-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JMLQb+T0WI03YIUOXRwe6zNFN2mjdDceeiW/6iyBm5dyzIYloEKjBxe01ekP4Yt5 xWuQlOYVjN1llnP1SJe70Q== 0000910213-97-000001.txt : 19971103 0000910213-97-000001.hdr.sgml : 19971103 ACCESSION NUMBER: 0000910213-97-000001 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970102 DATE AS OF CHANGE: 19971030 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BRADLEY PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000864268 STANDARD INDUSTRIAL CLASSIFICATION: 2834 IRS NUMBER: 222581418 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-43138 FILM NUMBER: 97500332 BUSINESS ADDRESS: STREET 1: 383 RTE 46 WEST CITY: FAIRFIELD STATE: NJ ZIP: 07004 BUSINESS PHONE: 9738821505 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BERLEX LABORATORIES INC CENTRAL INDEX KEY: 0001029862 STANDARD INDUSTRIAL CLASSIFICATION: FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 110 E HANOVER AVE CITY: CEDAR KNOLLS STATE: NJ ZIP: 07927 MAIL ADDRESS: STREET 1: 110 E HANOVER AVE CITY: CEDAR KNOLLS STATE: NJ ZIP: 07927 SC 13D 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 BRADLEY PHARMACEUTICALS, INC. (Name of Issuer) COMMON STOCK, NO PAR VALUE (Title of Class of Securities) 10457 6 10 3 (CUSIP Number) Berlex Laboratories, Inc. 110 East Hanover Avenue Cedar Knolls, New Jersey 07929 ATTENTION: Frank Curtis, Esq. (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) - with a copy to - Frederic M. Tudor, Esq. Sills Cummis Zuckerman Radin Tischman Epstein & Gross, P.A. One Riverfront Plaza Newark, New Jersey 07102 (201) 643-7000 DECEMBER 23, 1996 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-(b)(3) or (4), check the following box . Check the following box if a fee is being paid with this statement . The Exhibit Index is located on page ____ of this filing.
CUSIP No. 10457 6 10 3 13D Page 2 of 20 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON BERLEX LABORATORIES, INC. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) (b) 3 SEC USE ONLY 4 SOURCE OF FUNDS* SC/OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF 7 SOLE VOTING POWER SHARES 1,000,000 BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 1,000,000 10 SHARED DISPOSITIVE POWER 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13% 14 TYPE OF REPORTING PERSON* CO
SEC 1746(6-60) *SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 10457 6 10 3 13D Page 3 of 20 Pages 15 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SCHERING BERLIN INC. 16 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) (b) 17 SEC USE ONLY 18 SOURCE OF FUNDS* SC/OO 19 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 20 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF 21 SOLE VOTING POWER SHARES 1,000,000 BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 22 SHARED VOTING POWER 0 23 SOLE DISPOSITIVE POWER 1,000,000 24 SHARED DISPOSITIVE POWER 0
25 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 26 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 27 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13% 28 TYPE OF REPORTING PERSON* CO
SEC 1746(6-60) *SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D This Schedule 13D is filed on behalf of Berlex Laboratories, Inc., a Delaware corporation, and its affiliate. ITEM 1. SECURITY AND ISSUER The class of equity securities to which this Statement on Schedule 13D relates is the Class A Common Stock (the "Class A Common Stock") of Bradley Pharmaceuticals, Inc. (the "Issuer"), with principal executive offices located at 383 Route 46 West, Fairfield, N.J. 07004. ITEM 2. IDENTITY AND BACKGROUND Berlex Laboratories, Inc., a Delaware corporation ("Berlex"), has its principal offices at 110 East Hanover Avenue, Cedar Knolls, N.J. 07929. Berlex is engaged in the research, manufacture and marketing of pharmaceutical products in the fields of cardiovascular medicine, endocrinology and fertility control, diagnostic imaging, oncology and central nervous system disorders. Berlex is a wholly-owned subsidiary of Schering Berlin Inc., a Delaware corporation ("Schering Berlin" and, together with Berlex, the "Reporting Persons"), with its principal offices at 110 East Hanover Avenue, Cedar Knolls, N.J. 07929. Schering Berlin is a wholly-owned subsidiary of Schering AG, Germany, a company of the Federal Republic of Germany. Schering Berlin and Schering AG, Germany are engaged in the discovery, development, manufacture and marketing of pharmaceutical and health care products. To the best knowledge of the Reporting Persons, during the last five years, neither Reporting Person has been (a) convicted in a criminal proceeding, or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws. Information regarding the directors and executive officers of each Reporting Person is set forth on Schedule 1 attached hereto, which Schedule is incorporated herein by reference. During the last five years, to the best knowledge of the Reporting Persons, no person named on Schedule 1 has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Pursuant to a Purchase Agreement dated as of November 10, 1993, as amended (the "Purchase Agreement"), Berlex sold certain intellectual property rights and other assets relating to certain cough and cold products to the Issuer. The purchase price for these assets was to be paid by the Issuer in installments over time. On December 20, 1996, Berlex and the Issuer entered into Amendment No. 5 to Purchase Agreement ("Amendment No. 5"). Pursuant to Amendment No. 5, (a) Berlex agreed, among other things, to reduce the total payments and to restructure the remaining payments due under the Purchase Agreement, and (b) the Issuer agreed, among other things, to issue 1,000,000 shares of Class A Common Stock to Berlex. The effectiveness of Amendment No. 5 was subject to the satisfaction of certain conditions precedent. These conditions precedent were satisfied on December 23, 1996 and 1,000,000 shares of Class A Common Stock were issued to Berlex on that date. ITEM 4. PURPOSE OF TRANSACTION Berlex acquired the Class A Common Stock for investment purposes in connection with Amendment No. 5 (as described in Item 3). Berlex intends continuously to review its investment in the Issuer. In reaching any decision with respect to such investment, Berlex will take into consideration various factors, such as the Issuer's business prospects and financial position, other developments concerning the Issuer, the price level of the Class A Common Stock, available opportunities to acquire or dispose of the Class A Common Stock or realize trading profits, conditions in the securities markets, and general economic and industry conditions. Depending upon the results of its review of any or all of the aforementioned factors, Berlex may decide to purchase additional Common Stock in the open market, through privately negotiated transactions with third parties or otherwise, or to sell at any time, in the open market, through privately negotiated transactions with third parties or otherwise, all or a portion of the Class A Common Stock now owned or hereafter acquired by Berlex, including sales in the open market by Berlex upon the effectiveness (subject to the Issuer's right of first offer as described in Item 6) of a registration statement relating to Berlex's Class A Common Stock, which registration statement is to be filed by the Issuer pursuant to Amendment No. 5 (as described in Item 6). Other than as described above, neither Reporting Person has any present plans or proposals which relate to or would result in any transaction, change or event specified in clauses (a) through (j) of Item 4 of the Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE COMPANY (a) The Reporting Persons are the beneficial owners of 1,000,000 shares of Class A Common Stock representing approximately 13% of the total issued and outstanding Class A Common Stock of the Issuer as of December 19, 1996. The calculation of the foregoing percentage is based upon the number of shares of Class A Common Stock of the Issuer as of December 19, 1996, as represented by the Issuer. (b) Berlex possesses the sole power to vote and the sole power to dispose of all 1,000,000 shares of Class A Common Stock. (c) To the best knowledge of the Reporting Persons, except as described herein, there have been no transactions by any Reporting Person or by any other person named on Schedule 1 attached hereto in securities of the Issuer during the past 60 days. (d) Berlex has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Class A Common Stock owned by it. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE COMPANY Pursuant to Section 4 of Amendment No. 5, Berlex has agreed that prior to selling, transferring or assigning any of its shares of Class A Common Stock (other than a sale in accordance with Rule 144), it shall provide the Issuer the opportunity to purchase the shares it proposes to sell at the Sales Price described below. The Issuer's right to purchase any offered shares is subject to, and must be exercised in accordance with, the provisions of Section 4 of Amendment No. 5. The Issuer shall not have the right to purchase any offered shares if the Issuer's Class A Common Stock is not listed on NASDAQ or a national securities exchange. In addition, Berlex has been granted certain registration rights pursuant to Section 5 of Amendment No. 5. The Issuer has agreed to file a registration statement relating to Berlex's shares of Class A Common Stock not later than April 30, 1997, and to use its best efforts to cause such registration statement to be declared effective as soon thereafter as reasonably practicable. The Issuer will be responsible for the registration expenses in connection with such registration. Berlex will also have the right to participate in all registrations of Class A Common Stock by the Issuer on behalf of itself or another shareholder of the Issuer. The foregoing are summaries of the pertinent provisions of Amendment No. 5, which pertinent provisions are filed as Exhibit A attached hereto and are incorporated herein by reference. The foregoing summaries are qualified in their entireties by reference to such Exhibit. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The following is filed as an Exhibit to this Amendment: Exhibit A -Sections 4 and 5 of Amendment No. 5 to Purchase Agreement, dated as of December 20, 1996 between Bradley Pharmaceuticals, Inc. and Berlex Laboratories, Inc. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 31, 1996 BERLEX LABORATORIES, INC. By:/s/ JOHN NICHOLSON ---------------------------- Name: John Nicholson Title: Treasurer After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 31, 1996 SCHERING BERLIN INC. By:/s/ JOHN NICHOLSON ----------------------------- Name: John Nicholson Title: Treasurer SCHEDULE 1
A. EXECUTIVE OFFICERS AND DIRECTORS OF BERLEX LABORATORIES, INC. The name, business address, citizenship and present principal occupation or employment (in addition to any set forth in Section B of this Schedule 1) of each executive officer and director of Berlex Laboratories, Inc. is set forth below. Lutz Lingnau Germany Chairman of the Board of Schering Berlin Inc. Directors, President, Chief 110 East Hanover Avenue Executive Officer and, Cedar Knolls, NJ 07927 Member of Executive Committee Robert A. Chabora USA Director, Member of Schering Berlin Inc. Executive Committee, Vice 110 East Hanover Avenue President and Secretary Cedar Knolls, NJ 07927 Jorge Engel Germany Director, Member of Berlex Laboratories, Inc. Executive Committee and 110 East Hanover Avenue Vice President Cedar Knolls, NJ 07927 Wolfgand Kunze USA Director, Member of Schering Berlin Inc. Executive Committee and 110 East Hanover Avenue Vice President Cedar Knolls, NJ 07927 Elise Klein USA Member of Executive Berlex Laboratories, Inc. Committee and Vice 110 East Hanover Avenue President Cedar Knolls, NJ 07927 Dr. Jeff Latts USA Member of Executive Berlex Laboratories, Inc. Committee 110 East Hanover Avenue Cedar Knolls, NJ 07927 Robert Milos USA Member of Executive Schering Berlin Inc. Committee and Vice 110 East Hanover Avenue President Cedar Knolls, NJ 07927 Dr. Joseph Reiser USA Member of Executive Berlex Laboratories, Inc. Committee 110 East Hanover Avenue Cedar Knolls, NJ 07927 Howard Robin USA Member of Executive Berlex Laboratories, Inc. Committee and Vice 110 East Hanover Avenue President Cedar Knolls, NJ 07927 Dr. Dale Stringfellow USA Member of Executive Berlex Laboratories, Inc. Committee 110 East Hanover Avenue Cedar Knolls, NJ 07927 Tony Zook USA Member of Executive Berlex Laboratories, Inc. Committee 110 East Hanover Avenue Cedar Knolls, NJ 07927 John Nicholson USA Treasurer Schering Berlin Inc. 110 East Hanover Avenue Cedar Knolls, NJ 07927 Dr. Allan Rudzik Canada Vice President Schering Berlin Inc. 110 East Hanover Avenue Cedar Knolls, NJ 07927 Lutz Lingnau Germany President, Chief Executive Officer Schering Berlin Inc. and Director 110 East Hanover Avenue Cedar Knolls, NJ 07927 Robert A. Chabora USA Vice-President; Secretary and Schering Berlin Inc. General Counsel 110 East Hanover Avenue Cedar Knolls, NJ 07927 Wolfgang Kunze USA Vice-President and Director Schering Berlin Inc. 110 East Hanover Avenue Cedar Knolls, NJ 07927 Robert C. Milos USA Vice-President Schering Berlin Inc. 110 East Hanover Avenue Cedar Knolls, NJ 07927 John Nicholson USA Treasurer Schering Berlin Inc. 110 East Hanover Avenue Cedar Knolls, NJ 07927 Dr. Hubertus Erlen Germany Chairman of the Board of Directors; Schering AG, Germany Executive Director of Schering AG, Millerstrasse 178 Germany D-13350 Berlin Germany Dr. Ulrich Koestlin Germany Director; Executive Director of Schering AG, Germany Schering AG, Germany Millerstrasse 178 D-13350 Berlin Germany George Montgomery, Jr. USA Director; Senior Vice-President of Hambracht & Quist Hambrecht & Quist 1 Bush Street San Francisco, CA Prof. Klaus Pohle Germany Director; Vice-Chairman of the Board Schering AG, Germany of Executive Directors of Schering Millerstrasse 178 AG, Germany D-13350 Berlin Germany Dr. Allan Rudzik Canada Director Schering Berlin Inc. 110 East Hanover Avenue Cedar Knolls, NJ 07927 Dr. Guenter Stock Germany Director; Executive Director of Schering AG, Germany Schering AG, Germany Millerstrasse 178 D-13350 Berlin Germany
EXHIBIT INDEX EXHIBIT PAGE A - Sections 4 and 5 of Amendment No. 5 to [__] Purchase Agreement, dated as of December 20, 1996 between Bradley Pharmaceuticals, Inc. and Berlex Laboratories, Inc. EXHIBIT A For purposes of this Exhibit A, the following terms have the following meanings given them in Amendment No. 5: "Business Day" means any day other than a Saturday or Sunday or a day on which banks in the City of New York are neither permitted nor required to close by law. "Purchaser" means Bradley Pharmaceuticals, Inc. "Seller" means Berlex Laboratories, Inc. "Shares" means one million (1,000,000) shares of the Class A Common Capital Stock of Purchaser to be issued by Purchaser to Seller pursuant to Amendment No. 5. A. SECTION 4 OF AMENDMENT NO. 5. 4. RESTRICTIONS ON TRANSFER OF SHARES. Seller acknowledges that the Shares cannot be sold or transferred except pursuant to an effective registration statement under the Act as defined in Section 5 of this Amendment or a valid exemption from such registration. Seller agrees that prior to Seller offering for sale, transfer or assignment some or all of the Shares in a private sale (which shall be deemed to exclude sales pursuant to Rule 144) either through a sale on NASDAQ or on a national securities exchange (an "Open Market Sale") or a sale at which the price per share is determined or to be determined by an agreement, written or otherwise, between Seller and the prospective buyer of such shares, not on NASDAQ or on a national securities exchange (an "Agreed Upon Sale"), (Shares to be offered for sale by Seller are herein referred to as the "Offered Shares"), Seller shall provide Purchaser with the opportunity to purchase the Offered Shares at the Sales Price (herein defined). Purchaser shall exercise such opportunity by making payment of cash to Seller within five Business Days from Purchaser's receipt of the Sales Notice (herein defined) provided that Purchaser shall, at Seller's request, provide prior to such payment evidence reasonably satisfactory to Seller that (A) the purchase of such Offered Shares by Purchaser will not constitute a purchase in violation of applicable corporate or other applicable law and (B) there will not occur within ninety-one (91) days after the date of such payment any of the events described in Section 11.01(iv) or (v) hereof. In the event Seller makes such a request, such five (5) Business Day period shall be extended by such time as is reasonably required for Purchaser to comply with (A) and (B) above (but in no event more than two (2) additional Business Days). If Purchaser fails to pay for the Offered Shares within five (5) Business Days (as the same may be extended) of Purchaser's receipt of the Sales Notice, Seller may sell such Offered Shares during the next thirty (30) days, in the case of an Agreed Upon Sale, or ninety (90) days in the case of an Open Market Sale, free of any right whatsoever of Purchaser to purchase the Offered Shares; provided however, that the sale of the Offered Shares shall, on an Open Market Sale, be made on NASDAQ or on a national securities exchange and in the event of an Agreed Upon Sale be made at a price not less than the Offered Price (as defined below). In the event Seller does not sell the Offered Shares within such thirty (30) (or ninety (90)) day period, the rights contained in this Section 4 shall continue to apply to any proposed private sale by Seller of the Shares as if no Sales Notice had been given. "Sales Price" means (i) in the case of an Open Market Sale, the price per share which is equal to the average of the bid and asked price published in the Wall Street Journal on the Business Day before the Sales Notice is sent by Seller to Purchaser (or if there is no bid and asked price on such last Business Day, on the most recent day on which a bid and asked price had been published in the Wall Street Journal) or (ii) in the case of an Agreed Upon Sale, the price per share at which Seller proposes to sell the Offered Shares (the "Offered Price"). The Sales Notice shall be a written notice entitling Purchaser to purchase the Offered Shares within such five Business Day period and may be sent to Purchaser by fax, overnight mail (by federal express, DHL or some other similar service), personal delivery and/or certified mail, return receipt requested and, in the case of an Agreed Upon Sale, contain the price per share at which Seller proposes to sell the Offered Shares. Purchaser's right to buy the Offered Shares shall not apply if the Purchaser's common stock is not listed on NASDAQ or any national securities exchange. The only restrictive legend to be included on the Shares shall be the following legend: "The shares of Class A Common Stock represented by the Certificate have not been registered under the Securities Act of 1933, and cannot be sold or transferred unless and until they are so registered, or unless an exemption is then available." Upon the request of Seller, after the effectiveness of the Registration Statement, such restrictive legend shall be removed from the Certificates then owned by Seller. No buyer of any of the Shares shall have any obligation to determine whether Seller has complied with the provisions of Section 4 hereof and no claim can be asserted against any such buyer in connection therewith, provided that the preceding part of this sentence shall not in any manner excuse any breach by Seller of its obligations to comply with Section 4 hereof. Once the Shares are sold to a third party, Purchaser shall have no rights under this Section 4 hereof with respect to such transferred Shares. B. SECTION 5 OF AMENDMENT NO. 5. 5. REGISTRATION RIGHTS. 5.1 DEFINED TERMS. As used in this Section 5 the following terms shall have the following respective meanings: (a) "Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time; (b) "Commission" shall mean the Securities and Exchange Commission, or any other federal agency at the time administering the securities laws; (c) "Prospectus" shall mean any preliminary Prospectus and final Prospectus (as such may be amended or supplemented) which constitutes Part I of a Registration Statement filed with the Commission; (d) "Registration Expenses" shall mean all expenses arising out of or related to the preparation, filing, amendment(s) and supplementing(s) of a Registration Statement, provided, however, that Registration Expenses shall not include underwriting commissions, fees and discounts, if any, attributable solely to the inclusion of Seller's Shares in such Registration Statement, and any legal fees and disbursements for counsel to Seller; (e) "Registration Statement" shall mean a registration statement filed by the Purchaser with the Commission for a public offering and sale of securities of the Purchaser. 5.1 PURCHASER'S REGISTRATION. (a) Purchaser agrees that at Purchaser's sole expense, (i) Purchaser shall, no later than April 30, 1997, file on its behalf and on behalf of Seller with respect to the Shares a registration statement in accordance with the Act; and (ii) Purchaser shall use its best efforts to cause such Registration Statement to be declared effective by the Commission as soon thereafter as reasonably practicable. (b) In addition, whenever Purchaser proposes to register any of its Class A Common Stock (or securities convertible into or exercisable for its Class A Common Stock) under the Act for its own account or the account of any stockholder of Purchaser (a "Piggyback Registration"), Purchaser shall give prompt notice to Seller of its intention to effect such a registration and, subject to the remainder of this subsection (b), shall include in such registration all Shares with respect to which Purchaser has received a written request from Seller (which request shall specify the number of Shares for inclusion therein) within thirty (30) days after receipt by Seller of Purchaser's notice. If a Piggyback Registration involves an underwritten offering and if the managing underwriter in good faith advises Purchaser (in writing) that in its opinion the number of securities requested to be included in such Piggyback Registration exceeds the number that can be sold in such offering without materially adversely affecting the marketability of such offering or the price at which such securities can be sold, then Purchaser shall be required to include in such Piggyback Registration the maximum number of shares that such underwriter advises can be included, allocated PRO RATA on the basis on the number of shares each stockholder (including Seller) and Purchaser requests be included in such registration. 5.3 REGISTRATION PROCEDURES. With respect to Purchaser's obligations under this Section 5, if the Purchaser is required to use its best efforts to effect and/or continue the registration of the Shares under the Act (whether in connection with a Piggyback Registration or otherwise), the Purchaser shall: (a) File with the Commission a Registration Statement with respect to such Shares and subject to Section 5.4(b) below, use its best efforts to cause that Registration Statement to become and remain effective; (b) As expeditiously as possible prepare and file with the Commission any amendments and supplements to the Registration Statement and the prospectus included in the Registration Statement as may be necessary to keep the Registration Statement effective for a period of not less than twelve (12) months plus any delay described in Section 5.4(b), or through January 15, 1999, whichever date is later and in either case plus a period equal to the Delay Period (as herein defined); (c) As expeditiously as possible furnish to Seller such reasonable numbers of copies of the Prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as the Seller may reasonably request in order to facilitate the sale or other disposition of the Shares owned by the Seller; (d) As expeditiously as possible use its best efforts to register or qualify the Shares covered by the Registration Statement under the securities or Blue Sky laws of such states or jurisdictions as the Seller or the managing underwriter (or sole underwriter, as appropriate) deems appropriate, and do any and all other acts and things that may be necessary or desirable to enable the Seller to consummate the public sale or other disposition in such jurisdictions of the Shares owned by the Seller (including, without limitation, causing all Shares to be listed on NASDAQ or on each securities exchange on which similar securities issued by Purchaser are then listed); provided, however, that the Purchaser shall not be required in connection with this Subsection 5.3(d) to qualify as a foreign corporation or execute a general consent to service of process in any jurisdiction; and (e) Enter into an underwriting agreement with the underwriters designated pursuant to Section 5.4 hereof containing customary terms including representations, covenants, indemnifications and contribution provisions. If the Purchaser has delivered Prospectuses to the Seller and after having done so the Prospectus must be amended or supplemented to comply with the requirements of the Act, the Purchaser shall promptly notify the Seller, Seller agrees to cease making offers of Shares immediately upon such request and to return all prospectuses to the Purchaser. The Purchaser shall promptly provide the Seller with revised prospectuses and, following receipt of the revised prospectuses, the Seller shall be free to resume making offers of the Shares. Prior to the filing of any documents with the Commission from time to time pursuant to this Section 5 that names Seller, Seller shall have the right to review and comment on those sections of the Registration Statement, Prospectus and other documents in which Seller is named. Except as provided in the next preceding sentence and except with respect to any written information furnished to Purchaser by Seller, or its underwriter or its controlling person specifically for use in preparation thereof, Purchaser shall cause the Registration Statement, any Prospectuses, all other documents filed with the Commission relating thereto to or otherwise in connection therewith, and all amendments and/or supplements to any of the foregoing to comply with the Act and all other applicable laws. 5.4 CONDITIONS TO REGISTRATION. The following provisions shall also apply to the registration of Seller's Shares: (a) The Purchaser shall, in its sole discretion, select the underwriter or underwriters, if any, who are to undertake the sale and distribution of the Shares to be included in a Registration Statement filed in connection with a Piggyback Registration under the provisions of this Section 5. Purchaser shall have no obligation, in connection with any Piggyback Registration, to use an underwriter or underwriters in connection with the registration rights provided to Seller herein; (b) The Purchaser, in connection with a Piggyback Registration, shall have the right to require, if the offering is to be underwritten and includes securities being offered for the account of the Purchaser, that Seller delay any offering of the Shares to be included on their behalf for a reasonable period of time not to exceed ninety (90) days (the "Delay Period") after the effective date of such Registration Statement (upon the Purchaser first having delivered to Seller the written opinion of its managing or principal underwriter to the effect that the inclusion of such securities in the Registration Statement will have a material adverse effect on the marketing of such offering); provided, however, that all officers, directors and five percent (5%) or greater shareholders also delay offering securities to be sold on their behalf for such reasonable period of time; (c) Purchaser shall be required to keep the Registration Statement effective (for which purpose the Purchaser shall be required to prepare and file such amendments and supplements to the Registration Statement and Prospectus used in connection therewith as may be necessary to keep the Registration Statement effective) for the period set forth in Subsection 5.3(b), pursuant to which Seller is entitled to sell Shares and that Seller shall have the right, subject to the approval of the Purchaser, which approval shall not be unreasonably withheld or delayed, to select the underwriter or underwriters, if Seller desires any, who are to undertake the sale and distribution of the Shares to be offered for sale pursuant to such post- effective amendment to the Registration Statement, and that, without limiting the generality of Section 5.4 (but subject to Section 5.5 below), any additional expenses incurred by reason of the delayed registration of such securities (such as the necessity to file a post-effective amendment) shall be borne solely by the Purchaser; (d) In connection with any request for registration, Seller shall be required to furnish the Purchaser with all relevant information concerning the proposed method of sale or other disposition of the Shares, the identity and compensation to be paid to any proposed underwriters, if any, to be employed at the election of Seller in connection therewith, and such other information as may be reasonably required by the Purchaser properly to prepare and file such Registration Statement in accordance with applicable provisions of the Act (which includes the rules and regulations thereunder). Upon request of the Purchaser, such information shall be furnished by Seller in writing. 5.5 EXPENSES. In connection with or otherwise relating to registrations on behalf of Seller of any Shares under the Act pursuant to this Section 5, the Purchaser shall pay all Registration Expenses; provided, however, that the Seller shall be required to bear that portion of the underwriting commissions, fees and discounts, if any, attributable solely to the inclusion of Seller's shares in such Registration Statement and the inclusion of Seller's shares in the related filings under securities or Blue Sky laws of the several states; and further provided that the Seller shall pay the legal fees and disbursements of counsel to Seller. 5.6 INDEMNIFICATION. (a) In connection with or otherwise relating to the registration of any Shares under the Act pursuant to the provisions of this Amendment, the Purchaser agrees to indemnify and hold harmless and defend the Seller, each underwriter, if any, of such Shares, each other person, if any, who controls Seller or any such underwriter within the meaning of the Act, and Seller's officers, directors and counsel from and against any and all losses, claims, damages, liabilities, joint or several, to which such Seller, underwriter or controlling person or Seller's officers, directors and counsel may become subject under the Act or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Shares were registered under the Act or any Prospectus contained therein or related thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse such Seller, underwriter, controlling person or Seller's officers, directors and counsel for any legal or any other fees or expenses reasonably incurred by such Seller, underwriter, controlling person or Seller's officers, directors and counsel in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Purchaser will not be liable in any such case to the extent that any such loss, claim, damage, or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement or such Prospectus in reliance upon and in conformity with written information furnished to the Purchaser by the party seeking indemnification. (b) In connection with or otherwise relating to the registration of any Shares under the Act pursuant to the provisions hereof, Seller agrees to indemnify and hold harmless the Purchaser, each person who controls the Purchaser within the meaning of the Act, and each officer and director of the Purchaser from and against any losses, claims, damages or liabilities, joint or several, to which the Purchaser, such controlling person or any such officer or director or counsel may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged true statement of any material fact contained in any Registration Statement under which such Registrable Shares were registered under the Act or any Prospectus contained therein, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, which untrue statement or alleged untrue statement or omission or alleged omission was made therein in reliance upon and in conformity with written information furnished to the Purchaser by Seller or controlling person or Seller's officers, directors and counsel specifically for use in connection with the preparation thereof; and will reimburse the Purchaser, each such controlling person and each such officer or director for any legal or any other fees and expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action. (c) Each person entitled to indemnification hereunder (an "Indemnitee") agrees, as soon as is reasonably practicable after the receipt of notice of any claim or action against it, to notify the party from whom indemnity may be sought hereunder ("Indemnitor") in writing provided that any such failure to promptly provide such notice shall not excuse the Indemnitor from its obligations hereunder except to the extent the Indemnitor is actually prejudiced thereby, and then Indemnitor shall assume the defense of any such claim or action (and the cost thereof) by counsel of the Indemnitor's own choosing, who shall be reasonably satisfactory to such Indemnitee. Each Indemnitee shall have the right to employ separate counsel in connection with any such claim or action and to participate in the handling or defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnitee unless the employment of such counsel has been specifically authorized by the Indemnitor or the Indemnitor shall not have employed counsel to have charge of the defense of such action or claim or such Indemnitee shall have reasonably concluded that there may be defenses available to the Indemnitee (in which case the Indemnitor shall not have the right to direct the defense of such action on behalf of such Indemnitee), in any of which events such fees and expenses shall be borne by the Indemnitor. The Indemnitor shall be free to settle any claims or action in respect to which indemnity may be sought against it pursuant to this Subsection (c); provided, however, that the Indemnitor shall not settle any such claim or action if such settlement would result in the imposition against Indemnitee of a judgment, decree or order in the nature of equitable relief or otherwise require an acknowledgment of wrongdoing unless the Indemnitor has obtained the prior written consent of such Indemnitee (which consent shall not be unreasonably withheld). 5.7 COMPLIANCE WITH RULE 144. The Purchaser shall take such actions pursuant to or otherwise in connection with Rule 144 of the Commission under the Act as is necessary to enable the Seller to make sales of Registrable Shares pursuant to that Rule. 5.8 ASSIGNMENT. Seller's rights under this Section 5 may be assigned by Seller to a transferee or assignee of any of the Shares, provided that Purchaser is given written notice of such assignment at the time of or within a reasonable time after the assignment, stating the name and address of the transferee or assignee and identifying the number of Shares with respect to which such rights of Seller are being assigned. -----END PRIVACY-ENHANCED MESSAGE-----