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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): November 13, 1997
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North American Scientific, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-26670 51-0366422
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File number) Identification No.)
7435 Greenbush Avenue, North Hollywood, CA 91605
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 503-9201
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Former name or former address, if changed since last report
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Item 5. OTHER EVENTS
On November 13, 1997, the Company consummated a private placement of
800,000 shares of its common stock, par value $0.01 per share (the "Common
Stock"), to certain institutional investors (all of whom were accredited
investors), at $18.00 per share. The offering price represented a discount of
approximately 8% to the $19.50 closing price of the Common Stock on November 6,
1997, the date of pricing of the private placement. The net proceeds of the
private placement to the Company were approximately $13.3 million, raising the
Company's total assets as of the closing from approximately $3,221,000 to
approximately $16,521,000. CIBC Oppenheimer Corp. acted as the Company's
placement agent in connection with the sale and received a commission of
approximately $1,008,000 (7% of the gross proceeds), plus warrants to purchase
an additional 64,000 shares of Common Stock at an exercise price of $21.60 per
share. The sales were exempt pursuant to Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder, as sales not
involving a public offering. Copies of the Stock Purchase Agreement and the
Placement Agent's Warrant Agreement are attached hereto as Exhibits 10.1 and
10.2, respectively.
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INDEX
Exhibit
Number Description of Document
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10.1 Stock Purchase Agreement dated as of November 10, 1997 among
North American Scientific, Inc. and the Investors identified
therein.
10.2 Placement Agent's Warrant Agreement dated as of November 13, 1997
between North American Scientific, Inc. and CIBC Oppenheimer
Corp.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: November 24, 1997 NORTH AMERICAN SCIENTIFIC, INC.
(Registrant)
By: /s/ L. Michael Cutrer
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Name: L. Michael Cutrer
Title: President Chief Executive Officer
(Principal Executive, Financial and
Accounting Officer)
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EXHIBIT 10.1
NORTH AMERICAN SCIENTIFIC, INC.
COMMON STOCK PURCHASE AGREEMENT
NOVEMBER 10, 1997
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COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made as of
November 10, 1997 by and among NORTH AMERICAN SCIENTIFIC, INC., a Delaware
corporation (the "COMPANY"), with its principal office at 7435 Greenbush Avenue,
North Hollywood, California 92618, and the persons listed on the Schedule of
Investors attached hereto as EXHIBIT A (the "PURCHASERS").
SECTION 1. AUTHORIZATION AND SALE OF SHARES
1.1 AUTHORIZATION. The Company has authorized the sale and issuance of up
to 1,000,000 shares of its common stock, par value $0.01 per share ("COMMON
STOCK"), pursuant to this Agreement.
1.2 SALE OF SHARES. Subject to the terms and conditions of this
Agreement, the Company agrees to issue and sell to each Purchaser and each
Purchaser severally agrees to purchase from the Company on the Closing Date
hereinafter defined, the number of shares of Common Stock set forth opposite
each Purchaser's name on EXHIBIT A (the "SHARES") for a purchase price (the
"PURCHASE PRICE") $18.00 per share.
SECTION 2. CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The closing of the purchase and sale of the Shares (the
"CLOSING") shall be held at the offices of D'Ancona & Pflaum, 30 N. LaSalle
Street, Suite 2900, Chicago, Illinois at 8:00 a.m. (Pacific Daylight Time), on
November 13, 1997 or at such other time and place upon which the Company and
Purchasers purchasing the majority of the Shares shall agree. The date of the
Closing is hereinafter referred to as the "CLOSING DATE".
2.2 DELIVERY. At the Closing, the Company shall deliver to each Purchaser
a certificate, registered in the Purchaser's name as shown on EXHIBIT A,
representing the number of Shares to be purchased by the Purchaser. Such
delivery shall be against payment of the Purchase Price therefor by wire
transfer of immediately available funds in the amount set forth opposite such
Purchaser's name on EXHIBIT A to a bank account designated in writing by the
Company to each Purchaser at least two (2) business days prior to Closing Date.
Each Purchaser shall only be obligated to pay the Purchase Price of the Shares
purchased by it.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants as of the date hereof to, and
covenants with, the Purchasers as follows:
3.1 ORGANIZATION AND STANDING. The Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and authority to own
or lease its properties and conduct its business presently and as proposed to be
conducted and as described in the Confidential Offering Memorandum, dated
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November 3, 1997, as amended by that Addendum dated November 7, 1997 (together
with the attachments thereto, the "MEMORANDUM") and is duly qualified as a
foreign corporation and in good standing in all jurisdictions in which the
character of the property owned or leased or the nature of the business
transacted by it makes qualification necessary (except where the failure to be
so qualified would not have a Material Adverse Effect (as defined below) on the
business, properties, financial condition or results or operations of the
Company). Except for the Company's ownership of all the outstanding shares of
North American Scientific, Inc., a California corporation, and certain shares of
RadioMed Corporation ("RADIOMED") held on behalf of the Company by L. Michael
Cutrer and Irwin J. Gruverman, the Company has no subsidiaries or equity
interest in any other entity.
3.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite
corporate power, and has taken all requisite corporate action, to execute and
deliver this Agreement, to sell and issue the Shares and to carry out and
perform all of its obligations under this Agreement. This Agreement constitutes
the legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
the enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally and (iii) as to those provisions of Section 7.3 hereof
relating to indemnity or contribution. The execution and delivery of this
Agreement does not, and the performance of this Agreement and the compliance
with the provisions hereof and the issuance, sale and delivery of the Shares by
the Company will not conflict with, or result in a breach or violation of the
terms, conditions or provisions of, or constitute a default (or an event that
with notice or lapse of time or both would constitute a default) under, or
result in the creation or imposition of any lien pursuant to the terms of, the
Company's certificate of incorporation (the "CERTIFICATE OF INCORPORATION") or
its bylaws (the "BYLAWS") or, to the Company's knowledge, any statute, law, rule
applicable to the Company or regulation or any state or Federal order, judgment
or decree applicable to the Company or any indenture, mortgage, lease or other
agreement or instrument to which the Company or any of its properties is
subject, except as would not individually or in the aggregate have a material
adverse effect on, or result in a material adverse change in, the business,
properties, operation, condition (financial or other) or results of operations
of the Company, taken as a whole, or render this Agreement, or any portion
hereof, invalid or unenforceable or impair in any material respect the ability
of the Company to perform fully its obligations hereunder (any of the foregoing
shall be referred to herein as a "MATERIAL ADVERSE EFFECT").
3.3 ISSUANCE AND DELIVERY OF THE SHARES. The Shares have been duly
authorized and, when issued and paid for in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Registration Statement (as
defined below). The issuance and delivery of the Shares is not subject to
preemptive, co-sale, right of first refusal or any other similar rights of the
stockholders of the Company or any liens or encumbrances. Except for certain
"piggyback" registration rights granted to M.H. Meyerson & Co., Inc.
("MEYERSON") pursuant to that Letter Agreement dated as of December 11, 1996
between the Company and Meyerson, the Company has not granted any presently
effective registration rights with respect to its securities other than the
registration rights set forth herein. No further approval or authority of the
stockholders or Board of Directors of the Company will be required for the
issuance and sale of the Shares.
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3.4 MEMORANDUM; SEC DOCUMENTS; FINANCIAL STATEMENTS. Each complete or
partial statement, report, or proxy statement included in the Memorandum is a
true and complete copy of or excerpt from such document as filed by the Company
with the Securities and Exchange Commission (the "SEC"). The Company has filed
in a timely manner all documents that the Company was required to file with the
SEC under Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), during the twelve (12) months preceding the
date of this Agreement. As of their respective filing dates, all documents
filed by the Company with the SEC (the "SEC DOCUMENTS") complied in all material
respects with the requirements of the Exchange Act. Neither the Memorandum nor
any of the SEC Documents as of their respective dates contained any untrue
statement of material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents and the Memorandum (the
"FINANCIAL STATEMENTS") comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto. The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the financial position of the Company at the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring
adjustments). There is no material commitment of the Company which is not
reflected in the Financial Statements except commitments made in the ordinary
course of business. There have not been any changes in the assets, liabilities,
financial condition or operations of the Company from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not had a Material Adverse Effect.
3.5 INTELLECTUAL PROPERTY. The Company owns or possesses adequate rights
to use all patents, patent rights, inventions, trade secrets and know-how
described or referred to in the Memorandum as owned or used by it or that are
necessary for the conduct of its business as presently conducted and proposed to
be conducted as described in the Memorandum. Except as disclosed under
"BUSINESS - Legal Proceedings" in the Memorandum, the Company has not received
any notice of, nor has any knowledge of, any infringement of or conflict with
asserted rights of others with respect to any patent, patent right, invention,
trade secret or know-how that, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
3.6 PROPERTIES. The Company has good and valid title to all of the
properties and assets reflected as owned in the Financial Statements, free and
clear of all liens, mortgages, (statutory or otherwise), security interests,
pledges, claims or encumbrances except those, if any, disclosed in the Financial
Statements. The Company holds its leased properties under valid and binding
leases, with such exceptions as are not materially significant in relation to
the business of the Company. The Company owns or leases all of such properties
which, to its knowledge, are necessary to its operations as now conducted.
3.7 CAPITALIZATION. All of the Company's outstanding shares of capital
stock have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all Federal and state
securities laws, and were not issued in violation of or subject to any
preemptive right or other rights to subscribe for or purchase securities. The
actual authorized
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and outstanding capital stock of the Company as of the date hereof and as of the
Closing Date is set forth in the Memorandum under the caption "Capitalization,"
assuming 500,000 shares are issued in the Offering. Except as disclosed under
"EXECUTIVE SUMMARY - The Offering" in the Memorandum, there are no outstanding
options to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any securities or obligations convertible into, or any contracts
or commitments to issue or sell shares of the Company's capital stock or any
such options, rights, convertible securities or obligations.
3.8 LITIGATION. Except as disclosed under "BUSINESS - Legal Proceedings"
in the Memorandum, there is no pending or, to the Company's knowledge,
threatened action, suit or other proceeding before any court, governmental body
or authority, or arbitrator to which the Company is a party or to which its
property or assets are subject.
3.9 NO DEFAULTS. The Company is not in violation or default of any
provision of the Certificate of Incorporation or Bylaws, or any organizational
documents, or, to the Company's knowledge, is in breach with respect to any
provision of any agreement (including without limitation, the Stock Purchase
Agreement dated June 16, 1997 between the Company and Mentor Corporation),
judgement, decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which it is a party or by which it or
any of its properties are bound which violation, default or breach would have a
Material Adverse Effect; and the Company is not aware of any fact which
constitutes an event of default on the part of the Company as defined in such
documents or which, with notice or lapse of time or both, would constitute such
an event of default.
3.10 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
Federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states and other jurisdictions in which Shares are offered and/or sold,
which compliance will be effected in accordance with such laws, and (b) the
filing of the Registration Statement and all amendments thereto with the SEC as
contemplated by Section 7.2 hereof. The Company has not been advised, and has
no reason to believe, that it is not conducting business in compliance in all
material respects with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business including but not limited to,
all applicable local, state and Federal environmental laws and regulations.
3.11 TAXES. The Company has accurately prepared and timely filed all
Federal, state and other tax returns which are required to be filed by it and
has timely paid all taxes covered by such returns which have become due and
payable except for such taxes as are being contested in good faith. The Company
has no knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company which would have a Material Adverse Effect.
3.12 INSURANCE. The Company maintains insurance of the types and in the
amounts it deems adequate for its business covering all risks customarily
insured against, all of which insurance is in full force and effect.
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3.13 NO MATERIAL ADVERSE CHANGE. Since July 31, 1997, there have not been
any changes in the assets, liabilities, financial condition or operations of the
Company from that reflected in the Financial Statements except changes in the
ordinary course of business that have not had a Material Adverse Effect.
3.14 DISCLOSURE. This Agreement does not contain any untrue statement of
fact or omit to state a fact necessary in order to make the statements contained
herein and therein not materially misleading.
3.15 NASDAQ NMS QUALIFICATION. The Company has submitted a listing
application and listing agreement with the Nasdaq National Market System
("NASDAQ NMS") to list the Common Stock, including the Shares, for quotation on
the Nasdaq NMS. If such listing is approved, for so long as the Company is
obligated to keep in effect the Registration Statement provided under
Section 7.2 hereof, the Company shall use its reasonable best efforts to
maintain such listing on the Nasdaq NMS, the Nasdaq SmallCap Market or a
national securities exchange, as defined in the Exchange Act.
3.16 FDA APPROVAL. To the Company's knowledge, the Company's I-125
Brachytherapy Source has received all required approvals from the Federal Drug
Administration ("FDA") for commercial distribution in the United States and the
Company has delivered to the Placement Agent copies of all correspondence with
the FDA relating to such approvals.
3.17 INVESTMENT COMPANY. The Company is not a registered investment
company within the meaning of the Investment Company Act of 1940, as amended.
3.18 RADIOMED. The Company is under no contractual obligation to purchase
any additional equity securities from, or to make any additional capital
contribution to, RadioMed.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASERS
Each Purchaser hereby severally and not jointly, represents and warrants to
the Company, effective as of the Closing Date, as follows:
4.1 AUTHORIZATION. Purchaser represents and warrants to the Company that:
(i) Purchaser has all requisite legal and corporate or other power and capacity
and has taken all requisite corporate or other action to execute and deliver
this Agreement, to purchase the Shares to be purchased by it and to carry out
and perform all of its obligations under this Agreement; and (ii) this Agreement
constitutes the legal, valid and binding obligation of Purchaser, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, or similar laws relating to or affecting the
enforcement of creditors' rights generally and (b) as limited by equitable
principles generally.
4.2 INVESTMENT EXPERIENCE. Purchaser is an "accredited investor" as
defined in Rule 501(a) under the Securities Act of 1933, as amended (the
"SECURITIES ACT"). Purchaser is aware of the Company's business affairs and
financial condition and has had access to and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
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acquire the Shares. Purchaser has such business and financial experience as is
required to give it the capacity to protect its own interests in connection with
the purchase of the Shares. Purchaser is able to bear the economic risk of
holding the Shares for an indefinite period, including the loss of Purchaser's
entire investment. The Shares were not offered or sold to Purchaser by any form
of general solicitation or advertising.
4.3 INVESTMENT INTENT. Purchaser is purchasing the Shares for its own
account as principal, for investment purposes only, and not with a view to, or
for, resale, distribution or fractionalization thereof, in whole or in part,
within the meaning of the Securities Act. Purchaser understands that its
acquisition of the Shares has not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of Purchaser's investment intent as expressed herein.
Purchaser has completed or caused to be completed the Stock Certificate
Questionnaire and the Registration Questionnaire attached as APPENDIX I and
APPENDIX II, respectively, of EXHIBIT B hereto and the responses provided
therein shall be true and correct as of the Closing Date and will be true and
correct as of the effective date of the Registration Statement. Purchaser has,
in connection with its decision to purchase the number of shares set forth in
EXHIBIT A hereto, relied solely upon the Memorandum and the documents attached
as appendices thereto and the representations and warranties of the Company
contained herein.
4.4 REGISTRATION OR EXEMPTION REQUIREMENTS.
(a) Purchaser further acknowledges and understands that the Shares
may be required to be held indefinitely, and they may not be resold or otherwise
transferred except in a transaction registered under the Securities Act or where
an exemption from such registration is available. Purchaser understands that
the certificate(s) evidencing the Shares will be imprinted with a legend that
prohibits the transfer of the Shares unless (i) they are registered or such
registration is not required, and (ii) if the transfer is pursuant to an
exemption from registration other than Rule 144 promulgated under the Securities
Act ("RULE 144") and, if the Company shall so request in writing, an opinion of
counsel satisfactory to the Company is obtained to the effect that the
transaction is so exempt and in compliance with applicable state law.
(b) Purchaser further acknowledges that because the Common Stock is
not listed on the Nasdaq NMS or a national securities exchange, resale of the
Shares may be limited by applicable state law, even where a registration
statement covering resale of the Shares has been declared effective under the
Securities Act. For example, certain states may limit resale of the Shares to
qualified institutions or in unsolicited qualified broker transactions in the
absence of qualification or another exemption in such state.
4.5 RESTRICTION ON SHORT SALES. Purchaser represents and warrants to and
covenants with the Company that neither Purchaser nor its affiliates has engaged
or will engage in any short sales of the Common Stock prior to the effectiveness
of the Registration Statement, except to the extent that any such short sale is
fully covered by shares of Common Stock other than the Shares.
4.6 NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands that
nothing in the Memorandum, this Agreement or any other materials presented to
Purchaser in connection with the
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purchase and sale of the Shares constitutes legal, tax or investment advice.
Purchaser has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares.
SECTION 5. CONDITIONS TO CLOSING OF PURCHASERS
Each Purchaser's obligation to purchase the Shares at the Closing is, at
the option of such Purchaser, subject to the fulfillment or waiver as of the
Closing Date of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Company in Section 3 hereof shall be true and correct in all
material respects when made, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of said date.
5.2 LEGAL OPINION. The Company shall have delivered a legal opinion from
D'Ancona & Pflaum, counsel to the Company, addressed to the Purchasers and
Oppenheimer & Co., Inc. (the "PLACEMENT AGENT") in the form attached hereto as
EXHIBIT C-1 with respect to the sale of the Shares hereunder.
5.3 OFFICER'S CERTIFICATE. The Company shall deliver to the Purchasers a
certificate, dated as of the Closing Date, signed by the President of the
Company, stating that the signer of said certificate has carefully examined the
Memorandum and the SEC Documents and that the representations and warranties
set forth in Section 3 hereof are true as of and all of the closing conditions
set forth in Section 5 hereof have been satisfied on the Closing Date.
5.4 REGISTRATION STATEMENT. The Company shall have delivered a draft of
the Registration Statement that is acceptable to the Placement Agent in a form
that may be filed with the SEC as required herein.
5.5 SAS 71 REVIEW. The Company shall have received a SAS 71 review from
its independent auditors addressed to the Company, in a form acceptable to the
Placement Agent, relating to the Company's financial statements for the three
and nine month periods ended July 31, 1997.
5.6 COVENANTS. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects.
5.7 ADDITIONAL DOCUMENTS. The Placement Agent shall have received such
other documents as the Placement Agent and its counsel may reasonably request
for the purpose of facilitating the consummation or performance of the sale of
the Shares and the Placement Agent and its counsel shall be satisfied with all
matters and proceedings described in this Agreement or the Memorandum.
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SECTION 6. CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares at the Closing is, at
the option of the Company, subject to the fulfillment or waiver of the following
conditions:
6.1 RECEIPT OF PAYMENT. The Company shall have received payment, by check
or wire transfer of immediately available funds, in the full amount of the
Purchase Price for the Shares sold.
6.2 REPRESENTATIONS AND WARRANTIES. The representations made by the
Purchasers in Section 4 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of such date.
6.3 COVENANTS. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.
SECTION 7. AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
7.1 FINANCIAL INFORMATION. The Company will mail the following reports to
each Purchaser until such Purchaser transfers, assigns or sells more than fifty
percent (50%) of the Shares purchased by such Purchaser pursuant to this
Agreement:
(a) Within one hundred (100) days after the end of each fiscal year,
a copy of its Annual Report on Form 10-KSB.
(b) Within fifty-five (55) days after the end of the first, second
and third quarterly accounting periods of each fiscal year of the Company, a
copy of its Quarterly Report on Form 10-QSB.
7.2 REGISTRATION REQUIREMENTS
(a) No later than fifteen (15) business days following the Closing
Date, the Company shall file with the SEC one or more registration statements on
Form S-3 (together with the prospectus included therein, a "REGISTRATION
STATEMENT") pursuant to Rule 415 of the Securities Act in order to register with
the SEC the continuous resale by the Purchasers, from time to time, of the
Shares through the Nasdaq NMS or the facilities of any national securities
exchange on which Common Stock is then traded, or in privately-negotiated
transactions. The Company shall use its best efforts to cause such Registration
Statement to be declared effective as soon thereafter as possible and in any
event within sixty (60) days thereafter. Each Purchaser agrees to furnish
promptly to the Company in writing all information required from time to time to
be disclosed in order to make the information previously furnished to the
Company by such holder not misleading.
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(b) The Company shall pay all Registration Expenses (as defined
below) in connection with any registration, qualification or compliance
hereunder, and each Purchaser shall pay all Selling Expenses (as defined below)
and other expenses that are not Registration Expenses relating to the Shares
resold by such Purchaser. "REGISTRATION EXPENSES" shall mean all expenses,
except for Selling Expenses, incurred by the Company in complying with the
registration provisions herein described, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration. "SELLING EXPENSES" shall mean selling commissions, underwriting
fees and stock transfer taxes applicable to the Shares and all fees and
disbursements of counsel for any Purchaser.
(c) In the case of the registration effected by the Company pursuant
to these registration provisions, the Company will use its best efforts to:
(1) keep such registration effective until the earlier of (A)
the second anniversary of the Closing Date, (B) such date as all of the Shares
have been resold or (C) such time as all of the Shares held by the Purchasers
can be sold within a given three-month period without compliance with the
registration requirements of the Securities Act pursuant to Rule 144;
(2) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by the
Registration Statement;
(3) furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the prospectus, as
a Purchaser from time to time may reasonably request;
(4) cause all Shares registered as described herein to be listed
on each securities exchange and quoted on each quotation service on which the
Common Stock are then listed or quoted;
(5) provide a transfer agent and registrar for all Shares
registered pursuant to the Registration Statement and a CUSIP number for all
such Shares;
(6) otherwise use its best efforts promptly to comply with all
applicable rules and regulations of the SEC;
(7) file the documents required of the Company and otherwise use
its best efforts promptly to obtain, if applicable, and maintain requisite blue
sky clearance in (A) all jurisdictions in which any of the Shares are originally
sold and (B) all other states specified in writing by a Purchaser, provided as
to clause (B) however, that the Company shall not be required to qualify to do
business or consent to service of process in any state in which it is not now so
qualified or has not so consented; and
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(8) with respect to the initial filing of the Registration
Statement, as of the date of declaration of effectiveness, obtain an opinion of
counsel to the Company in the form of opinion attached hereto as EXHIBIT C-2,
addressed to each Purchaser selling registrable securities pursuant to the
Registration Statement. The Company shall use its best efforts to qualify for
use of Form S-3 under the Securities Act to register the resale of the Shares
and to maintain such qualification during the periods described in
subsection (c)(1) hereof.
(d) The Company shall furnish to each Purchaser upon request a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary in order to facilitate the public sale or other
disposition of all or any of the Shares held by the Purchaser.
(e) With a view to making available to the Purchasers the benefits of
Rule 144 and any other rule or regulation of the SEC that may at any time permit
a Purchaser to sell Shares to the public without registration or pursuant to
registration, the Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (A) the second anniversary of the Closing Date or (B) such
date as all of the Shares shall have been resold; (ii) file with the SEC in a
timely manner all reports and other documents required of the Company under the
Exchange Act; and (iii) furnish to any Purchaser upon request, as long as the
Purchaser owns any Shares, (A) a written statement by the Company that it has
complied with the reporting requirements of the Exchange Act, (B) a copy of the
most recent annual or quarterly report of the Company, and (C) such other
information as may be reasonably requested in order to avail any Purchaser of
any rule or regulation of the SEC that permits the selling of any such Shares
without registration.
(f) At any time the Company may refuse to permit a Purchaser to
resell any Shares pursuant to the Registration Statement; PROVIDED, HOWEVER,
that in order to exercise this right at any time the Company does not qualify
for Form S-3, the Company must deliver a certificate in writing to the
Purchasers to the effect that suspension of the sale of shares under the
Registration Statement, until such time as the Company can make an appropriate
filing with the SEC, is necessary because a sale pursuant to the Registration
Statement, in its then-current form, could constitute a violation of the Federal
securities laws. In such an event, the Company shall use its best efforts to
amend the Registration Statement if necessary and take all other actions
necessary to allow such sale under the Federal securities laws, and shall notify
the Purchasers and the Placement Agent promptly after it has determined that
such sale has become permissible under the Federal securities laws.
Notwithstanding the foregoing, the Company shall not under any circumstances be
entitled to exercise its right to suspend sales under the registration statement
more than two (2) times in any twelve (12) month period, and the period during
which such Registration Statement may be withdrawn shall not exceed thirty (30)
days.
7.3 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Purchaser
and its officers, directors, controlling persons and affiliates from and against
any losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) to which such Purchaser may become subject (under the Securities Act,
state law, common law or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon,
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<PAGE>
any untrue statement of a material fact contained in, or omission of a material
fact from, the Registration Statement, or arise out of any failure by the
Company to fulfill any undertaking included in the Registration Statement or
this Agreement, and the Company will, as incurred, reimburse such Purchaser for
any legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; PROVIDED, HOWEVER,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon an untrue
statement made in such Registration Statement in reliance upon and in conformity
with information furnished to the Company by or on behalf of such Purchaser
specifically for use in preparation of the Registration Statement. The Company
will reimburse the Purchasers for any legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the obligations under this section and
the possibility that such payments might later be held to be improper, provided,
that to the extent any such payment is ultimately held to be improper, the
persons receiving such payments shall promptly refund them.
(b) Each Purchaser, severally and not jointly, agrees to indemnify
and hold harmless the Company from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) to which the Company
may become subject (under the Securities Act, state law, common law or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon an untrue
statement made in such Registration Statement in reliance upon and in conformity
with information furnished to the Company by or on behalf of such Purchaser
specifically for use in preparation of the Registration Statement; PROVIDED,
HOWEVER, that no Purchaser shall be liable in any such case for any untrue
statement included in any Prospectus which statement has been corrected, in
writing, by such Purchaser and delivered to the Company before the sale from
which such loss occurred and in no event shall any Purchaser be liable for any
amount in excess of the net proceeds received for the sale of its Shares
pursuant to such Registration Statement.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and the indemnifying person shall have been notified thereof,
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified person. After notice from the
indemnifying person to such indemnified person of the indemnifying person's
election to assume the defense thereof, the indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof; PROVIDED,
HOWEVER, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the indemnified person for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person.
(d) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) hereof in respect of any
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<PAGE>
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Purchasers on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. 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 Company on the one hand or a Purchaser on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
amount received by the Purchaser from the sale of the Shares to which such loss
relates exceeds the amount of any damages which such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations in this subsection (d) to
contribute are several in proportion to their respective sales of Shares to
which such loss relates and not joint.
(e) The obligations of the Company and the Purchasers under this
Section 7.3 shall be in addition to any liability which the Company and the
respective Purchasers may otherwise have.
SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH
SECURITIES ACT
8.1 RESTRICTIONS ON TRANSFERABILITY. The Shares shall not be transferable
in the absence of a registration under the Securities Act or an exemption
therefrom or in the absence of compliance with any term of this Agreement. The
Company shall be entitled to give stop transfer instructions to its transfer
agent with respect to the Shares in order to enforce the foregoing restrictions.
8.2 RESTRICTIVE LEGEND. Each certificate representing Shares shall bear
substantially the following legends (in addition to any legends required under
applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM.
12
<PAGE>
ADDITIONALLY, THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS SPECIFIED IN THE COMMON STOCK PURCHASE
AGREEMENT DATED NOVEMBER 10, 1997 (THE "AGREEMENT") BETWEEN THE COMPANY AND
THE ORIGINAL PURCHASER, AND NO TRANSFER OF SHARES SHALL BE VALID OR
EFFECTIVE ABSENT COMPLIANCE WITH SUCH RESTRICTIONS. ALL SUBSEQUENT HOLDERS
OF THIS CERTIFICATE WILL HAVE AGREED TO BE BOUND BY CERTAIN OF THE TERMS OF
THE AGREEMENT, INCLUDING SECTIONS 7.2 AND 8.3 OF THE AGREEMENT. COPIES OF
THE AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
REGISTERED HOLDER OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.
8.3 TRANSFER OF SHARES AFTER REGISTRATION. Each Purchaser hereby
covenants with the Company not to make any sale of the Shares except either (i)
in accordance with the Registration Statement, in which case Purchaser covenants
to comply with the requirement of delivering a current prospectus, (ii) in
accordance with Rule 144, in which case Purchaser covenants to comply with Rule
144, or (iii) pursuant to another exemption under the Securities Act. Purchaser
further acknowledges and agrees that such Shares are not transferable on the
books of the Company unless the certificate submitted to the Company's transfer
agent evidencing such Shares is accompanied by a separate certificate executed
by an officer of, or other person duly authorized by, the Purchaser in the form
attached hereto as EXHIBIT D.
8.4 PURCHASER INFORMATION. Each Purchaser covenants that it will promptly
notify the Company in writing of any changes in the information set forth in the
Registration Statement regarding such Purchaser or such Purchaser's "Plan of
Distribution."
SECTION 9. MISCELLANEOUS
9.1 WAIVERS AND AMENDMENTS. With the exception of Section 7 hereof, the
terms of this Agreement may be waived or amended with the written consent of the
Company and each Purchaser. With respect to Section 7 hereof, with the written
consent of the Company and the record holders of more than fifty percent (50%)
of the Shares then outstanding and held by Purchasers, the terms of this
Agreement may be waived or amended and any such amendment or waiver shall be
binding upon the Company and all holders of Shares.
9.2 BROKER'S FEE. Each Purchaser acknowledges that the Company intends to
pay a fee to Oppenheimer & Co., Inc. in respect of the sale of the Shares to the
Purchaser. Each of the parties hereto hereby represents that, on the basis of
any actions and agreements by it, there are no other brokers or finders entitled
to compensation in connection with the sale of the Shares to the Purchasers.
9.3 GOVERNING LAW. This Agreement shall be governed in all respects by
and construed in accordance with the laws of the State of California without any
regard to conflicts of laws principles.
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9.4 SURVIVAL. The representations, warranties, covenants and agreements
made in this Agreement shall survive any investigation made by the Company or
the Purchasers and the Closing.
9.5 SUCCESSORS AND ASSIGNS. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement.
9.6 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
thereof.
9.7 NOTICES, ETC. All notices and other communications required or
permitted under this Agreement shall be effective upon receipt and shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or registered or certified United States mail, addressed to the Company or the
Purchasers, as the case may be, at their respective addresses set forth at the
beginning of this Agreement or on EXHIBIT A, or at such other address as the
Company or the Purchasers shall have furnished to the other party in writing
with a copy to Michael Fekete, Oppenheimer & Co., Inc., 10880 Wilshire
Boulevard, Los Angeles, California 90024. All notices and other communications
shall be effective upon the earlier of actual receipt thereof by the person to
whom notice is directed or (i) in the case of notices and communications sent by
personal delivery or telecopy, one business day after such notice or
communication arrives at the applicable address or was successfully sent to the
applicable telecopy number, (B) in the case of notices and communications sent
by overnight delivery service, at noon (local time) on the second business day
following the day such notice or communication was sent, and (c) in the case of
notices and communications sent by United States mail, seven (7) days after such
notice or communication shall have been deposited in the United States mail.
9.8 SEVERABILITY OF THIS AGREEMENT. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
9.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.10 FURTHER ASSURANCES. Each party to this Agreement 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 the other party hereto 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.
9.11 EXPENSES. The Company and each such Purchaser shall bear its own
expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby, including fees of legal counsel.
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<PAGE>
IN WITNESS WHEREOF, this Agreement is hereby executed as of the date first
above written.
the "COMPANY"
NORTH AMERICAN SCIENTIFIC, INC.
By: /s/ L. Michael Cutrer
-----------------------------------------
L. Michael Cutrer President & CEO
-----------------------------------------
[Print Name and Title]
15
<PAGE>
the "PURCHASERS"
GT GLOBAL HEALTH CARE CLASS
Name: /s/ Michael Yellen
------------------------------------
By: Michael Yellen
------------------------------------
Title: Investment Manager
------------------------------------
16
<PAGE>
the "PURCHASERS"
GT HEALTHCARE FUND
Name: /s/ Michael Yellen
------------------------------------
By: Michael Yellen
------------------------------------
Title: Investment Manager
------------------------------------
16
<PAGE>
the "PURCHASERS"
CONNECTICUT CAPITAL ASSOCIATES, LP.
Name: /s/ J. Howard Coale
------------------------------------
By: J. Howard Coale
------------------------------------
Title: President G.P.Connecticut Capital
------------------------------------
Associates, LP.
------------------------------------
16
<PAGE>
the "PURCHASERS"
SUNAMERICA SMALL CO. GROWTH FUND
Name: /s/ Audrey Snell
------------------------------------
By: Audrey Snell
------------------------------------
Title: Vice President Portfolio Manager
------------------------------------
16
<PAGE>
the "PURCHASERS"
THE RAPTOR GLOBAL FUND LTD.
Name: /s/ Mark F. Dalton
------------------------------------
By: Mark F. Dalton
------------------------------------
Title: President
------------------------------------
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<PAGE>
the "PURCHASERS"
THE RAPTOR GLOBAL FUND, L.P.
Name: /s/ Mark F. Dalton
------------------------------------
By: Mark F. Dalton
------------------------------------
Title: President
------------------------------------
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<PAGE>
the "PURCHASERS"
TUDOR BVI FUTURES, LTD.
Name: /s/ Mark F. Dalton
------------------------------------
By: Mark F. Dalton
------------------------------------
Title: President
------------------------------------
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<PAGE>
the "PURCHASERS"
PROMED PARTNERS, L.P.
Name: /s/ David B. Musket
------------------------------------
By: David B. Musket
------------------------------------
Title: Managing Member
------------------------------------
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<PAGE>
the "PURCHASERS"
TUDOR ARBITRAGE PARTNERS L.P.
Name: /s/ Mark F. Dalton
------------------------------------
By: Mark F. Dalton
------------------------------------
Title: President
------------------------------------
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<PAGE>
the "PURCHASERS"
INVESCO GLOBAL HEALTH SERVICES
Name: /s/ Glen A. Payne
------------------------------------
By: Glen A. Payne
------------------------------------
Title: Secretary
------------------------------------
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<PAGE>
the "PURCHASERS"
GT GLOBAL HEALTH CARE FUND
Name: /s/ Michael Yellen
------------------------------------
By: Michael Yellen
------------------------------------
Title: Investment Manager
------------------------------------
16
<PAGE>
EXHIBIT A
SCHEDULE OF PURCHASERS
PURCHASER NAME AND ADDRESS NUMBER OF SHARES PURCHASED
Connecticut Capital Associates L.P. 100,000
44 Signal Rd.
Stamford, CT 06902
Tudor BVI Futures, Ltd. 114,300
c/o Tudor Investment Corporation
40 Rowes Wharf, 2nd Floor
Boston, MA 02110
The Raptor Global Fund L.P. 45,300
c/o Tudor Investment Corporation
40 Rowes Wharf, 2nd Floor
Boston, MA 02110
The Raptor Global Fund Ltd. 125,100
c/o Tudor Investment Corporation
40 Rowes Wharf, 2nd Floor
Boston, MA 02110
Tudor Arbitrage Partners L.P. 15,300
c/o Tudor Investment Corporation
40 Rowes Wharf, 2nd Floor
Boston, MA 02110
ProMed Partners, L.P. 25,000
125 Cambridge Park Dr.
Cambridge, MA 02140
INVESCO Global Health Sciences Fund 100,000
c/o INVESCO TRUST CO.
7800 East Union Avenue
Suite 1100
Denver, CO 80237
SunAmerica Small Co Growth Fund 150,000
c/o SunAmerica Inc.
733 Third Avenue
Third Floor
New York, NY 10017
<PAGE>
PURCHASER NAME AND ADDRESS NUMBER OF SHARES PURCHASED
GT Global Health Care Class 30,000
c/o Chancellor LGT Asset Management, Inc.
50 California Street
San Francisco, CA 94111
GT Global Health Care Fund 75,000
c/o Chancellor LGT Asset Management, Inc.
50 California Street
San Francisco, CA 94111
GT Healthcare Fund 20,000
c/o Chancellor LGT Asset Management, Inc.
50 California Street
San Franscico, CA 94111
TOTAL SHARES SOLD: 800,000
<PAGE>
EXHIBIT 10.2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON NOVEMBER 13, 2002 OR IF NOT A BUSINESS
DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT FOLLOWING
BUSINESS DAY.
WARRANT TO PURCHASE
64,000 SHARES OF COMMON STOCK
NO. 1
WARRANT TO PURCHASE
COMMON STOCK
OF
NORTH AMERICAN SCIENTIFIC, INC.
TRANSFER RESTRICTED -- SEE SECTION 5.02
This certifies that, for good and valuable consideration, CIBC
Oppenheimer Corp. ("CIBC OPCO"), and its registered, permitted assigns
(collectively, the "Warrantholder"), is entitled to purchase from North American
Scientific, Inc., a Delaware corporation (the "Company"), subject to the terms
and conditions hereof, at any time on or after 9:00 A.M., New York time, on,
November 14, 1998, and before 5:00 P.M., New York time, on November 13, 2002,
(or, if such day is not a Business Day, at or before 5:00 P.M., New York time,
on the next following Business Day), the number of fully paid and non-assessable
shares of Common Stock stated above at the Exercise Price. The Exercise Price
and the number of shares purchasable hereunder are subject to adjustment from
time to time as provided in Article III hereof.
ARTICLE I
SECTION 1.01: DEFINITION OF TERMS. As used in this Warrant, the following
capitalized terms shall have the following respective meanings:
(a) BUSINESS DAY: A day other than a Saturday, Sunday or other day
on which banks in the State of New York are authorized by law to remain closed.
(b) COMMON STOCK: Common Stock, $.01 par value per share, of the
Company.
(c) COMMON STOCK EQUIVALENTS: Securities that are convertible
into or exercisable for shares of Common Stock.
(d) DEMAND REGISTRATION: See Section 6.02.
(e) EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
<PAGE>
(f) EXERCISE PRICE: $21.60 per Warrant Share, as such price may
be adjusted from time to time pursuant to Article III hereof.
(g) EXPIRATION DATE: 5:00 P.M., New York time, on November 13,
2002, or if such day is not a Business Day, the next succeeding day which is a
Business Day.
(h) 25% HOLDERS: At any time as to which a Demand Registration is
requested, the Holder and/or the holders of any other Warrants and/or the
holders of Warrant Shares who have the right to acquire or hold, as the case may
be, not less than 25% of the combined total of Warrant Shares issuable and
Warrant Shares outstanding at the time such Demand Registration is requested.
(i) HOLDER: A Holder of Registrable Securities.
(j) NASD: National Association of Securities Dealers, Inc., and
NASDAQ: NASD Automatic Quotation System.
(k) PERSON: An individual, partnership, joint venture, corporation,
trust, unincorporated organization or government or any department or agency
thereof.
(l) PIGGYBACK REGISTRATION: See Section 6.01.
(m) PROSPECTUS: Any prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and supplements
to the Prospectus, including post-effective amendments and all material
incorporated by reference in such Prospectus.
(n) PUBLIC OFFERINGS: A public offering of any of the Company's
equity or debt securities pursuant to a registration statement under the
Securities Act.
(o) REGISTRATION EXPENSES: Any and all expenses incurred in
connection with any registration or action incident to performance of or
compliance by the Company with Article VI, including, without limitation, (i)
all SEC, national securities exchange and NASD registration and filing fees; all
listing fees and all transfer agent fees; (ii) all fees and expenses of
complying with state securities or blue sky laws (including the fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities; (iii) all printing, mailing,
messenger and delivery expenses and (iv) all fees and disbursements of counsel
for the Company and of its accountants, including the expenses of any special
audits and/or "cold comfort" letters required by or incident to such performance
and compliance, but excluding underwriting discounts and commissions, brokerage
fees and transfer taxes, if any, and fees of counsel or accountants retained by
the holders of Registrable Securities to advise them in their capacity as
Holders of Registrable Securities.
(p) REGISTRABLE SECURITIES: Any Warrant Shares issued to CIBC OPCO
and/or its designees or transferees as permitted under Section 5.02 and/or other
securities that may be or are issued by the Company upon exercise of this
Warrant, including those which may thereafter be issued by the Company in
respect of any such securities by means of any stock splits, stock dividends,
recapitalizations, reclassifications or the like, and as adjusted pursuant to
Article III hereof.
(q) REGISTRATION STATEMENT: Any registration statement of the
Company filed or to be filed
2
<PAGE>
with the SEC which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including all amendments (including post-effective
amendments) and supplements thereto, all exhibits thereto and all material
incorporated therein by reference.
(r) SEC: The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
(s) SECURITIES ACT: The Securities Act of 1933, as amended.
(t) TRANSFER: See Section 5.02.
(u) WARRANTS: This Warrant, all other warrants issued on the
date hereof and all other warrants that may be issued in its or their place
(together evidencing the right to purchase an aggregate of 64,000 shares of
Common Stock), originally issued as set forth in the definition of Registrable
Securities.
(v) WARRANTHOLDER: The person(s) or entity(ies) to whom this Warrant
is originally issued, or any successor in interest thereto, or any assignee or
transferee thereof, in whose name this Warrant is registered upon the books to
be maintained by the Company for that purpose.
(w) WARRANT SHARES: Common Stock, Common Stock Equivalents and
other securities purchased or purchasable upon exercise of the Warrants.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
SECTION 2.01: DURATION OF WARRANT. The Warrantholder may exercise this
Warrant at any time and from time to time after 9:00 A.M., New York time, on
November 14, 1998, and before 5:00 P.M., New York time, on the Expiration Date.
If this Warrant is not exercised on or prior to the Expiration Date, it shall
become void, and all rights hereunder shall thereupon cease.
SECTION 2.02.: EXERCISE OF WARRANT.
(a) The Warrantholder may exercise this Warrant, in whole or in part, as
follows:
(i) By presentation and surrender of this Warrant to the Company
at its principal executive offices or at the office of its stock
transfer agent, if any, with the Subscription Form annexed hereto duly
executed and accompanied by payment of the full Exercise Price for
each Warrant Share to be purchased.
(b) Upon receipt of this Warrant, in the case of Section 2.02 (a) (i),
with the Subscription Form duly executed and accompanied by payment of the
aggregate Exercise Price for the Warrant Shares for which this Warrant is then
being exercised, the Company shall cause to be issued certificates for the total
number of whole shares of Common Stock for which this Warrant is being exercised
(adjusted to reflect the effect of the anti-dilution provisions contained in
Article III hereof, if any, and as provided in Section 2.04 hereof) in such
3
<PAGE>
denominations as are reasonably requested for delivery to the Warrantholder, and
the Company shall thereupon deliver such certificates to the Warrantholder. The
Warrantholder shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the
Warrantholder. If at the time this Warrant is exercised, a Registration
Statement is not in effect to register under the Securities Act the Warrant
Shares issuable upon exercise of this Warrant, the Company may require the
Warrantholder to make such representations, and may place such legends on
certificates representing the Warrant Shares, as may be reasonably required in
the opinion of counsel to the Company to permit the Warrant Shares to be issued
without such registration.
(c) The exercise of this Warrant shall be for at least 25% of the
Warrant Shares then owned by the Warrantholder. In case the Warrantholder shall
exercise this Warrant with respect to less than all of the Warrant Shares that
may be purchased under this Warrant, the Company shall execute a new warrant in
the form of this Warrant for the balance of such Warrant Shares and deliver such
new warrant to the Warrantholder.
(d) The Company shall pay any and all stock transfer and similar
taxes which may be payable in respect of the issue of this Warrant or in respect
of the issue of any Warrant Shares.
SECTION 2.03: RESERVATION OF SHARES. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of shares of Common Stock or other shares of capital
stock of the Company from time to time issuable upon exercise of this Warrant.
All such shares shall be duly authorized, and when issued upon such exercise,
shall be validly issued, fully paid and nonassessable, free and clear of all
liens, security interests, charges and other encumbrances or restrictions on
sale and free and clear of all preemptive rights (except the restrictions
imposed by the legend appearing at the top of Page 1 of this Warrant).
SECTION 2.04: FRACTIONAL SHARES. The Company shall not be required to
issue any fraction of a share of its capital stock in connection with the
exercise of this Warrant, and in any case where the Warrantholder would, except
for the provisions of this Section 2.04, be entitled under the terms of this
Warrant to receive a fraction of a share upon the exercise of this Warrant, the
Company shall, upon the exercise of this Warrant and tender of the Exercise
Price (as adjusted to cover the balance of the share), issue the larger number
of whole shares purchasable upon exercise of this Warrant. The Company shall
not be required to make any cash or other adjustment in respect of such fraction
of a share to which the Warrantholder would otherwise be entitled.
SECTION 2.05: LISTING. Prior to the issuance of any shares of Common
Stock upon exercise of this Warrant, the Company shall secure the listing of
such shares of Common Stock upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this Warrant) and shall
maintain, so long as any other shares of Common Stock shall so be listed, such
listing of all shares of Common Stock from time to time issuable upon the
exercise of this Warrant; and the Company shall so list on each national
securities exchange or automated quotation system, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon the
exercise of this Warrant if and so long as any shares of the same class shall be
listed on such national securities exchange or automated quotation system.
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ARTICLE III
ADJUSTMENT OF SHARES OF COMMON STOCK
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article III.
SECTION 3.01: MECHANICAL ADJUSTMENTS. (a) If at any time prior to the
exercise of this Warrant in full, the Company shall (i) declare a dividend or
make a distribution on the Common Stock payable in shares of its capital stock
(whether shares of Common Stock or of capital stock of any other class); (ii)
subdivide, reclassify or recapitalize outstanding Common Stock into a greater
number of shares; (iii) combine, reclassify or recapitalize its outstanding
Common Stock into a smaller number of shares; or (iv) issue any shares of its
capital stock by reclassification of its Common Stock (including any such
reclassification in connection with a consolidation or a merger in which the
Company is the continuing corporation), the Exercise Price in effect at the time
of the record date of such dividend, distribution, subdivision, combination,
reclassification or recapitalization shall be adjusted so that the Warrantholder
shall be entitled to receive the aggregate number and kind of shares which, if
this Warrant had been exercised in full immediately prior to such event, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, distribution, subdivision, combination, reclassification or
recapitalization. Any adjustment required by this paragraph 3.01(a) shall be
made successively immediately after the record date, in the case of a dividend
or distribution, or the effective date, in the case of a subdivision,
combination, reclassification or recapitalization to allow the purchase of such
aggregate number and kind of shares.
(b) If at any time after November 14, 1997 and prior to the exercise
of this Warrant in full, the Company shall (i) issue or sell any Common Stock or
Common Stock Equivalents without consideration or for consideration per share
(in cash, property or other assets) at least 25% less than the current market
price per share on the date of such issuance or sale as defined in Section 3.01
(f) (except for the issuance of any Common Stock or Common Stock Equivalents
pursuant to any options, warrants, rights or other agreements in effect prior to
November 13, 1997, or pursuant to any options or warrants granted subsequent to
November 13, 1997, provided such options or warrants have an exercise price
greater than or equal to the fair market value of the Company's Common Stock at
the date such options or warrants are granted or pursuant to transactions
described in Sections 3.01 (a), (c) or (d) (collectively, the "Excluded
Issuances")) or (ii) fix a record date for the issuance of subscription rights,
options or warrants to all holders of Common Stock entitling them to subscribe
for or purchase Common Stock (or Common Stock Equivalents) other than the
Excluded Issuances at a price (or having an exercise or conversion price per
share) at least 25% less than the current market price of the Common Stock (as
determined pursuant to Section 3.01 (f)) on the record date described below, the
Exercise Price shall be adjusted so that the Exercise Price shall equal the
price determined by multiplying the Exercise Price in effect immediately prior
to the date of such sale or issuance (which date in the event of distribution to
shareholders shall be deemed to be the record date set by the Company to
determine shareholders entitled to participate in such distribution) by a
fraction, the numerator of which shall be (i) the number of shares of Common
Stock outstanding on the date of such sale or issuance, plus (ii) the number of
additional shares of Common Stock which the aggregate consideration received by
the Company upon such issuance or sale (plus the aggregate of any additional
amount to be received by the Company upon the exercise of such subscription
rights, options or warrants) would purchase at such current market price per
share of the Common Stock; and the denominator of which shall be (i) the number
of shares of Common Stock outstanding on the date of such issuance or sale, plus
(ii) the number of additional shares of Common Stock offered for subscription or
purchase (or into which the Common Stock Equivalents so offered are exercisable
or convertible). Any adjustments required by this
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paragraph 3.01 (b) shall be made immediately after such issuance or sale or
record date, as the case may be. Such adjustments shall be made successively
whenever such event shall occur. To the extent that shares of Common Stock (or
Common Stock Equivalents) are not delivered in connection with such subscription
rights, options or warrants, the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect had the adjustments made upon the
issuance of such rights, options or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or Common Stock
Equivalents) actually delivered.
(c) If at any time prior to the exercise of this Warrant in full, the
Company shall fix a record date for the issuance or making a distribution to all
holders of Common Stock (including any such distribution to be made in
connection with a consolidation or merger in which the Company is to be the
continuing corporation) of evidences of its indebtedness, any other securities
of the Company or any cash, property or other assets (excluding a combination,
reclassification or recapitalization referred to in Section 3.01 (a), regular
cash dividends or cash distributions paid out of net profits legally available
therefor and in the ordinary course of business and subscription rights, options
or warrants for Common Stock or Common Stock Equivalents (excluding those
referred to in Section 3.01 (b)) (any such nonexcluded event being herein called
a "Special Dividend"), (i) the Exercise Price shall be decreased immediately
after the record date for such Special Dividend to a price determined by
multiplying the Exercise Price then in effect by a fraction, the numerator of
which shall be the then current market price of the Common Stock (as defined in
Section 3.01 (f)) on such record date less the fair market value (as determined
by the Company's Board of Directors) of the evidences of indebtedness,
securities or property, or other assets issued or distributed in such Special
Dividend applicable to one share of Common Stock or of such subscription rights,
options or warrants applicable to one share of Common Stock and the denominator
of which shall be such then current market price per share of Common Stock (as
so determined) and (ii) the number of shares of Common Stock subject to purchase
upon exercise of this Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock subject to purchase immediately
before such Special Dividend by a fraction, the numerator of which shall be the
Exercise Price in effect immediately before such Special Dividend and the
denominator of which shall be the Exercise Price in effect immediately after
such Special Dividend. Any adjustment required by this paragraph 3.01 (c) shall
be made successively whenever such a record date is fixed and in the event that
such distribution is not so made, the Exercise Price shall again be adjusted to
be the Exercise Price that was in effect immediately prior to such record date.
(d) If at any time prior to the exercise of this Warrant in full, the
Company shall make a distribution to all holders of the Common Stock of stock of
a subsidiary or securities convertible into or exercisable for such stock, then
in lieu of an adjustment in the Exercise Price or the number of Warrant Shares
purchasable upon the exercise of this warrant, each Warrantholder, upon the
exercise hereof at any time after such distribution, shall be entitled to
receive from the Company, such subsidiary or both, as the Company shall
determine, the stock or other securities to which such Warrantholder would have
been entitled if such Warrantholder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in this Article III, and
the Company shall reserve, for the life of the Warrant, such securities of such
subsidiary or other corporation; provided, however, that no adjustment in
respect of dividends or interest on such stock or other securities shall be made
during the term of this Warrant or upon its exercise.
(e) Whenever the Exercise Price payable upon exercise of each Warrant
is adjusted pursuant to one or more of paragraphs (a), (b) and (c) of this
Section 3.01, the Warrant Shares shall simultaneously be adjusted by multiplying
the number of Warrant Shares initially issuable upon exercise of each Warrant by
the Exercise Price in effect on the date of such adjustment and dividing the
product so obtained by the Exercise Price, as adjusted.
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(f) For the purpose of any computation under this Section 3.01, the
current market price per share of Common Stock at any date shall be deemed to be
the closing price on the day of such issuance or distribution. The closing
price for such day shall be the last sale price regular way or, in case no such
reported sales take place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal national securities
exchange on which the Common Stock is admitted to trading or listed, or if not
listed or admitted to trading on any such exchange, the representative closing
bid price as reported by NASDAQ, or other similar organization if NASDAQ is no
longer reporting such information, or if not so available, the fair market price
as determined by the Board of Directors of the Company.
(g) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least ten cents ($.10) in
such price; PROVIDED, HOWEVER, that any adjustments which by reason of this
paragraph (g) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
3.01 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Notwithstanding anything in this Section 3.01 to the
contrary, the Exercise Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(h) In the event that at any time, as a result of any adjustment made
pursuant to Section 3.01(a), the Warrantholder thereafter shall become entitled
to receive any shares of the Company other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in Section 3.01(a).
(i) In the case of an issue of additional Common Stock or Common
Stock Equivalents for cash, the consideration received by the Company therefor,
after deducting therefrom any discount or commission or other expenses paid by
the Company for any underwriting of, or otherwise in connection with, the
issuance thereof, shall be deemed to be the amount received by the Company
therefor. The term "issue" shall include the sale or other disposition of
shares held by or on account of the Company or in the treasury of the Company
but until so sold or otherwise disposed of such shares shall not be deemed
outstanding.
SECTION 3.02: NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price is adjusted as herein provided, the Company shall prepare
and deliver forthwith to the Warrantholder a certificate signed by its
President, and by any Vice President, Treasurer or Secretary, setting forth the
adjusted number of shares purchasable upon the exercise of this Warrant and the
Exercise Price of such shares after such adjustment, a brief statement of the
facts requiring such adjustment and the computation by which adjustment was
made.
SECTION 3.03: NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section
3.01 of this Agreement, no adjustment in respect of any cash dividends paid by
the Company shall be made during the term of this Warrant or upon the exercise
of this Warrant.
SECTION 3.04: PRESERVATION OF PURCHASE RIGHTS IN CERTAIN
TRANSACTIONS. In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock (other than a subdivision or a
combination of the outstanding Common Stock and other than a change in the par
value of the Common Stock or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which the Company is the continuing corporation and said merger does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant)) or in case of any sale, lease, transfer or conveyance to another
corporation of the property and assets of the Company as an entirety or
substantially as an entirety, the Company
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shall, as a condition precedent to such transaction, cause such successor or
purchasing corporation, as the case may be, to execute with the Warrantholder an
agreement granting the Warrantholder the right thereafter, upon payment of the
Exercise Price in effect immediately prior to such action, to receive upon
exercise of this Warrant the kind and amount of shares and other securities and
property which he would have owned or have been entitled to receive after the
happening of such reclassification, change, consolidation, merger, sale or
conveyance had this Warrant been exercised immediately prior to such action.
Such agreement shall provide for adjustments in respect of such shares of stock
and other securities and property, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article III. In the event
that in connection with any such reclassification, capital reorganization,
change, consolidation, merger, sale or conveyance, additional shares of Common
Stock shall be issued in exchange, conversion, substitution or payment, in whole
or in part, for, or of, a security of the Company other than Common Stock, any
such issue shall be treated as an issue of Common Stock covered by the
provisions of Article III. The provisions of this Section 3.04 shall similarly
apply to successive reclassification, capital reorganizations, consolidations,
mergers, sales or conveyances.
SECTION 3.05: FORM OF WARRANT AFTER ADJUSTMENTS. The form of this Warrant
need not be changed because of any adjustments in the Exercise Price or the
number or kind of the Warrant Shares, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued.
SECTION 3.06: TREATMENT OF WARRANTHOLDER. Prior to due presentment for
registration of transfer of this Warrant, the Company may deem and treat the
Warrantholder as the absolute owner of this Warrant (notwithstanding any
notation of ownership or other writing hereon) for all purposes and shall not be
affected by any notice to the contrary.
ARTICLE IV
OTHER PROVISIONS RELATING
TO RIGHTS OF WARRANTHOLDER
SECTION 4.01: NO RIGHTS AS SHAREHOLDERS; NOTICE TO WARRANTHOLDERS.
Nothing contained in this Warrant shall be construed as conferring upon the
Warrantholder or his or its transferees the right to vote or to receive
dividends or to consent to or receive notice as a shareholder in respect of any
meeting of shareholders for the election of directors of the Company or any
other matter, or any other rights whatsoever as shareholders of the Company.
The Company shall give notice to the Warrantholder by registered mail if at any
time prior to the expiration or exercise in full of the Warrants, any of the
following events shall occur:
(a) the Company shall authorize the payment of any dividend upon
shares of Common Stock payable in any securities or authorize the making of any
distribution (other than a cash dividend subject to the parenthetical set forth
in Section 3.01(c)) to all holders of Common Stock;
(b) the Company shall authorize the issuance to all holders of Common
Stock of any additional shares of Common Stock or Common Stock Equivalents or of
rights, options or warrants to subscribe for or purchase Common Stock or Common
Stock Equivalents or of any other subscription rights, options or warrants;
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, or sale or conveyance of the
property of the Company as an entirety or substantially as an entirety); or
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(d) a capital reorganization or reclassification of the Common Stock
(other than a subdivision or combination of the outstanding Common Stock and
other than a change in the par value of the Common Stock) or any consolidation
or merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
that does not result in any reclassification or change of Common Stock
outstanding) or in the case of any sale or conveyance to another corporation of
the property of the Company as an entirety or substantially as an entirety.
Such giving of notice shall be initiated (i) at least 10 Business Days (or such
shorter time as shall be practical in the circumstances) prior to the date fixed
as a record date or effective date or the date of closing of the Company's stock
transfer books for the determination of the shareholders entitled to such
dividend, distribution or subscription rights, or for the determination of the
shareholders entitled to vote on such proposed merger, consolidation, sale,
conveyance, dissolution, liquidation or winding up. Such notice shall specify
such record date or the date of closing the stock transfer books, as the case
may be. Failure to provide such notice shall not affect the validity of any
action taken in connection with such dividend, distribution or subscription
rights, or proposed merger, consolidation, sale, conveyance, dissolution,
liquidation or winding up.
SECTION 4.02: LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion impose (which shall, in
the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as and in substitution for this Warrant.
ARTICLE V
SPLIT-UP, COMBINATION
EXCHANGE AND TRANSFER OF WARRANTS
SECTION 5.01: SPLIT-UP, COMBINATION, EXCHANGE AND TRANSFER OF WARRANTS.
Subject to the provisions of Section 5.02 hereof, this Warrant may be split up,
combined or exchanged for another Warrant or Warrants containing the same terms
to purchase a like aggregate number of Warrant Shares. If the Warrantholder
desires to split up, combine or exchange Warrants, he or it shall make such
request in writing delivered to the Company and shall surrender to the Company
any Warrants to be so split up, combined or exchanged. Upon any such surrender
for a split up, combination or exchange, the Company shall execute and deliver
to the person entitled thereto a Warrant or Warrants, as the case may be, as so
requested. The Company shall not be required to effect any split up,
combination or exchange which will result in the issuance of a Warrant entitling
the Warrantholder to purchase upon exercise a fraction of a share of Common
Stock or a fractional Warrant. The Company may require such Warrantholder to
pay a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any split up, combination or exchange of Warrants.
SECTION 5.02: RESTRICTIONS ON TRANSFER. Neither this Warrant nor the
Warrant Shares may be disposed of or encumbered (any such action, a "Transfer"),
except (i) to CIBC OPCO, any successor to the business of such company, or any
officer of such company, or (ii) to any underwriter in connection with a Public
Offering of the Common Stock, provided (as to (ii)) that this Warrant is
exercised upon such Transfer and the shares of Common Stock issued upon such
exercise are sold by such underwriter as part of such Public Offering and, as to
both (i) and (ii), only in accordance with and subject to the provisions of the
Securities Act and the rules and regulations promulgated thereunder. If at the
time of a Transfer, a Registration Statement is not in effect to register this
Warrant or the Warrant Shares, the Company may require the Warrantholder to make
such representations, and may place such legends on certificates representing
this Warrant, as may be reasonably required in the opinion of counsel to the
Company to permit a Transfer without such registration.
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ARTICLE VI
REGISTRATION UNDER THE SECURITIES ACT OF 1933
SECTION 6.01: PIGGYBACK REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Subject to Section
6.06, if at any time or from time to time after November 13, 1998 and prior to
the Expiration Date, the Company proposes to register any of its securities
under the Securities Act on any form for the registration of securities under
such Act, whether or not for its own account (other than by a registration
statement on Form S-8, S-4 or other form which does not include substantially
the same information as would be required in a form for the general registration
of securities or would not be available for the Registrable Securities) (a
"Piggyback Registration"), it shall give written notice to all Holders of its
intention to do so and of such Holders' rights under this Section 6.01. Such
rights are referred to hereinafter as "Piggyback Registration Rights." Upon the
written request of any such Holder made within 10 days after receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such Holder), the Company shall include in the Registration
Statement the Registrable Securities which the Company has been so requested to
register by the Holders thereof and the Company shall keep such registration
statement in effect and maintain compliance with each Federal and state law or
regulation for the period necessary for such Holder to effect the proposed sale
or other disposition (but in no event for a period greater than 120 days).
(b) WITHDRAWAL OF PIGGYBACK REGISTRATION BY COMPANY. If, at any time
after giving written notice of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement, the Company shall determine for any reason not to
register such securities, the Company shall give written notice of such
determination to each Holder and, thereupon, shall be relieved of its obligation
to register any Registrable Securities in connection with such Piggyback
Registration. All best efforts obligations of the Company pursuant to Section
6.04 shall cease if the Company determines to terminate prior to such effective
date any registration where Registrable Securities are being registered pursuant
to this Section 6.01.
(c) PIGGYBACK REGISTRATION OF UNDERWRITTEN PUBLIC OFFERINGS. If a
Piggyback Registration involves an offering by or through underwriters, then,
(i) all Holders requesting to have their Registrable Securities included in the
Company's Registration Statement must sell their Registrable Securities to the
underwriters selected by the Company on the same terms and conditions as apply
to other selling shareholders and (ii) any Holder requesting to have his or its
Registrable Securities included in such Registration Statement may elect in
writing, not later than three Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
his or its Registrable Securities so included in connection with such
registration.
(d) PAYMENT OF REGISTRATION EXPENSES FOR PIGGYBACK REGISTRATION. The
Company shall pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to a Piggyback Registration Right
contained in this Section 6.01.
(e) PRIORITY IN PIGGYBACK REGISTRATION. If a Piggyback Registration
involves an offering by or through underwriters, the Company shall not be
required to include Registrable Shares therein if and to
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the extent the underwriter managing the offering reasonably believes in good
faith and advises each Holder requesting to have Registrable Securities included
in the Company's Registration Statement that such inclusion would materially
adversely affect such offering; provided that (i) if other selling shareholders
who are employees, officers, directors or other affiliates of the Company have
requested registration of securities in the proposed offering, the Company will
reduce or eliminate such other selling shareholders' securities on a PARI PASSU
basis with any reduction or elimination of Registrable Securities; (ii) any such
reduction or elimination (after taking into account the effect of clause (i))
shall be PRO RATA to all other holders of the securities of the Company
exercising "piggyback registration rights" similar to those set forth herein in
proportion to the respective number of shares they have requested to be
registered, and (iii) in such event, such Holders may delay any offering by them
of all Registrable Shares requested to be included (or that portion of such
Registrable Shares eliminated for such period, not to exceed 60 days, as the
managing underwriter shall request) and the Company shall file such supplements
and post-effective amendments and take such other action necessary under Federal
and state law or regulation as may be necessary to permit such Holders to make
their proposed offering for a period of 90 days following such period of delay.
SECTION 6.02: DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. Subject to Section 6.06, if, at any
time subsequent to November 13, 1998 and prior to the Expiration Date, any 25%
Holders request that the Company file a registration statement under the
Securities Act, the Company as soon as practicable shall use its best efforts to
file a registration statement with respect to all Warrant Shares that it has
been so requested to include and obtain the effectiveness thereof, and to take
all other action necessary under any Federal or state law or regulation to
permit the Warrant Shares that are then held and/or that may be acquired upon
the exercise of the Warrants specified in the notices of the Holders or holders
thereof to be sold or otherwise disposed of, and the Company shall maintain such
compliance with each such Federal and state law and regulation for the period
necessary for such Holders or holders to effect the proposed sale or other
disposition (but in no event for more than 120 days); PROVIDED, HOWEVER, the
Company shall be entitled to defer such registration for a period of up to 180
days if and to the extent that its Board of Directors shall determine that such
registration would interfere with a pending corporate transaction. The Company
shall also promptly give written notice to the Holder and the holders of any
other Warrants and/or the holders of any Warrant Shares who or that have not
made a request to the Company pursuant to the provisions of this subsection (a)
of its intention to effect any required registration or qualification and shall
use its best efforts to effect as expeditiously as possible such registration or
qualification of all other such Warrant Shares that are then held and/or that
may be acquired upon the exercise of the Warrants, the Holder or holders of
which have requested such registration or qualification, within 15 days after
such notice has been given by the Company, as provided in the preceding
sentence. The Company shall be required to effect a registration or
qualification pursuant to this subsection (a) on one occasion only.
(b) PAYMENT OF REGISTRATION EXPENSES FOR DEMAND REGISTRATION. The
Company shall pay all Registration Expenses in connection with the Demand
Registration.
(c) SELECTION OF UNDERWRITERS. If any Demand Registration is
requested to be in the form of an underwritten offering, the managing
underwriter shall be CIBC OPCO and the co-manager (if any) and the independent
pricer required under the rules of the NASD (if any) shall be selected and
obtained by the Holders of a majority of the Warrant Shares to be registered in
consultation with the Company. Such selection shall be subject to the Company's
consent, which consent shall not be unreasonably withheld. All fees and
expenses (other than Registration Expenses otherwise required to be paid) of any
managing underwriter, any co-manager or any independent underwriter or other
independent pricer required under the rules of the NASD shall be paid for by
such underwriters or by the Holders or holders whose shares are being
registered. If CIBC OPCO should
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decline to serve as managing underwriter, the Holders of a majority of the
Warrant Shares to be registered may select and obtain one or more managing
underwriters. Such selection shall be subject to the Company's consent, which
consent shall not be unreasonably withheld.
SECTION 6.03: BUY-OUTS OF REGISTRATION DEMAND. In lieu of carrying out
its obligations to effect a Piggyback Registration or Demand Registration of any
Registrable Securities pursuant to this Article VI, the Company may carry out
such obligation by offering to purchase and purchasing such Registrable
Securities requested to be registered at an amount in cash equal to 95% of the
difference between (a) the last sale price of the Common Stock on the day the
request for registration is made and (b) the Exercise Price in effect on such
day.
SECTION 6.04: REGISTRATION PROCEDURES. If and whenever the Company is
required to use its best efforts to take action pursuant to any Federal or state
law or regulation to permit the sale or other disposition of any Warrant Shares
that are then held or that may be acquired upon exercise of the Warrants, in
order to effect or cause the registration of any Registrable Securities under
the Securities Act as provided in this Article VI, the Company shall, as
expeditiously as practicable:
(a) furnish to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Registration
Statement, the Prospectus or the Prospectuses (including each preliminary
prospectus) and any amendment or supplement thereto as they may reasonably
request;
(b) enter into such agreements (including an underwriting agreement)
and take all such other actions reasonably required in connection therewith in
order to expedite or facilitate the disposition of such Registrable Securities
and in such connection, if the registration is in connection with an
underwritten offering (i) make such representations and warranties to the
underwriters in such form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions in form, scope and substance shall be
reasonably satisfactory to the underwriters) addressed to the underwriters and
the Holders covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such underwriters; (iii) obtain "cold comfort" letters and updates thereof from
the Company's accountants addressed to the underwriters such letters to be in
customary form and to cover matters of the type customarily covered in "cold
comfort" letters to underwriters and the Holders in connection with underwritten
offerings; (iv) set forth in full, in any underwriting agreement entered into,
the indemnification provisions and procedures of Section 6.05 hereof with
respect to all parties to be indemnified pursuant to said Section; and (v)
deliver such documents and certificates as may be reasonably requested by the
underwriters to evidence compliance with clause (i) above and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company; the above shall be done at each closing under such
underwriting or similar agreement or as and to the extent required thereunder;
(c) make available for inspection by one or more representatives of
the Holders of Registrable Securities being sold, any underwriter participating
in any disposition pursuant to such registration, and any attorney or accountant
retained by such Holders or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such representatives in connection with such;
(d) otherwise use its best efforts to comply with all applicable
Federal and state regulations; and take such other action as may be reasonably
necessary or advisable to enable each such Holder and each such underwriter to
consummate the sale or disposition in such jurisdiction or jurisdiction, in
which any such Holder
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or underwriter shall have requested that the Registrable Securities be sold.
Except as otherwise provided in this Agreement, the Company shall have sole
control in connection with the preparation, filing, withdrawal, amendment or
supplementing of each Registration Statement, the selection of underwriters, and
the distribution of any preliminary prospectus included in the Registration
Statement, and may include within the coverage thereof additional shares of
Common Stock or other securities for its own account or for the account of one
or more of its other security holders;
Each seller of Registrable Securities as to which any registration is
being effected shall furnish to the Company such information regarding the
distribution of such securities and such other information as may otherwise be
required by the Securities Act to be included in such Registration Statement.
SECTION 6.05: INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. In connection with each
Registration Statement relating to disposition of Registrable Securities, the
Company shall indemnify and hold harmless each Holder and each underwriter of
Registrable Securities and each Person, if any, who controls such Holder or
underwriter (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement of
any action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or other
Federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or any amendment
thereof or supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; PROVIDED, HOWEVER,
that such indemnity shall not inure to the benefit of any Holder or underwriter
(or any Person controlling such Holder or underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) on account
of any losses, claims, damages or liabilities arising from the sale of
Registrable Securities if such untrue statement or omission or alleged untrue
statement or omission was made in such Registration Statement, Prospectus or
preliminary prospectus, or such amendment or supplement, in reliance upon and in
conformity with information furnished in writing to the Company by the Holder or
underwriter specifically for use therein. The Company shall also indemnify
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities, if
requested. This indemnity agreement shall be in addition to any liability which
the Company may otherwise have.
(b) INDEMNIFICATION BY HOLDER. In connection with each Registration
Statement, each Holder shall indemnify, to the same extent as the
indemnification provided by the Company in Section 6.05(a), the Company, its
directors and each officer who signs the Registration Statement and each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) but only insofar as such losses, claims,
damages and liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration Statement, the Prospectus or preliminary prospectus or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
information furnished in writing by such Holder to the Company specifically for
use therein. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation. The Company shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above, with respect to information
so furnished in writing by such Persons specifically for inclusion in any
Prospectus, Registration Statement or preliminary prospectus or any amendment
thereof or
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supplement thereto.
(c) CONDUCT OF INDEMNIFICATION PROCEDURE. Any party that proposes
to assert the right to be indemnified hereunder will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or parties
under this Section, notify each such indemnifying party of the commencement of
such action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 6.05(a) or 6.05(b) shall be available to
any party who shall fail to give notice as provided in this Section 6.05(c) if
the party to whom notice was not given was unaware of the proceeding to which
such notice would have related and was prejudiced by the failure to give such
notice, but the omission so to notify such indemnifying party of any such
action, suit or proceeding shall not relieve it from any liability that it may
have to any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and the approval by the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the indemnified
party of such counsel, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses, except as provided below and
except for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified party
shall have the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has been
authorized in writing by the indemnifying parties, (ii) the indemnified party
shall have reasonably concluded that there may be a conflict of interest between
the indemnifying parties and the indemnified party in the conduct of the defense
of such action (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified party) or
(iii) the indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the commencement
thereof, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not be liable
for any settlement of any action, suit, proceeding or claim effected without its
written consent.
(d) CONTRIBUTION. In connection with each Registration Statement
relating to the disposition of Registrable Securities, if the indemnification
provided for in subsection (a) hereof is unavailable to an indemnified party
thereunder in respect of any losses, claims, damages or liabilities referred to
therein, then the Company shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities. The amount to be contributed by
the Company hereunder shall be an amount which is in the same proportionate
relationship to the total amount of such losses, claims, damages or liabilities
as the total net proceeds from the offering (before deducting expenses) of the
Registrable Securities bears to the total price to the public (including
underwriters' discounts) for the offering of the Registrable Securities covered
by such registration.
(e) SPECIFIC PERFORMANCE. The Company and the Holder acknowledge
that remedies at law for the enforcement of this Section 6.05 may be inadequate
and intend that this Section 6.05 shall be specifically enforceable.
SECTION 6.06: REGISTRATION ON FORM S-3. In the event that the Company
registers the Registrable Securities of all Holders on Form S-3, in accordance
with the provisions of the Act, (the "S-3 Registration"), the registration
rights set forth in Sections 6.01 and 6.02 hereof shall not be exercisable so
long as such registration remains effective. The Company will keep each Holder
of Registrable Securities advised in writing as to the initiation of such
registration and as to the completion thereof. In the event the Company
includes such Registrable Securities on Form S-3, it shall keep such
registration effective for a period of five (5) years from the date hereof or
until the holders of Registrable Securities have completed the distribution
described in the
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registration statement relating thereto, whichever first occurs. The Company
will pay all Registration Expenses in connection with such S-3 Registration.
ARTICLE VII
OTHER MATTERS
SECTION 7.01: AMENDMENTS AND WAIVERS. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waiver or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of the outstanding Registrable Securities. Holders shall
be bound by any consent authorized by this Section whether or not certificates
representing such Registrable Securities have been marked to indicate such
consent.
SECTION 7.02: COUNTERPARTS. This Warrant may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
SECTION 7.03: GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7.04: SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
SECTION 7.05: ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provisions of this Warrant, or where any provisions hereof or
thereof is validly asserted as a defense, the successful party shall be entitled
to recover reasonable attorneys' fees and disbursements in addition to its costs
and expenses and any other available remedy.
SECTION 7.06: COMPUTATIONS OF CONSENT. Whenever the consent or approval
of Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (other
than the Warrantholder or subsequent Holders if they are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
SECTION 7.07: NOTICE. Any notices or certificates by the Company to the
Holder and by the Holder to the Company shall be deemed delivered if in writing
and delivered in person or by registered mail (return receipt requested) to the
Holder addressed to him in care of CIBC Oppenheimer, CIBC Oppenheimer Tower,
World Financial Center, New York, New York 10281 or, if the Holder has
designated, by notice in writing to the Company, any other address, to such
other address, and if to the Company, addressed to it at 7435 Greenbush Avenue,
North Hollywood, California 91605. The Company may change its address by
written notice to the Holder and the Holder may change his or its address by
written notice to the Company.
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IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company under its corporate seal as of the 13th day of November, 1997.
North American Scientific, Inc.
By: /s/ L. Michael Cutrer
------------------------------
L. Michael Cutrer
President and Chief
Executive Officer
Attest:______________________
Secretary
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