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction
or through other means, give notice of such request to the Company.
. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the
Company unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or
omission of material fact in the Registration Statement that directly
relates to such Investor, (iii) the release of such information is
ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction, or (iv) such information
has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such
information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give notice of such request to such Investor.
. The Company shall (i) cause all the Registrable
Securities covered by the Registration Statement to be listed on each
national securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing
of such Registrable Securities is then permitted under the rules of
such exchange, or (ii) secure the designation and quotation of all the
Registrable Securities covered by the Registration Statement on
Nasdaq.
. The Company shall provide a transfer agent and
registrar, which may be a single entity, for the Registrable
Securities not later than the Effective Date.
. The Company shall enter into such customary agreements
(including underwriting agreements in customary form as are reasonably
satisfactory to the Company with customary indemnification and
contribution obligations) and take all such other appropriate actions
as the holders of a majority-in-interest of the Registrable Securities
being sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities.
The Investors holding Registrable Securities which are to be
distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that the Company make to
and for the benefit of such holders the representations, warranties
and covenants of the Company which are being made to and for the
benefit of such underwriters and which are of the type customarily
provided to institutional investors in secondary offerings.
. The Company shall use it best efforts to obtain an
opinion from the Company's counsel and a "cold comfort" letter from
the Company's independent public accountants in customary form and
covering such matters as are customarily covered by such opinions and
"cold comfort" letters delivered to underwriters in underwritten
public offerings, which opinion and letter shall be reasonably
satisfactory to the underwriter, if any, and to the Investors holding
a majority-in-interest of the Registrable Securities, and furnish to
each Investor participating in the offering and to each underwriter,
if any, a copy of such opinion and letter addressed to such Investor
or underwriter.
. The Company shall cooperate with the Investors holding
Registrable Securities and the managing underwriter, if any, to
facilitate the timely preparation and delivery of certificates not
bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to be
issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of
Registrable Securities to the underwriters or, if not an underwritten
offering, in accordance with the instructions of the Investors holding
Registrable Securities at least three business days prior to any sale
of Registrable Securities and instruct any transfer agent and
registrar of Registrable Securities to release any stop transfer
orders in respect thereof.
. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of
Registrable Securities pursuant to the Registration Statement.
. If any such registration statement or comparable
statement under "blue sky" laws refers to any Investor by name or
otherwise as the holder of any securities of the Company, then such
Investor shall have the right to require (i) the insertion therein of
language, in form and substance satisfactory to such Investor and the
Company, to the effect that the holding by such Investor of such
securities is not to be construed as a recommendation by such Investor
of the investment quality of the Company's securities covered thereby
and that such holding does not imply that such Investor will assist in
meeting any future financial requirements of the Company, or (ii) in
the event that such reference to such Investor by name or otherwise is
not in the judgment of the Company, as advised by counsel, required by
the 1933 Act or any similar federal statute or any state "blue sky" or
securities law then in force, the deletion of the reference to such
Investor.
. OBLIGATIONS OF THE INVESTORS.
----------------------------
In connection with the registration of the Registrable
Securities, the Investors shall have the following obligations:
. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of a particular Investor that
such Investor furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be
reasonably required to effect the registration of such Registrable
Securities and as are customarily provided by selling stockholders and
shall execute such documents in connection with such registration as
the Company may reasonably request and as are customarily executed by
selling stockholders; provided that any such information shall be used
only in connection with such registration. At least five (5) business
days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Investor or its counsel of
the information the Company requires from each such Investor.
. Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation
and filing of the Registration Statement, unless such Investor has
notified the Company in writing of such Investor's election to exclude
all of such Investor's Registrable Securities from the Registration
Statement.
. Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described
in Section 3(e) or 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Investor's
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) or 3(f) and, if so directed by the
Company, such Investor shall, at its option, deliver to the Company
(at the expense of the Company) or destroy (and deliver to the Company
a certificate of destruction) all copies in such Investor's
possession, of the prospectus covering such Registrable Securities at
the time of receipt of such notice.
. No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such
Investor's Registrable Securities on the basis provided in any
underwriting arrangements entered into by the Company, (ii) completes
and executes all questionnaires, indemnities, underwriting agreements
and other documents (other than powers of attorney) reasonably
required under the terms of such underwriting arrangements, and (iii)
agrees to pay its pro rata share of all underwriting discounts and
commissions and its own expenses (including, without limitation,
counsel fees, except as specifically provided herein).
. EXPENSES OF REGISTRATION.
------------------------
All expenses incident to the Company's 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 the Company and
all independent certified public accountants, underwriters (excluding
underwriting discounts and commissions) and other persons retained by
the Company (all such expenses being herein called "Registration
Expenses"), will be borne by the Company. Additionally, the Company
will reimburse the holders of Registrable Securities covered by a
Registration Statement for the reasonable fees and disbursements of
one counsel chosen by the holders of a majority-in-interest of the
Registrable Securities. Each Investor will, however, bear any transfer
taxes and underwriting discounts or commissions applicable to the
Registrable Securities sold by such Investor.
. INDEMNIFICATION.
---------------
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
. To the fullest extent permitted by law, the Company
will, and hereby agrees to, indemnify, hold harmless and defend (i)
each Investor who holds such Registrable Securities, (ii) the
directors, officers, partners, employees, agents and each person who
controls any Investor within the meaning of the 1933 Act or the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, of any similar successor statute (the "1934
ACT"), if any, (iii) any underwriter (as defined in the 1933 Act) for
the Investors, and (iv) the directors, officers, partners, employees
and each person who controls any such underwriter within the meaning
of the 1933 Act or the 1934 Act, if any (each, an "INDEMNIFIED
PERSON"), against any and all joint or several losses, claims,
damages, liabilities or expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof,
"CLAIMS") to which any of them may become subject insofar as such
Claims arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration
Statement or the omission or alleged omission to state therein a
material fact required to be stated or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus
if used prior to the Effective Date, or contained in the final
prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under
which they were made, not misleading; or (iii) any violation or
alleged violation by the Company of the 1933 Act, the 1934 Act, any
other law, including, without limitation, any state securities law, or
any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities (the matters in the foregoing clauses (i)
through (iii) being, collectively, "VIOLATIONS"). Subject to the
restrictions set forth in Section 6(c) hereof with respect to the
retention of legal counsel by an Indemnified Person or Indemnified
Party (as defined below), the Company shall reimburse the Indemnified
Person, promptly as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any
such Claim. Notwithstanding anything to the contrary contained herein,
the indemnification agreement contained in this Section 6(a): (i)
shall not apply to a Claim arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Indemnified
Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; and (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any
Indemnified Person if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely
basis in the prospectus, as then amended or supplemented, such
corrected prospectus was timely made available by the Company pursuant
to Section 3(c) hereof, and the Investors were promptly advised in
writing not to use the incorrect prospectus prior to the use giving
rise to a Violation and such Indemnified Person, notwithstanding such
advice, used it. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9 hereof.
. In connection with any Registration Statement in which
an Investor is participating, each such Investor agrees severally and
not jointly to indemnify, hold harmless and defend, to the same extent
and in the same manner set forth in Section 6(a) hereof, the Company,
each of its directors, each of its officers who signs the Registration
Statement, to the fullest extent permitted by law, each person, if
any, who controls the Company within the meaning of the 1933 Act or
the 1934 Act, any underwriter and any other stockholder selling
securities pursuant to the Registration Statement or any of its
directors, officers, agents or any person who controls such
stockholder or underwriter within the meaning of the 1933 Act or the
1934 Act (collectively and together with an Indemnified Person, an
"INDEMNIFIED PARTY"), against any Claim to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar
as such Claim arises out of or is based upon any Violation by such
Investor, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for
use in connection with such Registration Statement; and subject to
Section 6(c) hereof with respect to the retention of legal counsel by
an Indemnified Person or Indemnified Party, such Investor will
reimburse any legal or other expenses (promptly as such expenses are
incurred and are due and payable) reasonably incurred by them in
connection with investigating or defending any such Claim; provided,
however, that the Investor shall be liable under this Agreement
(including this Section 6(b) and Section 7 hereof) for only that
amount as does not exceed the net proceeds from the sale of
Registrable Securities by such Investor pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9 hereof.
Notwithstanding anything herein to the contrary, the indemnification
agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely
basis in the prospectus, as then amended or supplemented.
. Indemnification similar to that specified in the
preceding paragraphs (a) and (b) of this Section 6 (with appropriate
modifications) shall be given by the Company and each Investor selling
Registrable Securities with respect to any required registration or
other qualification of securities under any state securities and "blue
sky" laws.
. Any person entitled to indemnification under this
Agreement shall notify promptly the indemnifying party in writing of
the commencement of any action or proceeding with respect to which a
claim for indemnification may be made pursuant to this Section 6, but
the failure of any indemnified party to provide such notice shall not
relieve the indemnifying party of its obligations under the preceding
paragraphs of this Section 6, except to the extent the indemnifying
party is materially prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 6. In case any
action or proceeding is brought against an indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and,
unless in the reasonable opinion of outside counsel to the indemnified
party a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, to assume the defense
thereof jointly with any other indemnifying party similarly notified,
to the extent that it chooses, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party that it
so chooses, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided,
however, that (i) if the indemnifying party fails to take reasonable
steps necessary to defend diligently the action or proceeding within
20 days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; (ii) if such
indemnified party who is a defendant in any action or proceeding which
is also brought against the indemnifying party reasonably shall have
concluded that there may be one or more legal defenses available to
such indemnified party which are not available to the indemnifying
party; or (iii) if representation of both parties by the same counsel
is otherwise inappropriate under applicable standards of professional
conduct, then, in any such case, the indemnified party shall have the
right to assume or continue its own defense as set forth above (but
with no more than one firm of counsel for all indemnified parties in
each jurisdiction, except to the extent any indemnified party or
parties reasonably shall have concluded that there may be legal
defenses available to such party or parties which are not available to
the other indemnified parties or to the extent representation of all
indemnified parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct) and the
indemnifying party shall be liable for any expenses therefor. No
indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to any pending or threatened
action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such
settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of
such action or claim and (B) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf
of any indemnified party.
. If for any reason the foregoing indemnity is
unavailable or is insufficient to hold harmless an indemnified party
under Sections 6(a), (b) or (c), then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as
a result of any Claim in such proportion as is appropriate to reflect
the relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, with respect to such offering of
securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying
party or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. If, however, the allocation
provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative faults but also the
relative benefits of the indemnifying party and the indemnified party
as well as any other relevant equitable considerations. The parties
hereto agree that it would not be just and equitable if contributions
pursuant to this Section 6(e) were to be determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the preceding
sentences of this Section 6(e). The amount paid or payable in respect
of any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. Notwithstanding
anything in this Section 6(e) to the contrary, no indemnifying party
(other than the Company) shall be required pursuant to this Section
6(e) to contribute any amount in excess of the net proceeds received
by such indemnifying party from the sale of Registrable Securities in
the offering to which the losses, claims, damages or liabilities of
the indemnified parties relate, less the amount of any indemnification
payment made pursuant to Sections 6(b) and (c).
. The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which
any indemnified party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any indemnified party
and shall survive the transfer of the Registrable Securities by any
such party.
. The indemnification and contribution required by this
Section 6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills
are received or expense, loss, damage or liability is incurred.
. NO OBLIGATION TO SELL.
---------------------
Nothing in this Agreement shall be deemed to create an
independent obligation on the part of any Investor to sell any
Registrable Securities pursuant to any effective registration
statement.
. REPORTS UNDER THE 1934 ACT.
--------------------------
With a view to making available to the Investors the benefits of
Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the investors to
sell securities of the Company to the public without registration
("RULE 144"), the Company agrees, during the term of this Agreement,
to:
. make and keep public information available, as those
terms are understood and defined in Rule 144;
. file with the SEC in a timely manner all reports and
other documents required of the Company under the 1933 Act and the
1934 Act so long as the Company remains subject to such requirements
and the filing of such reports and other documents is required for the
applicable provisions of Rule 144; and
. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon written request, (i) a written
statement by the Company as to whether or not it has complied with the
reporting requirements of Rule 144, the 1933 Act and the 1934 Act,
(ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company,
and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144
without registration.
. ASSIGNMENT.
----------
The rights under this Agreement may be assigned by the Investors
to any transferee of all or any portion of Registrable Securities if
the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein (such agreement being
evidenced by the execution of a Counterpart and Acknowledgement
substantially in the form attached hereto as Exhibit A). Subject to
the requirements of this Section 9, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of
the parties hereto.
. AMENDMENT.
---------
Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively) only with written consent
of the Company and Investors who hold a majority-in-interest of the
Registrable Securities; provided, however, that no Investor who
purchases $1 million or more of Common Stock pursuant to the
Subscription Agreements shall be bound by any such amendment or waiver
without such Investor's written consent. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon each
Investor and the Company.
- MISCELLANEOUS.
-------------
. Definition of Holder of Registrable Securities. A
person or entity is deemed to be the holder of Registrable Securities
owned by such person and its affiliates. If Registrable Securities are
held by a nominee for the beneficial owner thereof, the beneficial
owner thereof may, at its option, be treated as the holder of such
Registrable Securities for purposes of any request or other action by
any holder or holders of Registrable Securities pursuant to this
Agreement (or any determination of any number or percentage of shares
constituting Registrable Securities held by any holder or holders of
Registrable Securities contemplated by this Agreement); provided that
the Company shall have received assurances reasonably satisfactory to
it of such beneficial ownership.
. Notices. Any notices required or permitted to be given
under the terms hereof shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier
(including a nationally recognized overnight delivery service) or by
facsimile and shall be effective five days after being placed in the
mail, if mailed by regular U.S. mail, or upon receipt, if delivered
personally or by courier (including a nationally recognized overnight
delivery service) or by facsimile, in each case addressed to a party.
The addresses for such communications shall be:
If to the Company:
Biofield Corp.
1225 Northmeadow Parkway
Suite 120
Roswell, Georgia 30076
Attention: Michael R. Gavenchak
Facsimile: (770) 410-1779
With copy to:
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176-0001
Attention: Stephen H. Kay, Esq.
Facsimile: (212) 697-6686
If to an Investor: to the address set forth immediately below such
Investor's name on the signature pages to the Subscription Agreements.
. Remedies. Any person having rights under any provision
of this Agreement shall be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any
provision of this Agreement and to exercise all other rights granted
by law. The parties hereto agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any
bond or other security) for specific performance and for other
injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement. Failure of any party to exercise any
right or remedy under this Agreement or otherwise, or delay by a party
in exercising such right or remedy, shall not operate as a waiver
thereof.
. Governing Law; Severability. This Agreement shall be
enforced, governed by and construed in accordance with the laws of New
York applicable to agreements made and to be performed entirely within
such State. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any provision hereof which may prove
invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof. The parties hereto
hereby submit to the exclusive jurisdiction of the United States
Federal Courts located in New York with respect to any dispute arising
under this Agreement or the transactions contemplated hereby.
. Merger Clause. This Agreement and the Subscription
Agreements (including all schedules and exhibits thereto) constitute
the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings other than those set forth or
referred to herein and therein. This Agreement and the Subscription
Agreements supersede all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof and thereof.
Notwithstanding the foregoing, this Agreement shall have no effect on
any other registration rights agreement to which any Investor and the
Company are a party.
. Descriptive Headings. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all
of which shall constitute one and the same agreement. This Agreement,
once executed by a party, may be delivered to any other party hereto
by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
. Further Acts. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates,
instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
. Consents. Except as otherwise provided herein, all
consents and other determinations to be made by the Investors pursuant
to this Agreement shall be made by Investors holding a
majority-in-interest of the Registrable Securities.
. Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied
against any party.
* * * * *
IN WITNESS WHEREOF, the Company and the undersigned Initial
Investors have caused this Agreement to be duly executed as of the
date first above written.
BIOFIELD CORP.
By:_______________________________
Its:______________________________
INVESTORS:
__________________________________
By:_______________________________
Its:______________________________
Address:__________________________
Facsimile:________________________
__________________________________
By:_______________________________
Its:______________________________
Address:__________________________
Facsimile:________________________
__________________________________
By:_______________________________
Its:______________________________
Address:__________________________
Facsimile:________________________
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
COUNTERPART AND ACKNOWLEDGEMENT
TO: BIOFIELD CORP.
RE: The Registration Rights Agreement (the "Agreement")
dated as of __________ __, 1997, by and among Biofield
Corp. and the Initial Investors (as defined in the
Agreement)
The undersigned hereby agrees to be bound by the terms of
the Agreement as a party to the Agreement, and shall be entitled to
all benefits of an Investor (as defined in the Agreement) pursuant to
the Agreement, as fully and effectively as though the undersigned had
executed a counterpart of the Agreement together with the other
parties to the Agreement. The undersigned hereby acknowledges having
received and reviewed a copy of the Agreement.
DATED this _____ day of ____________, 199__.
INVESTOR
__________________________________
By:_______________________________
Its:______________________________
Address:__________________________
Facsimile:________________________
Number of Shares of
Registrable Securities:____________
EXHIBIT 10
SECOND AMENDMENT, (the "Second Amendment"), dated December
17, 1997, to the Registration Rights Agreement (the "Registration
Rights Agreement"), dated March 3, 1995, as amended, among Biofield
Corp., a Delaware corporation (the "Company"), GS Capital Partners,
L.P., a Delaware limited partnership ("GSCP"), and the other parties
signatory thereto.
WHEREAS, the Company is contemplating a private placement
(the "Placement Offering") of its common stock, par value $.001 (the
"Common Stock") with a maximum offering amount of $15,000,000 in gross
proceeds and a minimum offering amount of $7,000,000 in gross
proceeds;
WHEREAS, in connection with the Placement Offering, the
Company is offering to issue, upon consummation of the Placement
Offering, shares of Common Stock in exchange for certain of its
outstanding Warrants (the "Warrant Exchange");
NOW, THEREFORE, in consideration of the premises and of the
respective agreements and conditions contained herein, the parties
agree as follows:
1. Capitalized Terms. Capitalized terms used but otherwise
not defined herein have the meaning assigned to such terms in the
Registration Rights Agreement.
2. Amendment to Section 1.6. Section 1.6 of the
Registration Rights Agreement is hereby amended and restated in its
entirety as follows:
"1.6. "Registrable Securities": any shares of Common Stock
issued upon conversion of any share of New Series Preferred
Stock or upon exercise or exchange of any of the Warrants
(and any shares issued upon any subdivision, combination or
reclassification of such shares or any stock dividend in
respect of any of the foregoing shares). As to any
particular Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall
have been declared effective under the Securities Act and
such securities shall have been disposed of in accordance
with such registration statement, or (ii) such securities
shall have been sold (other than in a privately negotiated
sale) pursuant to Rule 144 (or any successor provision)
under the Securities Act and in compliance with the
requirements of paragraphs (c), (e), (f) and (g) of Rule 144
(notwithstanding the provisions of paragraph (k) of such
Rule)."
3. Shelf Registration. It is understood and agreed to by
the Company that a request by any Holder to include Registrable
Securities pursuant to Section 2.2 of the Registration Rights
Agreement in any registration statement covering the resale of
securities issued in the Placement Offering shall not, by itself,
violate any lock-up letter or similar agreement executed by any Holder
in connection with the Placement Offering or the Warrant Exchange, it
being understood that the foregoing shall not permit a Holder to sell
or offer to sell securities under such registration statement during
the lock-up period described in any such lock-up letter or in a
similar agreement.
4. Continuing Effect of the Registration Rights Agreement.
This Second Amendment shall not constitute an amendment of any other
provision of the Registration Rights Agreement not expressly referred
to herein and shall not be construed as a consent to any further or
future amendment of any of the terms of the Registration Rights
Agreement. Except as expressly amended hereby, the provisions of the
Registration Rights Agreement are and shall remain in full force and
effect.
5. Counterparts. This Second Amendment may be executed in
counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument.
6. Governing Law. This Second Amendment shall be construed
in accordance with and governed by the laws of the State of New York
applicable to agreements made and to be performed wholly within such
jurisdiction.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Second Amendment to be duly executed on its behalf as of the date
first above written.
BIOFIELD CORP.
By: /s/Michael R. Gavenchak
----------------------------------------
Name: Michael R. Gavenchak
Title: Executive Vice President
GS CAPITAL PARTNERS, L.P.
By: GS Advisors L.P., its general partner
By: GS Advisors, Inc., its general partner
By:/s/ Katherine B. Enquist
------------------------------------------
Name: Katherine B. Enquist
Title: Vice President
AGREED AND ACCEPTED BY:
STONE STREET FUND 1994, L.P.
By: Stone Street Funding Corp., its general partner
By:/s/ Katherine B. Enquist
------------------------------------------
Name: Katherine B. Enquist
Title: Vice President
STONE STREET FUND 1995, L.P.
By: Stone Street Value Corp., its general partner
By:/s/ Katherine B. Enquist
------------------------------------------
Name: Katherine B. Enquist
Title: Vice President
BRIDGE STREET FUND 1994, L.P.
By: Stone Street Funding Corp., its general partner
By:/s/ Katherine B. Enquist
------------------------------------------
Name: Katherine B. Enquist
Title: Vice President
BRIDGE STREET FUND 1995, L.P.
By: Stone Street Value Corp., its general partner
By:/s/ Katherine B. Enquist
------------------------------------------
Name: Katherine B. Enquist
Title: Vice President
EXHIBIT 11
October 24, 1997
Hambrecht & Quist LLC
230 Park Avenue
21st Floor
New York, New York 10169
Ladies and Gentlemen:
The undersigned is a holder of securities of Biofield Corp.,
a Delaware corporation (the "Company"), and understands that the
Company is conducting a private placement (the "Placement") of the
common stock, par value $.001 per share, of the Company (the "Common
Stock"). Hambrecht & Quist LLC ("H&Q") is acting as placement agent in
connection with the Placement. The Placement will be made pursuant to
the provisions of a letter agreement dated October 16, 1997 by and
between the Company and H&Q.
To facilitate the Placement and for other good and valuable
consideration, receipt of which is hereby acknowledged, the
undersigned agrees that, during the period from the date of the first
closing of a purchase of Common Stock pursuant to the Placement (the
"Closing Date") to and including the earlier of (a) the 90th day after
the date on which the Securities and Exchange Commission declares
effective the registration statement registering for resale the Common
Stock purchased by the investors in the Placement pursuant to the
Registration Rights Agreement set forth in the Private Placement
Memorandum regarding the Placement (the "Memorandum"), or (b) the date
which is one year from the Closing Date, he, she or it shall not,
without the prior written consent of H&Q, which consent may be
withheld at the sole discretion of H&Q, directly or indirectly, offer
to sell, assign or grant options to purchase or otherwise dispose of
or transfer (i) any shares of Common Stock, (ii) any security
convertible into or exchangeable for Common Stock, or (iii) rights to
acquire Common Stock owned or directly or indirectly controlled
(whether or not beneficially owned by the undersigned or registered in
the name of the undersigned) by the undersigned (whether or not such
shares or securities are now owned or controlled or become owned or
controlled after the date hereof); provided, however, that the
foregoing agreement and representation shall not apply to (w) gifts or
charitable contributions of (A) Common Stock, (B) securities
convertible into or exchangeable for Common Stock, or (C) rights to
acquire Common Stock made by the undersigned, if the recipient of such
gift or contribution agrees in writing as a condition precedent to
such gift or contribution to be bound by the terms hereof, (x)
transfers of (A) Common Stock, (B) securities convertible into or
exchangeable for Common Stock, or (C) rights to acquire Common Stock
made by the undersigned, to "affiliates" of the transferor in
transfers not involving a public distribution or public offering if
the transferee agrees in writing as a condition precedent to such
transfer to be bound by the terms hereof, (y) the Warrant Exchange (as
defined in the Memorandum) contemplated in the Memorandum, or (z) the
activities of the undersigned's broker dealer affiliates in connection
with its customary broker, dealer and trading activities. The term
"affiliate" shall have the meaning given such term in Rule 144
promulgated under the Securities Act of 1933, as amended.
The undersigned is aware that H&Q will rely upon the
representations set forth in this agreement in proceeding with the
Placement. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent against
the transfer of Common Stock held by the undersigned, except in
accordance with the terms hereof.
The undersigned represents that he, she or it is duly
authorized to enter into this agreement and that this agreement is a
valid and binding agreement of the undersigned and the undersigned's
respective successors, heirs, personal representatives and assigns and
is enforceable in accordance with its terms.
This agreement shall no longer be of any effect if a closing
does not occur pursuant to the Placement on or before January 31,
1998.
Very truly yours,
________________________________________
(signature)
________________________________________
(print name of stockholder)
________________________________________
(print name of signatory)
________________________________________
(print title of signatory, if necessary)
EXHIBIT 12
Biofield Corp.
1225 Northmeadow Parkway
Suite 120
Roswell, Georgia 30076
Ladies and Gentlemen:
The undersigned is a holder of warrants (the "Warrants") of
Biofield Corp., a Delaware corporation (the "Company"), issued in the
Company's 1995 private placement of securities units, and understands
that the Company is conducting a private placement (the "Offering") of
the common stock, par value $.001 per share, of the Company (the
"Common Stock") pursuant to a Confidential Private Placement
Memorandum, dated October 24, 1997 (the "Memorandum"). In conjunction
with the Offering, the Company is offering to issue, upon the
consummation of the Offering, shares of Common Stock in exchange (the
"Warrant Exchange") for the outstanding Warrants.
To facilitate the Offering and as a condition to participate
in the Warrant Exchange and for other good and valuable consideration,
receipt of which is hereby acknowledged, the undersigned agrees that,
during the period from the date of the first closing of the Offering
(the "Closing Date") to and including the date which is one year from
the Closing Date, he, she or it shall not, directly or indirectly,
offer, sell, offer to sell, grant options to purchase or otherwise
sell or dispose of any shares of Common Stock which the undersigned
receives upon conversion of the Warrants he, she or it holds (the
"Exchange Shares"); provided, however, that the foregoing agreement
and representation shall not apply to (i) gift or charitable
contributions of the Exchange Shares if the recipient of such gifts or
contribution agrees in writing as a condition precedent to such gift
or contribution to be bound by the terms hereof, or (ii) transfers of
the Exchange Shares to "affiliates" of the transferor in transfers not
involving a public distribution or public offering if the transferee
agrees in writing as a condition precedent to such transfer to be
bound by the terms hereof. The term "affiliate" shall have the meaning
given such term in Rule 144 promulgated under the Securities Act of
1933, as amended.
The undersigned is aware that the Company will rely upon the
representations set forth in this agreement in proceeding with the
Offering and the Warrant Exchange. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Exchange Shares held by the
undersigned, except in accordance with the terms hereof.
The undersigned represents that he, she or it is duly
authorized to enter into this agreement and that this agreement is a
valid and binding agreement of the undersigned and the undersigned's
respective successors, heirs, personal representatives and assigns and
is enforceable in accordance with its terms.
This Agreement shall no longer be of any effect if a closing
does not occur pursuant to the Offering on or before February 28,
1998.
Very truly yours,
Dated:____________________ ________________________________________
(signature)
________________________________________
(print name of stockholder)
________________________________________
(print name of signatory)
________________________________________
(print title of signatory, if necessary)
