EXHIBIT 10.14
STOCK PURCHASE AGREEMENT
------------------------
This Stock Purchase Agreement is entered into as of April 26, 1996, by
and between Kyowa Medex Co., Ltd. ("Investor") and Boston Biomedica, Inc., a
Massachusetts corporation (the "Company").
RECITALS
The Investor desires to purchase from the Company that number of shares
of Common Stock, $.01 par value per share, set forth in paragraph 1 hereof (the
"Shares").
The Investor is currently the exclusive distributor in Japan of the
Company's products. The Company and the Investor are currently negotiating the
terms and conditions of a formal agreement pursuant to which the Investor will
continue as the exclusive distributor of the Company's products in Japan.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Purchase of Shares; Payment. Investor hereby agrees to purchase from the
Company, and the Company hereby agrees to sell to the Investor, 235,295 Shares,
in accordance with the terms hereof. The purchase price shall be $4.25 for each
Share being acquired, or $1,000,003.75 in the aggregate. The closing of the
purchase and sale contemplated hereby shall be on a date determined by mutual
agreement of the parties, provided that the closing shall take place on or
before April 30, 1996.
2. Agreement to be Bound by Securities Laws. By executing this Stock Purchase
Agreement, the Investor agrees as follows: the Shares offered hereby have not
been and will not be registered under the United States Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder (the "1933
Act"), and Investor shall not offer or sell the Shares offered hereby within the
United States (as defined in Regulation S of the 1933 Act) or to, or for the
account or benefit of, U.S. Persons (as defined in Regulation S of the 1933 Act)
except in accordance with Regulation S of the 1933 Act, or pursuant to a
registration statement under the 1933 Act or an exemption from the registration
requirements of such Act.
3. Representations. Investor represents and warrants that:
(a) All information provided to the Corporation concerning Investor is
true and correct in all respects as of the date thereof;
(b) Investor is acquiring the Shares subscribed for hereunder for its
own account for investment and not for the account of another nor with a view
to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act, the state
securities laws of the applicable jurisdiction, or the rules and regulations
promulgated thereunder;
(c) Investor is able financially to bear the risk of losing its entire
investment, has adequate means of providing for its current needs and possible
contingencies, and has no need for liquidity of this investment;
(d) Investor has itself, or is relying on a qualified purchaser
representative who has, sufficient knowledge and expertise in business, tax and
financial matters to be able to evaluate the risks and merits inherent in
investments of this type;
(e) Investor and/or its professional adviser or purchaser representative
has received information from the Corporation with respect to all matters it
considers material to its investment decision, has had the opportunity to ask
questions of the officers of the Corporation on any matter material to its
investment decision, and all such questions have been answered to its
satisfaction;
(f) Investor acknowledges that no representations have been made to it
orally or in writing regarding the Corporation except by means of responses by
the officers of the Corporation to questions asked and written information
furnished in response to requests by Investor for such information pursuant to
paragraph 3(e) above, and by executing this Agreement, Investor acknowledges
that it is not relying upon any representations or information other than
representations or information furnished in response to questions and requests
for information under paragraph 3(e), and the results of its own investigation
or that of its financial adviser or purchaser representative; and
(g) Investor understands that an investment in the Shares involves a
high degree of risk.
Investor understands that the Corporation will rely upon these
representations and warranties and those contained in paragraph 4 in determining
its exemption from registration of the offering of the Shares under the
Securities Act and applicable state securities laws.
4. Additional Representations and Covenants. Investor certifies, represents and
warrants to, and covenants and agrees with, the Company as follows:
(a) Investor is not organized under the laws of any jurisdiction within
the United States, was not formed by a U.S. Person (as defined in Section 902(o)
of Regulation S) for the purpose of investing in Regulation S securities and is
not otherwise a U.S. Person. Investor is not, and on the closing date will not
be, an affiliate of the Company;
(b) At the time the buy order for the Shares was originated, Investor
was outside the United States and is outside of the United States as of the date
of the execution and delivery of this Agreement;
(c) No offer to purchase the Shares was made in the United States;
-2-
(d) Investor is purchasing the Shares for its own account and not for
the account or benefit of any U.S. Persons, and Investor is qualified to
purchase the Shares under the laws of its residence and the offer and sale of
the Shares will not violate the securities or other laws of such jurisdiction;
(e) Any offers and sales of the Shares by Investor permitted hereunder
shall be made in compliance with any applicable securities laws of any
applicable jurisdiction and in accordance with Rule 903 or 904, as applicable,
of Regulation S or pursuant to registration of the Shares under the 1933 Act or
pursuant to an exemption from registration;
(f) The transactions contemplated by this Agreement (a) have not been
and will not be prearranged by Investor with a purchaser located in the United
States or a purchaser which is a U.S. Person, and (b) are not and will not be
part of a plan or scheme by Investor to evade the registration provisions of the
1933 Act;
(g) Investor understands that the Shares are not registered under the
1933 Act and are being offered and sold to it in reliance on specific exemptions
from the registration requirements of Federal and State securities laws, and
that the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of Investor set forth
herein in order to determine the applicability of such exemptions and the
suitability of Investor to acquire the Shares;
(h) Investor has not conducted and shall not conduct any "directed
selling efforts," as that term is defined in Rule 902(b) of Regulation S, nor
has Investor conducted any general solicitation relating to the offer and sale
of the Shares in the United States or elsewhere;
(i) Any invitations, offers or sales of, or in respect of, the Shares by
Investor and any distribution by Investor of any documents relating to any offer
by it of the Shares will be in compliance with applicable laws and regulations
and will be made in such a manner that no prospectus need be filed and no other
filing need be made by the Company with any regulatory authority or stock
exchange in any country or any political subdivision of any country;
(j) Investor will not make any offer or sale of the Shares by any means
which would not comply with the laws and regulations of the territory in which
such offer or sale takes place or to which such offer or sale is subject or
which would in connection with any such offer or sale impose upon the company
any obligation to satisfy any public filing or registration requirement or
provide or publish any information of any kind whatsoever or otherwise undertake
or become obliged to do any act;
(k) Neither Investor nor any of its affiliates has entered into, has the
intention of entering into, or will during the Restricted Period enter into, any
put option, short position or other similar instrument or position with respect
to the Shares or securities of the same class as the Shares;
-3-
(l) Investor has an overall commitment to investments which are not
readily marketable which is not disproportionate to the Investor's net worth and
which, with the investment in the Shares, will not cause such overall commitment
to become excessive;
(m) Investor was not formed for the specific purpose of making this
investment, has been in existence for more than one year and is investing less
than 25% of its capital in the Corporation; and
(n) Investor is a corporation or other entity not formed for the
specific purpose of acquiring the Shares, and Investor has total assets in
excess of Five Million United States Dollars ($5,000,000).
5. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Investor that:
(a) Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all required corporate power and
authority to own its property, to carry on its business as presently conducted
and to carry out the transactions contemplated hereby. The Company is qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where such qualification is required.
(b) Subsidiaries. The Company has no investments in any other
corporation or business organization except its investments in the following
Subsidiaries:
Name of Subsidiary Place of Incorporation
- ------------------ ----------------------
BBI - North American Clinical Connecticut
Laboratories, Inc.
BTRL Contracts and Services, Inc. Maryland
(d/b/a) Biotech Research Laboratories
Each Subsidiary is duly organized, validly existing and in good standing under
the laws of the state of its incorporation and is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where such
qualification is required. Each Subsidiary has all required corporate power and
authority to own its property and to carry on its business as presently
conducted. All of the outstanding shares of capital stock of each Subsidiary are
owned by the Company, which has good and marketable title thereto free of any
lien, restriction or encumbrance, and said shares have been duly issued and are
validly outstanding.
(c) Capitalization. The authorized capital stock of the Company
consists of 15,000,000 shares of Common Stock, .01 par value, of which 5,280,835
shares are validly issued and outstanding, fully paid and non-assessable.
-4-
(d) Authorization of Transaction. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate or other action of the Company and it is the valid and binding
obligation of the Company, enforceable in accordance with its terms, subject to
laws of general application relating to bankruptcy, insolvency and the relief of
debtors. The issuance of the Shares pursuant to the terms of this Agreement
shall be duly and validly authorized, and no further approval or authority of
the shareholders or the directors of the Company or of any governmental
authority or agency will be required for the issuance and sale of the Shares as
contemplated by this Agreement. When issued and sold to the Investors, the
Shares will be duly and validly issued, fully paid and non-assessable.
(e) Approvals; Compliance With Laws. Neither the Company nor any
Subsidiary is in violation of its Charter or by-laws as of the date hereof. The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby (i) do not require any approval or consent of, or filing
with, any governmental agency or authority in the United States of America or
otherwise which has not been obtained and which is not in full force and effect
as of the date hereof, (ii) will not conflict with or constitute a breach or
violation of the respective Charters or by-laws of the Company or any
Subsidiary, and (iii) will not result in a violation of or any law or regulation
to which they are subject.
(f) Condition of Properties. All of the Company's and its Subsidiaries'
properties, machinery and equipment which are necessary to the business of the
Company or any Subsidiary is in good condition and repair.
(g) Payment of Taxes. The Company and each of its Subsidiaries have
filed all federal, state and local income, excise or franchise tax returns, real
estate and personal property tax returns, sales and use tax returns and other
tax returns required to be filed by them and have paid all taxes owing by them
except taxes which have not yet accrued or otherwise become due. Neither the
Internal Revenue Service nor any other taxing authority is now asserting or, to
the knowledge of the Company or any Subsidiary, threatening to assert against
the Company or any Subsidiary any deficiency or claim for additional taxes or
interest thereon or penalties in connection therewith.
(h) Compliance with Instruments. Neither the Company nor any Subsidiary
is in default in the performance of any material obligation, agreement or
condition contained in any bond or debenture or any other evidence of
indebtedness or any indenture or loan agreement of the Company or any Subsidiary
which default affords to any person the unconditional right to accelerate any
material indebtedness or terminate any material right or agreement of the
Company or any Subsidiary. Neither the execution and delivery of this Agreement,
nor the fulfillment of the terms herein set forth, nor the consummation of the
transactions contemplated hereby, will (i) conflict with or constitute a breach
of, default under or violation of any agreement, indenture, mortgage, deed of
trust or other material instrument or undertaking by which the Company or any of
the Subsidiaries is bound or to which they or any of their respective properties
are subject, or (ii) result in a violation of any court decree binding upon the
Company or any of the Subsidiaries, or (iii) result in the creation or
imposition of any material
-5-
lien, charge or encumbrance upon any property or assets of the Company or any of
the Subsidiaries.
(i) Litigation. There is no litigation pending or, to the knowledge of
the Company, any Subsidiary, threatened against the Company or any Subsidiary
and there are no outstanding court orders, court decrees, or court stipulations
to which the Company or any of its Subsidiaries is a party which question this
Agreement or affect the transactions contemplated hereby, or which will or could
result in any materially adverse change in the business, properties, operations,
prospects, assets or in the condition, financial or otherwise, of Company or any
of its Subsidiaries. Neither the Company nor any Subsidiary has reason to
believe that any such action, suit, proceeding or investigation may be brought
against the Company or any of its Subsidiaries.
(j) Permits and Licenses; Compliance with Law. The Company and each of
its Subsidiaries have all necessary franchises, permits, licenses and other
rights and privileges necessary to permit them to own their properties and to
conduct their present business. Neither the Company nor any Subsidiary is in
violation of any law, regulation, authorization or order of any public authority
relevant to the ownership of its properties or the carrying on of its present
business which violation would have a material adverse effect on the Company and
its subsidiaries taken as a whole.
(k) Descriptive Memorandum. The Company's Descriptive Memorandum dated
June 1995 furnished to the Investor prior to the date hereof describes all
material aspects of the business of the Company and its Subsidiaries, contains
no untrue or misleading statement of a material fact or any omission to state a
fact material to the business of the Company and its Subsidiaries or necessary
to make the statements contained therein not misleading, except however, with
respect to the financial projections contained therein, which have been revised
and furnished to the Investor and are included as Exhibit A hereto.
(l) Financial Projections. Attached hereto as Exhibit A are financial
projections dated April 10, 1996 prepared by the Company. The Company believes
that the assumptions upon which such financial projections are based are
reasonable. However, there can be no assurance that actual results will not vary
materially from those contained in the projections. Investor acknowledges that
it has received and has read and understands the risk factors described in the
Company's Descriptive Memorandum dated June 1995. Investor further acknowledges
that actual results may differ materially from those contained in the financial
projections as a result of a number of important factors, including those risk
factors described in the Company's Descriptive Memorandum.
6. Registration Rights. The Company hereby grants the following rights with
respect to the Shares.
(a) "Piggy-Back" Registration. If at any time after the expiration of
the one-year period following the Company's initial public offering, the Company
shall determine to register under the Securities Act of 1933 any of its common
stock (other than on Form S-8 or Form S-4
-6-
or their then equivalents relating to shares of common stock issuable in
connection with any stock option or other employee benefits plan or shares of
common stock to be issued solely in connection with an acquisition of any entity
or business), it shall send to Investor written notice of such determination
and, if within 5 days after receipt of such notice, Investor so requests in
writing, the Company shall include in such registration statement all or any
part of the Shares as to which Investor requests inclusion in the registration
statement. The Company shall cause the managing underwriter of the proposed
offering to offer the Shares on the same terms and conditions as the capital
stock to be included in the offering by the Company. Notwithstanding the
foregoing, if in connection with any underwritten offering, the managing
underwriter shall impose a limitation on the number of shares of common stock
which may be included in any such registration statement because, in its
judgment, such limitation is necessary to effect an orderly public distribution
of the common stock and to maintain a stable market for the securities of the
Company, then the Company shall be obligated to include in such registration
statement only such limited portion (which may be none) of the Shares with
respect to which Investor has requested registration. The obligations of the
Company under this section shall expire and terminate at such time as Investor
shall be entitled to sell such securities without restriction and without
registration under the Securities Act, pursuant to subparagraph (k) of Rule 144
as promulgated by the Securities and Exchange Commission.
(b) Demand Registration Rights. One time after the expiration of the
one-year period following the Company's initial public offering, within sixty
(60) days of the written request of the Investor, the Company shall file a
Registration Statement on Form S-3 (or any successor Form) under the Securities
Act of 1933, and use its best efforts to cause the Shares to be registered for
resale by the Investor under such Act and to be qualified for resale under
applicable state securities laws, as necessary. The Company shall maintain the
effectiveness of such Registration Statement under the Act and shall maintain
such qualifications for a period of three months after the effective date of
such Registration Statement. The Company shall only be obligated to register the
Shares under this subsection if the Company is eligible to use a Form S-3
Registration Statement (or a successor Form).
(c) Expenses. In the case of a registration under subsection (a), the
Company shall bear all costs and expenses of each such registration, including,
but not limited to, printing, legal and accounting expenses, Securities and
Exchange Commission and NASD filing fees, and "Blue Sky" fees and expenses;
provided, however, that the Company shall have no obligation to pay or otherwise
bear any portion of the underwriters commissions or discounts attributable to
the Shares, or the fees and expenses of any counsel for Investor in connection
with the registration of the Shares. In the case of a registration under
subsection (b), the Investor shall bear all the costs and expenses of such
registration.
7. Restrictions on Transfer.
(a) As long as the Distributor Agreement of even date between the
Company and the Investor (the "Distributor Agreement") remains in effect,
subject and in addition to any other restrictions provided herein on the
transferability of the Shares, the Investor shall not transfer the Shares until
the expiration of the earlier of (i) the one-year period following consummation
of an
-7-
initial public offering of the Company's Common Stock and (2) two years from the
date hereof, provided, however, that the Investor may transfer the Shares to an
"affiliate" of the Investor (which, for purposes hereof, means an entity (which
is not a U.S. Person) controlled by, or under common control with, the
Investor), provided that such transfer is in compliance with Regulation S of the
1933 Act.
(b) Notwithstanding anything to the contrary contained herein, in no
event shall the Shares be offered or sold by the Investor to or for the account
or benefit of any U.S. Person prior to the expiration of the earlier of (i) the
one-year period following consummation of an initial public offering of the
Company's Common Stock and (2) two years from the date hereof (the "Restricted
Period"). However, the Investor shall not at any time transfer the Shares to any
person or entity engaged in a business which is in any way competitive with the
Company's business.
8. Restrictive Legend. The certificate(s) evidencing the Shares shall bear a
restrictive legend, substantially in the following form:
"THE SHARES OF COMMON STOCK EVIDENCED HEREBY HAVE NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT"), AND MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES (AS DEFINED
IN REGULATION S OF THE 1933 ACT) OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S OF
THE 1933 ACT) EXCEPT IN ACCORDANCE WITH REGULATION S OF THE
1933 ACT OR PURSUANT TO REGISTRATION UNDER OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT."
"TRANSFER OF THE SHARES OF COMMON STOCK EVIDENCED HEREBY IS
SUBJECT TO RESTRICTION UNDER THE TERMS AND CONDITIONS OF A
CERTAIN STOCK PURCHASE AGREEMENT."
9. Transfer and Registration of Shares. The Company shall not register in the
Company's stock transfer records any transfer of the Shares which is not made in
accordance with Regulation S of the 1933 Act.
10. Authorization of Agreement. Investor represents that: (i) it is duly
organized, validly existing and in good standing in its jurisdiction of
organization and has all the requisite power and authority to invest in the
Shares as provided herein; (ii) such investment does not result in any violation
of, or conflict with, any term of the charter, bylaws or other governing
documents of the Investor or any instrument to which it is bound or any law or
regulation applicable to it; (iii) such investment has been duly authorized by
all necessary action on behalf of the Investor; and (iv) this Stock Purchase
Agreement has been duly executed and delivered on behalf of the Investor and
constitutes a legal, valid and binding agreement of the Investor. The foregoing
-8-
representations and warranties shall be true and accurate as of the date hereof
and as of the date of delivery of the purchase price to the Corporation and
shall survive such delivery.
11. Indemnity. Investor agrees to indemnify and hold harmless the Corporation,
its directors and officers and its affiliates from and against all damages,
losses, costs and expenses (including reasonable attorneys' fees) which they may
incur by reason of the failure of the Investor to fulfill any of the terms,
conditions or agreements of this Stock Purchase Agreement, or by reason of any
breach of the representations and warranties by the Investor herein or in any
document provided by Investor to the Corporation.
12. Repurchase Rights. Investor shall sell the Shares to the Company and the
Company shall buy the Shares from the Investor if the Distributor Agreement is
terminated or expires prior to the Company's initial public offering ("IPO") of
securities upon the terms and conditions hereinafter set forth (the "Repurchase
Rights"). The purchase price for such Shares under the Repurchase Rights shall
be $4.25 per share or $1,000,003.75 in the aggregate, subject to proportionate
adjustment in the event of any stock dividends, stock splits, recapitalizations
or similar events. The obligation to sell and purchase the Shares under the
Repurchase Rights may be exercised by either Investor or the Company during the
three (3) month period following termination or expiration of the Distributor
Agreement, provided the Company's IPO has not been completed, by written notice
to the other party of the exercise of the Repurchase Rights. The purchase price
for the Shares shall be paid by the Company in three equal installments of
$333,334.58 payable one (1) month, thirteen (13) months and twenty-five (25)
months following such notice. Certificates representing all such Shares, duly
endorsed for transfer, shall be delivered in escrow to the Company's counsel,
Brown, Rudnick, Freed & Gesmer, Attn: Steven R. London, Esq., One Financial
Center, Boston, MA 02111 in exchange for the initial installment of the purchase
price. Upon receipt of notice from the Investor that it has received the full
amount of the purchase price for the Shares, the Company's counsel shall deliver
the certificates evidencing the Shares to the Company. In the event Investor
fails to tender the Shares or the certificate(s) evidencing the Shares, the
Company may cancel the Shares and the certificate(s) representing the Shares and
deposit the purchase price in a bank account for the benefit of the Investor,
whereupon such Shares shall be for all purposes canceled, and neither the
Investor nor any transferee shall have any rights as stockholders of the Company
for any purpose, including, without limitation, dividend and voting rights. In
addition to any other legal or equitable remedies which it may have, the Company
may enforce its rights by actions for specific performance (to the extent
permitted by law).
13. Miscellaneous.
(a) This Agreement may not be modified or amended except in writing.
(b) This Agreement shall be governed by and interpreted under the laws
of the Commonwealth of Massachusetts, without regard to the choice of law
principles thereof.
-9-
14. Record Ownership. The Shares will be registered in the name of Kyowa Medex
Co., Ltd., unless otherwise indicated in the space provided below:
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement on the day and year first above written.
Kyowa Medex Co., Ltd.
By: /s/ Akira Furuya 4/30-96
------------------------------
Akira Furuya, Ph.D., President
Boston Biomedica, Inc.
By: /s/ Richard T. Schumaker 4/30/96
---------------------------------
Richard T. Schumacher, President
-10-