-----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, G7BV/3EXbYNEiloCuwTh7slDHdylRJ0A7ccokqRs5aGyqqFMrSgSuXENw2zfvDOO jotVVoLiE7RiDbXN6QZehg== 0000929624-00-000049.txt : 20000202 0000929624-00-000049.hdr.sgml : 20000202 ACCESSION NUMBER: 0000929624-00-000049 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20000120 GROUP MEMBERS: GENSTAR CAPITAL LLC GROUP MEMBERS: GENSTAR CAPITAL PARTNERS II, L.P. GROUP MEMBERS: JEAN-PIERRE L. CONTE GROUP MEMBERS: RICHARD D. PATERSON GROUP MEMBERS: RICHARD F. HOSKINS GROUP MEMBERS: STARGEN II LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BIOSOURCE INTERNATIONAL INC CENTRAL INDEX KEY: 0000860451 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 770340829 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-52879 FILM NUMBER: 510545 BUSINESS ADDRESS: STREET 1: 820 FLYNN RD STE A CITY: CAMARILLO STATE: CA ZIP: 93012 BUSINESS PHONE: 8059870086 MAIL ADDRESS: STREET 1: 820 FLYNN ROAD CITY: CAMARILLO STATE: CA ZIP: 93012 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GENSTAR CAPITAL LLC CENTRAL INDEX KEY: 0001103633 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 585 CALIFORNIA STREET SUITE 4650 CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 4158342350 MAIL ADDRESS: STREET 1: 585 CALIFORNIA STREET SUITE 4650 CITY: SAN FRANCISCO STATE: CA ZIP: 94104 SC 13D 1 SCHEDULE 13-D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. __) BioSource International, Inc. __________________ (Name of Issuer) Common Stock, par value $0.001 per share ___________________________ (Title of Class of Securities) 09066H104 --------- (CUSIP Number) Genstar Capital LLC 555 California Street, Suite 4850 San Francisco, California 94104 (415) 834-2350 ______________________________________________ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: Scott R. Haber Latham & Watkins 505 Montgomery Street, Suite 1900 San Francisco, California 94111-2562 (415) 391-0600 January 10, 2000 __________________________________________________________ (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 statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. (Continued on following pages) (Page 1 of 17 Pages) SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 09066H104 PAGE 2 OF 17 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Genstar Capital LLC - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 AF, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF -0- shares of Common Stock SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 -0- shares of Common Stock OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING -0- shares of Common Stock PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 -0- shares of Common Stock - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 -0- shares of Common Stock - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 0% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14 OO - ------------------------------------------------------------------------------ 2 SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 09066H104 PAGE 3 OF 17 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Genstar Capital Partners II, L.P. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 AF, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF -0- shares of Common Stock SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 -0- shares of Common Stock OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING -0- shares of Common Stock PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 -0- shares of Common Stock - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 -0- shares of Common Stock - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 0% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14 PN - ------------------------------------------------------------------------------ 3 SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 09066H104 PAGE 4 OF 17 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Stargen II LLC - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 AF, OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF -0- shares of Common Stock SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 -0- shares of Common Stock OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING -0- shares of Common Stock PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 -0- shares of Common Stock - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 -0- shares of Common Stock - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 0% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14 OO - ------------------------------------------------------------------------------ 4 SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 09066H104 PAGE 5 OF 17 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Jean-Pierre L. Conte - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 PF - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States of America - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF -0- shares of Common Stock SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 -0- shares of Common Stock OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING -0- shares of Common Stock PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 -0- shares of Common Stock - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 -0- shares of Common Stock - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 0% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14 IN - ------------------------------------------------------------------------------ 5 SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 09066H104 PAGE 6 OF 17 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Richard F. Hoskins - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 PF - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States of America - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF -0- shares of Common Stock SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 -0- shares of Common Stock OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING -0- shares of Common Stock PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 -0- shares of Common Stock - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 -0- shares of Common Stock - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 0% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14 IN - ------------------------------------------------------------------------------ 6 SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 09066H104 PAGE 7 OF 17 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Richard D. Paterson - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 PF - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Canada - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF -0- shares of Common Stock SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 -0- shares of Common Stock OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING -0- shares of Common Stock PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 -0- shares of Common Stock - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 -0- shares of Common Stock - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 0% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14 IN - ------------------------------------------------------------------------------ 7 Item 1. Security and Issuer. -------------------- This statement relates to shares of common stock, par value $0.001 per share (the "Common Stock"), of BioSource International, Inc., a Delaware corporation ("BioSource" or the "Company"). The Company's principal executive offices are located at 820 Flynn Road, Camarillo, California 93012. Item 2. Identity and Background. ------------------------ (a)-(c), (f). This statement is being filed by (1) Genstar Capital LLC, a Delaware limited liability company ("Genstar Capital"), (2) Genstar Capital Partners II, L.P., a Delaware limited partnership ("Genstar Capital Partners"), (3) Stargen II LLC, a Delaware limited liability company ("Stargen"), (4) Jean-Pierre L. Conte ("Mr. Conte"), (5) Richard F. Hoskins ("Mr. Hoskins") and (6) Richard D. Paterson ("Mr. Paterson"). Genstar Capital, Genstar Capital Partners, Stargen, Mr. Conte, Mr. Hoskins and Mr. Paterson are sometimes collectively referred to herein as the "Reporting Persons." The agreement among the Reporting Persons relating to the joint filing of this statement is attached as Exhibit 1 hereto. Genstar Capital, Genstar Capital Partners and Stargen are each principally engaged in the business of investing in securities of the Company and other companies. Genstar Capital is the general partner of Genstar Capital Partners. The address of the principal business and office of each of Genstar Capital, Genstar Capital Partners and Stargen is 555 California Street, Suite 4850, San Francisco, California 94104. Mr. Conte, Mr. Hoskins and Mr. Paterson are the managers and managing directors of Genstar Capital and members of Stargen. Mr. Paterson is the Administrative Member of Stargen. Mr. Conte and Mr. Hoskins are each United States citizens, and Mr. Paterson is a Canadian citizen, and the present principal occupation or employment of each is as a manager and managing director of Genstar Capital. The business address of each of Mr. Conte, Mr. Hoskins and Mr. Paterson is 555 California Street, Suite 4850, San Francisco, California 94104. (d), (e). During the last five years, none of Genstar Capital, Genstar Capital Partners, Stargen, Mr. Conte, Mr. Hoskins or Mr. Paterson has (1) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. -------------------------------------------------- Pursuant to the terms of a Securities Purchase Agreement dated January 10, 2000 (the "Purchase Agreement") by and among BioSource, on the one hand, and Genstar Capital Partners and Stargen (the "Investors"), on the other hand, BioSource agreed to issue and sell, and 8 Genstar Capital Partners and Stargen agreed to purchase, 364,244 and 7,056 shares, respectively, of the Company's Series B Preferred Stock (the "Shares"), initially convertible into 1,456,976 and 28,224 shares, respectively, of Common Stock, or an effective price of $6.06 per share of Common Stock. Pursuant to the Purchase Agreement, BioSource also agreed to issue to Genstar Capital Partners and Stargen warrants (each, a "Warrant" and collectively, the "Warrants") to purchase 1,262,542 and 24,458 shares, respectively, of Common Stock at a per share exercise price of $7.77. In consideration for the Shares and Warrants, Genstar Capital Partners and Stargen will pay the Company $8,829,270 and $171,042, respectively. The source of funds for the acquisition of the Shares and Warrants by Genstar Capital Partners and Stargen will be capital contributions from their respective partners and members. The Purchase Agreement is attached hereto as Exhibit 2 and is incorporated by reference herein. Item 4. Purpose of Transaction. ----------------------- Purchase Agreement - ------------------ The Investors have agreed to purchase, and the Company has agreed to sell, the Shares and Warrants pursuant to the Purchase Agreement. The closing of the sale of the Shares and Warrants is subject to customary closing conditions, including Genstar Capital Partners and Stargen receiving the required financing from their respective partners and members. It is anticipated that the closing will occur in February 2000 (the "Closing Date"). The Shares will vote with the Common Stock on an as-converted basis. Initially, the Shares will represent an aggregate of 19.99% of the voting power of the Company. Pursuant to the Purchase Agreement, the Company has agreed that for a period of 90 days after the Closing Date, it will not enter into any contract to issue equity or equity-linked securities in a private transaction, other than pursuant to certain exceptions, including a merger, consolidation or acquisition of assets, or in connection with a strategic partnership, collaboration or joint venture or as consideration for the acquisition of a business, product or license, the issuance of securities in an underwritten public offering, the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities or the grant of additional stock options or additional securities under the Company's stock option, stock purchase or restricted stock plan for the benefit of the Company's employees, consultants or directors. Investor Rights Agreement - ------------------------- Pursuant to the Purchase Agreement, the Company, Genstar Capital Partners and Stargen have agreed to enter into an Investor Rights Agreement to be dated the Closing Date. 9 Pursuant to the Investor Rights Agreement, so long as the Investors own (i) not less than 750,000 shares of Common Stock, the Investors are entitled to designate two (2) persons reasonably acceptable to BioSource to serve on the Company's Board of Directors, and (ii) not less than 495,000 shares of Common Stock, the Investors are entitled to designate one (1) person reasonably acceptable to BioSource to serve on the Company's Board of Directors. On the Closing Date, BioSource will increase the size of its Board of Directors from five (5) to seven (7) members and will appoint two directors designated by the Investors to fill the vacancies created thereby. The Investors intend to designate Mr. Conte and Robert J. Weltman to serve as directors of the Company. Pursuant to the Investor Rights Agreement, for 30 days after receiving notice of the Company's proposed offering of any shares of, or securities convertible into or exercisable for any shares of, any class of capital stock of the Company ("Additional Securities"), the Investors will have the exclusive right to negotiate with the Company with respect to the purchase of such Additional Securities. If the Company and one or more of the Investors do not agree to enter into an agreement for the purchase and sale of the Additional Securities on or before the expiration of this 30-day period, then the Company is permitted to sell the Additional Securities to any other person for a period of 120 days following the expiration of the initial 30-day period. In addition to the negotiation rights described in the preceding paragraph, so long as the Investors hold not less than 50% of the aggregate Shares and Warrants they purchased pursuant to the Purchase Agreement (or an equivalent amount of Common Stock issued upon conversion or exercise thereof), BioSource must give the Investors 30 days' notice prior to offering any Additional Securities to any other person. For 15 days after receiving the Company's notice, the Investors have a right to purchase such Additional Securities at the price and on the terms contained in the Company's notice. If the Investors do not agree to purchase the Additional Securities within this 15- day period and/or fail to consummate the purchase within 60 days after agreeing to purchase the Additional Securities, then the Company is permitted to sell such Additional Securities to any other person on substantially the same terms as those set forth in the Company's notice to the Investors. Pursuant to the Investor Rights Agreement, the Company has granted the Investors the right to require the Company to register the shares of Common Stock issuable upon conversion of the Shares and upon exercise of the Warrants, subject to certain exceptions. The Investor Rights Agreement provides that the Investors may initiate three registrations and also provides that the Investors will have piggyback registration rights and the right to request the Company to register the Investors' securities on Form S-3. The Company is obligated to pay all expenses incurred in connection with such registrations (other than brokers' fees, underwriting discounts and commissions and similar selling expenses applicable to the Investors' securities, which will be borne by the Investors). The Company has agreed to indemnify the Investors and related persons against certain liabilities under the securities laws in connection with the sale of securities under such registrations. 10 A copy of the Investor Rights Agreement is attached hereto as Exhibit 5 and is incorporated by reference herein. Certificate of Designations - --------------------------- The terms of the Shares are set forth in the Certificate of Designation, Preferences, Rights and Limitations of Series B Preferred Stock of BioSource International, Inc. (the "Certificate of Designations"). The Shares will be entitled to receive dividends at a rate of 8% of the original issue price payable in additional Shares. Unless all dividends on the outstanding Shares shall have been paid, no dividends or other distributions may be paid to the holders of Common Stock (other than those that are payable in shares of Common Stock or other securities of the Company). Upon a liquidation, dissolution or winding-up of the Company, holders of the Shares are entitled to receive a liquidation preference equal to the original issue price, plus all accrued but unpaid dividends, before any liquidating distribution may be made with respect to the Common Stock. For purposes of the Certificate of Designations, a sale of all or substantially all of the assets of the Company or acquisition of the Company pursuant to a merger, consolidation, share exchange, reorganization or otherwise is treated as a liquidation, thereby entitling holders of the Shares to receive the liquidation preference. The Shares are convertible into shares of Common Stock initially at a rate of four shares of Common Stock for each Share. Initially, the effective conversion price per share of Common Stock will be $6.06. The conversion ratio is subject to anti-dilution adjustment under certain circumstances as set forth in the Certificate of Designations. Holders of the Shares have the right to require the Company to redeem the Shares at the original issue price plus all accrued and unpaid dividends on and after the fourth anniversary of the date of issuance of the Shares. If during a test period (as defined below), the Common Stock has an average market price (defined as the average closing price for 30 consecutive trading days) that is less than the effective conversion price per share of Common Stock, then the anniversary date upon the which the Shares are redeemable would be reduced by one year. The "test period" is the first six months of a calendar year or the last six months of a calendar year. So long as the Shares are outstanding, the Company may not take any of the following actions without the prior written consent of a the holders of greater than two-thirds of the outstanding Shares: (1) create a new class or series of stock that ranks senior to or on parity with the Shares as to dividend rights, redemption rights, conversion rights or liquidation preferences, (2) sell, convey or otherwise dispose of all of its assets, property or business or dissolve, liquidate or wind up the Company, (3) amend its certificate of incorporation or bylaws in any manner that adversely affects the preferences, privileges, restrictions or other rights of the holders of Shares, (4) increase or decrease the number of authorized shares of Series B Preferred Stock, (5) increase or decrease the number of authorized seats on the Company's Board of Directors, (6) declare, pay or set aside for payment any dividend or other distribution in respect of the Company's capital stock, (7) call for redemption, redeem, purchase or otherwise acquire for any consideration any of the Company's capital stock (other than certain repurchases from employees, directors, consultants or other persons performing services for the Company) or 11 Series B Preferred Stock or (8) merge or consolidate the Company (other than where the holders of voting securities of the Company immediately prior to such merger or consolidation beneficially own, directly or indirectly, a majority of the combined voting power of the surviving entity resulting from such merger or consolidation). A copy of the Certificate of Designations is attached hereto as Exhibit 6 and is incorporated by reference herein. Warrants - -------- The Warrants represent the right to purchase shares of the Company's Common Stock at an exercise price of $7.77 per share. Payment of the exercise price may be made in cash, cancellation of indebtedness of the Company to the holder of the Warrant or through the exchange of Warrants for shares of Common Stock equal to the value of the amount equal to the value of the Warrants being exchanged. The exercise price and the number of shares issuable upon exercise of the Warrants is subject to anti-dilution adjustment under certain circumstances as set forth in the Warrants. A copy of the Warrant to be issued to Genstar Capital Partners is attached hereto as Exhibit 3 and is incorporated by reference herein. A copy of the Warrant to be issued to Stargen is attached hereto as Exhibit 4 and is incorporated by reference herein. Concurrently with its approval of the Purchase Agreement and the transactions contemplated hereby, the Board of Directors of the Company amended the Company's stockholder rights plan to exempt Genstar Capital and its affiliates from the applicable provisions of the rights plan. The Reporting Persons intend to acquire the Shares and Warrants for investment purposes. Depending on the factors discussed herein, the Reporting Persons may, from time to time, exercise all or a portion of the Warrants or convert all or a portion of the Shares and may acquire, retain or sell all or a portion of the Shares, Warrants and/or Common Stock issued upon conversion of the Shares or exercise of the Warrants in the open market or in privately negotiated transactions. Any actions the Reporting Persons might undertake will be dependent upon the Reporting Persons' review of numerous factors, including, among other things, the price levels of the Common Stock; general market and economic conditions; ongoing evaluation of the Company's business, financial condition, operations and prospects; the relative attractiveness of alternative business and investment opportunities; and other future developments. Except as set forth above, the Reporting Persons have no present plans or intentions which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. 12 Item 5. Interest in Securities of the Issuer. ------------------------------------- (a), (b). As of the close of business on January 10, 2000, none of the Reporting Persons beneficially owned any Common Stock directly. Pursuant to the Purchase Agreement, the Investors have agreed to purchase from the Company, and the Company has agreed to issue and sell to the Investors, an aggregate of 371,300 Shares which initially will be convertible into 1,485,200 shares of Common Stock, representing 19.99% of the 7,429,716 shares of Common Stock outstanding as of January 7, 2000. Also pursuant to the Purchase Agreement, the Investors have agreed to purchase from the Company, and the Company has agreed to issue and sell to the Investors, Warrants to purchase an aggregate of 1,287,000 shares of Common Stock, representing 14.8% of the shares of Common Stock outstanding (assuming exercise of the Warrants). Assuming exercise of the Warrants and conversion of the Shares into Common Stock, the Shares and Warrants would represent, in the aggregate, 27.2% of the shares of Common Stock outstanding. Assuming consummation of the sale of Shares and Warrants pursuant to the Purchase Agreement, Genstar Capital Partners and Stargen will acquire the following Shares and Warrants:
Name of Investor Number of Shares Number of Shares of Percentage of - ---------------- ---------------- ------------------- ------------- of Preferred Stock Common Stock Issuable Outstanding Shares ------------------- --------------------- ------------------ Upon Conversion of (Assuming Conversion of ------------------ ----------------------- Preferred Stock the Preferred Stock --------------- ------------------- - --------------------------------------------------------------------------------------------- Genstar Capital 364,244 1,456,976 19.61% Partners - --------------------------------------------------------------------------------------------- Stargen 7,056 28,224 0.38% - ---------------------------------------------------------------------------------------------
Name of Investor Number of Shares of Common Percentage of Outstanding - ---------------- -------------------------- ------------------------- Stock Issuable Upon Exercise of Shares (Assuming Exercise ------------------------------- ------------------------- Warrants of the Warrants) -------- ---------------- - ----------------------------------------------------------------------------------------------- Genstar Capital Partners 1,262,542 14.5% - ----------------------------------------------------------------------------------------------- Stargen 24,458 0.3% - -----------------------------------------------------------------------------------------------
On and after the Closing Date, Genstar Capital Partners will have the sole power to dispose or direct the disposition of the Shares and Warrants which it would hold directly or the shares of Common Stock issued upon conversion of such Shares or exercise of such Warrants. On and after the Closing Date, Genstar Capital Partners will have the power to vote or direct the 13 vote of such Shares on an as-converted basis, but will not have the power to vote or direct the vote of any of the shares of Common Stock which it would own upon exercise of such Warrants prior to the receipt of such shares of Common Stock upon exercise of such Warrants. Genstar Capital is the sole general partner of Genstar Capital Partners and in such capacity may be deemed to have the power to dispose or direct the disposition of the Shares and Warrants that Genstar Capital Partners would hold on and after the Closing Date, and shares of Common Stock which Genstar Capital Partners would hold upon conversion of such Shares or exercise of such Warrants, and to vote or direct the vote of such Shares on an as- converted basis or such shares of Common Stock. On and after the Closing Date, Stargen will have the sole power to dispose or direct the disposition of the Shares and Warrants which it would hold directly and the shares of Common Stock issued upon conversion of such Shares or exercise of such Warrants. On and after the Closing Date, Stargen will have the power to vote or direct the vote of such Shares on an as-converted basis, but will not have the power to vote or direct the vote of any of the shares of Common Stock which it would own upon exercise of such Warrants prior to the receipt of such shares of Common Stock upon exercise of such Warrants. Messrs. Conte, Hoskins and Paterson are the managers and managing directors of Genstar Capital and are members of Stargen, and Mr. Paterson is the Administrative Member of Stargen and in such capacity may be deemed to have the power to dispose or direct the disposition of the Shares and Warrants which the Investors would hold on and after the Closing Date, and shares of Common Stock which the Investors would own upon conversion of such Shares and exercise of such Warrants, and may be deemed to have the power to vote or direct the vote of such Shares on an as-converted basis or such shares of Common Stock. The Reporting Persons may be deemed to be acting as a group in relation to their respective holdings in BioSource but do not affirm the existence of any such group. Except as set forth in this Item 5(a)-(b), each of the persons named in this Item 5(a)-(b) disclaims beneficial ownership of any Common Stock owned beneficially or of record by any other person named in this Item 5(a)-(b). (c). Except as set forth herein, none of the Reporting Persons has effected any transaction in the Common Stock during the past 60 days. (d). Not applicable. (e). Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect --------------------------------------------------------------------- to Securities of the Issuer. ---------------------------- Item 4 above summarizes certain provisions of the Purchase Agreement, the Investor Rights Agreement, the Warrants and the Certificate of Designations. 14 A copy of the Purchase Agreement is attached hereto as Exhibit 2 and is incorporated by reference herein. A copy of the Genstar Warrant is attached hereto as Exhibit 3 and is incorporated by reference herein. A copy of the Stargen Warrant is attached hereto as Exhibit 4 and is incorporated by reference herein. A copy of the Investor Rights Agreement is attached hereto as Exhibit 5 and is incorporated by reference herein. A copy of the Certificate of Designations is attached hereto as Exhibit 6 and is incorporated by reference herein. Except as set forth herein, none of the Reporting Persons has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of BioSource, including but not limited to any contracts, arrangements, understandings or relationships concerning the transfer or voting of such securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. --------------------------------- Exhibit 1 Joint Filing Agreement. Exhibit 2 Securities Purchase Agreement, dated January 10, 2000, among BioSource International, Inc., Genstar Capital Partners II, L.P. and Stargen II LLC. Exhibit 3 Warrant to Purchase Common Stock of BioSource International, Inc., to be issued to Genstar Capital Partners II, L.P. on the Closing Date. Exhibit 4 Warrant to Purchase Common Stock of BioSource International, Inc., to be issued to Stargen II LLC on the Closing Date. Exhibit 5 Investor Rights Agreement, to be dated the Closing Date, among BioSource International, Inc., Genstar Capital Partners II, L.P. and Stargen II LLC. Exhibit 6 Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock of BioSource International, Inc. Exhibit 7 Power of Attorney. 15 SIGNATURE --------- After reasonable inquiry and to the best of each of the undersigned's knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: January 20, 2000 GENSTAR CAPITAL LLC By: /s/ Jean-Pierre L. Conte --------------------------------- Name: Jean-Pierre L. Conte Its: Managing Member GENSTAR CAPITAL PARTNERS II, L.P. By: Genstar Capital LLC, its general partner By: /s/ Jean-Pierre L. Conte ------------------------------- Name: Jean-Pierre L. Conte Its: Managing Member STARGEN II LLC By: /s/ Jean-Pierre L. Conte ------------------------------- Name: Jean-Pierre L. Conte Its: Member /s/ Jean-Pierre L. Conte ------------------------------------ Jean-Pierre L. Conte /s/ Jean-Pierre L. Conte ------------------------------------ Jean-Pierre L. Conte Attorney-in-fact for Richard F. Hoskins /s/ Jean-Pierre L. Conte ------------------------------------ Jean-Pierre L. Conte Attorney-in-fact for Richard D. Paterson 16 EXHIBIT INDEX ------------- Exhibit 1 Joint Filing Agreement. Exhibit 2 Securities Purchase Agreement, dated January 10, 2000, among BioSource International, Inc., Genstar Capital Partners II, L.P. and Stargen II LLC. Exhibit 3 Warrant to Purchase Common Stock of BioSource International, Inc., to be issued to Genstar Capital Partners II, L.P. on the Closing Date. Exhibit 4 Warrant to Purchase Common Stock of BioSource International, Inc., to be issued to Stargen II LLC on the Closing Date. Exhibit 5 Investor Rights Agreement, to be dated the Closing Date, among BioSource International, Inc., Genstar Capital Partners II, L.P. and Stargen II LLC. Exhibit 6 Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock of BioSource International, Inc. Exhibit 7 Power of Attorney. 17 EX-99.1 2 JOINT FILING AGREEMENT EXHIBIT 1 JOINT FILING AGREEMENT ---------------------- In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common stock, par value $0.001 per share, of BioSource International, Inc., a Delaware corporation, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the 20th day of January, 2000. GENSTAR CAPITAL LLC By: /s/ Jean-Pierre L. Conte -------------------------------- Name: Jean-Pierre L. Conte Its: Managing Member GENSTAR CAPITAL PARTNERS II, L.P. By: Genstar Capital LLC, its general partner By: /s/ Jean-Pierre L. Conte ------------------------------- Name: Jean-Pierre L. Conte Its: Managing Member STARGEN II LLC By: /s/ Jean-Pierre L. Conte ------------------------------- Name: Jean-Pierre L. Conte Its: Member /s/ Jean-Pierre L. Conte ------------------------------------ Jean-Pierre L. Conte /s/ Jean-Pierre L. Conte ------------------------------------ Jean-Pierre L. Conte Attorney-in-fact for Richard F. Hoskins /s/ Jean-Pierre L. Conte ------------------------------------ Jean-Pierre L. Conte Attorney-in-fact for Richard D. Paterson EX-99.2 3 SECURITIES PURCHASE AGREEMENT EXHIBIT 2 SECURITIES PURCHASE AGREEMENT ----------------------------- SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of January 10, 2000, by and among BIOSOURCE INTERNATIONAL, INC., a corporation organized under the laws of the State of Delaware (the "Company"), and the purchasers (each a "Purchaser" and collectively the "Purchasers")) set forth on the execution page hereof (the "Execution Page"). R E C I T A L S - - - - - - - - A. The Company and the Purchasers are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D ("Regulation D"), as promulgated by the United States Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). B. The Purchasers desire to purchase subject to the terms and conditions stated in this Agreement, (i) 371,300 shares of the Company's Series B Convertible Preferred Stock, par value $.001 per share (the "Preferred Stock") with the terms and conditions set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock of BioSource International, Inc. in the form attached hereto as Exhibit A (the "Certificate --------- of Designations"), and (ii) warrants in the form attached hereto as Exhibit B --------- (including any warrants issued in replacement thereof, the "Warrants"), to acquire 1,287,000 shares of the Company's common stock, par value $.001 per share (the "Common Stock"). The shares of Common Stock issuable upon conversion of or otherwise pursuant to the Preferred Stock are referred to herein as the "Conversion Shares." The shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants are referred to herein as the "Warrant Shares." C. The exercise price of the Warrants shall be $7.77 per share of Common Stock which represents a price of 112% of the market value of the Common Stock (based on the closing price of the Common Stock of $6.9375 per share on January 7, 2000). D. Contemporaneous with the execution and delivery of this Agreement, the parties hereto are executing and delivering an Investor Rights Agreement in the form attached hereto as Exhibit C (the "Investor Rights Agreement"), pursuant to --------- which the Company has agreed to provide certain rights to the Purchasers, including registration rights under the Securities Act and the rules and regulations promulgated thereunder, and applicable state securities laws. A G R E E M E N T - - - - - - - - - NOW, THEREFORE, the Company and the Purchasers hereby agree as follows: 1. CERTAIN DEFINITIONS. ------------------- 1 For purposes of this Agreement, the following terms shall have the meanings ascribed to them as provided below: "Business Day" shall mean any day on which the principal United States securities exchange or trading market on which the Common Stock is listed or traded as reported by NTMS (as defined below) is open for trading. "Investment Amount" for each Purchaser shall mean the dollar amount to be invested in the Company at the Closing pursuant to this Agreement by such Purchaser, as set forth on the Execution Page hereto executed by such Purchaser. "Material Adverse Effect" shall mean any event, condition or circumstance that has had or is reasonably likely to have a material adverse effect on (i) the Securities, (ii) the ability of the Company to perform its obligations hereunder (including, without limitation, the issuance of the Shares and the Warrants), under the Certificate of Designations (including, without limitation, the issuance of the Conversion Shares), under the Warrants (including, without limitation, the issuance of the Warrant Shares) or under the Investor Rights Agreement or (iii) the business, operations, properties, prospects or financial condition of the Company and its subsidiaries, taken as a whole. "NTMS" shall mean the Research Service of Nasdaq Trading and Market Services (or a comparable reporting service of national reputation if the Research Service of Nasdaq Trading and Market Services is not then reporting closing bid prices of such security). "Securities" shall mean the Shares, the Conversion Shares, the Warrants and the Warrant Shares. "Shares" means the shares of Preferred Stock to be issued and sold by the Company and purchased by the Purchasers at the Closing. 2. PURCHASE AND SALE OF SHARES AND WARRANTS. ---------------------------------------- a. Generally. Subject to the satisfaction (or waiver) of the conditions --------- set forth in Section 6 and Section 7 below, the Purchasers shall purchase the number of Shares and Warrants determined as provided in this Section 2, and the Company shall issue and sell such number of Shares and Warrants to the Purchasers for the Investment Amount as provided below. b. Number of Closing Shares and Warrants; Form of Payment; Closing Date. -------------------------------------------------------------------- i. On the Closing Date (as defined below), the Company shall sell and the Purchasers shall buy (A) 371,300 shares of Preferred Stock at $24.24 per share, and (B) Warrants to purchase 1,287,000 shares of Common Stock at an exercise price of $7.77 per share. ii. On the Closing Date, each Purchaser shall pay an amount in cash equal to its Investment Amount against delivery of certificates representing the Shares and duly executed 2 Warrants being purchased by such Purchaser, and the Company shall deliver to each Purchaser certificates representing the Shares being purchased by such Purchaser and duly executed Warrants being purchased by such Purchaser. iii. Subject to the satisfaction (or waiver) of the conditions set forth in Section 6 and Section 7 below, the closing of the transactions contemplated by this Agreement (the "Closing") shall take place at 10:00 a.m. on the date which is the earlier of (i) 30 days from the date hereof, or (ii) two business days after the Purchasers have received all investment funds pursuant to their call on investors (the "Closing Date"). The Closing shall occur at the offices of Troop Steuber Pasich Reddick & Tobey, LLP, Los Angeles, California, or at such other place as the Purchasers and the Company may otherwise mutually agree. 3. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES. ---------------------------------------------- The Purchasers represent and warrant to the Company as follows: a. Purchase for Own Account. Each Purchaser is purchasing the Shares and ------------------------ Warrants for its own account and not with a present view towards the distribution thereof. Each Purchaser understands that it must bear the economic risk of this investment indefinitely, unless the Securities are registered pursuant to the Securities Act and any applicable state securities or blue sky laws or an exemption from such registration is available, and that the Company has no present intention of registering any such Securities other than as contemplated by the Investor Rights Agreement. Notwithstanding anything in this Section 3(a) to the contrary, by making the foregoing representation, the Purchasers do not agree to hold the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption from registration under the Securities Act and any applicable state securities laws. b. Information. The Purchasers have been furnished all materials ----------- relating to the business, finances and operations of the Company and its subsidiaries and materials relating to the offer and sale of the Securities that have been requested by them. The Purchasers have been afforded the opportunity to ask questions of the Company and have received what they believe to be satisfactory answers to any such inquiries. Each Purchaser understands that its investment in the Securities involves a high degree of risk. Neither such inquiries nor any other due diligence investigation conducted by the Purchasers or their counsel or any of their representatives shall modify, amend or affect the Purchasers' right to rely on the Company's representations and warranties contained in Section 4 below. c. Governmental Review. Each Purchaser understands that no United States ------------------- federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities. d. Authorization; Enforcement. Each Purchaser has the requisite power and -------------------------- authority to enter into and perform its obligations under this Agreement and to purchase the Shares and the Warrants in accordance with the terms hereof. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Purchaser and is a valid and binding 3 agreement of such Purchaser enforceable against such Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws affecting creditors' rights and remedies generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). e. Transfer or Resale. Each Purchaser understands that (i) except as ------------------ provided in the Investor Rights Agreement, the Securities have not been and are not being registered under the Securities Act or any state securities laws, and may not be transferred unless (a) subsequently registered thereunder, or (b) such Purchaser shall have delivered to the Company an opinion of counsel reasonably acceptable to the Company (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Securities to be sold or transferred may be sold or transferred under an exemption from such registration, or (c) sold under Rule 144 promulgated under the Securities Act (or a successor rule), or (d) sold or transferred to an affiliate of such Purchaser or a partner or member of such Purchaser pursuant to an exemption under the Securities Act; and (ii) neither the Company nor any other person is under any obligation to register such Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder, in each case, other than pursuant to the Investor Rights Agreement. f. Legends. Each Purchaser understands that the Shares and the Warrants ------- and, until such time as the Shares (or the Conversion Shares) and the Warrants (or the Warrant Shares) have been registered under the Securities Act as contemplated by the Investor Rights Agreement or otherwise may be sold by the Purchaser under Rule 144, the certificates for the Shares, Conversion Shares, Warrants and Warrant Shares may bear a restrictive legend in substantially the following form: The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state of the United States. The securities represented hereby may not be offered or sold in the absence of an effective registration statement for the securities under applicable securities laws unless offered, sold or transferred under an available exemption from the registration requirements of those laws. The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if (a) the sale of such Security is registered under the Securities Act or (b) in connection with the resale of such Security, such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, or a "no action" letter from the staff of the SEC, in either case to the effect that a public sale or transfer of such Security may be made without registration under the Securities Act or (c) when such Security may be sold by a person who is not an "affiliate" of the Company under Rule 144(k). Each Purchaser agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, pursuant to an effective registration statement or under an exemption from the registration requirements of the Securities Act. The Company acknowledges that the Purchasers 4 may distribute the Shares or Warrants to their respective partners or members in accordance with the terms of their respective organizational documents and the legend set forth above shall be removed for Securities held by holders who can sell such Securities pursuant to Rule 144(k). g. Accredited Investor Status. Each Purchaser is an "accredited investor" -------------------------- as that term is defined in Rule 501(a) of Regulation D. Neither the Purchasers nor any of their respective affiliates is registered as a broker or dealer under Section 15(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), affiliated with any broker or dealer registered under Section 15(a) of the Exchange Act, or a member of the NASD (as defined below). 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. --------------------------------------------- The Company represents and warrants to the Purchasers as follows: a. Organization and Qualification. The Company and each of its ------------------------------ subsidiaries is a corporation duly organized and existing under the laws of the jurisdiction in which it is incorporated, and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company and each of its subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary and where the failure so to qualify would have, individually or in the aggregate, a Material Adverse Effect. Schedule 4(a) sets forth the Company's jurisdiction of ------------- incorporation and the name of each of the Company's subsidiaries and its jurisdiction of incorporation. All of the outstanding equity securities of each subsidiary is owned by the Company or one or more of its subsidiaries. b. Authorization; Enforcement. (i) The Company has the requisite -------------------------- corporate power and authority to enter into and perform its obligations under this Agreement, the Certificate of Designations, the Warrants and the Investor Rights Agreement, to issue and sell the Shares and the Warrants in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Shares and the Warrant Shares upon exercise of the Warrants in accordance with the terms of the Certificate of Designations and Warrants, respectively; (ii) the execution, delivery and performance of this Agreement, Certificate of Designations, the Warrants and the Investor Rights Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby (including, without limitation, the reservation for issuance and issuance of the Shares and the Conversion Shares and the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares) have been duly authorized by the Company's Board of Directors and no further consent or authorization of the Company, its Board of Directors or its shareholders is required; (iii) this Agreement has been duly executed and delivered by the Company; and (iv) this Agreement constitutes, and, upon execution and delivery by the Company and the other parties thereto to the extent required of the Investor Rights Agreement and the Warrants, such agreements will constitute, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws affecting creditors' rights and remedies generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). The Company 5 has delivered to the Purchasers all correspondence and filings between the Company and/or its representatives and the NASD with respect to this Agreement and the transactions contemplated hereby. The Board of Directors of the Company has taken all actions necessary under the Delaware General Corporation Law to ensure that Section 203 does not and will not apply to the transactions contemplated hereby or any "business combination" with any "interested stockholder" after the date hereof. On or prior to the Closing, the Company will file the Certificate of Designations with the Secretary of State of the State of Delaware. The Board of Directors of the Company has taken all actions necessary under the terms of its Shareholder Rights Plan to ensure that such Shareholder Rights Plan does not and will not apply to the transactions contemplated hereby. c. Capitalization. The capitalization of the Company as of the date -------------- hereof is set forth on Schedule 4(c), including the authorized capital stock, ------------- the number of shares issued and outstanding, the number of shares issuable and reserved for issuance pursuant to the Company's stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock. All of such outstanding shares of the Company's capital stock have been, or upon issuance will be, validly issued, fully paid and nonassessable. Except as set forth on Schedule 4(c), no shares of capital stock of the Company (including the ------------- Shares, the Conversion Shares and the Warrant Shares) are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances. Except for the Securities and as disclosed in Schedule -------- 4(c), as of the date of this Agreement, (i) there are no outstanding securities, - ---- options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever to which the Company is a party relating to the issuance by the Company of securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company, or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company, and (ii) there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act (except the Investor Rights Agreement). The Company has made available to the Purchasers through its filings with the SEC true and correct copies of the Company's Certificate of Incorporation as in effect on the date hereof ("Certificate of Incorporation"), the Company's By-laws as in effect on the date hereof (the "By-laws") and all other instruments and agreements governing securities convertible into or exercisable or exchangeable for capital stock of the Company, except for stock options granted under any employee benefit plan or director stock option plan of the Company. d. Issuance of Shares. The Shares are duly authorized and when issued and ------------------ paid for in accordance with the terms hereof, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances (other than those imposed through acts or omissions of the Purchaser thereof), and will not be subject to preemptive rights, rights of first refusal or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof. The Conversion Shares are duly authorized and reserved for issuance, and, upon conversion of the Shares in accordance with the terms of the Certificate of Designations, will be validly issued, fully paid and non-assessable and free from all taxes and liens, claims and encumbrances (other than those imposed through acts or omissions of the Purchaser thereof), and will not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof. The 6 Warrant Shares are duly authorized and reserved for issuance, and, upon exercise of the Warrants in accordance with the terms thereof, will be validly issued, fully paid and non-assessable and free from all taxes and liens, claims and encumbrances (other than those imposed through acts or omissions of the Purchaser thereof), and will not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof. e. No Conflicts. The execution, delivery and performance of this ------------ Agreement, the Investor Rights Agreement and the Warrants by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the reservation for issuance and issuance of the Shares, the Conversion Shares, the Warrant Shares and the issuance of the Warrants) will not (i) conflict with or result in a violation of the Certificate of Incorporation (as amended by the Certificate of Designations) or By-laws or (ii) conflict with, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument to which the Company is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including (assuming the accuracy of the representations and warranties of the Purchasers) the United States federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected (except, with respect to clause (ii), for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). The Company is not in violation of its Certificate of Incorporation, By-laws and other organizational documents and is not in default (and no event has occurred which, with notice or lapse of time or both, would put the Company in default) under, nor has there occurred any event giving others (with notice or lapse of time or both) any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, except for actual or possible violations, defaults or rights as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company are not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for actual or possible violations, if any, the sanctions for which either singly or in the aggregate would not have a Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required to obtain any consent, approval, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or self regulatory agency in order for it to execute, deliver or perform any of its obligations under this Agreement including without limitation the issuance and sale of the Shares and Warrants as provided hereby and the issuance of the Conversion Shares upon conversion of the Shares, the Warrants (including without limitation the issuance of the Warrant Shares) or the Investor Rights Agreement, in each case in accordance with the terms hereof or thereof. The Company is not in violation of the listing requirements of the Nasdaq National Market ("NASDAQ") and does not reasonably anticipate that the Common Stock will be delisted by NASDAQ in the foreseeable future based on its rules (and interpretations thereof) as currently in effect. f. SEC Documents; Financial Statements. The Company has timely filed all ----------------------------------- reports, schedules, forms, statements and other documents required to be filed by it with the SEC 7 pursuant to the Exchange Act, and has filed all registration statements and other documents required to be filed by it with the SEC pursuant to the Securities Act (all of the foregoing filed prior to the date hereof, and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred to herein as the "SEC Documents"). The Company has made available to the Purchasers true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act or the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Any statements made in any such SEC Documents that are or were required to be updated or amended under applicable law have been so updated or amended. As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC applicable with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal and recurring year-end audit adjustments which are not material). Except as set forth in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to the date of such SEC Documents and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such SEC Documents, which liabilities and obligations referred to in clauses (i) and (ii), individually or in the aggregate, would not have a Material Adverse Effect. g. Absence of Certain Changes. Except as disclosed in the SEC Documents, -------------------------- there has been no change or development which individually or in the aggregate has had or could have a Material Adverse Effect. h. Absence of Litigation. Except as disclosed in the SEC Documents, there --------------------- is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of their directors or officers in their capacities as such which would have, individually or in the aggregate, a Material Adverse Effect. i. Acknowledgment Regarding the Purchaser's Purchase of the Securities. ------------------------------------------------------------------- The Company acknowledges and agrees that the Purchasers are not acting as financial advisors or, acting as fiduciaries of the Company (or in any similar capacity) with respect to this Agreement or the transactions contemplated hereby, and the relationship between the Company and the 8 Purchasers is "arms length" and that any statement made by the Purchasers or any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Purchasers' purchases of Securities and has not been relied upon by the Company, its officers or directors in any way. The Company further represents to the Purchasers that the Company's decision to enter into this Agreement has been based solely on an independent evaluation by the Company and its representatives. j. No Brokers. The Company has not engaged any person to which or to whom ---------- brokerage commissions, finder's fees, financial advisory fees or similar payments are or will become due in connection with this Agreement or the transactions contemplated hereby. k. Form S-3 Eligibility. The Company is currently eligible to register -------------------- the resale of its Common Stock on a registration statement on Form S-3 under the Securities Act. There exist no facts or circumstances (including without limitation any required approvals or waivers of any circumstances that may delay or prevent the obtaining of accountant's consents) that would prohibit or delay the preparation and filing of a registration statement on Form S-3 with respect to the Registrable Securities (as defined in the Investor Rights Agreement). l. Intellectual Property. The Company owns or possesses sufficient legal --------------------- rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and proprietary rights and processes necessary for its business without any conflict with, or infringement of, the rights of others. The Company has not received any communications alleging that the Company has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, trade names, copyrights, trade secrets or other proprietary rights or processes of any other person or entity. The Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of such employee's best efforts to promote the interest of the Company or that would conflict with the Company's business. Neither the execution or delivery of this Agreement, nor the carrying on of the Company's business by the employees of the Company, nor the conduct of the Company's business as proposed, will, to the Company's knowledge, conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated. The Company does not believe it is or will be necessary to use any inventions of any of its employees (or persons it currently intends to hire) made prior to their employment by the Company. Set forth in Schedule 4(l)_ is a listing of all patents, trademarks and licenses of the Company. m. Taxes. The Company has filed all tax returns and reports as required ----- by law. These returns and reports are true and correct in all material respects. The Company has paid all taxes and other assessments due. n. Environmental Laws. The Company is not in violation of any applicable ------------------ statute, law or regulation relating to the environment or occupational health and safety, and to its knowledge, no material expenditures are or will be required in order to comply with any such 9 existing statute, law or regulation. No Hazardous Materials (as defined below) are used or have been used, stored, or disposed of by the Company or, to the Company's knowledge, by any other person or entity on any property owned, leased or used by the Company. For the purposes of the preceding sentence, "Hazardous Materials" shall mean (a) materials which are listed or otherwise defined as "hazardous" or "toxic" under any applicable local, state, federal and/or foreign laws and regulations that govern the existence and/or remedy of contamination on property, the protection of the environment from contamination, the control of hazardous wastes, or other activities involving hazardous substances, including building materials or (b) any petroleum products or nuclear materials. o. ERISA Compliance. The Company is in compliance in all material ---------------- respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"). The Company does not have and has never had any "defined benefit plan" as defined under ERISA and is not and has never been obligated to contribute to a "multi-employer plan" as defined in ERISA. p. No Misrepresentations. No representation, warranty, acknowledgement or --------------------- certification of the Company contained in this Agreement, any schedule, annex or exhibit hereto or any certificate furnished by the Company to the Purchasers pursuant to this Agreement, contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 5. COVENANTS. --------- a. Satisfaction of Conditions. The parties shall use reasonable best -------------------------- efforts to satisfy in a timely manner each of the conditions set forth in Section 6 and Section 7 of this Agreement. b. Form D; Blue Sky Laws. The Company agrees to file a Form D with --------------------- respect to the Securities as required under Regulation D and to provide a copy thereof to the Purchasers promptly after such filing. The Company shall, on or prior to the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Purchasers pursuant to this Agreement under applicable securities or "blue sky" laws of the states of the United States or obtain exemption therefrom. c. Reporting Status. So long as the Purchasers beneficially own any ---------------- Securities or have the right to acquire any Securities pursuant to this Agreement, the Company shall timely file all reports required to be filed with the SEC pursuant to the Exchange Act, and shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination. d. Use of Proceeds. The Company shall not use the net proceeds from the --------------- sale of the Shares and the Warrants to repurchase any outstanding equity securities of the Company. e. Upfront Fee; Expenses. At the Closing, the Company shall pay to --------------------- Genstar Capital LLC a sum equal to three percent (3%) of the aggregate Investment Amount and 10 reimburse each Purchaser for the out-of-pocket expenses reasonably incurred by it and its affiliates and advisors in connection with the negotiation, preparation, execution and delivery of this Agreement, the Investor Rights Agreement, the Warrants and the other agreements to be executed in connection herewith, including, without limitation, its reasonable attorneys' fees and expenses (the "Expenses"). f. Financial Information. So long as the Purchasers hold not less than --------------------- 20% of the aggregate amount of Shares and Warrants being purchased pursuant to this Agreement, following the Closing, the Company agrees to send to the Purchasers within ten days after the filing with the SEC, to the extent not available through the SEC's EDGAR system, a copy of its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, its proxy and information statements and any Current Reports on Form 8-K and to send to the Purchasers at such time as they are generally available to management month end summary financial statements, but in no event later than 30 days after the end of each month. g. Reservation of Shares. The Company has and shall at all times have --------------------- authorized and reserved for the purpose of issuance a sufficient number of shares of Common Stock to provide for the issuance of the Shares as provided in Section 2 hereof, the full conversion of the Shares and the issuance of the Conversion Shares, and the full exercise of the Warrants and the issuance of the Warrant Shares in connection therewith and as otherwise required hereby and by the Warrants. The Company shall not reduce the number of shares of Common Stock reserved for issuance under this Agreement (except as a result of the issuance of the Conversion Shares upon conversion of the Shares), the Warrants (except as a result of the issuance of the Warrant Shares upon the exercise of the Warrants) or the Investor Rights Agreement, without the consent of the Purchaser, such consent not to be unreasonably withheld, conditioned or delayed. h. Listing. On the Closing Date, the Company shall have applied for the ------- listing of the Conversion Shares and Warrant Shares, in each case, upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed or quoted and shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Shares and all Warrant Shares from time to time issuable upon exercise of the Warrants. The Company shall use all commercially reasonable efforts to continue the listing and trading of its Common Stock on NASDAQ and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of NASDAQ and the NASD or any other exchanges, as applicable. The Company shall use all commercially reasonable efforts to obtain from the NASD a letter reasonably satisfactory to the Purchasers confirming that no shareholder approval of the transactions contemplated hereby is required under the rules of the NASD. The Company shall deliver to the Purchasers all correspondence and filings between the Company and/or its representatives and the NASD with respect to this Agreement and the transactions contemplated hereby. i. Additional Equity Capital. The Company agrees that during the period ------------------------- beginning on the date hereof and ending on the date which is 90 days following the Closing Date (the "Lock-Up Period"), the Company will not, without the prior written consent of the Purchasers or their designees, such consent not to be unreasonably withheld, conditioned or delayed, 11 contract with any party to obtain additional financing in which any equity or equity-linked securities are issued (including any debt financing with an equity component) (an "Equity Financing") pursuant to any offering exempt from the registration requirements of the Securities Act which grants any registration rights exercisable within six months of the Closing Date. The limitations referred to in this Section 5(i) shall not apply to (i) any transaction involving issuances of securities as consideration in a merger, consolidation or acquisition of assets, or in connection with any strategic partnership, collaboration or joint venture (the primary purpose of which is not to raise equity capital), or as consideration for the acquisition of a business, product or license by the Company, (ii) the issuance of securities pursuant to an underwritten public offering, (iii) the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities outstanding as of the date hereof as set forth in Schedule 4(c) or (iv) the ------------- grant of additional options or warrants, or the issuance of additional securities, under any duly authorized Company stock option, stock purchase or restricted stock plan for the benefit of the Company's employees, consultants or directors. j. Operations in the Ordinary Course. Between the date of this Agreement --------------------------------- and the Closing Date, the Company shall, and shall cause its subsidiaries to, conduct its business in all material respects in the ordinary course consistent with past practice, and shall use reasonable best efforts to preserve intact its business organization and maintain its existing relations and goodwill with customers, suppliers, regulators, distributors, creditors, lessors and others having business dealings with it. 6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. ---------------------------------------------- The obligation of the Company hereunder to issue and sell Shares and Warrants to the Purchasers at the Closing hereunder is subject to the satisfaction, at or before the Closing Date, of each of the following conditions thereto; provided, however, that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion. a. The representations and warranties of the Purchasers shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which representations and warranties shall be true and correct as of such date), and the Purchasers shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Purchasers at or prior to the Closing Date. b. No statute, rule, regulation, executive order, decree, ruling, injunction, action, proceeding or interpretation shall have been enacted, entered, promulgated, endorsed or adopted by any court or governmental authority of competent jurisdiction or any self-regulatory organization, or the staff of any thereof, having authority over the matters contemplated hereby which questions the validity of, or challenges or prohibits the consummation of, any of the transactions contemplated by this Agreement. 12 7. CONDITIONS TO PURCHASERS' OBLIGATION TO PURCHASE SHARES AND WARRANTS. -------------------------------------------------------------------- The obligation of the Purchasers hereunder to purchase Shares and Warrants to be purchased by them hereunder is subject to the satisfaction, at or before the Closing Date, of each of the following conditions; provided, however that these conditions are for the Purchasers' sole benefit and may be waived by the Purchasers at any time in the Purchasers' sole discretion: a. The Company shall have delivered to the Purchasers duly executed certificates representing the number of Shares and duly executed Warrants as provided in Section 2(b) above. b. The representations and warranties of the Company shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which representations and warranties shall be true and correct as of such date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Purchasers shall have received a certificate, executed on behalf of the Company by its Chief Financial Officer, dated as of the Closing Date, to the foregoing effect and attaching true and correct copies of the resolutions adopted by the Company's Board of Directors authorizing the execution, delivery and performance by the Company of its obligations under this Agreement, the Certificate of Designations, the Warrants and the Investor Rights Agreement. c. No statute, rule, regulation, executive order, decree, ruling, injunction, action, proceeding or interpretation shall have been enacted, entered, promulgated, endorsed or adopted by any court or governmental authority of competent jurisdiction or any self-regulatory organization, or the staff of any thereof, having authority over the matters contemplated hereby which questions the validity of, or challenges or prohibits the consummation of, any of the transactions contemplated by this Agreement. d. The Purchasers shall have received an opinion of the Company's counsel, dated as of the Closing Date, in the form of Exhibit D attached hereto. --------- e. From the date of this Agreement through the Closing Date, there shall not have occurred any Material Adverse Effect. 8. GOVERNING LAW; MISCELLANEOUS. ---------------------------- a. Governing Law; Jurisdiction. This Agreement shall be governed by and --------------------------- construed in accordance with the laws of the State of California applicable to contracts made and to be performed in the State of California. Each of the parties irrevocably consents to the jurisdiction of the United States federal courts and the state courts located in the State of California in any suit or proceeding based on or arising under this Agreement and irrevocably agrees that all claims in respect of such suit or proceeding may be determined in such courts. 13 Each of the parties irrevocably waives the defense of an inconvenient forum to the maintenance of such suit or proceeding. Each of the parties further agrees that service of process upon such party mailed by first class mail to the address set forth in Section 8(f) shall be deemed in every respect effective service of process upon such party in any such suit or proceeding. Nothing herein shall affect the right of the Purchasers to serve process in any other manner permitted by law. Each of the parties, agrees that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner. b. Counterparts. This Agreement may be executed in two or more ------------ counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. In the event any signature is delivered by facsimile transmission, the party using such means of delivery shall cause the manually executed Execution Page(s) hereof to be physically delivered to the other party within five (5) days of the execution hereof. c. Headings. The headings of this Agreement are for convenience of -------- reference and shall not form part of, or affect the interpretation of, this Agreement. d. Severability. If any provision of this Agreement shall be invalid or ------------ unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction. e. Entire Agreement; Amendments; Waiver. This Agreement and the ------------------------------------ instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Purchasers make any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing. Any waiver by the Purchasers, on the one hand, or the Company, on the other hand, of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision of or any breach of any other provision of this Agreement. The failure of the Purchasers, on the one hand, or the Company, on the other hand to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. f. Notices. Any notices required or permitted to be given under the ------- terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier or by confirmed telecopy, and shall be effective five days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier or confirmed telecopy, in each case addressed to a party. The addresses for such communications shall be: 14 If to the Company: BioSource International, Inc. 820 Flynn Road Camarillo, California 93012 Facsimile No.: (805) 383-5382 Attention: James Chamberlain, President and Chief Executive Officer With a copy, which shall not constitute notice, to: Troop Steuber Pasich Reddick & Tobey, LLP 2029 Century Park East, 24th Floor Los Angeles, CA 90067 Facsimile No.: (310) 728-2222 Attention: Scott W. Alderton, Esq. If to a Purchaser, to the address set forth under such Purchaser's name on the Execution Page hereto executed by such Purchaser, with a copy, which shall not constitute notice, to: Latham & Watkins 505 Montgomery Street, Suite 1900 San Francisco, CA 94111-2562 Facsimile No.: (415) 395-8095 Attention: Scott Haber, Esq. Each party hereto may from time to time change its address or facsimile number for notices under this Section 8 by giving at least ten (10) days' prior written notice of such changed address or facsimile number, in the case of the Purchasers to the Company, and in the case of the Company to the Purchasers. g. Successors and Assigns. This Agreement shall be binding upon and ---------------------- inure to the benefit of the parties and their successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers, such consent not to be unreasonably withheld, conditioned or delayed. The Purchasers shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company, such consent not to be unreasonably withheld, conditioned or delayed, except to an affiliate of such Purchaser, and provided further, that any such assignee shall agree in writing with the Company to be bound by the terms and conditions hereof and of the Investor Rights Agreement. h. Third Party Beneficiaries. This Agreement is intended for the benefit ------------------------- of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by any other person. i. Survival. The representations and warranties of the Company shall -------- survive for 15 one (1) year following the Closing Date (other than Section 4(d) which shall survive indefinitely), notwithstanding any due diligence investigation conducted by or on behalf of the Purchasers. Moreover, none of the representations and warranties made by the Company herein shall act as a waiver of any rights or remedies the Purchasers may have under applicable federal or state securities laws. The Company agrees to indemnify and hold harmless the Purchasers and each of the Purchasers' respective officers, directors, employees, partners, members, agents and affiliates for loss or damage relating to the Securities purchased hereunder arising as a result of or related to any breach by the Company of any of its representations or covenants set forth herein, including advancement of expenses as they are incurred. j. Publicity. The Company shall have the right to approve the issuance --------- of any press releases or any other public statements with respect to the transactions contemplated hereby. Within five days after the Closing Date, the Company shall file a Current Report on Form 8-K or other appropriate form with the SEC disclosing the transactions contemplated hereby. Nothing contained in this Section 8(j) shall prevent the Company from satisfying its disclosure obligations under the federal or state securities laws or pursuant to any rule of any trading market that is a principal trading market for any of the Company's securities. k. Further Assurances. Each party shall do and perform, or cause to be ------------------ done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. l. Termination. In the event that the Closing shall not have occurred on ----------- or before March 31, 2000, or such other date as the Company and the Purchasers may mutually agree, this Agreement shall terminate at the close of business on such date. Notwithstanding any termination of this Agreement, any party not in breach of this Agreement shall preserve all rights and remedies it may have against another party hereto for a breach of this Agreement prior to or relating to the termination hereof. l. California Corporate Securities Law. THE SALE OF THE SECURITIES THAT ----------------------------------- ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS EXEMPT. 16 IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused this Agreement to be duly executed as of the date first above written. COMPANY: BIOSOURCE INTERNATIONAL, INC. By: /s/ James Chamberlain ----------------------------------------- James Chamberlain President and Chief Executive Officer The Purchasers: GENSTAR CAPITAL PARTNERS II, L.P. By: Genstar Capital LLC By: /s/ Jean-Pierre L. Conte ----------------------------------------- Jean-Pierre L. Conte Managing Director Investment Amount: $8,829,270.00 Shares of Series B Preferred: 364,244 No. of Warrants: 1,262,542 Address: 555 California Street, Suite 4850 San Francisco, CA 94104 Telecopy No.: (415) 834-2383 Attention: Jean-Pierre L. Conte STARGEN II LLC By: /s/ Jean-Pierre L. Conte ----------------------------------------- Jean-Pierre L. Conte Member Investment Amount: $171,042.00 Shares of Series B Preferred: 7,056 No. of Warrants: 24,458 Address: 555 California Street, Suite 4850 San Francisco, CA 94104 Telecopy No.: (415) 834-2383 Attention: Jean-Pierre L. Conte 17 EX-99.3 4 WARRANT - BIOSOURCE TO BE ISSUED TO GENSTAR CAPITAL PTNRS EXHIBIT 3 THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH SECURITIES IS MADE PURSUANT TO SEC RULE 144. WARRANT TO PURCHASE COMMON STOCK OF BIOSOURCE INTERNATIONAL, INC. NO. February __, 2000 THIS CERTIFIES THAT, for value received by BioSource International, Inc., a Delaware corporation (the "Company"), GenStar Capital Partners II, LP, or its ------- permitted registered assigns ("Holder"), is entitled, subject to the terms and ------ conditions of this Warrant, at any time or from time to time after the issuance date of this Warrant (the "Effective Date"), and before 5:00 p.m. Pacific Time --------------- on the fifth (5th) anniversary of the Effective Date (the "Expiration Date"), to --------------- purchase from the Company 1,262,542 shares of Common Stock of the Company, at a price per share of $7.77 (the "Purchase Price"). Both the number of shares of --------------- Common Stock purchasable upon exercise of this Warrant and the Purchase Price are subject to adjustment and change as provided herein. 1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have the following respective meanings: 1.1 "Fair Market Value" of a share of Common Stock as of a particular ----------------- date shall mean: (a) If traded on a securities exchange or the Nasdaq National Market, the Fair Market Value shall be deemed to be the average of the closing prices of the Common Stock of the Company on such exchange or market over the five (5) trading days ending immediately prior to the applicable date of valuation; (b) If actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the closing bid prices over the thirty (30)-day period ending immediately prior to the applicable date of valuation; and (c) If there is no active public market, the Fair Market Value shall be the value thereof, as agreed upon by the Company and the Holder; provided, however, that if the Company and the Holder cannot agree on such value, such value shall be determined by an independent valuation firm experienced in valuing businesses such as the Company and jointly selected in good faith by the Company and the Holder. Fees and expenses of the valuation firm shall be paid for by the Company. 1.2 "Registered Holder" shall mean any Holder in whose name this Warrant ----------------- is registered upon the books and records maintained by the Company. 1.3 "Warrant" as used herein, shall include this Warrant and any warrant ------- delivered in substitution or exchange therefor as provided herein. 1.4 "Common Stock" shall mean the Common Stock of the Company and any ------------ other securities at any time receivable or issuable upon exercise of this Warrant. 2. EXERCISE OF WARRANT. 2.1 Payment. Subject to compliance with the terms and conditions of this ------- Warrant and applicable securities laws, this Warrant may be exercised, in whole or in part at any time or from time to time, on or before the Expiration Date by the delivery (including, without limitation, delivery by facsimile) of the form of Notice of Exercise attached hereto as Exhibit A (the "Notice of Exercise"), duly executed by the Holder, at the principal office of the Company, and as soon as practicable after such date, surrendering (a) this Warrant at the principal office of the Company, and (b) payment, (i) in cash (by check) or by wire transfer, (ii) by cancellation by the Holder of indebtedness of the Company to the Holder; or (iii) by a combination of (i) and (ii), of an amount equal to the product obtained by multiplying the number of shares of Common Stock being purchased upon such exercise by the then effective Purchase Price (the "Exercise Amount"). --------------- 2.2 Net Issue Exercise. In lieu of the payment methods set forth in ------------------ Section 2.1(b) above, the Holder may elect to exchange all or some of this - -------------- Warrant for shares of Common Stock equal to the value of the amount of the Warrant being exchanged on the date of exchange. If Holder elects to exchange this Warrant as provided in this Section 2.2, Holder shall tender to the Company ----------- the Warrant for the amount being exchanged, along with written notice of Holder's election to exchange some or all of the Warrant, and the Company shall issue to Holder the number of shares of the Common Stock computed using the following formula: X = Y (A-B) ------------- A Where: X = the number of shares of Common Stock to be issued to Holder. Y = the number of shares of Common Stock purchasable under the amount of the Warrant being exchanged (as adjusted to the date of such calculation). A = the Fair Market Value of one share of the Common Stock. B = Purchase Price (as adjusted to the date of such calculation). 2.3 "Easy Sale" Exercise. In lieu of the payment methods set forth in ------------------- Sections 2.1(b) and 2.2, above, when permitted by law and applicable regulations - ----------------------- (including Nasdaq and NASD rules), the Holder may pay the Purchase Price through a "same day sale" commitment from the Holder (and if applicable a broker-dealer that is a member of the National Association of Securities Dealers (an "NASD ---- Dealer")), whereby the Holder irrevocably elects to exercise this - ------ 2 Warrant and to sell a portion of the shares so purchased to pay the Purchase Price and the Holder (or, if applicable, the NASD Dealer) commits upon sale (or, in the case of the NASD Dealer, upon receipt) of such shares to forward the Purchase Price directly to the Company. 2.4 Stock Certificates; Fractional Shares. As soon as practicable on or ------------------------------------- after the date of any exercise of this Warrant, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of whole shares of Common Stock issuable upon such exercise, together with cash in lieu of any fraction of a share equal to such fraction of the current Fair Market Value of one whole share of Common Stock as of such date of exercise. No fractional shares or scrip representing fractional shares shall be issued upon an exercise of this Warrant. 2.5 Partial Exercise; Effective Date of Exercise. In case of any partial -------------------------------------------- exercise of this Warrant, the Company shall cancel this Warrant upon surrender hereof and shall execute and deliver a new Warrant of like tenor and date for the balance of the shares of Common Stock purchasable hereunder. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above. The person entitled to receive the shares of Common Stock issuable upon exercise of this Warrant shall be treated for all purposes as the holder of record of such shares as of the close of business on the date the Holder is deemed to have exercised this Warrant. 2.6 Vesting. This Warrant shall vest fully upon issuance. ------- 3. VALID ISSUANCE: TAXES. All shares of Common Stock issued upon the exercise of this Warrant shall be validly issued, fully paid and non-assessable, and the Company shall pay all taxes and other governmental charges that may be imposed in respect of the issue or delivery thereof. The Company shall not be required to pay any tax or other charge imposed in connection with any transfer involved in the issuance of any certificate for shares of Common Stock in any name other than that of the Registered Holder of this Warrant, and in such case the Company shall not be required to issue or deliver any stock certificate or security until such tax or other charge has been paid, or it has been established to the Company's reasonable satisfaction that no tax or other charge is due. 4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities or property receivable or issuable upon exercise of this Warrant) and the Purchase Price are subject to adjustment upon occurrence of the following events: 4.1 Adjustment for Stock Splits, Stock Subdivisions or Combinations of ------------------------------------------------------------------ Shares. The Purchase Price of this Warrant shall be proportionally decreased and - ------ the number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities at the time issuable upon exercise of this Warrant) shall be proportionally increased to reflect any stock split or subdivision of the Company's Common Stock. The Purchase Price of this Warrant shall be proportionally increased and the number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities at the time issuable upon exercise of this Warrant) shall be proportionally decreased to reflect any combination of the Company's Common Stock. 4.2 Adjustment for Dividends or Distributions of Stock or Other ----------------------------------------------------------- Securities or Property. In case the Company shall make or issue, or shall fix a - ---------------------- record date for the determination 3 of eligible holders entitled to receive, a dividend or other distribution with respect to the Common Stock (or any shares of stock or other securities at the time issuable upon exercise of the Warrant) payable in (a) securities of the Company or (b) assets or (c) cash dividends paid or payable solely out of retained earnings, but only if such cash dividends are Extraordinary Dividends (as defined below), then, in each such case, the Holder of this Warrant on exercise hereof at any time after the consummation, effective date or record date of such dividend or other distribution, shall receive, in addition to the shares of Common Stock (or such other stock or securities) issuable on such exercise prior to such date, and without the payment of additional consideration therefor, the securities, assets or cash to which such Holder would have been entitled upon such date if such Holder had exercised this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and all such additional securities, assets or cash distributed with respect to such shares as aforesaid during such period giving effect to all adjustments called for by this Section 4. "Extraordinary Dividends" shall mean dividends or distributions - --------- declared with respect to the Common Stock that are in an amount greater than 3% of the aggregate Fair Market Value of the shares of capital stock receiving such dividends as of the trading day prior to the declaration of such dividends or distributions. 4.3 Reclassification. If the Company, by reclassification of securities ---------------- or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change, and the Purchase Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 4. No adjustment shall be made pursuant to this Section 4.3 upon any conversion or redemption of ----------- the Common Stock which is the subject of Section 4.5. ----------- 4.4 Adjustment for Capital Reorganization, Merger or Consolidation. In -------------------------------------------------------------- case of any capital reorganization of the capital stock of the Company (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), or any merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all the assets of the Company then, and in each such case, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the Holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 4. The foregoing provisions of this Section 4.4 shall similarly --------- ----------- apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. If the per-share consideration payable to the Holder hereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company's Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. 4 4.5 Conversion of Common Stock. In case all or any portion of the -------------------------- authorized and outstanding shares of Common Stock of the Company are redeemed or converted or reclassified into other securities or property pursuant to the Company's Certificate of Incorporation or otherwise, or the Common Stock otherwise ceases to exist, then, in such case, the Holder of this Warrant, upon exercise hereof at any time after the date on which the Common Stock is so redeemed or converted, reclassified or ceases to exist (the "Termination Date"), ---------------- shall receive, in lieu of the number of shares of Common Stock that would have been issuable upon such exercise immediately prior to the Termination Date, the securities or property that would have been received if this Warrant had been exercised in full and the Common Stock received thereupon had been simultaneously converted immediately prior to the Termination Date, all subject to further adjustment as provided in this Warrant. Additionally, the Purchase Price shall be immediately adjusted to equal the quotient obtained by dividing (x) the aggregate Purchase Price of the maximum number of shares of Common Stock for which this Warrant was exercisable immediately prior to the Termination Date by (y) the number of shares of Common Stock of the Company for which this Warrant is exercisable immediately after the Termination Date, all subject to further adjustment as provided herein. 4.6 Issuances Below Market. In case the Company shall issue or sell (a) ---------------------- Common Stock, (b) rights, warrants or options entitling the holders thereof to subscribe for or purchase shares of Common Stock or (c) any security convertible into Common Stock, in each case at a price, or having an exercise or conversion price, per share less than the Purchase Price (excluding any issuance for which an appropriate and full adjustment has been made pursuant to Section 4.2), the Purchase Price shall be immediately reduced by multiplying the Purchase Price by a fraction of which (A) the numerator shall be the number of shares of Common Stock outstanding immediately prior to such issuance or sale plus the number of shares of Common Stock which the aggregate consideration received or receivable (I) for the total number of shares of Common Stock, rights, warrants or options or convertible securities so issued or sold and (II) upon the exercise or conversion of all such rights, warrants, options or securities, would purchase at such Purchase Price, and (B) the denominator shall be the number of shares of Common Stock outstanding immediately prior to such issuance plus (without duplication) the number of shares of Common Stock subject to all such rights, warrants, options and convertible securities. The issuance of any shares of Common Stock or other rights, warrants, options or convertible securities pursuant to (a) the effectuation of a split or subdivision of the outstanding shares of Common Stock or a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock, (b) Common Stock (or securities exercisable or convertible into Common Stock) issuable or issued to employees, consultants or directors of the Company after the Purchase Date directly or pursuant to a stock option plan or restricted stock plan approved by the Board of Directors of the Company, (c) securities issued pursuant to the conversion or exercise of convertible or exercisable securities outstanding or deemed outstanding on the date of this Warrant, and (d) securities issued or issuable in connection with the acquisition, merger, consolidation, or other business combination by or of the Company with, by, or of any person, shall not be deemed to constitute an issuance or sale to which this Section 4.6 applies. 5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the Purchase Price, or number or type of shares issuable upon exercise of this Warrant, the Chief Financial Officer or Controller of the Company shall compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based, including a statement of the adjusted Purchase 5 Price. The Company shall promptly send (by facsimile and by either first class mail, postage prepaid or overnight delivery) a copy of each such certificate to the Holder. 6. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to the Company of the ownership of and the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to it, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof a new Warrant of like tenor as the lost, stolen, destroyed or mutilated Warrant. 7. RESERVATION OF COMMON STOCK. The Company hereby covenants 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 as are from time to time issuable upon exercise of this Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation. All such shares shall be duly authorized, and when issued upon such exercise, shall be validly issued, fully paid and non-assessable, 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 encumbrances or restrictions arising under federal or state securities laws. Issuance of this Warrant shall constitute full authority to the Company's Officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the exercise of this Warrant. 8. TRANSFER AND EXCHANGE. Subject to the terms and conditions of this Warrant and compliance with all applicable securities laws, this Warrant and all rights hereunder may be transferred to any Registered Holder's parent, subsidiary or affiliate, or, if the Registered Holder is a partnership, to any partner of such Registered Holder, or, if the Registered Holder is a limited liability company, to any member of such Registered Holder, in whole or in part, on the books of the Company maintained for such purpose at the principal office of the Company referred to above, by the Registered Holder hereof in person, or by duly authorized attorney, upon surrender of this Warrant properly endorsed and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. Upon any permitted partial transfer, the Company will issue and deliver to the Registered Holder a new Warrant or Warrants with respect to the shares of Common Stock not so transferred. Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that when this Warrant shall have been so endorsed, the person in possession of this Warrant may be treated by the Company, and all other persons dealing with this Warrant, as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, any notice to the contrary notwithstanding; provided, however that until a transfer of this Warrant is duly registered on the books of the Company, the Company may treat the Registered Holder hereof as the owner for all purposes. 9. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees that, absent an effective registration statement filed with the Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended --- (the "Securities Act") covering the disposition or sale of this Warrant or the -------------- Common Stock issued or issuable upon exercise hereof, as the case may be, and registration or qualification under applicable state securities laws, such Holder will not sell, transfer, pledge, or hypothecate any or all of this Warrant or such Common Stock, as the case may be, unless either (i) the Company has received an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such registration is not required 6 in connection with such disposition, (ii) the sale of such securities is made pursuant to SEC Rule 144or (iii) such sale or transfer is to the Holder's parent, subsidiary or affiliate, or, if the Holder is a partnership, to any partner of such Holder, or, if the Holder is a limited liability company, to any member of such Holder, pursuant to an exemption under the Securities Act. 10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the Holder hereby represents, warrants and covenants that any shares of stock purchased upon exercise of this Warrant shall be acquired for investment only and not with a view to, or for sale in connection with, any distribution thereof; that the Holder has had such opportunity as such Holder has deemed adequate to obtain from representatives of the Company such information as is necessary to permit the Holder to evaluate the merits and risks of its investment in the Company; that the Holder is able to bear the economic risk of holding such shares as may be acquired pursuant to the exercise of this Warrant for an indefinite period; that the Holder understands that the shares of stock acquired pursuant to the exercise of this Warrant will not be registered under the Securities Act (unless otherwise required pursuant to exercise by the Holder of the registration rights, if any, granted to the Registered Holder) and will be "restricted securities" within the meaning of Rule 144 under the Securities Act and that the exemption from registration under Rule 144 will not be available for at least one (1) year from the date of exercise of this Warrant, subject to any special treatment by the SEC for exercise of this Warrant pursuant to Section 2.2, and even then will not be available unless a public ----------- market then exists for the stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and that all stock certificates representing shares of stock issued to the Holder upon exercise of this Warrant or upon conversion of such shares may have affixed thereto a legend substantially in the following form: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 11. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. In the absence of affirmative action by such Holder to purchase Common Stock by exercise of this Warrant or Common Stock upon conversion thereof, no provisions of this Warrant, and no enumeration herein of the rights or privileges of the Holder hereof shall cause such Holder hereof to be a stockholder of the Company for any purpose. 12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to Holder that: 7 12.1 Due Authorization; Consents. All corporate action on the part of --------------------------- the Company, its officers, directors and shareholders necessary for (a) the authorization, execution and delivery of, and the performance of all obligations of the Company under, this Warrant, and (b) the authorization, issuance, reservation for issuance and delivery of all of the Common Stock issuable upon exercise of this Warrant, has been duly taken. This Warrant constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors' rights generally and to general equitable principles. All consents, approvals and authorizations of, and registrations, qualifications and filings with, any federal or state governmental agency, authority or body, or any third party, required in connection with the execution, delivery and performance of this Warrant and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the issuance and delivery of all of the Common Stock issuable upon exercise of this Warrant, have been obtained. 12.2 Organization. The Company is a corporation duly organized, validly ------------ existing and in good standing under the laws of the State of Delaware and has all requisite corporate power to own, lease and operate its property and to carry on its business as now being conducted and as currently proposed to be conducted. 12.3 Valid Issuance of Stock. The outstanding shares of the capital ----------------------- stock of the Company are duly and validly issued, fully paid and non-assessable, and such shares, and all outstanding options and other securities of the Company, have been issued in full compliance with the registration and prospectus delivery requirements of the Securities Act and the registration and qualification requirements of all applicable state securities laws, or in compliance with applicable exemptions therefrom, and all other provisions of applicable federal and state securities laws, including without limitation, anti-fraud provisions. 12.4 Governmental Consents. All consents, approvals, orders, --------------------- authorizations or registrations, qualifications, declarations or filings with any federal or state governmental authority on the part of the Company required in connection with the consummation of the transactions contemplated herein, including, without limitation, those under the Securities Act and all applicable state securities laws, shall have been obtained prior to and be effective as of the Effective Date. 12.5 Listing on Nasdaq or Securities Exchange. The Company shall use its ---------------------------------------- best efforts to list any shares of Common Stock issuable upon exercise of this Warrant on Nasdaq or such other national securities exchange on which shares of Common Stock are then listed. The Company will at its expense cause all shares of Common Stock issued upon exercise of this Warrant to be listed on Nasdaq and/or such other national securities exchange on which shares of Common Stock are then listed at the time of such issuance and shall maintain such listing. 12.6 No Impairment. The Company further covenants that it will not, by ------------- amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by the Company. 13. NOTICES. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other party; (b) when received when sent by facsimile at the address and number set forth below; (c) three business days 8 after deposit in the U.S. mail with first class or certified mail receipt requested postage prepaid and addressed to the other party as set forth below; or (d) the next business day after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. To Holder: To the Company: GenStar Capital Partners II, LP BioSource International, Inc. 820 Flynn Road Camarillo, California 93012 Telephone No.: (805) Facsimile No.: (805) Attention: James Chamberlain President and Chief Executive Officer With copies to (which shall not With copies to (which shall not constitute notice): constitute notice): Latham & Watkins Troop Steuber Pasich Reddick & Tobe 505 Montgomery Street, Suite 1900 2029 Century Park East, 24th Floor y, LLP San Francisco, CA 94111-2562 Los Angeles, CA 90067 Telephone No.: (415) 391-0600 Telephone No.: (310) 728-3222 Facsimile No.: (415) 395-8095 Facsimile No.: (310) 728-2222 Attention: Scott Haber, Esq. Attention: Scott W. Alderton, Esq.
Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 14 by giving the other party written ---------- notice of the new address in the manner set forth above. 14. HEADINGS. The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof. 15. LAW GOVERNING. This Warrant shall be construed and enforced in accordance with, and governed by, the laws of the State of California, with regard to conflict of law principles of such state. 16. NO IMPAIRMENT. The Company will not, by amendment of its Certificate of Incorporation or bylaws, or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Registered Holder of this Warrant against impairment. Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of stock issuable upon the exercise of this Warrant above the amount payable therefor upon such exercise, and (b) will take all such action as may be necessary or appropriate in order that the 9 Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon exercise of this Warrant. 17. NOTICES OF RECORD DATE. In case: 17.1 the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant), for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities or to receive any other right; or 17.2 of any consolidation or merger of the Company with or into another corporation, any capital reorganization of the Company, any reclassification of the capital stock of the Company, or any conveyance of all or substantially all of the assets of the Company to another corporation in which holders of the Company's stock are to receive stock, securities or property of another corporation; or 17.3 of any voluntary dissolution, liquidation or winding-up of the Company; or 17.4 of any redemption or conversion of all outstanding Common Stock; then, and in each such case, the Company will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation, winding-up, redemption or conversion is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock or (such stock or securities as at the time are receivable upon the exercise of this Warrant), shall be entitled to exchange their shares of Common Stock (or such other stock or securities), for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. The Company shall use all reasonable efforts to ensure such notice shall be delivered at least thirty (30) days prior to the date therein specified. 18. SEVERABILITY. If any term, provision, covenant or restriction of this Warrant is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Warrant shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 19. COUNTERPARTS. For the convenience of the parties, any number of counterparts of this Warrant may be executed by the parties hereto and each such executed counterpart shall be, and shall be deemed to be, an original instrument. 20. NO INCONSISTENT AGREEMENTS. The Company will not on or after the date of this Warrant enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders of this Warrant or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to holders of the Company's securities under any other agreements, except rights that have been waived. 21. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a Saturday, Sunday or legal holiday, the Expiration Date shall automatically be extended until 5:00 p.m. the next business day. 10 22. ENTIRE AGREEMENT. This Warrant, the Securities Purchase Agreement dated as of January 10, 2000 by and among the Company and the Holder, and the Investor Rights Agreement dated as of February __, 2000 by and among the Company and the Holder, contain the sole and entire agreement and understanding of the parties with respect to the entire subject matter of this Warrant, and any and all prior discussions, negotiations, commitments and understandings, whether oral or otherwise, related to the subject matter of this Warrant are hereby merged herein. IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Effective Date. BIOSOURCE INTERNATIONAL, INC. - --------------------------------------- By Printed Name Title 11 EXHIBIT A --------- NOTICE OF EXERCISE (To be executed upon exercise of Warrant) BioSource International, Inc. The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate for, and to purchase thereunder, the securities of BioSource International, Inc., as provided for therein, and (check the applicable box): [_] tenders herewith payment of the exercise price in full in the form of cash or a certified or official bank check in same-day funds in the amount of $____________ for _________ such securities. [_] Elects the [Net Issue Exercise][Easy Sale Exercise] option pursuant to Section 2.2 or 2.3 of the Warrant, and accordingly requests delivery of a net of ______________ of such securities. Please issue a certificate or certificates for such securities in the name of, and pay any cash for any fractional share to (please print name, address and social security number): Name: ---------------------------------------------------------------- Address: ---------------------------------------------------------------- Signature: ---------------------------------------------------------------- Note: The above signature should correspond exactly with the name on the first page of this Warrant Certificate or with the name of the assignee appearing in the assignment form below. If said number of shares shall not be all the shares purchasable under the within Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the shares purchasable thereunder rounded up to the next higher whole number of shares. EXHIBIT B --------- ASSIGNMENT (To be executed only upon assignment of Warrant Certificate) For value received, hereby sells, assigns and transfers unto ___________________ ____________________________ the within Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________________ attorney, to transfer said Warrant Certificate on the books of the within-named Company with respect to the number of Warrants set forth below, with full power of substitution in the premises:
- --------------------------------------- ------------------------------------- ------------------------------------ Name(s) of Assignee(s) Address # of Warrants - --------------------------------------- ------------------------------------- ------------------------------------ - --------------------------------------- ------------------------------------- ------------------------------------ - --------------------------------------- ------------------------------------- ------------------------------------ - --------------------------------------- ------------------------------------- ------------------------------------ - --------------------------------------- ------------------------------------- ------------------------------------ - --------------------------------------- ------------------------------------- ------------------------------------
And if said number of Warrants shall not be all the Warrants represented by the Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the Warrants registered by said Warrant Certificate. -------------------------------------------------------------- Dated: -------------------------------------------------------------- Signature: -------------------------------------------------------------- Notice: The signature to the foregoing Assignment must correspond to the name as written upon the face of this security in every particular, without alteration or any change whatsoever; signature(s) must be guaranteed by an eligible guarantor institution (banks, stock brokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Securities and Exchange Commission Rule 17Ad-15. EX-99.4 5 WARRANT - BIOSOURCE TO BE ISSUED TO STARGEN II LLC EXHIBIT 4 THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH SECURITIES IS MADE PURSUANT TO SEC RULE 144. WARRANT TO PURCHASE COMMON STOCK OF BIOSOURCE INTERNATIONAL, INC. NO. February __, 2000 THIS CERTIFIES THAT, for value received by BioSource International, Inc., a Delaware corporation (the "Company"), Stargen II LLC, or its permitted ------- registered assigns ("Holder"), is entitled, subject to the terms and conditions ------ of this Warrant, at any time or from time to time after the issuance date of this Warrant (the "Effective Date"), and before 5:00 p.m. Pacific Time on the -------------- fifth (5th) anniversary of the Effective Date (the "Expiration Date"), to --------------- purchase from the Company 24,458 shares of Common Stock of the Company, at a price per share of $7.77 (the "Purchase Price"). Both the number of shares of -------------- Common Stock purchasable upon exercise of this Warrant and the Purchase Price are subject to adjustment and change as provided herein. 1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have the following respective meanings: 1.1 "Fair Market Value" of a share of Common Stock as of a particular ------------------- date shall mean: (a) If traded on a securities exchange or the Nasdaq National Market, the Fair Market Value shall be deemed to be the average of the closing prices of the Common Stock of the Company on such exchange or market over the five (5) trading days ending immediately prior to the applicable date of valuation; (b) If actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the closing bid prices over the thirty (30)-day period ending immediately prior to the applicable date of valuation; and (c) If there is no active public market, the Fair Market Value shall be the value thereof, as agreed upon by the Company and the Holder; provided, however, that if the Company and the Holder cannot agree on such value, such value shall be determined by an independent valuation firm experienced in valuing businesses such as the Company and jointly selected in good faith by the Company and the Holder. Fees and expenses of the valuation firm shall be paid for by the Company. 1.2 "Registered Holder" shall mean any Holder in whose name this ----------------- Warrant is registered upon the books and records maintained by the Company. 1.3 "Warrant" as used herein, shall include this Warrant and any ------- warrant delivered in substitution or exchange therefor as provided herein . 1.4 "Common Stock" shall mean the Common Stock of the Company and any ------------ other securities at any time receivable or issuable upon exercise of this Warrant. 2. EXERCISE OF WARRANT. 2.1 Payment. Subject to compliance with the terms and conditions of ------- this Warrant and applicable securities laws, this Warrant may be exercised, in whole or in part at any time or from time to time, on or before the Expiration Date by the delivery (including, without limitation, delivery by facsimile) of the form of Notice of Exercise attached hereto as Exhibit A (the "Notice of --------- ------- Exercise"), duly executed by the Holder, at the principal office of the Company, - -------- and as soon as practicable after such date, surrendering (a) this Warrant at the principal office of the Company, and (b) payment, (i) in cash (by check) or by wire transfer, (ii) by cancellation by the Holder of indebtedness of the Company to the Holder; or (iii) by a combination of (i) and (ii), of an amount equal to the product obtained by multiplying the number of shares of Common Stock being purchased upon such exercise by the then effective Purchase Price (the "Exercise Amount"). --------------- 2.2 Net Issue Exercise. In lieu of the payment methods set forth in ------------------ Section 2.1(b) above, the Holder may elect to exchange all or some of this Warrant for shares of Common Stock equal to the value of the amount of the Warrant being exchanged on the date of exchange. If Holder elects to exchange this Warrant as provided in this Section 2.2, Holder shall tender to the Company ----------- the Warrant for the amount being exchanged, along with written notice of Holder's election to exchange some or all of the Warrant, and the Company shall issue to Holder the number of shares of the Common Stock computed using the following formula: X = Y (A-B) --------- A Where: X = the number of shares of Common Stock to be issued to Holder. Y = the number of shares of Common Stock purchasable under the amount of the Warrant being exchanged (as adjusted to the date of such calculation). A = the Fair Market Value of one share of the Common Stock. B = Purchase Price (as adjusted to the date of such calculation). 2.3 "Easy Sale" Exercise. In lieu of the payment methods set forth in -------------------- Sections 2.1(b) and 2.2, above, when permitted by law and applicable regulations - ----------------------- (including Nasdaq and NASD rules), the Holder may pay the Purchase Price through a "same day sale" commitment from the Holder (and if applicable a broker-dealer that is a member of the National Association of 2 Securities Dealers (an "NASD Dealer")), whereby the Holder irrevocably elects to ----------- exercise this Warrant and to sell a portion of the shares so purchased to pay the Purchase Price and the Holder (or, if applicable, the NASD Dealer) commits upon sale (or, in the case of the NASD Dealer, upon receipt) of such shares to forward the Purchase Price directly to the Company. 2.4 Stock Certificates; Fractional Shares. As soon as practicable on ------------------------------------- or after the date of any exercise of this Warrant, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of whole shares of Common Stock issuable upon such exercise, together with cash in lieu of any fraction of a share equal to such fraction of the current Fair Market Value of one whole share of Common Stock as of such date of exercise. No fractional shares or scrip representing fractional shares shall be issued upon an exercise of this Warrant. 2.5 Partial Exercise; Effective Date of Exercise. In case of any -------------------------------------------- partial exercise of this Warrant, the Company shall cancel this Warrant upon surrender hereof and shall execute and deliver a new Warrant of like tenor and date for the balance of the shares of Common Stock purchasable hereunder. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above. The person entitled to receive the shares of Common Stock issuable upon exercise of this Warrant shall be treated for all purposes as the holder of record of such shares as of the close of business on the date the Holder is deemed to have exercised this Warrant. 2.6 Vesting. This Warrant shall vest fully upon issuance. ------- 3. VALID ISSUANCE: TAXES. All shares of Common Stock issued upon the exercise of this Warrant shall be validly issued, fully paid and non-assessable, and the Company shall pay all taxes and other governmental charges that may be imposed in respect of the issue or delivery thereof. The Company shall not be required to pay any tax or other charge imposed in connection with any transfer involved in the issuance of any certificate for shares of Common Stock in any name other than that of the Registered Holder of this Warrant, and in such case the Company shall not be required to issue or deliver any stock certificate or security until such tax or other charge has been paid, or it has been established to the Company's reasonable satisfaction that no tax or other charge is due. 4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities or property receivable or issuable upon exercise of this Warrant) and the Purchase Price are subject to adjustment upon occurrence of the following events: 4.1 Adjustment for Stock Splits, Stock Subdivisions or Combinations of ------------------------------------------------------------------ Shares. The Purchase Price of this Warrant shall be proportionally decreased and - ------ the number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities at the time issuable upon exercise of this Warrant) shall be proportionally increased to reflect any stock split or subdivision of the Company's Common Stock. The Purchase Price of this Warrant shall be proportionally increased and the number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or other securities at the time issuable upon exercise of this Warrant) shall be proportionally decreased to reflect any combination of the Company's Common Stock. 3 4.2 Adjustment for Dividends or Distributions of Stock or Other ----------------------------------------------------------- Securities or Property. In case the Company shall make or issue, or shall fix a - ---------------------- record date for the determination of eligible holders entitled to receive, a dividend or other distribution with respect to the Common Stock (or any shares of stock or other securities at the time issuable upon exercise of the Warrant) payable in (a) securities of the Company or (b) assets or (c) cash dividends paid or payable solely out of retained earnings, but only if such cash dividends are Extraordinary Dividends (as defined below), then, in each such case, the Holder of this Warrant on exercise hereof at any time after the consummation, effective date or record date of such dividend or other distribution, shall receive, in addition to the shares of Common Stock (or such other stock or securities) issuable on such exercise prior to such date, and without the payment of additional consideration therefor, the securities, assets or cash to which such Holder would have been entitled upon such date if such Holder had exercised this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and all such additional securities, assets or cash distributed with respect to such shares as aforesaid during such period giving effect to all adjustments called for by this Section 4. "Extraordinary Dividends" shall mean --------- dividends or distributions declared with respect to the Common Stock that are in an amount greater than 3% of the aggregate Fair Market Value of the shares of capital stock receiving such dividends as of the trading day prior to the declaration of such dividends or distributions. 4.3 Reclassification. If the Company, by reclassification of ---------------- securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change, and the Purchase Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 4. No adjustment shall be made pursuant to this Section 4.3 upon any - --------- ----------- conversion or redemption of the Common Stock which is the subject of Section ------- 4.5. - --- 4.4 Adjustment for Capital Reorganization, Merger or Consolidation. In -------------------------------------------------------------- case of any capital reorganization of the capital stock of the Company (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), or any merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all the assets of the Company then, and in each such case, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the Holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 4. The foregoing provisions of this Section 4.4 shall similarly --------- ----------- apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. If the per-share consideration payable to the Holder hereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company's Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect 4 to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. 4.5 Conversion of Common Stock. In case all or any portion of the -------------------------- authorized and outstanding shares of Common Stock of the Company are redeemed or converted or reclassified into other securities or property pursuant to the Company's Certificate of Incorporation or otherwise, or the Common Stock otherwise ceases to exist, then, in such case, the Holder of this Warrant, upon exercise hereof at any time after the date on which the Common Stock is so redeemed or converted, reclassified or ceases to exist (the "Termination Date"), ---------------- shall receive, in lieu of the number of shares of Common Stock that would have been issuable upon such exercise immediately prior to the Termination Date, the securities or property that would have been received if this Warrant had been exercised in full and the Common Stock received thereupon had been simultaneously converted immediately prior to the Termination Date, all subject to further adjustment as provided in this Warrant. Additionally, the Purchase Price shall be immediately adjusted to equal the quotient obtained by dividing (x) the aggregate Purchase Price of the maximum number of shares of Common Stock for which this Warrant was exercisable immediately prior to the Termination Date by (y) the number of shares of Common Stock of the Company for which this Warrant is exercisable immediately after the Termination Date, all subject to further adjustment as provided herein. 4.6 Issuances Below Market. In case the Company shall issue or sell ---------------------- (a) Common Stock, (b) rights, warrants or options entitling the holders thereof to subscribe for or purchase shares of Common Stock or (c) any security convertible into Common Stock, in each case at a price, or having an exercise or conversion price, per share less than the Purchase Price (excluding any issuance for which an appropriate and full adjustment has been made pursuant to Section 4.2), the Purchase Price shall be immediately reduced by multiplying the Purchase Price by a fraction of which (A) the numerator shall be the number of shares of Common Stock outstanding immediately prior to such issuance or sale plus the number of shares of Common Stock which the aggregate consideration received or receivable (I) for the total number of shares of Common Stock, rights, warrants or options or convertible securities so issued or sold and (II) upon the exercise or conversion of all such rights, warrants, options or securities, would purchase at such Purchase Price, and (B) the denominator shall be the number of shares of Common Stock outstanding immediately prior to such issuance plus (without duplication) the number of shares of Common Stock subject to all such rights, warrants, options and convertible securities. The issuance of any shares of Common Stock or other rights, warrants, options or convertible securities pursuant to (a) the effectuation of a split or subdivision of the outstanding shares of Common Stock or a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock, (b) Common Stock (or securities exercisable or convertible into Common Stock) issuable or issued to employees, consultants or directors of the Company after the Purchase Date directly or pursuant to a stock option plan or restricted stock plan approved by the Board of Directors of the Company, (c) securities issued pursuant to the conversion or exercise of convertible or exercisable securities outstanding or deemed outstanding on the date of this Warrant, and (d) securities issued or issuable in connection with the acquisition, merger, consolidation, or other business combination by or of the Company with, by, or of any person, shall not be deemed to constitute an issuance or sale to which this Section 4.6 applies. 5 5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the Purchase Price, or number or type of shares issuable upon exercise of this Warrant, the Chief Financial Officer or Controller of the Company shall compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based, including a statement of the adjusted Purchase Price. The Company shall promptly send (by facsimile and by either first class mail, postage prepaid or overnight delivery) a copy of each such certificate to the Holder. 6. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to the Company of the ownership of and the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to it, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof a new Warrant of like tenor as the lost, stolen, destroyed or mutilated Warrant. 7. RESERVATION OF COMMON STOCK. The Company hereby covenants 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 as are from time to time issuable upon exercise of this Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation. All such shares shall be duly authorized, and when issued upon such exercise, shall be validly issued, fully paid and non-assessable, 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 encumbrances or restrictions arising under federal or state securities laws. Issuance of this Warrant shall constitute full authority to the Company's Officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the exercise of this Warrant. 8. TRANSFER AND EXCHANGE. Subject to the terms and conditions of this Warrant and compliance with all applicable securities laws, this Warrant and all rights hereunder may be transferred to any Registered Holder's parent, subsidiary or affiliate, or, if the Registered Holder is a partnership, to any partner of such Registered Holder, or, if the Registered Holder is a limited liability company, to any member of such Registered Holder, in whole or in part, on the books of the Company maintained for such purpose at the principal office of the Company referred to above, by the Registered Holder hereof in person, or by duly authorized attorney, upon surrender of this Warrant properly endorsed and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. Upon any permitted partial transfer, the Company will issue and deliver to the Registered Holder a new Warrant or Warrants with respect to the shares of Common Stock not so transferred. Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that when this Warrant shall have been so endorsed, the person in possession of this Warrant may be treated by the Company, and all other persons dealing with this Warrant, as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, any notice to the contrary notwithstanding; provided, however that until a transfer of this Warrant is duly registered on the books of the Company, the Company may treat the Registered Holder hereof as the owner for all purposes. 9. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees that, absent an effective registration statement filed with the Securities and Exchange Commission 6 (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act") --- -------------- covering the disposition or sale of this Warrant or the Common Stock issued or issuable upon exercise hereof, as the case may be, and registration or qualification under applicable state securities laws, such Holder will not sell, transfer, pledge, or hypothecate any or all of this Warrant or such Common Stock, as the case may be, unless either (i) the Company has received an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such registration is not required in connection with such disposition, (ii) the sale of such securities is made pursuant to SEC Rule 144or (iii) such sale or transfer is to the Holder's parent, subsidiary or affiliate, or, if the Holder is a partnership, to any partner of such Holder, or, if the Holder is a limited liability company, to any member of such Holder, pursuant to an exemption under the Securities Act. 10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the Holder hereby represents, warrants and covenants that any shares of stock purchased upon exercise of this Warrant shall be acquired for investment only and not with a view to, or for sale in connection with, any distribution thereof; that the Holder has had such opportunity as such Holder has deemed adequate to obtain from representatives of the Company such information as is necessary to permit the Holder to evaluate the merits and risks of its investment in the Company; that the Holder is able to bear the economic risk of holding such shares as may be acquired pursuant to the exercise of this Warrant for an indefinite period; that the Holder understands that the shares of stock acquired pursuant to the exercise of this Warrant will not be registered under the Securities Act (unless otherwise required pursuant to exercise by the Holder of the registration rights, if any, granted to the Registered Holder) and will be "restricted securities" within the meaning of Rule 144 under the Securities Act and that the exemption from registration under Rule 144 will not be available for at least one (1) year from the date of exercise of this Warrant, subject to any special treatment by the SEC for exercise of this Warrant pursuant to Section 2.2, and even then will not be available unless a public ----------- market then exists for the stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and that all stock certificates representing shares of stock issued to the Holder upon exercise of this Warrant or upon conversion of such shares may have affixed thereto a legend substantially in the following form: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 11. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. In the 7 absence of affirmative action by such Holder to purchase Common Stock by exercise of this Warrant or Common Stock upon conversion thereof, no provisions of this Warrant, and no enumeration herein of the rights or privileges of the Holder hereof shall cause such Holder hereof to be a stockholder of the Company for any purpose. 12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to Holder that: 12.1 Due Authorization; Consents. All corporate action on the --------------------------- part of the Company, its officers, directors and shareholders necessary for (a) the authorization, execution and delivery of, and the performance of all obligations of the Company under, this Warrant, and (b) the authorization, issuance, reservation for issuance and delivery of all of the Common Stock issuable upon exercise of this Warrant, has been duly taken. This Warrant constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors' rights generally and to general equitable principles. All consents, approvals and authorizations of, and registrations, qualifications and filings with, any federal or state governmental agency, authority or body, or any third party, required in connection with the execution, delivery and performance of this Warrant and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the issuance and delivery of all of the Common Stock issuable upon exercise of this Warrant, have been obtained. 12.2 Organization. The Company is a corporation duly organized, ------------ validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power to own, lease and operate its property and to carry on its business as now being conducted and as currently proposed to be conducted. 12.3 Valid Issuance of Stock. The outstanding shares of the ----------------------- capital stock of the Company are duly and validly issued, fully paid and non- assessable, and such shares, and all outstanding options and other securities of the Company, have been issued in full compliance with the registration and prospectus delivery requirements of the Securities Act and the registration and qualification requirements of all applicable state securities laws, or in compliance with applicable exemptions therefrom, and all other provisions of applicable federal and state securities laws, including without limitation, anti-fraud provisions. 12.4 Governmental Consents. All consents, approvals, orders, --------------------- authorizations or registrations, qualifications, declarations or filings with any federal or state governmental authority on the part of the Company required in connection with the consummation of the transactions contemplated herein, including, without limitation, those under the Securities Act and all applicable state securities laws, shall have been obtained prior to and be effective as of the Effective Date. 12.5 Listing on Nasdaq or Securities Exchange. The Company shall ---------------------------------------- use its best efforts to list any shares of Common Stock issuable upon exercise of this Warrant on Nasdaq or such other national securities exchange on which shares of Common Stock are then listed. The Company will at its expense cause all shares of Common Stock issued upon exercise of this Warrant to be listed on Nasdaq and/or such other national securities exchange on which shares of Common Stock are then listed at the time of such issuance and shall maintain such listing. 8 12.6 No Impairment. The Company further covenants that it will ------------- not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by the Company. 13. NOTICES. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other party; (b) when received when sent by facsimile at the address and number set forth below; (c) three business days after deposit in the U.S. mail with first class or certified mail receipt requested postage prepaid and addressed to the other party as set forth below; or (d) the next business day after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider.
To Holder: To the Company: Stargen II LLC BioSource International, Inc. 820 Flynn Road Camarillo, California 93012 Telephone No.: (805) Facsimile No.: (805) Attention: James Chamberlain President and Chief Executive Officer With copies to (which shall not With copies to (which shall not constitute notice): constitute notice): Latham & Watkins Troop Steuber Pasich Reddic & Tobey, 505 Montgomery Street, Suite 1900 LLP San Francisco, CA 94111-2562 2029 Century Park East, 24th Floor Telephone No.: (415) 391-0600 Los Angeles, CA 90067 Facsimile No.: (415) 395-8095 Telephone No.: (310) 728-3222 Attention: Scott Haber, Esq. Facsimile No.: (310) 728-2222 Attention: Scott W. Alderton Esq.
Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 14 by giving the other party written ---------- notice of the new address in the manner set forth above. 14. HEADINGS. The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof. 15. LAW GOVERNING. This Warrant shall be construed and enforced in accordance with, and governed by, the laws of the State of California, with regard to conflict of law principles of such state. 9 16. NO IMPAIRMENT. The Company will not, by amendment of its Certificate of Incorporation or bylaws, or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Registered Holder of this Warrant against impairment. Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of stock issuable upon the exercise of this Warrant above the amount payable therefor upon such exercise, and (b) will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon exercise of this Warrant. 17. NOTICES OF RECORD DATE. In case: 17.1 the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant), for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities or to receive any other right; or 17.2 of any consolidation or merger of the Company with or into another corporation, any capital reorganization of the Company, any reclassification of the capital stock of the Company, or any conveyance of all or substantially all of the assets of the Company to another corporation in which holders of the Company's stock are to receive stock, securities or property of another corporation; or 17.3 of any voluntary dissolution, liquidation or winding-up of the Company; or 17.4 of any redemption or conversion of all outstanding Common Stock; then, and in each such case, the Company will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation, winding-up, redemption or conversion is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock or (such stock or securities as at the time are receivable upon the exercise of this Warrant), shall be entitled to exchange their shares of Common Stock (or such other stock or securities), for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. The Company shall use all reasonable efforts to ensure such notice shall be delivered at least thirty (30) days prior to the date therein specified. 18. SEVERABILITY. If any term, provision, covenant or restriction of this Warrant is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Warrant shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 19. COUNTERPARTS. For the convenience of the parties, any number of counterparts of this Warrant may be executed by the parties hereto and each such executed counterpart shall be, and shall be deemed to be, an original instrument. 10 20. NO INCONSISTENT AGREEMENTS. The Company will not on or after the date of this Warrant enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders of this Warrant or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to holders of the Company's securities under any other agreements, except rights that have been waived. 21. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a Saturday, Sunday or legal holiday, the Expiration Date shall automatically be extended until 5:00 p.m. the next business day. 22. ENTIRE AGREEMENT. This Warrant, the Securities Purchase Agreement dated as of January 10, 2000 by and among the Company and the Holder, and the Investor Rights Agreement dated as of February __, 2000 by and among the Company and the Holder, contain the sole and entire agreement and understanding of the parties with respect to the entire subject matter of this Warrant, and any and all prior discussions, negotiations, commitments and understandings, whether oral or otherwise, related to the subject matter of this Warrant are hereby merged herein. IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Effective Date. BIOSOURCE INTERNATIONAL, INC. - ------------------------------------------- By Printed Name Title 11 EXHIBIT A --------- NOTICE OF EXERCISE (To be executed upon exercise of Warrant) BioSource International, Inc. The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate for, and to purchase thereunder, the securities of BioSource International, Inc., as provided for therein, and (check the applicable box): [ ] tenders herewith payment of the exercise price in full in the form of cash or a certified or official bank check in same-day funds in the amount of $____________ for _________ such securities. [ ] Elects the [Net Issue Exercise][Easy Sale Exercise] option pursuant to Section 2.2 or 2.3 of the Warrant, and accordingly requests delivery of a net of ______________ of such securities. Please issue a certificate or certificates for such securities in the name of, and pay any cash for any fractional share to (please print name, address and social security number): Name: ------------------------------------------------------------------ Address: ------------------------------------------------------------------ Signature: ------------------------------------------------------------------ Note: The above signature should correspond exactly with the name on the first page of this Warrant Certificate or with the name of the assignee appearing in the assignment form below. If said number of shares shall not be all the shares purchasable under the within Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the shares purchasable thereunder rounded up to the next higher whole number of shares. 12 EXHIBIT B --------- ASSIGNMENT (To be executed only upon assignment of Warrant Certificate) For value received, hereby sells, assigns and transfers unto _______________ the within Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________________ attorney, to transfer said Warrant Certificate on the books of the within-named Company with respect to the number of Warrants set forth below, with full power of substitution in the premises: - -------------------------------------------------------------------------------- Name(s) of Assignee(s) Address # of Warrants - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- And if said number of Warrants shall not be all the Warrants represented by the Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the Warrants registered by said Warrant Certificate. ------------------------------------------------------------------ Dated: ------------------------------------------------------------------ Signature: ------------------------------------------------------------------ Notice: The signature to the foregoing Assignment must correspond to the name as written upon the face of this security in every particular, without alteration or any change whatsoever; signature(s) must be guaranteed by an eligible guarantor institution (banks, stock brokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Securities and Exchange Commission Rule 17Ad-15. 13 EX-99.5 6 INVESTOR RIGHTS AGREEMENT EXHIBIT 5 INVESTOR RIGHTS AGREEMENT INVESTOR RIGHTS AGREEMENT (this "Agreement"), dated as of February __, 2000, by and among BIOSOURCE INTERNATIONAL, INC., a corporation organized under the laws of the State of Delaware (the "Company"), and GENSTAR CAPITAL PARTNERS II, L.P., Delaware limited partnership, and STARGEN II LLC, a Delaware limited liability company (each, an "Investor" and collectively, the "Investors"). R E C I T A L S - - - - - - - - A. The Company and the Investors have entered into a Securities Purchase Agreement dated as of January 10, 2000 (the "Purchase Agreement;" capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement). In connection with the Purchase Agreement, the Company has agreed, upon the terms and subject to the conditions contained therein, to issue and sell to the Investors an aggregate of 371,300 shares of the Company's Series B Convertible Preferred Stock, par value $0.001 per share (the "Series B Shares") and warrants to purchase an aggregate of 1,287,000 shares of the Company's Common Stock, par value $.001 per share (the "Warrants"). B. In connection with the transactions contemplated by the Purchase Agreement, the Company has agreed to provide to the Investors certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "Securities Act"), and applicable state securities laws. A G R E E M E N T - - - - - - - - - NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investors, intending to be legally bound, hereby agree as follows: 1. DEFINITIONS. ----------- As used in this Agreement, the following terms shall have the following meanings: (a) "register," "registered," and "registration" refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis ("Rule 415"), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the "SEC"). (b) "Registrable Securities" means the shares of Common Stock of the Company issued or issuable to the Investors upon conversion of the Series B Shares or upon exercise of the Warrants and any shares of capital stock issued or issuable, from time to time (with any adjustments), as a distribution on or in exchange for or otherwise with respect to the foregoing. (c) "Registration Statement" means one or more registration statements of the Company under the Securities Act registering all or a portion of the Registrable Securities. 2. REGISTRATION. ------------ (a) Requested Registration. ---------------------- (i) Request for Registration. If the Company shall receive from ------------------------ any Investor or Investors holding not less than 50% of the Registrable Securities then outstanding, at any time, a written request that the Company effect any registration with respect to all or a part of the Registrable Securities, the Company will, as soon as reasonably practicable, use its reasonable best efforts to effect such registration (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request; provided that the Company shall not be obligated -------- to effect, or take any action to effect, any such registration pursuant to this Section 2(a): A. after the Company has effected three (3) such registrations pursuant to this Section 2(a) requested by the Investors, and, in each case, such registrations have been declared or ordered effective and have remained effective for ninety (90) days; provided, however, that the limitation set forth in this Section 2(a)(i)A is not applicable if, at the time of the request for registration, the Company qualifies to register the resale of the Registrable Securities in accordance with the request on a Form S-3; B. if at the time of any request to register Registrable Securities, the Company is engaged or intends to engage in an acquisition, financing or other material transaction which, in the good faith determination of the Board of Directors of the Company, would be adversely affected by the requested registration to the material detriment of the Company, or the Board of Directors of the Company determines in good faith that the registration would require the disclosure of material information that the Company has a bona fide business purpose for preserving as confidential, and that the Company is not otherwise required by applicable securities laws or regulations to disclose, in which event, the Company may, at its option, direct that such request be delayed for a period not in excess of 120 days from the date of the determination by the Board of Directors, as the case may be; provided, however, that the Company may not exercise this deferral right more than once in any 12- -2- month period. Subject to Section 2(a)(ii), a Registration Statement filed pursuant to this Section 2(a)(i) may include other securities, other than Registrable Securities, of the Company which are held by the other stockholders ("Other Stockholders") of the Company. The Company shall prepare and file with the SEC, as soon as practicable, the applicable Registration Statement required by Section 2(a) and shall use reasonable best efforts to cause such Registration Statement to become effective as soon as practicable after such filing. The Company shall keep such Registration Statement effective pursuant to Rule 415 until the earliest of (i) one hundred and eighty (180) days from the date the applicable Registration Statement is declared effective by the SEC, (ii) the date at which all Registrable Securities included in such Registration Statement have been sold by the Investors or (iii) the date on which all of the Registrable Securities may (in the reasonable opinion of counsel to the Company) be immediately sold to the public without registration or restriction pursuant to Rule 144(k) under the Securities Act (the "Registration Period"). (ii) Underwriting. If the Investors intend to distribute the ------------ Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2(i)(a). If securities held by Other Stockholders are requested by such Other Stockholders to be included in any registration pursuant to this Section 2, the Company shall condition such inclusion on their acceptance of the further applicable provisions of this Section 2. The Investors and the Company shall (together with all Other Stockholders proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company and reasonably acceptable to such Investor; provided, however, that an Investor shall not be required to make any representations, warranties or indemnities except as they relate to such Investor's ownership of securities and authority to enter into the underwriting agreement and to such Investor's intended method of distribution, and the liability of such Investor shall be limited to an amount equal to the net proceeds from the offering received by such Investor. Notwithstanding any other provision of this Section 2(a), if the representative advises the Investors in writing that marketing factors (including, without limitation, pricing considerations) require a limitation on the number of shares to be underwritten, the securities of the Company held by Other Stockholders shall be excluded from such registration to the extent so required by such limitation. If, after the exclusion of such shares, further reductions are still required, the securities proposed to be sold by the Company shall be excluded from such registration to the extent so required by such limitation. If, after the exclusion of such shares, further reductions are still required, the Registrable Securities proposed to be sold by the Investors shall be excluded from such registration to the extent so required by such limitation, provided, however, that the number of Registrable Securities to be included in the offering by the Investors shall not be reduced unless all other securities are excluded entirely from the offering. No Registrable Securities or any other securities excluded from the -3- underwriting by reason of the underwriter's marketing limitation shall be included in such registration. If any Other Stockholder who has requested inclusion in such registration as provided above disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the underwriter and the Investors. The securities so withdrawn shall also be withdrawn from registration. (iii) Shares; Warrants. The Investors may elect to sell the ---------------- Series B Shares or Warrants to the underwriters and have the underwriters convert the Series B Shares into the Conversion Shares and sell such Conversion Shares or exercise the Warrants for the Warrant Shares and sell such Warrant Shares. (b) Company Registration. -------------------- (i) If the Company shall determine to register any of its equity securities either for its own account or any Other Stockholders (a "Company Registration"), other than a registration relating solely to employee benefit plans, or a registration relating solely to a SEC Rule 145 transaction, or a registration on any registration form which does not permit secondary sales or does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities, the Company will: (A) deliver to the Investors written notice thereof at least thirty (30) days prior to the filing of the registration statement relating to such Company Registration; and (B) include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made by Investor within ten (10) days after receipt of the written notice from the Company described in clause (A) above, except as set forth in Section 2(b)(ii) below. The Company may terminate, in its sole and absolute discretion, any registration described in this Section 2(b) at any time prior to the effectiveness of the applicable registration statement. Upon such termination, the Company's obligations under this Section 2(b) with respect to such terminated registration shall terminate. (ii) Underwriting. If the Company Registration of which the ------------ Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Investors as a part of the written notice given pursuant to Section 2(b)(i)(A). In such event, the right of the Investors to registration pursuant to this Section 2(b) shall be conditioned upon the Investors' participation in such underwriting and the inclusion of the Investors' Registrable Securities in the underwriting to the extent provided herein. The Investors shall (together with the Company and the Other Stockholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form -4- with the representative of the underwriter or underwriters selected for underwriting by the Company; provided, however, that an Investor shall not be required to make any representations, warranties or indemnities except as they relate to such Investor's ownership of securities and authority to enter into the underwriting agreement and to such Investor's intended method of distribution, and the liability of such Investor shall be limited to an amount equal to the net proceeds from the offering received by such Investor. Notwithstanding any other provision of this Section 2(b), if the representative determines that marketing factors require a limitation on the number of shares to be underwritten, the representative may limit or eliminate the number of Registrable Securities to be included in the registration and underwriting to the extent so required by such limitation; provided, however, that the number of Registrable Securities to be included in the offering by the Investors shall not be reduced unless all securities to be included in the offering by Other Stockholders are also reduced, in which instance the number of Registrable Securities to be included in the offering by the Investors and the number of securities to be included in the offering by Other Stockholders shall be allocated among the Investors and the Other Stockholders in proportion (or as nearly as practicable) to the amount of securities sought to be included in the offering by each Investor and each Other Stockholder, as the case may be. (iii) Number and Transferability. Each Investor shall be -------------------------- entitled to have its Registrable Securities included in an unlimited number of registrations pursuant to this Section 2(b). (iv) Shares; Warrants. The Investors may elect to sell ---------------- the Series B Shares or Warrants to the underwriters and have the underwriters convert the Series B Shares into the Conversion Shares and sell such Conversion Shares or exercise the Warrants for the Warrant Shares and sell such Warrant Shares. (c) Form S-3 Registration. In case the Company shall receive --------------------- from any Investor or Investors holding not less than fifty percent (50%) of the Registrable Securities then outstanding a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Investor or Investors, the Company will: (i) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Investors; and (ii) as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Investor's or Investors' Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Investor or Investors joining in such request as are specified in a written request given within 15 days after receipt of such written notice from the Company; provided, -5- however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 2(c): (i) if Form S-3 is not available for such offering by the Investors; (ii) if the Company shall furnish to the Investors a certificate signed by the President of Company stating that in the good faith judgment of the Board of Directors of the Company that the registration would require the disclosure of material information that the Company has a bona fide business purpose for preserving as confidential, and that the Company is not otherwise required by applicable securities laws or regulations to disclose, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than 120 days after receipt of the request of the Investor or Investors under this Section 2(c); provided, however, that the Company shall not utilize this right more than once in any twelve month period; (iii) if the Company has, within the twelve (12) month period preceding the date of such request, already effected two registrations on Form S-3 for the Investors pursuant to this Section 2(c); (iv) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or (v) during the period ending one hundred eighty (180) days after the effective date of a registration statement subject to Section 2(b). (iii) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Investors. Registrations effected pursuant to this Section 2(c) shall not be counted as demands for registration or registrations effected pursuant to Sections 2(a). 3. OBLIGATIONS OF THE COMPANY. -------------------------- In connection with each registration of the Registrable Securities, the Company shall have the following obligations: (a) Each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein and all documents incorporated by reference therein) filed pursuant to this Agreement (i) shall comply in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC promulgated thereunder and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading. The financial statements of the Company included in the Registration Statement or incorporated by reference therein shall comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC applicable with respect thereto. Such financial statements shall be prepared in accordance with U.S. generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may not -6- include footnotes or may be condensed or summary statements) and shall fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to immaterial year-end adjustments). (b) The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the Investor as set forth in the Registration Statement. Notwithstanding the foregoing, the Company's obligations hereunder to file a Registration Statement and to keep a Registration Statement in effect under the Securities Act shall be suspended if the Company is engaged or intends to engage in an acquisition, financing or other material transaction which, in the good faith determination of the Board of Directors of the Company, would be adversely affected by the requested registration to the material detriment of the Company, or the Board of Directors of the Company determines in good faith that the registration would require the disclosure of material information that the Company has a bona fide business purpose for preserving as confidential, and that the Company is not otherwise required by applicable securities laws or regulations to disclose, in which event, the Company may, at its option, direct that such request be delayed for a period not in excess of 120 days from the date of the determination by the Board of Directors, as the case may be; provided, however, that the Company may not exercise this deferral right more than once in any 12-month period.. (c) The Company shall furnish to the Investor (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, such reasonable number of copies of the Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto as the Investors may reasonably request. In the case of the Registration Statement referred to in Section 2(a), the Company shall furnish to the Investors a copy of each letter written by or on behalf of the Company to the SEC or the staff of the SEC (including, without limitation, any request to accelerate the effectiveness of any Registration Statement or amendment thereto), and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion, if any, thereof which contains information for which the Company has sought confidential treatment), (ii) on the date of effectiveness of the Registration Statement or any amendment thereto, a notice stating that the Registration Statement or amendment has been declared effective, and (iii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as such Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor. -7- (d) The Company shall use all commercially reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or "blue sky" laws of such jurisdictions in the United States as such Investor reasonably requests (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (a) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (b) subject itself to general taxation in any such jurisdiction, (c) file a general consent to service of process in any such jurisdiction, (d) provide any undertakings that cause the Company undue expense or burden, or (e) make any change in its certificate of incorporation or bylaws, which in each case the Board of Directors of the Company determines in good faith to be contrary to the best interests of the Company and its stockholders. (e) As promptly as practicable after becoming aware of such event, the Company shall notify the Investors by telephone or facsimile of the happening of any event, of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and use reasonable best efforts promptly to prepare a supplement or amendment to the Registration Statement to correct such untrue statement or omission and deliver such number of copies of such supplement or amendment to the Investors as the Investors may reasonably request. (f) The Company shall use reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, and, if such an order is issued, to obtain the withdrawal of such order at the earliest practicable date (including in each case by amending or supplementing such Registration Statement) and to notify each Investor who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof (and if such Registration Statement is supplemented or amended, deliver such number of copies of such supplement or amendment to such Investor as the Investor may reasonably request). (g) The Company shall permit a single firm of counsel designated by the Investors to review the Registration Statement and all amendments and supplements thereto a reasonable period of time prior to their filing with the SEC. (h) The Company shall make available for inspection by (i) any underwriter participating in any disposition pursuant to a Registration Statement and (ii) one firm of attorneys -8- retained by all such underwriters (collectively, the "Inspectors") all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably deemed necessary by each Inspector to enable each Inspector to exercise its due diligence responsibility, and cause the Company's officers, directors and employees to supply all information which any Inspector may reasonably request for purposes of such due diligence. (i) The Company shall use reasonable best efforts to promptly either (i) secure the designation and quotation, of all the Registrable Securities covered by a Registration Statement on the Nasdaq National Market or the Nasdaq Small Cap Market, or (ii) cause all the Registrable Securities covered by the Registration Statement to be listed on the NYSE or the AMEX or another national securities exchange and on each additional national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange. (j) The Company shall provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement. (k) The Company shall hold in confidence and not make any disclosure of information provided to the Company concerning the Investors unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction, (iv) such information has been made generally available to the public other than by disclosure in violation of this or any other agreement, or (v) the Investors consent to the form and content of any such disclosure. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investors is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Investors prior to making such disclosure, and allow the Investors, at their expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information. (l) The Company shall cooperate with the Investors and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be offered pursuant to the Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the managing underwriter or underwriters, if any, or the Investors may reasonably request and registered in such names as the managing underwriter or underwriters, if any, or the Investors may request, and, within three (3) business days after a Registration Statement which includes Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable -9- Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) (1) an opinion of counsel for the Company, dated the effective date of the Registration Statement, and (2) "comfort" letters signed by the Company's independent public accountants who have examined and reported on the Company's financial statements included in the Registration Statement, to the extent permitted by the standards of the AICPA or other relevant authorities, covering substantially the same matters with respect to the registration statement (and the prospectus included therein) and (in the case of the accountants' "comfort" letters, with respect to events subsequent to the date of the financial statements), in each case as are customarily covered in opinions of issuers' counsel and in accountants' "comfort" letters delivered to the underwriters in underwritten public offerings of securities. (m) The Company shall comply with applicable federal securities laws and regulations related to a Registration Statement and offering and sale of securities. (n) The Company shall use its commercially reasonable efforts to qualify for registration on Form S-3 or any comparable or successor form or forms and remain so qualified following the Closing Date. (o) The Company shall take all such other actions as any Investor or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities. 4. OBLIGATIONS OF THE INVESTOR. --------------------------- In connection with the registration of the Registrable Securities, the Investors shall have the following obligations: (a) It shall be a condition precedent to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Securities that each Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least five (5) business days prior to the first anticipated filing date of the Registration Statement, the Company shall notify the Investors of any information the Company requires from them. (b) Each Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder. (c) If the Investors determine to engage the services of an underwriter, the -10- Investors agree to enter into and perform its obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the underwriter(s) of such offering and the Company and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, provided, however, that an Investor shall not be required to make any representations, warranties or indemnities except as they relate to such Investor's ownership of securities and authority to enter into the underwriting agreement and to such Investor's intended method of distribution, and the liability of such Investor shall be limited to an amount equal to the net proceeds from the offering received by such Investor. (d) The Investors will not participate in any underwritten distribution hereunder unless they (i) agree to sell such the Registrable Securities on the basis provided in any underwriting arrangements in usual and customary form entered into by the Company, provided, however, that an Investor shall not be required to make any representations, warranties or indemnities except as they relate to such Investor's ownership of securities and authority to enter into the underwriting agreement and to such Investor's intended method of distribution, and the liability of such Investor shall be limited to an amount equal to the net proceeds from the offering received by such Investor, (ii) complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, provided, however, that an Investor shall not be required to make any representations, warranties or indemnities except as they relate to the Investor's ownership of securities and authority to enter into the underwriting agreement and to such Investor's intended method of distribution, and the liability of such Investor shall be limited to an amount equal to the net proceeds from the offering received by such Investor, and (iii) agree to pay all brokers fees, underwriting discounts and commissions and other selling expenses applicable to the Registrable Securities. 5. EXPENSES OF REGISTRATION. ------------------------ All expenses incurred by the Company in connection with registrations, filings or qualifications pursuant to Sections 2 and 3 above, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees and the fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Investors selected by them, shall be borne by the Company. All brokers' fees, underwriting discounts and commissions and similar selling expenses applicable to the Registrable Securities shall be borne by the Investors. 6. INDEMNIFICATION. --------------- In the event any Registrable Securities are included in a Registration Statement under this Agreement: (a) To the extent permitted by law, the Company will indemnify, hold harmless -11- and defend (i) each Investor, and (ii) the directors, officers, partners, members, employees and agents of each Investor and each person who controls such Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), if any (each, an "Indemnified Person"), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, "Claims") to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement, including any preliminary prospectus or final prospectus contained therein and any amendments or supplements thereto or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities (the matters in the foregoing clauses (i) through (iii) being, collectively, "Violations"). Subject to the restrictions set forth in Section 6(c) with respect to the number of legal counsel, the Company shall reimburse each Investor and each other Indemnified Person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person expressly for use in the Registration Statement or any such amendment thereof or supplement thereto; (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld; and (iii) with respect to any preliminary prospectus, shall not inure to the benefit of any Indemnified Person if the untrue statement or omission of material fact contained in such preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented, if such corrected prospectus was timely made available by the Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9. (b) In connection with any Registration Statement in which an Investor is participating, to the extent permitted by law, each selling Investor agrees to indemnify, hold harmless and defend, to the same extent and in the same manner set forth in Section 6(a), the -12- Company, each of its directors, each of its officers who signs the Registration Statement, its employees, agents and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and any other stockholder selling securities pursuant to the Registration Statement or any of its directors or officers or any person who controls such stockholder or underwriter within the meaning of the Securities Act or the Exchange Act (each, an "Indemnified Party"), against any Claim to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by the Investor expressly for use in connection with such Registration Statement; and subject to Section 6(c) the Investor will reimburse any legal or other expenses (promptly as such expenses are incurred and are due and payable) reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, and provided further, that the obligations of an Investor hereunder shall be limited to an amount equal to the net proceeds to such Investor from the Registrable Securities sold under such Registration Statement, prospectus, offering circular or other document contemplated herein. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive any transfer of the Registrable Securities by the Investor pursuant to Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact by the Investor contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented, and the Indemnified Party failed to utilize such corrected prospectus. (c) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that such indemnifying party shall not be entitled to assume such defense and an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential conflicts of interest between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding or the actual or potential defendants in, or targets of, any such action include both the Indemnified Person or the Indemnified Party and the indemnifying party and any such Indemnified Person or Indemnified Party reasonably determines that there may be legal defenses available to such -13- Indemnified Person or Indemnified Party which are in conflict with those available to such indemnifying party. The indemnifying party shall pay for only one separate legal counsel for the Indemnified Persons or the Indemnified Parties, as applicable, and such legal counsel shall be selected by the Investor, if the Investor is entitled to indemnification hereunder, or by the Company, if the Company is entitled to indemnification hereunder, as applicable. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is actually prejudiced in its ability to defend such action. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable. 7. CONTRIBUTION. ------------ To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6, (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation, and (iii) contribution (together with any indemnification or other obligations under this Agreement) by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities. 8. REPORTS UNDER THE EXCHANGE ACT. ------------------------------ With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees to: (a) file with the SEC in a timely manner and make and keep available all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing and availability of such reports and other documents as is required for the applicable provisions of Rule 144; and (b) furnish to any Investor so long as such Investor owns Registrable Securities, promptly upon written request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act and that it qualifies as a registrant whose securities may be resold pursuant to Form S-3, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the -14- Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration. 9. ASSIGNMENT OF REGISTRATION RIGHTS. --------------------------------- The rights of the Investors hereunder, including the right to have the Company register Registrable Securities pursuant to this Agreement, shall be assignable, by any Investor to any transferee of all or any portion of the Registrable Securities if: (i) such Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company after such assignment, (ii) the Company is furnished with written notice of (a) the name and address of such transferee or assignee and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment, the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws, (iv) the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein, and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement, and the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained therein. 10. BOARD REPRESENTATION. -------------------- So long as the Investors beneficially own (as defined in Rule 13d-3 under the Exchange Act) (A) not less than 750,000 shares of Common Stock, the Investors shall be entitled to designate two (2) persons reasonably acceptable to the Company to serve on the Board of Directors of the Company, and (B) not less than 495,000 shares of Common Stock, the Investors shall be entitled to designate one (1) person reasonably acceptable to the Company to serve on the Board of Directors of the Company (the "Designated Directors"), and the Company shall use its best efforts (including the inclusion of such persons in the Company's proxy statement as director nominees) to cause the Designated Directors to be elected as directors of the Company. The Company shall immediately expand the size of its Board of Directors to seven (7) members and appoint the Designated Directors to fill the vacancies created thereby. For so long as the Investors are entitled to designate directors pursuant to this Section 10, the Company shall procure and maintain directors' and officers' indemnification insurance covering the Designated Directors in such amounts and with such deductibles and covering such risks as are customary for similarly situated businesses. The Company shall indemnify each Designated Director to the same extent that it indemnifies its other directors pursuant to its organizational documents and applicable law. The Company shall reimburse each Designated Director for all reasonable costs and expenses incurred in connection with such Directors' attendance at meetings of the Board of Directors or any committee upon which they, or any of them, may serve. 11. RIGHT OF FIRST NEGOTIATION FOR ADDITIONAL SECURITIES. ---------------------------------------------------- -15- So long as the Investors hold not less than 50% of the aggregate Series B Shares and Warrants they purchased pursuant to the Purchase Agreement (or an equivalent amount of Common Stock issued upon conversion or exercise thereof), each time the Company proposes to offer any shares of, or securities convertible into or exercisable for any shares of, any class of its capital stock ("Additional Securities"), the Company will make an offering of such Additional Securities to the Investors in accordance with the following provisions: (a) The Company shall deliver a written notice (a "First Negotiation Notice") to the Investors, which notice shall set forth all material terms and conditions, including, without limitation, the number of shares and the purchase price, on which the Company desires to sell the Additional Securities. (b) The Investors shall, for a period of thirty (30) days following the receipt of the First Negotiation Notice by the Investors (the "First Negotiation Period"), have the exclusive right to negotiate with the Company with respect to the purchase and sale of the Additional Securities. All negotiations between the Company and any Investor shall be conducted in good faith. (c) If, during the First Negotiation Period, the Company and one or more of the Investors agree to enter into an agreement for the purchase and sale of the Additional Securities, then the Company may not offer the Additional Securities to any other Person and the purchase and sale of the Additional Securities shall occur on the terms and conditions on which the Company and the Investors agree. If more than one Investor agrees to purchase the Additional Securities on the terms set forth in the First Negotiation Notice, each Investor so electing shall be entitled to purchase its pro rata share of the Additional Securities. (d) If the Company and one or more of the Investors do not agree to enter into an agreement for the purchase and sale of the Additional Securities on or before the expiration of the First Negotiation Period, then the Company may attempt to sell the Additional Securities to any other person or entity for a period of one hundred and twenty (120) days following the expiration of the First Negotiation Period. (e) Additional Securities shall not include any securities: (i) subject to a Company Registration (as defined in Section 2(b)(i), above), (ii) relating to a SEC Rule 145 transaction, (iii) issued in connection with the effectuation of a split or subdivision of the outstanding shares of Common Stock or a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock, (iv) issued or issueable to employees, consultants or directors of the Company directly or pursuant to a stock option plan or restricted stock plan approved by the Board of Directors of the Company, (v) issued pursuant to the conversion or exercise of convertible or exercisable securities outstanding or deemed outstanding on the date -16- hereof, or (vi) issued or issuable in connection with the acquisition, merger, consolidation, or other business combination by or of the Company with, by, or of any person. 12. PRE-EMPTIVE RIGHTS TO ACQUIRE ADDITIONAL SECURITIES --------------------------------------------------- So long as the Investors hold not less than 50% of the aggregate Series B Shares and Warrants they purchased pursuant to the Purchase Agreement (or an equivalent amount of Common Stock issued upon conversion or exercise thereof), each time the Company proposes to offer any Additional Securities, the Company will, in addition to the right of first negotiation required under Section 11, ---------- above, make an offering of such Additional Securities to the Investors in accordance with the following provisions: (a) At least thirty (30) days prior to consummating the offer of Additional Securities, the Company shall deliver a notice (the "Transfer Notice") to the Investors at the addresses set forth in the Purchase Agreement stating: (i) its bona fide intention to offer such Additional Securities, (ii) the amount of such Additional Securities to be offered, (iii) the price and terms, if any, upon which it proposes to offer such Additional Securities, and (iv) an offer to the Investors to purchase the Additional Securities on the same terms and conditions as contained in the Transfer Notice. (b) The Investor may accept the offer to purchase such Additional Securities by giving written notice of acceptance to the Company within fifteen (15) days of receipt of the Transfer Notice, and the transfer of the Additional Securities shall thereafter be effected between the Company and the Investors upon all of the applicable terms and conditions set forth in the Transfer Notice, or such other or additional terms as the Company and the Investors shall agree. In the event that the Investors do not accept the offer to purchase such Additional Securities by giving written notice of acceptance to the Company within fifteen (15) days of receipt of the Transfer Notice, and/or consummate the sale of the Additional Securities within sixty (60) days of its acceptance of the offer contained in the Transfer Notice, the Company shall be free to sell such Additional Securities on substantially the same terms as those set forth in the Transfer Notice. 13 AMENDMENT OF REGISTRATION RIGHTS. -------------------------------- Provisions of this Agreement may be amended and the observance thereof may be waived solely upon the written consent of the Company and the Investors holding a majority of the Shares and Warrants (or an equivalent amount of Common Stock issued upon conversion or exercise thereof). 14. MISCELLANEOUS. ------------- (a) A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the -17- same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities. (b) Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier or by confirmed telecopy, and shall be effective five (5) days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier or confirmed telecopy, in each case addressed to a party. The addresses for such communications shall be as set forth in the Purchase Agreement. (c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. (d) This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed in the State of California. Each of the Company and the Investors irrevocably consents to the jurisdiction of the United States federal courts and state courts located in the State of California in any suit or proceeding based on or arising under this Agreement and irrevocably agrees that all claims in respect of such suit or proceeding may be determined in such courts. Each of the Company and the Investors irrevocably waives the defense of an inconvenient forum to the maintenance of such suit or proceeding. Each of the Company and the Investors further agrees that service of process upon the Company mailed by first class mail to the address set forth in the Purchase Agreement shall be deemed in every respect effective service of process upon the Company in any such suit or proceeding. Nothing herein shall affect either the Company's or any Investor's right to serve process in any other manner permitted by law. (e) This Agreement and the Purchase Agreement (including all schedules and exhibits thereto) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings among the parties hereto and thereto with respect to the subject matter hereof and thereof. (f) Subject to the requirements of Section 9 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto. (g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This -18- Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. (i) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. (j) For purposes of this Agreement, the term "business day" means any day other than a Saturday or Sunday or a day on which banking institutions in the State of California are authorized or obligated by law, regulation or executive order to close. [Remainder of Page Intentionally Left Blank] -19- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written. BIOSOURCE INTERNATIONAL, INC. a Delaware corporation By:_________________________________ James H. Chamberlain President and Chief Executive Officer GENSTAR CAPITAL PARTNERS II, L.P. By: Genstar Capital LLC Its General Partner By: ___________________________ Name: Title: STARGEN LLC II By:______________________________ Its: -20- EX-99.6 7 CERTIFICATE OF DESIGNATIONS EXHIBIT 6 CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES B PREFERRED STOCK OF BIOSOURCE INTERNATIONAL, INC. _____________________________ (Pursuant to Section 151 of the General Corporation Law of the State of Delaware) BIOSOURCE INTERNATIONAL, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), in accordance with the provisions of Section 151(g) thereof: HEREBY CERTIFIES: That pursuant to the authority conferred upon the Board of Directors by the Certificate of Incorporation of the Corporation, the Board of Directors on January 8, 2000 adopted the following resolution creating a series of 500,000 of preferred stock designated as Series B Preferred Stock: RESOLVED, that there is hereby designated a series of Preferred Stock to be known as Series B Preferred Stock, $.001 par value per share, having the following rights and preferences: 1. Designation of Shares. The designation of this initial series of preferred --------------------- shares is "Series B Preferred Stock, par value $.001 per share." 2. Number of Shares. The number of shares constituting the Series B ---------------- Preferred Stock shall be 500,000 (each referred to as a "Series B Share" and collectively as the "Series B Shares"). 3. Dividend Rights. Commencing on the date of issuance, the holder of record --------------- of each Series B Share of the Corporation (a "Holder") shall be entitled to be credited with a non-cash dividend (a "Dividend") on January 1 of each year (a "Dividend Payment Date"), in additional Series B Shares at the Dividend Rate (as defined below) for each Annual Payment Period that such Series B Share is outstanding. An "Annual Payment Period" shall mean each of the twelve-month periods ending on December 31 of each year (or such shorter period commencing on the date of issuance and ending on December 31). The first Dividend Payment Date shall be January 1, 2001. The "Dividend Rate" shall mean eight percent (8%) of the Original Issuance Price (as defined below) plus all Dividends paid in any prior Annual Payment Period. Dividends shall accrue (whether or not paid) during each Annual Payment Period from the date on which such Annual Payment Period commences to the last day of such Annual Payment Period, or if any Conversion or Liquidation occurs prior thereto, pro rata through the date of Conversion or Liquidation. For purposes of this Certificate of Designation, "Original Issuance Price" shall mean the price per share at which the Series B Shares are first issued to any Holder. Unless all dividends on the outstanding Series B Shares that shall have accrued and become payable as of any date shall have been paid, or declared and funds set apart for payment thereof, no dividend or other distribution (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation), shall be paid to the holders of Common Stock. 4. Liquidation. ----------- 4.1. Preference. In the event of the liquidation, dissolution or winding- ---------- up, whether voluntary or involuntary, of the Corporation ("Liquidation"), but not upon the conversion of Series B Shares: 4.1.1. First, the Holder of a Series B Share shall be entitled to receive with respect to each Series B Share, after the satisfaction of all distributions to holders of other series of preferred stock, if any, which are required (at the direction of the holder thereof or otherwise) to be redeemed prior to or in connection with the consummation of such Liquidation or which are expressly senior in liquidation preference to the Series B Shares including, without limitation, any series of preferred stock which is mandatorily redeemable (collectively, the "Senior Payments") but before any distribution is made to or set aside for the holders of Common Stock or any other series of preferred stock of the Corporation, if any, which are not then required to be redeemed or which are junior in liquidation preference to the Series B Shares, cash or any other assets of the Corporation in an amount (or having a fair market value) equal to the Original Issuance Price (as adjusted for any stock dividends, combinations or splits with respect to such shares) ("Liquidation Preference") plus all accrued but unpaid Dividends which have been added to the Liquidation Preference of such shares pursuant to Section 3 up to the --------- date of the final distribution in Liquidation. If, after the satisfaction of all Senior Payments, the assets of the Corporation available for distribution to the Holders of Series B Shares shall be insufficient to permit the payment in full of the amount due to the Holders of Series B Shares pursuant to this Section 4, the entire assets of the --------- Corporation available for distribution to such Holders after the satisfaction of all Senior Payments shall be distributed ratably among the Holders of the Series B Shares and the holders of other series of preferred stock which are not junior in liquidation 2 preferences to the Series B Shares, if any, in accordance with their respective liquidation preferences. The fair market value of any assets of the Corporation and the proportion of cash and other assets distributed by the Corporation to the Holders of the Series B Shares shall be reasonably determined in good faith by the Board of Directors. 4.1.2. Then, if assets or surplus funds remain, all or an appropriate portion of such remaining assets and surplus funds shall be distributed to the holders of any other class or series of preferred stock of the Corporation having a liquidation preference over the Common Stock to the extent of, and in accordance with, such preference. 4.1.3. Then, if assets or surplus funds remain, all of such remaining assets and surplus funds shall be distributed to the holders of the Common Stock. 4.2. Merger; Sale. The sale of all or substantially all of the assets of ------------ the Corporation, or the acquisition of the Corporation by another entity by means of merger, consolidation, share exchange, reorganization or otherwise pursuant to which shares of capital stock of the Corporation are converted into cash, securities or other property of the acquiring entity or any of its affiliates shall be regarded as a liquidation within the meaning of this Section (excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation); provided, however, that each Holder of a Series B Share shall have the right to elect the conversion benefits of the provisions of Section 5 or other --------- applicable conversion provisions in lieu of receiving payment in liquidation, dissolution or winding up of the Corporation pursuant to this Section; provided, further, that this provision shall not apply if the holders of voting securities of the Corporation immediately prior to such merger, consolidation, share exchange, reorganization or sale of assets, beneficially own, directly or indirectly, a majority of the combined voting power of the surviving entity resulting from such merger, consolidation, share exchange, reorganization or sale of assets; provided, however, that shares of the surviving entity held by holders of the capital stock of the Corporation acquired by means other than the exchange or conversion of the capital stock of the Corporation for shares of the surviving entity shall not be used in determining if the stockholders of the Corporation own a majority of the voting power of the surviving entity (or its parent), but shall be used for determining the total outstanding voting power of such entity. 5. Conversion Rights. The Holders of Series B Shares shall have conversion ----------------- rights as follows (the "Conversion Rights"): 5.1. Right to Convert. Each Series B Share shall be convertible, at the ---------------- option of the Holder, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such stock, into such number of fully 3 paid and nonassessable shares of Common Stock as is determined by: (A) dividing the Original Issuance Price plus all accrued but unpaid Dividends which have been added to the Original Issuance Price of such shares pursuant to Section 3 up to the date of such conversion --------- by a conversion price (such amount is referred to as the "Conversion Price"), determined as hereafter provided, in effect on the date the certificate is surrendered for conversion (B) multiplied by four (4) (such product of (A) and (B) is referred to as the "Conversion Rate"). The initial Conversion Price per share for the Series B Shares shall be the Original Issuance Price; provided, however, that the Conversion Price shall be subject to adjustment as set forth in Section 5.4. ----------- 5.2. Automatic Conversion. Each Series B Share shall automatically be -------------------- converted into shares of Common Stock at the Conversion Rate at the time in effect immediately upon (i) consummation of the Corporation's sale of its Common Stock in a firm commitment underwritten public offering registered under the Securities Act of 1933, as amended, in which the public offering price is not less than $15.00 per share (as adjusted for stock splits, stock dividends and similar transactions) and which results in proceeds to the Corporation of at least $40,000,000 in the aggregate before deduction of commissions, discounts and expenses (a "Qualified Offering") or, (ii) the date specified by written notice from the Corporation to the Holders of the then outstanding Series B Shares if the Market Price of a Common Share receivable upon such conversion shall exceed $20.00, or (iii) if not sooner converted, each Series B Share shall automatically be converted into shares of Common Stock at the Conversion Rate at the time in effect immediately upon the date specified by written consent or agreement of the Holders of more than fifty percent (50%) of the then outstanding Series B Shares. Market Price for the purpose of this Section 5.2 shall mean the last reported sale price regular way ----------- for 20 consecutive trading days within 30 days of the date of the notice of conversion on the principal national securities exchange or quotation system on which the Common Stock is traded (including for purposes hereof, the Nasdaq National Market System). 5.3. Mechanics of Conversion. Before any Holder of Series B Shares shall ----------------------- be entitled to convert the same into shares of Common Stock (other than by an automatic conversion pursuant to Section 5.2), the Holder ----------- shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Series B Shares, and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such Holder of Series B Shares, or to the nominee or nominees of such Holder, a certificate or certificates for the number of shares of Common Stock to which such Holder shall be entitled as aforesaid. Such conversion shall be 4 deemed to have been made immediately prior to the close of business on the date of such surrender of the Series B Shares to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. If the conversion is in connection with an event specified in Section 5.2, the conversion may, at the option of any Holder ----------- tendering Series B Shares for conversion, be conditioned upon the closing of the event specified therein, in which event the persons entitled to receive the Common Stock upon conversion of the Series B Shares shall not be deemed to have converted such Series B Shares until immediately prior to the closing of such transaction. 5.4. Conversion Price Adjustments for Certain Dilutive Issuances, Splits ------------------------------------------------------------------- and Combinations. The Conversion Price of the Series B Shares shall ---------------- be subject to adjustment from time to time as follows: 5.4.1. Adjustment with respect to Additional Stock Issuances ----------------------------------------------------- 5.4.1.1. If the Corporation shall issue any Additional Stock (as defined below) for no consideration or for a consideration per share less than the Conversion Price in effect immediately prior to the issuance of such Additional Stock divided by four (4), the Conversion Price in effect immediately prior to each such issuance shall forthwith (except as otherwise provided in this Section 5.4.1) be adjusted to a ------------- price determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance (including shares of Common Stock deemed to be issued pursuant to Section 5.4.1.5.1 or 5.4.1.5.2) plus the number of ------------------------------ shares of Common Stock that the aggregate consideration received by the Corporation for such issuance would purchase at such Conversion Price divided by four (4); and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance (including shares of Common Stock deemed to be issued pursuant to Section 5.4.1.5.1 or 5.4.1.5.2) ----------------- --------- plus the number of shares of such Additional Stock. 5.4.1.2. No adjustment of the Conversion Price for the Series B Shares shall be made in an amount less than one cent per share, provided that any adjustments that are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made 5 prior to three (3) years from the date of the event giving rise to the adjustment being carried forward, or shall be made at the end of three (3) years from the date of the event giving rise to the adjustment being carried forward. Except to the limited extent provided for in Sections 5.4.4 and 5.5, no -------------- --- adjustment of such Conversion Price pursuant to this Section 5.4.1 shall have the effect of increasing ------------ the Conversion Price above the Conversion Price in effect immediately prior to such adjustment. 5.4.1.3. In the case of the issuance of Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof. 5.4.1.4. In the case of the issuance of the Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Board of Directors; provided, however, that if the consideration consists of securities, the fair market value of such securities shall be valued as follows: 5.4.1.4.1. If traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or system over the thirty (30) day period ending three (3) days prior to the closing; 5.4.1.4.2. If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the closing; and 5.4.1.4.3. If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors of the Corporation. 5.4.1.5. In the case of the issuance (whether before, on or after the applicable Purchase Date (as defined below)) of options to 6 purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for such convertible or exchangeable securities, the following provisions shall apply for all purposes of this Section 5.4.1 ------------- and Section 5.4.2: ------------- 5.4.1.5.1. The aggregate maximum number of shares of Common Stock deliverable upon exercise (assuming the satisfaction of any conditions to the right to exercise, including, without limitation, the passage of time, but without taking into account potential antidilution adjustments) of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in Sections 5.4.1.3 and ---------------- 5.4.1.4), if any, received by the ------- Corporation upon the issuance of such options or rights plus the minimum exercise price provided in such options or rights (without taking into account potential antidilution adjustments) for the Common Stock covered thereby. 5.4.1.5.2. The aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange (assuming the satisfaction of any conditions to convertibility or exchangeability, including, without limitation, the passage of time, but without taking into account potential antidilution adjustments) for any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options or rights were issued and for a consideration equal to the consideration, if any, received by the Corporation for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the minimum additional consideration, if any, to be received by 7 the Corporation (without taking into account potential antidilution adjustments) upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in Sections 5.4.1.3 and 5.4.1.4). ---------------- ------- 5.4.1.5.3. In the event of any change in the number of shares of Common Stock deliverable or in the consideration payable to the Corporation upon exercise of such options or rights or upon conversion of or in exchange for such convertible or exchangeable securities, including, but not limited to, a change resulting from the antidilution provisions thereof (unless such options or rights or convertible or exchangeable securities were merely deemed to be included in the numerator and denominator for purposes of determining the number of shares of Common Stock outstanding for purposes of Section 5.4.1.1), the Conversion Price --------------- of the Series B Shares, to the extent in any way affected by or computed using such options, rights or securities, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of Common Stock or any payment of such consideration upon the exercise of any such options or rights or the conversion or exchange of such securities. 5.4.1.5.4. Upon the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Conversion Price of the Series B Shares, to the extent in any way affected by or computed using such options, rights or securities or options or rights related to such securities (unless such options or rights were merely deemed to be included in the numerator and denominator for purposes of determining the number of shares of Common Stock outstanding for purposes of Section ------- 5.4.1.1), shall be recomputed to reflect ------- the issuance of only the number of shares of Common Stock (and convertible or exchangeable securities that 8 remain in effect) actually issued upon the exercise of such options or rights, upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities. 5.4.1.5.5. The number of shares of Common Stock deemed issued and the consideration deemed paid therefor pursuant to Sections 5.4.1.5.1 and 5.4.1.5.2 shall ------------------ --------- be appropriately adjusted to reflect any change, termination or expiration of the type described in either Section ------- 5.4.1.5.3 or 5.4.1.5.4. --------- --------- 5.4.2. "Additional Stock" shall mean any shares of Common Stock issued (or deemed to have been issued pursuant to Section ------- 5.4.1.5) by the Corporation after the date of the first ------- issuance of Series B Preferred Stock (the "Purchase Date") other than: 5.4.2.1. Common Stock issued pursuant to a transaction described in Section 5.4.3 or 5.5 hereof; ------------- --- 5.4.2.2. Common Stock (or securities exercisable or convertible into Common Stock) issuable or issued to employees, consultants or directors of the Corporation after the Purchase Date directly or pursuant to a stock option plan or restricted stock plan approved by the Board of Directors of the Corporation; 5.4.2.3. securities issued pursuant to the conversion or exercise of convertible or exercisable securities outstanding or deemed outstanding on the Purchase Date; and 5.4.2.4. securities issued or issuable in connection with the acquisition, merger, consolidation, or other business combination by or of the Corporation with, by, or of any person. 5.4.3. In the event the Corporation should at any time or from time to time fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as "Common Stock Equivalents") without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), 9 then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of the Series B Shares shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of each Series B Share shall be increased in proportion to such increase of the aggregate of shares of Common Stock outstanding and those issuable with respect to such Common Stock Equivalents. 5.4.4. If the number of shares of Common Stock outstanding at any time after the Purchase Date is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for the Series B Shares shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of each Series B Share shall be decreased in proportion to such decrease in outstanding shares. 5.5. Recapitalizations. If at any time or from time to time there shall be ----------------- a recapitalization of the Common Stock (other than a subdivision or combination provided for elsewhere in this Section 5) provision shall --------- be made so that the Holders of the Series B Shares shall thereafter be entitled to receive upon conversion of such Series B Shares the number of shares of stock or other securities or property of the Corporation or otherwise, to which a holder of Common Stock deliverable upon conversion would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 5 with respect to the rights of the --------- Holders of the Series B Shares after the recapitalization to the end that the provisions of this Section 5 (including adjustment of the --------- Conversion Price then in effect and the number of shares purchasable upon conversion of the Series B Shares) shall be applicable after that event as nearly equivalent as may be practicable. 5.6. No Impairment. The Corporation will not, by amendment of its ------------- Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 5 and in the taking of all such --------- action as may be necessary or appropriate in order to protect the Conversion Rights of the Holders of the Series B Shares against impairment. 5.7. No Fractional Shares and Certificate as to Adjustments. ------------------------------------------------------ 10 5.7.1. No fractional shares shall be issued upon the conversion of any Series B Share, and the number of shares of Common Stock to be issued shall be rounded to the nearest whole share. Whether or not fractional shares are issuable upon such conversion shall be determined on the basis of the total number of Series B Shares the Holder is at the time converting into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion. 5.7.2. Upon the occurrence of each adjustment or readjustment of the Conversion Price of the Series B Shares pursuant to this Section 5, the Corporation, at its expense, shall promptly --------- compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each Holder of Series B Shares a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. 5.8. Reservation of Stock Issuable Upon Conversion. The Corporation shall --------------------------------------------- at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series B Shares, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Series B Shares; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding Series B Shares, in addition to such other remedies as shall be available to the Holders of Series B Shares, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation. 5.9. Notices. Any notice required by the provisions of this Section 5 to ------- --------- be given to the Holders of shares of Series B Shares shall be deemed given if deposited in the United States first class mail, postage prepaid, and addressed to each holder of record at such holder's address appearing on the books of the Corporation. Each such notice or other communication shall be treated as effective or having been given when delivered, if delivered personally, or, if sent by facsimile, upon the sender's receipt of confirmation, or, if sent by mail, at the earlier of its receipt or five (5) days after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and postage prepaid as aforesaid. 5.10. Payment of Taxes. The Corporation will pay all issue or other taxes ---------------- (other than taxes based upon income) and other governmental charges that may be 11 imposed with respect to the issue or delivery of shares of Common Stock upon conversion of shares of Series B Preferred Stock, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series B Preferred Stock so converted were registered. 5.11. Notices of Record Date. In the event of any taking by the Corporation ---------------------- of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall mail to each holder of Series B Shares, at least twenty (20) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. 5.12. Registrations and Approvals. If any shares of Common Stock which --------------------------- would be issuable upon conversion of the Series B Shares hereunder require registration with or approval of any governmental authority before such shares may be issued upon conversion, the Corporation will in good faith and as expeditiously as possible cause such shares to be duly registered or approved, as the case may be. The Corporation will use commercially reasonable efforts to list the shares of (or depository shares representing fractional interests in) Common Stock required to be delivered upon conversion of such Series B Shares prior to such delivery upon the principal national securities exchange or quotation system upon which the outstanding Common Stock is listed or eligible for trading at the time of such delivery, if any. 6. Voting Rights. Subject to the rights of series of Preferred Stock that may ------------- from time to time come into existence, the Holders of outstanding Series B Shares shall have the right to vote, together with the holders of all the outstanding shares of Common Stock and not by classes, except as otherwise provided herein or as required by the General Corporation Law of the State of Delaware, on all matters on which the holders of outstanding shares of Common Stock shall have the right to vote. Subject to the foregoing, for each one issued and outstanding Series B Share held of record by a Holder, such Holder shall have the right to vote the number of shares of Common Stock into which a Series B Share is then convertible. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which Series B Shares held by each Holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward). 7. Redemption Rights. ----------------- 12 7.1.1 Redemption Generally. Subject to Section 7.1.2, at any time after -------------------- the date (the "Redemption Anniversary Date") which is four (4) years from the first issuance of Series B Shares, at the written request (the "Redemption Request") of any Holder of Series B Shares executed and delivered to the Corporation, the Corporation shall, on the date which is forty-five (45) days following its receipt of such Redemption Request (or, if such date is not a business day, on the next succeeding business day) (the "Redemption Date"), be obligated to redeem at a price per share equal to the Series B Redemption Price (as defined below) of such shares, all of the Holder's Series B Shares which are outstanding on such Redemption Date. The redemption of each Series B Share shall be made at a price equal to the Original Issue Price for such share plus all accrued but unpaid Dividends on such share up to and including the Redemption Date (the "Series B Redemption Price"). The period from the date of issuance through the Redemption Anniversary Date is referred to herein as the "Redemption Period." 7.1.2 Change in Redemption Period; Average Market Price. If the Average --------------------------- -------------------- Market Price (as defined below) of a share of Common Stock during any Test Period (as defined below) is less than the Conversion Price then in effect divided by four, then the Redemption Period shall be reduced by one (1) year; provided that if the date on which the Average Market Price is determined is less than one (1) year prior to the Redemption Anniversary Date, then the Redemption Period shall be reduced such that the Redemption Anniversary Date shall be the date of such determination; and provided further once the Redemption Anniversary Date has occurred, no adjustment shall be made in the Redemption Period. "Test Period" shall mean the first six months of a calendar year or the last six months of a calendar year; provided that the first Test Period shall be the date of issuance through the next succeeding June 30 or December 31, whichever occurs first. For example, if the original issue date is prior to June 30, 2000 and at any time during the period from July 1, 2000 through and including December 31, 2000, the Average Market Price of a share of Common Stock shall be less than the Conversion Price then in effect divided by four, then the Redemption Period would be reduced to three (3) years. "Average Market Price" for the purpose of this Section 7.1.2 ------------- shall mean the average of the last reported sale prices regular way for 30 consecutive trading days on the principal national securities exchange or quotation system on which the Common Stock is traded (including for purposes hereof, the Nasdaq National Market System). 7.2 Redemption of Less than all Series B Shares. If the funds of the ------------------------------------------- Corporation legally available to be paid for redemption of the Series B Shares on any Redemption Date are insufficient to redeem the total number of Series B Shares to be redeemed on such date, those funds which are legally available will be used to redeem the maximum possible number of such shares ratably among the Holders of Series B Shares to be redeemed as provided below. Amounts available for such redemption 13 shall be allocated ratably among the Holders of Series B Shares to be redeemed based upon the number of shares held. The Series B Shares not redeemed shall remain outstanding and continue to be entitled to all of the rights and preferences provided in this Certificate of Designation. At any time thereafter when additional funds of the Corporation are legally available to be paid for the redemption of Series B Shares, such funds shall be immediately used to redeem the balance of the Series B Shares that the Corporation is obligated to redeem on any Redemption Date, ratably among the Holders of the Series B Shares to be redeemed based upon the number of Series B Shares held of record by such Holder; provided, however, that the Corporation shall have the right and power to make such allocations of the Series B Shares to be redeemed among the Holders to avoid the redemption of fractional shares. 7.3 Redemption Notice. At least fifteen (15) but not more than thirty ----------------- (30) days prior to any Redemption Date, the Corporation shall mail written notice (the "Redemption Notice"), postage pre-paid, to each Holder of the Series B Shares to be redeemed, at the Holders' post office address last shown on the records of the Corporation. The Redemption Notice shall state: 7.3.1 The total number of Series B Shares being redeemed; 7.3.2 The number of Series B Shares held by the Holder which the Corporation intends to redeem; 7.3.3 The applicable Redemption Date; and 7.3.4 The time and manner in which, and place at which, the Holder is to surrender to the Corporation its certificate or certificates representing the Series B Shares to be redeemed. The Corporation's delivery of a Redemption Notice hereunder shall not affect the Holders' rights to convert Series B Shares owned by them pursuant to Section 5. --------- 7.4 Surrender of Stock. On or before each Redemption Date, each ------------------ Holder of Series B Shares to be redeemed, unless the Holder has given notice of its intent to exercise its right to convert the shares as provided in Section 5, shall surrender the certificate --------- or certificates representing such shares to the Corporation, and thereupon the Redemption Price for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be canceled and retired. In the event less than all of the shares represented by such certificate are redeemed, a new certificate representing the unredeemed shares shall be issued to the Holder of such shares. 7.5 Termination of Rights. If the Redemption Notice is duly given, --------------------- and if on the Redemption Date the applicable Redemption Price is paid to the Holder or set 14 aside for that purpose, then, notwithstanding that any certificates evidencing Series B Shares so called for redemption have not been surrendered, any dividends with respect to such shares shall cease to accrue after the Redemption Date and all rights with respect to such shares shall forthwith at the Redemption Date cease and terminate. 7.6 Waiver of Redemption. Any of the Corporation's redemption -------------------- obligations under this Section 7 may be waived or deferred, in --------- whole or in part, by and in accordance with the terms of a written consent executed by Holders of greater than two-thirds of the total number of Series B Shares then outstanding. 8 Protective Provisions. So long as any of the Series B Shares shall be --------------------- outstanding, without first obtaining the written consent, authorization or waiver of the Holders of greater than two-thirds of the total number of outstanding Series B Shares, voting as a separate class, and any other capital stock that, by its terms, has the power to approve any of the following matters with the Holders of the Series B Shares, which approval may be obtained without the necessity of formal stockholder action or of notice to the holders of any shares of capital stock not expressly empowered with such right to consent, authorize or waive, the Corporation shall not after the date hereof: 8.1 create any new class or series of stock ranking senior to or on parity with the Series B Preferred Stock as to dividend rights, redemption rights, conversion rights or liquidation preferences; 8.2 sell, convey or otherwise dispose of all or substantially all of its assets, property or business or dissolve, liquidate or wind up the Corporation; 8.3 amend its Certificate of Incorporation or Bylaws in any manner that adversely affects the preferences, privileges, restrictions or other rights of the Holders of Series B Shares; 8.4 increase or decrease the number of authorized shares of Series B Preferred Stock; 8.5 increase or decrease the number of authorized seats on the Corporation's Board of Directors; 8.6 declare, pay or set aside for payment any dividend or other distribution in respect of the Corporation's capital stock; 8.7 call for redemption, redeem, purchase or otherwise acquire for any consideration any of the Corporation's capital stock (other than the repurchase by the Corporation of any Common Stock from employees, directors, consultants or other persons performing services for the Corporation pursuant to agreements under which the Corporation has the option to repurchase such 15 shares upon the occurrence of certain events, such as termination of employment) or Series B Preferred Stock; or 8.8 merge or consolidate the Corporation (other than where the holders of voting securities of the Corporation immediately prior to such merger or consolidation beneficially own, directly or indirectly, a majority of the combined voting power of the surviving entity resulting from such merger or consolidation). 9 Exclusion of Other Rights and Privileges. Except as may otherwise be ---------------------------------------- required by law, the Series B Shares shall not have any preferences or relative, participating, optional or other special rights, other than those specifically set forth in this resolution (as such resolution may be amended from time to time pursuant to Section 8 hereof), and the --------- Certificate of Incorporation of the Corporation, as amended pursuant to Section 8 hereof. --------- IN WITNESS WHEREOF, the undersigned has duly executed this Certificate in the name and on behalf of BioSource International, Inc. on the ___/TH/ day of February, 2000, and the statements contained herein are affirmed as true under penalty of perjury. BIOSOURCE INTERNATIONAL, INC. By: _______________________ James H. Chamberlain, President and Chief Executive Officer 16 EX-99.7 8 POWER OF ATTORNEY EXHIBIT 7 POWER OF ATTORNEY ----------------- Know all men by these presents that Richard F. Hoskins and Richard D. Paterson do hereby make, constitute and appoint Jean-Pierre L. Conte as a true and lawful attorney-in-fact of the undersigned with full powers of substitution and revocation, for and in the name, place and stead of the undersigned, (both in the undersigned's individual capacity and as a member of any limited liability company or partner of any partnership for which the undersigned is otherwise authorized to sign), to execute and deliver such forms as may be required to be filed from time to time with the Securities and Exchange Commission with respect to any investments of Genstar Capital LLC, Genstar Capital Partners II, L.P. and Stargen II LLC (including any amendments or supplements to any reports from schedules previously filed by such persons or entities) including any joint filing agreements or joint filer information statements in connection therewith with respect to BioSource International, Inc.: (i) pursuant to Sections 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended, including without limitation, Schedules 13D and 13G, statements on Form 3, Form 4 and Form 5 and (ii) in connection with any applications for EDGAR access codes, including without limitation the Form ID. /s/ Richard F. Hoskins ------------------------------- Name: Richard F. Hoskins /s/ Richard D. Paterson ------------------------------- Name: Richard D. Paterson Dated: January 20, 2000 -----END PRIVACY-ENHANCED MESSAGE-----