-----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, Jqt0kS4JG26YAnpKv92salQOIVmV6g3QOYNK4i/OwXz4mNGnXmK1CDKlBuybqBWp B8WYOjU6iBTTg2QAO1445w== 0000950123-96-006138.txt : 19961104 0000950123-96-006138.hdr.sgml : 19961104 ACCESSION NUMBER: 0000950123-96-006138 CONFORMED SUBMISSION TYPE: SB-2/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19961101 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARRINGER TECHNOLOGIES INC CENTRAL INDEX KEY: 0000010119 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 840720473 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-2/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-13703 FILM NUMBER: 96652893 BUSINESS ADDRESS: STREET 1: 219 SOUTH STREET CITY: NEW PROVIDENCE STATE: NJ ZIP: 07974 BUSINESS PHONE: 9086658200 MAIL ADDRESS: STREET 1: 219 SOUTH STREET CITY: NEW PROVIDENCE STATE: NJ ZIP: 07974 FORMER COMPANY: FORMER CONFORMED NAME: BARRINGER RESOURCES INC DATE OF NAME CHANGE: 19910331 FORMER COMPANY: FORMER CONFORMED NAME: BARRINGER RESEARCH INC DATE OF NAME CHANGE: 19800821 SB-2/A 1 AMEND. # 2 TO FORM SB-2 1 REGISTRATION NO. 333-13703 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 2 TO FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ BARRINGER TECHNOLOGIES INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 3829 84-0720473 (STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER) INCORPORATION OR ORGANIZATION)
219 SOUTH STREET, NEW PROVIDENCE, NEW JERSEY 07974 (908) 665-8200 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) STANLEY S. BINDER, PRESIDENT BARRINGER TECHNOLOGIES INC. 219 SOUTH STREET, NEW PROVIDENCE, NEW JERSEY 07974 (908) 665-8200 (NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPIES TO: JOHN D. HOGOBOOM, ESQ. ARTHUR M. BORDEN, ESQ. LOWENSTEIN, SANDLER, KOHL, FISHER & BOYLAN, P.A. ROSENMAN & COLIN LLP 65 LIVINGSTON AVENUE 575 MADISON AVENUE ROSELAND, NEW JERSEY 07068 NEW YORK, NEW YORK 10022 (201) 992-8700 (212) 940-8790
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE. ------------------------ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, please check the following box. [ ] ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS Article Tenth of the Certificate of Incorporation, as amended (the "Certificate of Incorporation"), and Section 10 of the Company's by-laws, as amended ("By-laws"), provide that the Company shall, to the fullest extent permitted by law, indemnify each person (including the heirs, executors, administrators and other personal representatives of such person) against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred by such person in connection with any threatened, pending or actual suit, action or proceeding (whether civil, criminal, administrative or investigative in nature or otherwise) in which such person may be involved by reason of the fact that he or she is or was a director or officer of the Company or is serving any other incorporated or unincorporated enterprise in any of such capacities at the request of the Company. Section 145 of the General Corporation Law of the State of Delaware (the "GCL") permits a corporation, under specified circumstances, to indemnify its directors, officers, employees or agents against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with any action, suit or proceeding brought by third parties by reason of the fact that they were or are directors, officers, employees or agents of the corporation, if such directors, officers, employees or agents acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reason to believe their conduct was unlawful. In a derivative action, i.e., one by or in the right of the corporation, indemnification may be made only for expenses actually and reasonably incurred by directors, officers, employees or agents in connection with the defense or settlement of an action or suit, and only with respect to a matter as to which they shall have acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been judged liable to the corporation unless and only to the extent that the court in which the action or suit was brought shall determine upon application that the defendant directors, officers, employees or agents are fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability. Article Tenth of the Certificate of Incorporation also contains a provision limiting the personal liability of directors to the fullest extent permitted or authorized by the GCL or other applicable law. Under the GCL, such provision would not limit liability of a director for (i) breach of the director's duty of loyalty, (ii) acts or omissions not in good faith or involving intentional misconduct or knowing violation of law, (iii) payment of dividends or repurchases or redemptions of stock other than from lawfully available funds, or (iv) any transactions from which the director derives an improper benefit. II-1 3 ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table lists the expenses which will be incurred in connection with the issuance and distribution of the Securities being registered:
EXPENSE -------- SEC Registration Fee.............................................. $ 5,543 National Association of Securities Dealers, Inc. Filing Fee....... 2,300 NASDAQ NMS Listing Fee............................................ 42,485 Accounting Fees and Expenses...................................... 75,000 Legal Fees and Expenses........................................... 175,000 Blue Sky Fees and Expenses........................................ 25,000 Printing and Engraving............................................ 110,000 Miscellaneous..................................................... 39,672 -------- TOTAL................................................... $475,000 ========
All of the above amounts, other than the registration fee, are estimates only. All of the above expenses will be paid by the Company. ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES The following information relates to securities of the Company issued or sold within the past three years which were not registered under the Securities Act (all share and per share amounts have been adjusted to reflect the one-for-four reverse stock split of the Company's common stock, $.01 par value (the "Common Stock") effected on September 25, 1995): (i) On July 10, 1996 the Company issued an aggregate amount of $1,000,000 of its 6% subordinated convertible debentures, due 1997 (the "Debentures") to institutional and private investors and members of management for an aggregate purchase price of $1,000,000. This transaction was completed without registration under the Securities Act of the Debentures or the shares of Common Stock into which such Debentures are convertible in reliance upon exemptions provided by Section 4(2) of the Securities Act. There were no underwriters for this issuance. (ii) On June 30, 1995 the Company issued an aggregate of 28 units, each unit consisting of 2,500 shares of Common Stock and a five-year warrant to purchase 2,500 shares of Common Stock at $2.00 per share (a "Unit"), to private investors and members of management, for an aggregate purchase price of $168,000. This transaction was completed without registration under the Securities Act of the shares of Common Stock or the warrants comprising the Units or the shares of Common Stock underlying the warrants in reliance upon the exemptions provided by Section 4(2) of the Securities Act. There were no underwriters for this issuance. (iii) On May 9, 1995 the Company issued an aggregate of 125 Units and one three-year warrant to purchase 37,500 shares of Common Stock at $2.00 per share, to two institutional investors, for an aggregate purchase price of $750,000. This transaction was completed without registration under the Securities Act of the shares of Common Stock or the warrants comprising the Units, the shares of Common Stock underlying the warrants included in the Units, the additional three-year warrant or the shares of Common Stock underlying the three-year warrant, in reliance upon the exemptions provided by Section 4(2) of the Securities Act. There were no underwriters for this issuance. (iv) At various times between October 1993 and October 1996, the Company granted stock options to certain employees of the Company covering an aggregate of 434,375 shares of Common Stock. These grants were exempt from registration pursuant to Securities Act Release No. 33-6188 (Feb. 1, 1980). No underwriter was involved in these grants. II-2 4 ITEM 27. EXHIBITS The following exhibits are filed as part of this Registration Statement: 1.1 Form of Underwriting Agreement. 3.1 Certificate of Incorporation of the Company, as amended.(1) 3.2 Bylaws of the Company.(2) 4.1 Form of Warrant Agreement. 4.2 Form of Warrant to be issued to Janney Montgomery Scott Inc. 5.1 Opinion of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A. 10.1 Employment Agreement between Stanley S. Binder and the Company dated as of July 10, 1989.(3) 10.2 Form of Employment Agreement between Richard S. Rosenfeld and the Company. 10.3 Form of Employment Agreement between Kenneth S. Wood and the Company. 10.4 Consulting Agreement between John J. Harte and the Company dated as of January 1, 1991.* 10.5 Barringer Resources, Inc. 1990 Stock Option Plan.(4) 10.6 Form of 1995 nonqualified stock option agreement.* 10.7 Form of 1996 nonqualified stock option agreement.* 10.8 Description of 1991 Warrant Plan.* 10.9 Description of Exercise Plan.* 10.10 License Agreement dated February 27, 1989 between Canadian Patents and Development Limited -- Societe Canadienne Des Brevets Et D'Exploitation Limite and Barringer Instruments Limited (the "License Agreement"), Supplement #1 dated March 4, 1991, Assignment of License Agreement, dated January 2, 1992, to Her Majesty the Queen in Right of Canada, as Represented By the Minister of National Revenue and Supplemental Letter Agreement, dated October 7, 1996.* 10.11 Termination Agreement between the Company and Labco dated October 7, 1996.* 10.12 Unit Purchase Agreement and Form of Warrant Agreement by and between the Company, Special Situations Fund III, L.P. and Special Situations Cayman Fund, L.P. dated May 9, 1995.(5) 10.13 Form of Subscription Agreement and Form of Warrant Agreement by and between the Company and certain officers and directors of the Company, dated as of June 30, 1995.(6) 10.14 Form of Debenture Purchase Agreement dated as of July 10, 1996, by and between the Company and certain accredited investors.* 10.15 Loan Agreement dated September 20, 1994 by and between Ontario Development Corporation and Barringer Research Limited.(7) 10.16 Agreement dated September 28, 1995 between the Toronto-Dominion Bank, the Company and Barringer Research Limited.(8) 10.17 Lease between the Company and Murray Hill Inn Associates dated as of February 17, 1993.* 10.18 Lease between BRL and Lehndorff Management Limited ("Lehndorff") dated as of July 27, 1995.* 10.31 Form of Stock Purchase Agreement dated as of November 30, 1992 by and between the Company and certain accredited investors.(9) 10.33 Stock Purchase Agreement dated as of February 2, 1993 by and between the Company and Special Situations Cayman Funds, L.P.(9) 10.34 Form of Stock Purchase Agreement dated as of December 13, 1993 by and between the Company and certain accredited investors.(9) 11 Earnings per share computation for the six months ended June 30, 1996.(10) 21 List of Subsidiaries of the Company.
II-3 5 23.1 Consent of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A. (included in Exhibit 5.1 to this registration statement). 23.2 Consent of BDO Seidman, LLP, independent certified public accountants.* 24.1 Power of Attorney (included on the signature page).*
- --------------- * Previously filed. (1) Incorporated by reference to Exhibit 3.1A to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, File No. 0-3207. (2) Incorporated by reference to Exhibit 3.2A to the Company's Annual Report on Form 10-K/A-2 for the fiscal year ended December 31, 1994, File No. 0-3207. (3) Incorporated by reference to Exhibit 10.15 to the Company's Registration Statement on Form S-1, File No. 33-3162. (4) Incorporated by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1990, File No. 0-3207. (5) Incorporated by reference to Exhibit 4.17 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-3207. (6) Incorporated by reference to Exhibit 4.19 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-3207. (7) Incorporated by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994, File No. 0-3207. (8) Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on October 13, 1995, File No. 0-3207. (9) Incorporated by reference to the identically numbered Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, File No. 0-3207. (10) Incorporated by reference to the identically numbered Exhibit to the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30, 1996, File No. 0-3207. ITEM 28. UNDERTAKINGS The undersigned registrant hereby undertakes: (1) For the purpose of determining any liability under the Securities Act, the information omitted from the form of Prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of Prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act, shall be deemed a part of this Registration Statement as of the time it was declared effective. (2) For the purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of Prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions on indemnifications, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-4 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorizes this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Borough of New Providence, State of New Jersey, on November 1, 1996. BARRINGER TECHNOLOGIES INC. By: /s/ STANLEY S. BINDER ------------------------------------ Stanley S. Binder, President and Chief Executive Officer
SIGNATURE TITLE - --------------------------------------------- ----------------------------------------- /s/ STANLEY S. BINDER President, Chief Executive Officer - --------------------------------------------- (Principal Executive Officer) and Stanley S. Binder Director * Director - --------------------------------------------- John D. Abernathy * Director - --------------------------------------------- Richard D. Condon * Director - --------------------------------------------- John H. Davies * Director - --------------------------------------------- John J. Harte * Director - --------------------------------------------- James C. McGrath /s/ RICHARD S. ROSENFELD Vice President-Finance, Chief Financial - --------------------------------------------- Officer Richard S. Rosenfeld and Treasurer (Principal Accounting and Financial Officer) *By: /s/ STANLEY S. BINDER - --------------------------------------------- Stanley S. Binder, Attorney-in-Fact
II-5 7 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION PAGE NO. - ----------- --------------------------------------------------------------------------------- 1.1 Form of Underwriting Agreement................................... 3.1 Certificate of Incorporation of the Company, as amended(1)....... 3.2 Bylaws of the Company(2)......................................... 4.1 Form of Warrant Agreement........................................ 4.2 Form of Warrant to be issued to Janney Montgomery Scott Inc...... 5.1 Opinion of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A....... 10.1 Employment Agreement between Stanley S. Binder and the Company dated as of July 10, 1989(3)..................................... 10.2 Form of Employment Agreement between Richard S. Rosenfeld and the Company.......................................................... 10.3 Form of Employment Agreement between Kenneth S. Wood and the Company.......................................................... 10.4 Consulting Agreement between John J. Harte and the Company dated as of January 1, 1991*........................................... 10.5 Barringer Resources, Inc. 1990 Stock Option Plan(4).............. 10.6 Form of 1995 nonqualified stock option agreement*................ 10.7 Form of 1996 nonqualified stock option agreement*................ 10.8 Description of 1991 Warrant Plan*................................ 10.9 Description of Exercise Plan*.................................... 10.10 License Agreement dated February 27, 1989 between Canadian Patents and Development Limited -- Societe Canadienne Des Brevets Et D'Exploitation Limite and Barringer Instruments Limited (the "License Agreement"), Supplement #1 dated March 4, 1991, Assignment of License Agreement, dated January 2, 1992, to Her Majesty the Queen in Right of Canada, as Represented By the Minister of National Revenue and Supplemental Letter Agreement, dated October 7, 1996*........................................... 10.11 Termination Agreement between the Company and Labco dated October 7, 1996*......................................................... 10.12 Unit Purchase Agreement and Form of Warrant Agreement by and between the Company, Special Situations Fund III, L.P. and Special Situations Cayman Fund, L.P. dated May 9, 1995(5)........ 10.13 Form of Subscription Agreement and Form of Warrant Agreement by and between the Company and certain officers and directors of the Company, dated as of June 30, 1995(6)............................ 10.14 Form of Debenture Purchase Agreement dated as of July 10, 1996, by and between the Company and certain accredited investors*..... 10.15 Loan Agreement dated September 20, 1994 by and between Ontario Development Corporation and Barringer Research Limited(7)........ 10.16 Agreement dated September 28, 1995 between the Toronto-Dominion Bank, the Company and Barringer Research Limited(8).............. 10.17 Lease between the Company and Murray Hill Inn Associates dated as of February 17, 1993*............................................ 10.18 Lease between BRL and Lehndorff Management Limited ("Lehndorff") dated as of July 27, 1995*.......................................
8
EXHIBIT NO. DESCRIPTION PAGE NO. - ----------- --------------------------------------------------------------------------------- 10.31 Form of Stock Purchase Agreement dated as of November 30, 1992 by and between the Company and certain accredited investors(9)...... 10.33 Stock Purchase Agreement dated as of February 2, 1993 by and between the Company and Special Situations Cayman Funds, L.P.(9).......................................................... 10.34 Form of Stock Purchase Agreement dated as of December 13, 1993 by and between the Company and certain accredited investors(9)...... 11 Earnings per share computation for the six months ended June 30, 1996(10)......................................................... 21 List of Subsidiaries of the Company............................. 23.1 Consent of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A. (included in Exhibit 5.1 to this registration statement)......... 23.2 Consent of BDO Seidman, LLP, independent certified public accountants*..................................................... 24.1 Power of Attorney (included on the signature page)*..............
- --------------- * Previously filed. (1) Incorporated by reference to Exhibit 3.1A to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, File No. 0-3207. (2) Incorporated by reference to Exhibit 3.2A to the Company's Annual Report on Form 10-K/A-2 for the fiscal year ended December 31, 1994, File No. 0-3207. (3) Incorporated by reference to Exhibit 10.15 to the Company's Registration Statement on Form S-1, File No. 33-3162. (4) Incorporated by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1990, File No. 0-3207. (5) Incorporated by reference to Exhibit 4.17 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-3207. (6) Incorporated by reference to Exhibit 4.19 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995, File No. 0-3207. (7) Incorporated by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994, File No. 0-3207. (8) Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on October 13, 1995, File No. 0-3207. (9) Incorporated by reference to the identically numbered Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, File No. 0-3207. (10) Incorporated by reference to the identically numbered Exhibit to the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30, 1996, File No. 0-3207. EX-1.1 2 FORM OF UNDERWRITING AGRMT. 1 Exhibit 1.1 ____________, 1996 1,250,000 SHARES OF COMMON STOCK 1,250,000 COMMON STOCK PURCHASE WARRANTS BARRINGER TECHNOLOGIES INC. UNDERWRITING AGREEMENT , 1996 JANNEY MONTGOMERY SCOTT INC. 1801 Market Street 20th Floor Philadelphia, Pennsylvania 19103 Attention: Syndicate Department Dear Ladies and Gentlemen: Barringer Technologies Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the several underwriters named in Schedule I hereto (the "Underwriters") 1,250,000 shares of its common stock, par value $.01 per share (the "Common Stock") and 1,250,000 Common Stock Purchase Warrants. Each such Warrant shall represent the right to acquire one quarter of a share of Common Stock, shall expire three years from the effective date of the initial offering unless redeemed prior thereto, shall be exercisable at a price equal to 115% of the offering price per share of Common Stock, and shall contain such other terms and conditions as are set forth in the related exhibit to the Registration Statement described below. The 1,250,000 shares of Common Stock to be purchased by the Underwriters are hereinafter referred to as the "Firm Shares" and the 1,250,000 Common Stock Purchase Warrants to be purchased by the Underwriters as the "Firm Warrants". The Firm Shares and Firm Warrants are hereinafter collectively referred to as the "Firm Securities". In addition, the Company proposes to grant to the several Underwriters, solely for the purpose of covering over-allotments in the sale of the Firm Shares, the option described in Section 5 of this agreement (the "Agreement") to purchase up to 187,500 additional shares of Common Stock (the "Additional Shares") and 187,500 additional Common Stock Purchase Warrants (the "Additional Warrants"). The Additional Shares and the Additional Warrants are hereinafter collectively referred to as the "Additional Securities". The Additional Securities may only be purchased on the basis of one Additional Warrant for each Additional Share purchased. The Firm Securities and the Additional Securities, and the shares of Common Stock issuable upon exercise of the Firm Warrants and the Additional Warrants are hereinafter 2 collectively referred to as the "Offered Securities"; the Offered Securities and the Representative's Securities (defined below in Section 6 hereof) collectively as the "Securities"; all the warrants included in the Securities as the "Warrants" and all of the shares of Common Stock issuable on exercise of the Warrants as the "Warrant Shares". You, as representative of the Underwriters (the "Representative"), have advised the Company that you and the other Underwriters desire to purchase, severally and not jointly, the Firm Securities and that you have been authorized by the Underwriters to execute this Agreement on their behalf. The Company hereby confirms the agreement made by it with respect to the purchase of the Firm Securities by the several Underwriters on whose behalf you are signing this Agreement, as follows: 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to, and agrees with, each of the Underwriters that: (a) REGISTRATION STATEMENT AND PROSPECTUS. The Company has filed with the Securities and Exchange Commission ("Commission") a registration statement on Form SB-2 (No. 333-13703) for the registration under the Securities Act of 1933, as amended ("Securities Act"), of the Securities, and may have filed one or more amendments thereto, copies of which have heretofore been delivered to you. The registration statement, including the prospectus, financial statements and exhibits, when it shall become effective, and such additional information, if any, with respect to the offering permitted to be omitted from such registration statement when it becomes effective if subsequently filed with the Commission pursuant to Rule 430A of the General Rules and Regulations of the Commission under the Securities Act (the "Rules under the Securities Act"), is hereinafter called the "Registration Statement" and the final prospectus included as part of the Registration Statement is herein called the "Prospectus", except that, if any revised prospectus shall be provided to the Underwriters by the Company for use in connection with the offering of the Securities which differs from the Prospectus on file at the Commission at the time the Registration Statement becomes effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the Rules under the Securities Act), the term "Prospectus" shall refer to such revised prospectus from and after the time it is first provided to the Underwriters for such use. The term "Preliminary Prospectus" as used in this Agreement means a preliminary prospectus as defined in Rule 430 of the Rules under the Securities Act. The Securities Act, the Securities Exchange Act of 1934, as amended ("Exchange Act"), and the rules and regulations promulgated thereunder are sometimes collectively referred to in this Agreement as the "Acts." All contracts and documents required by the Acts to be filed or submitted in connection with the Registration Statement have been so filed or submitted. 2 3 (b) COMPLIANCE WITH SECURITIES ACT, ETC. When the Registration Statement shall become effective and at all times subsequent thereto, up to and including the Closing Date and the Option Closing Date (as such terms are herein defined), and during such longer period until any post-effective amendment to the Registration Statement shall become effective, the Registration Statement (and any post-effective amendment to the Registration Statement) will contain all statements which are required to be stated therein in accordance with the Securities Act and the Rules under the Securities Act, will fully comply as to form in all material respects with the applicable provisions of the Securities Act and the Rules under the Securities Act, and the Registration Statement and any post-effective amendment to the Registration Statement will not contain any untrue statement of a material fact and will not omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and the Prospectus and any amendment or supplement thereto will at all times up to and including the Closing Date and the Option Closing Date (as hereinafter defined), and during such longer period as the Prospectus may be required to be delivered in connection with sales of Securities by the Underwriters or any dealer, fully comply in all material respects with the provisions of the Securities Act and the Rules under the Securities Act and will not contain any untrue statement of a material fact and will not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement and any post-effective amendment to the Registration Statement or the Prospectus or any amendment of, or supplement to, either of them in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representative specifically for use in connection with the preparation of the Registration Statement or of the Prospectus. It is understood that for all purposes of this Agreement the statements set forth in the Prospectus on page 2 with respect to stabilization, the second and third sentences of the last paragraph under "Certain Relationships and Related Transactions" with respect to the transactions with officers of the Representative under the section entitled "Underwriting" and the identity of counsel for the Underwriters under the section entitled "Legal Matters" constitute the only information furnished in writing by or on behalf of the Underwriters for inclusion in the Registration Statement and Prospectus. (c) NO STOP ORDER. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus, and each Preliminary Prospectus, at the time of filing thereof, fully complied in all material respects with the provisions of the Securities Act and the Rules under the Securities Act and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to 3 4 the information contained in or omitted from any Preliminary Prospectus in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representative specifically for use in connection with the preparation of such Preliminary Prospectus. (d) ACCOUNTANTS. BDO Seidman, LLP has audited the audited financial statements filed as part of the Registration Statement and those included in the Prospectus, to the extent set forth in their reports in the Registration Statement and Prospectus, and are independent certified public accountants with respect to the Company as required by the Securities Act and the Rules under the Securities Act. (e) FINANCIAL STATEMENTS. The consolidated financial statements and the notes thereto included in the Registration Statement and Prospectus comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Rules under the Securities Act. The consolidated financial statements present fairly the financial condition and results of operations and combined cash flows of the Company and its consolidated subsidiaries, at the dates and for the periods indicated therein, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as disclosed in the notes thereto). The financial information set forth in the Prospectus under the headings "Summary Consolidated Financial Information", "Recent Developments" and "Selected Consolidated Financial Data" present fairly, on the basis stated in the Prospectus, the information set forth therein and has been derived from or compiled on a basis consistent with that of the audited consolidated financial statements included in the Prospectus. The Companies (as defined below) maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any difference. (f) SUBSIDIARIES; COMMONLY CONTROLLED ENTITIES. The Company owns all of the outstanding shares of capital stock of Barringer Instruments, Inc., a Delaware corporation ("BII"), and of Barringer Research Ltd., an Ontario, Canada corporation ("BRL"; collectively, the "Subsidiaries") and 26% of the capital stock of Barringer Laboratories, Inc., a corporation ("Labco"). All the outstanding shares of Capital Stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable and all the shares of capital stock of BII and BRL and shares of Labco are owned beneficially by the Company, free and clear of any liens, encumbrances, security interests or other restrictions, except 4 5 restrictions created pursuant to the Stock Purchase Agreement (the "Stock Purchase Agreement"), dated December 1, 1995, between the Company and Labco and the Termination Agreement (the "Termination Agreement"), dated October 1996, between the Company and Labco, and no rights exist to acquire any of the capital stock of any of the Subsidiaries, except those included in the Stock Purchase Agreement and the Termination Agreement. Neither the Company, nor any of its Subsidiaries owns any securities of any corporation or has any equity interest in any firm, partnership, association or other entity. The Company and the Subsidiaries are hereinafter collectively referred to as the "Companies". (g) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, other than as stated therein, none of the Companies has sustained any material loss or interference with their respective businesses, financial condition or properties from fire, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and, subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, none of the Companies has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions, not in the ordinary course of business, and there has not been any material change in the capital stock (including any dividend or distribution of any kind declared, paid, or made on any class of capital stock of any of the Companies) or long-term debt or obligations under capital leases of any of the Companies, or any material adverse change; and there is no present intention by any of the Companies to terminate any material supplier relationship or knowledge by any of them of any material supplier's present intention to terminate the supplier relationship with any of the Companies, nor any knowledge of any development involving a prospective material adverse change in the supplier's respective businesses, financial conditions or properties, including any proposed legislation or regulations which, if enacted or adopted, could have a material adverse change, in the condition (financial or otherwise), or in the earnings, business affairs or business prospects of the any of the Companies other than those reflected in the Registration Statement and the Prospectus. (h) CAPITALIZATION; DESCRIPTIONS OF SECURITIES. (i) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus under "Capitalization"; the issued and outstanding shares of Common Stock and Preferred Stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; the Firm Shares and Additional Shares, upon payment of the applicable price therefor, and when issued and delivered by the Company pursuant to this Agreement, will be validly issued, fully paid and non-assessable. The shares of Common Stock and Preferred Stock of the Company conform to the descriptions of them contained in the Prospectus, and the descriptions of the Common Stock and Preferred Stock conform to the rights set forth in the Company's Certificate of Incorporation, as amended, defining the same. No rights exist to acquire any of the capital stock of the Company, except as set forth in the 5 6 Registration Statement. The issuance of the Firm Shares and the Additional Shares is not subject to, or in violation of, any preemptive or other subscription rights. (ii) The Warrants have been duly authorized and, when delivered and paid for in accordance with this Agreement and the Warrant Agreement related thereto, will be validly issued and will constitute valid and binding obligations of the Company in accordance with, and will be exercisable in accordance with, their terms; the shares of Common Stock issuable upon exercise of the Warrants have been duly and validly reserved for issuance pursuant to the terms of the Warrants and, when delivered and paid for pursuant to the terms of such Warrants upon the due exercise of the Warrants by the holders thereof, will be duly authorized, validly issued, fully paid and nonassessable, and the holders will not be subject to personal liability by reason of being such holders, and such shares will not be subject to the preemptive rights of any stockholder of the Company. (iii) The Warrants conform in all material respects to the description thereof contained in the Prospectus, and such description conforms to the rights set forth in the instrument defining the same. (i) ORGANIZATION, QUALIFICATION, ETC. The Company is a duly organized and validly existing corporation in good standing under the laws of the State of Delaware with corporate power and authority to own and lease its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement, BII is a duly organized and validly existing corporation in good standing under the laws of the State of New Jersey, BRL is a duly organized and validly existing corporation in good standing under the laws of Ontario, Canada, each with corporate power to own and lease its properties and to conduct its business as described in the Prospectus, and each is duly qualified to do business and in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a material adverse effect on its condition, financial or otherwise, or on its earnings, business affairs or business prospects (a "Material Adverse Change"). (j) REGULATORY COMPLIANCE. Each of the Companies holds all material licenses, certificates, permits and other evidence of regulatory compliance issued by appropriate federal, state or local or foreign governmental agencies or bodies necessary for the conduct of its business as described in the Prospectus except for those which the failure of the Company to hold would not result in a Material Adverse Change, and none of the Companies has received any notice of proceedings relating to the revocation or modification of any such license, certificate, permit or other evidence of compliance which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Change. 6 7 (k) AUTHORITY. The Company has the corporate power and authority, and has taken all corporate action necessary, to enter into this Agreement and to authorize, issue and sell the Securities on the terms and conditions set forth in this Agreement, and this Agreement has been duly authorized, executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except to the extent enforceability may be limited by bankruptcy or other laws relating to or affecting creditors' rights generally or equitable provisions under federal or state securities laws or public policy. (l) COMPLIANCE WITH OTHER INSTRUMENTS; CONSENTS. None of the Companies is in violation of its charter or bylaws or in default in the performance or observation of any obligation, agreement, covenant or condition contained in any distribution agreement, indenture, mortgage, deed of trust, note, bank loan or credit agreement, or any other material agreement or instrument to which any of the Companies is a party or by which it is bound, or to which any of its properties or assets are subject, other than those default or defaults, which singly or in the aggregate would not result in a Material Adverse Change, and each such distribution agreement, indenture, mortgage, deed of trust, note, bank loan or credit agreement, and other material agreement or instrument, is in full force and effect and, assuming that such agreement or instrument is the legal, valid and binding obligation of the other party to such agreement or instrument, is the legal, valid and binding obligation of, and is enforceable as to, each of the Companies, as the case may be, in accordance with its terms. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated herein will not (i) conflict with, result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give rise to the rights of termination under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Companies pursuant to, any distribution agreement, indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other material agreement or instrument to which any of the Companies is a party or by which any of their respective properties or assets are bound other than such conflicts, breaches, violations or defaults which, singly or in the aggregate, would not result in a Material Adverse Change, nor will such action result in any violation of the provisions of the charter or bylaws of any of the Companies, or any law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court having jurisdiction over any of the Companies, or their respective properties or operations except for such violations, which, singly or in the aggregate, would not result in a Material Adverse Change, or (ii) require the consent, approval, authorization or order of any court or governmental agency or body for the consummation by the Company of any of the transactions contemplated hereby, except such as have been obtained and such as may be required under the Acts, and under state securities or "Blue Sky" laws in connection with the issuance and distribution of the Securities or except for those which the failure of the Company to obtain would not result in a Material Adverse 7 8 Change. There are no contracts or documents of the Companies that are required to be filed as exhibits to the Registration Statement under the Securities Act or the Rules that have not been so filed. (m) LITIGATION. Except as set forth in the Prospectus, there is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending or, to the knowledge of the Company, threatened, against or affecting any of the Companies, that is required to be disclosed in the Registration Statement (other than as disclosed therein), or that might result in a Material Adverse Change or that might materially and adversely affect the properties or assets thereof or that might materially or adversely affect the consummation of this Agreement; all pending legal or governmental proceedings to which any of the Companies is a party or of which any of their respective properties or assets are the subject, that are not described in the Registration Statement, including ordinary routine litigation incidental to the business of the Companies, are not material. (n) PAYMENT OF TAXES. Each of the Companies has filed all United States federal, state and local tax returns which are required to be filed and all such filed returns are complete and accurate except for such incompletions and inaccuracies as would not result in a Material Adverse Change. All taxes and all assessments to the extent that they have become due have been paid in full or the Company has contested such amounts through appropriate proceedings and has established adequate reserves therefor in accordance with generally accepted accounting principles, and each of them has made adequate accruals for all taxes which may be owed but have not been paid. There is no audit, examination, deficiency, or refund litigation pending or, to the Company's knowledge, threatened, with respect to any Taxes of the Companies that would individually or in the aggregate result in a Material Adverse Change. All Taxes, interest, additions, and penalties due with respect to completed and settled examinations or concluded litigation relating to it have been paid in full. None of the Companies has executed an extension or waiver of any statute of limitations on the assessment or collection of any Tax that is currently in effect. No rulings have been issued by or agreements entered into with any Tax Authority (as defined below) with respect to the Company or any subsidiary or affiliate. For purposes of this paragraph, "Taxes" shall mean all taxes, charges, fees, liens, duties or other assessments, however denominated, including any interest or penalties that may become payable in respect thereof, imposed by the United States government, any state, local or foreign government or any agency or political subdivision of any such government (a "Taxing Authority"), which taxes shall include, without limiting the generality of the foregoing, all income taxes, payroll and employee withholding taxes, unemployment insurance taxes, social security taxes, sales and use taxes, excise taxes, capital taxes, franchise taxes, gross receipt taxes, occupation taxes, real or personal property taxes, value added taxes, stamp taxes, transfer taxes, workers' compensation taxes, and other obligations of the same or of a similar nature. 8 9 (o) Listing. The Securities are qualified for listing on The NASDAQ National Market System. (p) INVESTMENT COMPANY STATUS. None of the Companies are an "investment company" or an "affiliated person" of, or promoter, or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act of 1940. (q) REAL AND PERSONAL PROPERTY. Except as disclosed in the Prospectus, each of the Companies owns outright, in fee simple, title to the real and personal property purported to be owned by it, free and clear of all liens, mortgages, charges or encumbrances of any nature, except those which do not materially diminish the value of the property subject to them or materially interfere with or materially impair the present and continued use of that property in the usual and normal conduct of its business (collectively "Permitted Encumbrances"). All of the leases under which each of the Companies holds properties or assets as lessee are in all material respects as described in the Prospectus, are valid and in full force and effect and, to the Companies' knowledge, enforceable as to the Companies in accordance with their terms, and none of the Companies is in default in any respect under any of the terms or provisions of any such leases, except for any default which would not result in a Material Adverse Change and, to the Company's knowledge, no claim has been asserted by anyone adverse to the rights of the Companies as lessee under any of the leases mentioned above, or affecting or questioning the right of any of the Companies to continued possession of the leased premises or assets under any such lease that would result in a Material Adverse Change. (r) INTELLECTUAL PROPERTY. Each of the Companies owns or possesses adequate licenses or other rights to use all patents, trade secrets, trademarks, trade names and copyrights necessary to enable it to conduct its business as now operated (the "Intellectual Property") except for such licenses or other rights, which the failure of the Company to own of possess would not result in a Material Adverse Change and such Intellectual Property (other than Intellectual Property rights acquired as licensee) is owned free and clear of any liens, security interests, mortgages, charges, encumbrances and adverse rights of every kind, nature and description; and none of the Companies has any knowledge of any claim or received any notice of infringement of or conflict with asserted rights of others or have knowledge of infringement by others of its rights with respect to any of the foregoing which, singly or in the aggregate, could result in a Material Adverse Change . Except for the rights of customers under license agreements, the Intellectual Property is not subject to any licenses, sublicenses, royalty arrangements, or disputes, and except for such rights, each of the Companies has the exclusive right to make, copy, sell, exploit and provide to others the use of the Intellectual Property pertinent to it and all derivative works thereof free and clear of any liens, security interests, mortgages, charges, encumbrances and adverse rights of every kind, nature and description. There are no defects in the Intellectual Property, which defects would in any material and 9 10 adverse respect affect the functioning thereof in accordance with the specifications therefor, or the use or exploitation thereof. No agreement exists which would preclude any desired change to the Intellectual Property, excluding Permitted Encumbrances. Each of the Companies has taken or is taking all actions necessary in its reasonable judgment to protect the Intellectual Property pertinent to it. Except as disclosed in the Prospectus, no third party has any interest in, or right to compensation from any of the Companies by reason of the use, exploitation or sale of the Intellectual Property, and none of the Companies has received notice or knowledge of any complaint, assertion, threat or allegation that would contradict the foregoing. (s) INSURANCE. Each of the Companies has its property adequately insured against loss or damage by fire, maintains adequate insurance against liability for negligence, and maintains such other insurance in such nature and amounts of coverage as is usually maintained by companies engaged in the same or similar business. (t) NO STABILIZATION OR MANIPULATION OF PRICE. Neither the Company nor any officer or director of the Company has taken or will take, directly or indirectly, any action designed to stabilize or manipulate the price of any security of the Company, or which has constituted or which might in the future reasonably be expected to constitute stabilization or manipulation of the price of the Offered Securities in connection with the offering contemplated by the Registration Statement. (u) RELATED TRANSACTIONS. There are no business relationships or related-party transactions of the nature described in Item 404 of Regulation S-B involving any of the Companies and any other persons referred to in said Item 404 that are required to be described in the Prospectus and which have not been so described. (v) NO REGISTRATION RIGHTS. Except as set forth in Schedule __ hereto, no person or entity has the right (which has not been waived) to require registration of Common Stock or other securities of the Company because of the filing or effectiveness of the Registration Statement or otherwise. (w) LOCK-UP AGREEMENTS. The Company has obtained and delivered to the Underwriters a written agreement, in form satisfactory to Rosenman & Colin LLP, counsel for the Underwriters, by each officer and director of the Company as of the Effective Date not to, directly or indirectly, sell, offer to sell or agree to sell or otherwise dispose of any Common Stock of the Company for a period of 180 days from the Effective Date without the prior written consent of the Representative, other than pursuant to the Registration Statement or as described in such agreement. 10 11 (x) NO BROKER OR FINDER ENGAGED BY THE COMPANY. Except as disclosed in the Prospectus, the Company has not incurred any liability for any finder's fees or similar payments in connection with any of the transactions herein contemplated. (y) LABOR RELATIONS. None of the Companies is involved in any labor dispute which might reasonably be expected to result in a Material Adverse Change nor, to the knowledge of the Companies, is any such dispute threatened. (z) DEALINGS. None of the Companies nor any of their respective officers, directors, employees, agents or any other person acting on their behalf has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or an agent of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder their respective businesses (or assist in connection with any actual or proposed transaction) which (a) might subject any of them to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (b) if not given in the past, might result in a Material Adverse Change as reflected in any of the combined financial statements contained in the Prospectus, or (c) if not continued in the future, would reasonably be expected to result in a Material Adverse Change. Each of the Companies' internal accounting controls and procedures are sufficient to cause it to comply with the Foreign Corrupt Practices Act of 1977, as amended. (aa) PRIOR TRANSACTIONS. Except as set forth in the Registration Statement, the Company has not issued, sold or offered for sale within the last three years any of its equity securities. 2. PURCHASE AND SALE OF SHARES. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby agrees to issue and sell to the Underwriters, severally and not jointly,the number of Firm Securities to be sold by the Company set forth opposite the name of each Underwriter on Schedule I, and each Underwriter, severally and not jointly, hereby agrees to purchase from the Company the number of Firm Securities set forth opposite the name of such Underwriter in Schedule I hereto, at a purchase price of $ per Firm Share and $ per Firm Warrant. 3. DELIVERY AND PAYMENT. The Company shall deliver the Firm Securities at the office of Janney Montgomery Scott Inc., 26 Broadway, New York, New York, on , 1996 at 10:00 A.M., New York City time, the date and time of such delivery being hereinafter called the "Closing Date." On the Closing Date, delivery of the Firm Securities shall be made to you, for the respective accounts of the several Underwriters, against payment by the several Underwriters through you of the purchase price for the Firm Securities. The purchase price for the Firm Securities will be paid to or upon the order of the Company, in bank checks in New York Clearing House funds. Certificates for the Firm Securities shall be made available to you for inspection, checking and packaging at the office 11 12 of Janney Montgomery Scott Inc., 26 Broadway, New York, New York, not less than one full business day prior to the Closing Date. Time shall be of the essence and delivery at the time and place specified in this Agreement is a further condition to the obligations of each Underwriter. In the event the Underwriters exercise the option granted in Section 4(a) hereof to purchase all or any portion of the Additional Securities, the Company shall deliver the Additional Securities at the office of Janney Montgomery Scott Inc., 26 Broadway, New York, New York, at 10:00 A.M., New York City time on the Option Closing Date (as hereinafter defined). On the Option Closing Date, delivery of the Additional Securities shall be made to you, for the respective accounts of the several Underwriters, against payment by the several Underwriters through you of the purchase price for the Additional Securities. The purchase price for the Additional Securities will be paid to or upon the order of the Company, in bank checks in New York Clearing House funds. Certificates for the Additional Securities shall be made available to you for inspection, checking and packaging at the office of Janney Montgomery Scott Inc., 26 Broadway, New York, New York, not less than one full business day prior to the Option Closing Date. Time shall be of the essence and delivery at the time and place specified in this Agreement is a further condition to the obligations of each Underwriter. 4. OPTION TO PURCHASE ADDITIONAL SHARES. (a) For the sole purpose of covering any over-allotments in connection with the distribution and sale of the Firm Securities as contemplated by the Prospectus, the Company hereby grants an option to the Underwriters to purchase 150,000 Additional Shares and 150,000 Additional Warrants from the Company, in each case at a price identical to the price per Firm Share and Firm Warrant set forth in Section 2 of this Agreement. The option hereby granted may be exercised by the Underwriters as to all or any part of the Additional Securities at any time, but only once prior to the end of the close of business on the thirtieth day following the Closing Date; provided, however, that Additional Securities may only be purchased on the basis of one Additional Warrant for each Additional Share purchased. Subject to such adjustments to eliminate fractional Additional Securities as you, as the Representative of the Underwriters, may determine, the number of Additional Securities to be purchased by each Underwriter shall be equal to the number of Additional Shares multiplied by a fraction, the numerator of which is the number of Firm Shares purchased by such Underwriter and the denominator of which is the total number of Firm Shares purchased by all Underwriters including the Representative. (b) The option granted hereby may be exercised by you, as the Representative of the Underwriters, by giving written notice to the Company setting forth the number of Additional Securities to be purchased, the date and time for delivery of payment for the Additional Securities, and stating that the Additional Securities being purchased are to be used solely for the purpose of covering over-allotments in connection with the distribution and sale of the Firm Securities. If the notice is given prior to the Closing Date, the date for delivery and payment shall not be earlier than the later of two (2) full business days after the notice is given or the Closing Date. If the notice is given on or after the Closing Date, the date for delivery and payment shall not be earlier than three full business days 12 13 after the day on which the notice is given. In either event, the date shall not be more than fifteen (15) full business days after the day on which the notice is given. The date and time for delivery and payment is called the "Option Closing Date." Upon exercise of the option, the Company shall become obligated to sell to the Underwriters and, subject to the terms and conditions set forth in Section 4(c) of this Agreement, the Underwriters shall become obligated, severally and not jointly, to purchase the number of Additional Shares described in Section 4(a) above. (c) The obligation of the Underwriters to purchase and pay for any of the Additional Securities is subject to the accuracy in all material respects as of the date of this Agreement, the Closing Date and the Option Closing Date of, and the compliance by the Company in all material respects with, its representations and warranties in this Agreement, to the accuracy in all material respects of the statements of the officers of the Company made pursuant to this Agreement, to the performance in all material respects by the Company of its obligations under this Agreement, to the satisfaction by the Company as of the Option Closing Date of the conditions set forth in Section 11 of this Agreement, and to the delivery to you of opinions, certificates, and letters addressed to you and dated the Option Closing Date substantially similar in scope to those specified in Section 11 of this Agreement, but with each reference to "Firm Securities" to be to the Additional Securities being sold, and "Closing Date" to be to the "Option Closing Date." 5. OFFERING BY UNDERWRITERS. After the Registration Statement becomes effective, the Underwriters propose to offer for sale to the public the Firm Securities and any Additional Securities which may be sold at the price and upon the terms set forth in the Prospectus. The Representative represents and warrants that it has not incurred any liability for finder's fees or similar payments in connection with the transactions herein contemplated. 6. REPRESENTATIVE'S WARRANTS. At the Closing, the Company shall sell to the Representative, for $.0012 per warrant, five-year warrants (the "Representative's Warrants") entitling the holder to purchase up to 125,000 shares of Common Stock and three-year warrants (the "Underlying Warrants") entitling the holder to purchase up to 125,000 warrants identical in form and substance to the Firm Warrants. The Representative's Warrants shall be exercisable for a period of four years commencing one year after the effective date of the Prospectus and the Underlying Warrants shall be exercisable for a period of two years commencing one year after the effective date of the Prospectus, in each case at a price or prices conforming to the requirements of the National Association of Securities Dealers Inc. and shall contain the registration rights and other terms and conditions set forth in the related Exhibit to the Registration Statement. As used herein, "Representative's Securities" shall mean the Representative's Warrants, the Underlying Warrants and the shares of Common Stock issuable on exercise of all such Warrants. 7. EXPENSES. The Company will pay all fees, taxes and expenses incident to the performance of the obligations of the Company under this Agreement and under any other agreement in connection with the offer, sale and issuance of the Firm Securities and Additional Securities, 13 14 and any fees, taxes and expenses, including transfer taxes incident to the issuance and delivery of the Firm Securities and Additional Securities to the Underwriters as may be required by this Agreement, including, without limitation, accounting, legal (other than the fees and disbursements of the Underwriters' counsel, except as provided below), printing, any state or local transfer or other taxes, advertising and other costs incurred in connection with the preparation, printing, filing and delivery to the Representative of the Registration Statement, the Preliminary Prospectus, the Prospectus, and all amendments or supplements to them, preliminary and final Blue Sky Memoranda, this Agreement, the Agreement Among Underwriters and Selected Dealer Agreement, Underwriters' Questionnaires, powers of attorney, the listing of the Securities on The Nasdaq National Market System and any other agreements or similar items of expense, including postage, printing, advertising costs, the expenses of "road shows" and other marketing expenses reasonably incurred by you or reasonably required or desirable in connection with the offering and sale of the Firm Securities and Additional Securities, and in connection with furnishing copies of the Preliminary Prospectus, the Prospectus and all supplements and amendments to them to the several Underwriters and all filing fees to the Commission and the National Association of Securities Dealers, Inc. ("NASD") payable in connection with this offering. The Company will pay all legal fees (including the reasonable fees of Rosenman and Colin LLP, Blue Sky counsel to the Company), disbursements, filing fees and other costs of compliance with or registration and qualification under applicable state securities or Blue Sky laws and all reasonable expenses incident thereto. The Company shall also pay the fees and expenses of the transfer agent and warrant agent. At the Closing, the Company shall pay to the Representative a non-accountable expense allowance of 2% of the gross proceeds of the offering of the Firm Securities, of which the Representative acknowledges having received a non-refundable advance of $20,000, and at any Option Closing shall pay to the Representative a further non-accountable expense allowance of 2% of the gross proceeds of the offering of Additional Securities. 8. FURTHER COVENANTS OF THE COMPANY. In further consideration of the agreements of the Underwriters contained in this Agreement, the Company covenants and agrees with each of the several Underwriters as follows: (a) The Company will not at any time submit or make any amendment or supplement to the Prospectus or Registration Statement which shall not have been submitted to you within a reasonable time prior to the proposed submission thereof, or to which you shall reasonably object in writing, or which is not in compliance with the Acts. (b) The Company will use its best efforts to cause the Registration Statement and any post-effective amendments thereto to comply with the requirements of the Securities Act and the Rules under the Securities Act and to become effective, and will promptly advise you and confirm in writing upon your request (i) when the Registration Statement and any amendment thereto shall become effective, (ii) when any post-effective amendment to the Registration Statement becomes effective, (iii) of the receipt of any comments from the Commission, (iv) when the Commission shall request any amendment to the Registration Statement or Prospectus, or request any additional information, (v) of the necessity 14 15 of amending or supplementing the Registration Statement or any post-effective amendment in order to then meet the requirements of the Securities Act and the Rules under the Securities Act, and (vi) of the issuance by the Commission, any "Blue Sky" authority or any other governmental agency with jurisdiction over the Company or its securities, of any stop order or similar order with regard to the Registration Statement or the Prospectus, or any order preventing or suspending the use of any Preliminary Prospectus or the Registration Statement or Prospectus, or of the suspension of the qualification of the Securities for offer or sale in any jurisdiction, or of the institution of any proceedings for any such purpose. The Company will use its best efforts to prevent the issuance of any stop order or of any order preventing or suspending such use and if such an order shall be issued, the Company will use its best efforts to obtain its withdrawal as soon as possible. (c) The Company will prepare and file with the Commission, upon your reasonable request, any amendments or supplements to the Registration Statement or Prospectus, in form and substance reasonably satisfactory to counsel for the Company, as in the opinion of Rosenman & Colin LLP, counsel for the Underwriters, may be necessary or advisable in connection with the distribution of the Offered Securities and the exercise of the Warrants included therein, and will use its best efforts to cause the same to become effective as promptly as possible and to remain effective for the term of the Warrants included in the Offered Securities. (d) The Company consents to the use of any Preliminary Prospectus by the several Underwriters and by dealers for the purposes contemplated by this Agreement and in accordance with the Acts. The Company will deliver to you, at or before the Closing Date, three copies of the Registration Statement and all amendments thereto, including all financial statements and exhibits filed with it, and copies of all written communications between the Company, its representatives and agents and the Commission, and will deliver to you such number of copies of the Registration Statement, including such financial statements, but without exhibits, and all amendments thereto as you may reasonably request. The Company will deliver or mail to you and, upon your request, to the Underwriters, from time to time, during the period when delivery of the Prospectus relating to the Offered Securities shall be required under the Acts, as many copies of the Prospectus (as amended or supplemented) as you may reasonably request. (e) If, at the time that the Registration Statement becomes effective, any information shall have been omitted therefrom in reliance upon Rule 430A of the Rules under the Securities Act, then, at the times specified in Rule 430A and Rule 424(b), the Company will prepare, and file or transmit for filing with the Commission in accordance with such Rule 430A and Rule 424(b) of the Rules under the Securities Act copies of the amended Prospectus, or, if required by such Rule 430A, a post-effective amendment to the Registration Statement (including an amended Prospectus) containing all information so omitted. (f) The Company will comply with the requirements of the Acts and any other applicable rules and regulations of any governmental authority having 15 16 jurisdiction over this offering so as to permit the completion of the public distribution of the Offered Securities. Subject to the provisions of Subsection (a) of this Section 8, if, at any time when a Prospectus is required to be delivered under the Acts, (i) an event relating to or affecting the Company shall have occurred which, in the judgment of the Company and its counsel, or in the opinion of counsel for the Underwriters, would cause the Registration Statement as then in effect to include an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or in order to make the Registration Statement comply with the Acts and the Rules under the Securities Act, or (ii) it is necessary to amend or supplement the Registration Statement or Prospectus, the Company will promptly notify you of the occurrence and will promptly prepare, file and deliver to you without charge such number of copies of the amended or supplemented Registration Statement or Prospectus as you shall reasonably request, and will use its best efforts to cause the Commission and appropriate "Blue Sky" authorities to take all required action with regard to any such amendment as may be necessary to permit the lawful use of the Registration Statement and Prospectus in connection with the distribution of the Offered Securities. (g) The Company will supply all necessary documents, exhibits and information and execute all applications, instruments and papers as may be necessary or desirable in the opinion of Rosenman & Colin LLP, Blue Sky counsel, and as requested by you, to qualify the Offered Securities for sale under the Blue Sky or other securities laws in such jurisdictions as the Underwriters may reasonably request, provided the Company shall not have to qualify as a foreign corporation and shall not be required to consent to service of process generally. The Company will take any reasonable measures requested by you and such action, if any, which is necessary under such laws in order to qualify the Offered Securities for sale and to continue such registration or qualification so long as necessary to permit the completion of the public distribution with respect to such Securities. (h) The Company will make generally available to its security holders as soon as practicable after the expiration of one year after the date the Registration Statement becomes effective, and in all events not later than , 1997, an earnings statement of the Company (which will be in such detail and form as you may reasonably request and which need not be audited) covering a period of at least 12 months beginning not later than the first day of the Company's fiscal quarter next following the date the Registration Statement becomes effective, which earnings statement shall satisfy the provision of Section 11(a) of the Securities Act including Rule 158 promulgated thereunder. (i) So long as the Company shall be subject to the reporting requirements of the Exchange Act, the Company shall furnish to its stockholders and warrantholders annual reports containing financial statements of the Company audited by its independent certified public accountants and quarterly reports for the first three quarters of its fiscal year containing financial information which may be unaudited. 16 17 (j) So long as the Company shall be subject to the reporting requirements of the Exchange Act, the Company will, from time to time, after the date the Registration Statement becomes effective, file with the Commission such reports as are required by the Acts and with state securities commissions in states where the Offered Securities have been sold by the Representative (as the Representative shall have advised the Company in writing) such reports as are required to be filed by the securities acts and the regulations of those states. (k) The Company will apply the net proceeds from the sale of the Offered Securities for the purposes set forth under "Use of Proceeds" in the Prospectus. (l) The Company shall furnish to you as early as practicable prior to the Closing Date, but no later than three (3) full business days prior thereto, a copy of the latest available unaudited interim financial statements of the Company which have been read by the Company's independent certified public accountants, as stated in their letters to be furnished pursuant to Section 11(i) of this Agreement. (m) During the period of five (5) years from the date the Registration Statement becomes effective, the Company will furnish to the Representative copies of all reports and other communications (financial or other) furnished by the Company to its shareholders and, as soon as reasonably practicable, copies of any reports or financial statements furnished or filed by the Company to or with the Commission, NASDAQ, or any national exchange on which any class of securities of the Company may be listed. (n) During a period of 180 days after the date the Registration Statement becomes effective, the Company will not, directly or indirectly, without the prior written consent of the Representative, offer, sell, grant any option to purchase or otherwise dispose of any Common Stock or any securities convertible into or exchangeable for Common Stock except pursuant to this Agreement, and except (i) in connection with a merger or asset acquisition, (ii) upon exercise or conversion of securities (including stock options) of the Company outstanding prior to the effective date of the Registration Statement (iii) the creation and adoption of an employee stock compensation program (a "Program"), or (iv) the grant of options, SARs, restricted stock and other securities under such Program, not to exceed 200,000 shares of Common Stock. (o) The Company will reasonably enforce, for your benefit, the written agreements (copies of which have been furnished to you) by all of the executive officers and directors of the Company pursuant to Section 1(w) hereof. (p) The Company will cause the officers and directors of the Company (enumerate) to enter into an agreement with the Representative to the effect that, for a period of 180 days from the date hereof, he or she will not, without the prior consent of the Representative, directly or indirectly, offer, sell, offer to sell, grant any option to purchase or otherwise sell or dispose of any shares of the Common Stock of the Company or any securities convertible into or exercisable or exchangeable 17 18 therefor or with respect to which such person has the power of disposition, except for the exercise of stock options. (q) The Prospectus and any amendment or supplement thereto will at all times up to and including the Closing Date and the Option Closing Date (as hereinafter defined), and during such longer period as the Prospectus may be required to be delivered in connection with the issuance and sale by the Company of shares of Common Stock or exercise of any of the Warrants fully comply in all material respects with the provisions of the Securities Act and the Rules under the Securities Act and will not contain any untrue statement of a material fact and will not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 9. INDEMNIFICATION. (a) The Company agrees to indemnify and hold harmless, and, subject to Section 9(c) to indemnify and hold harmless, each Underwriter (including specifically each person who may be substituted for an Underwriter as provided in Section 13 of this Agreement) and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act, from and against any and all losses, claims, damages, expenses or liabilities, joint or several, to which they or any of them may become subject under the Act, state securities laws or under any other statute or at common law or otherwise, and, except as hereinafter provided, will reimburse each of the Underwriters and each such controlling person, if any, for any legal or other out-of-pocket expenses reasonably incurred by them or any of them in connection with investigating or defending any claim or action whether or not resulting in any liability, insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, in any Preliminary Prospectus or in the Prospectus (or the Registration Statement or Prospectus as from time to time amended or supplemented by the Company) or in any application or other document (hereinafter "Application") executed by the Company or based upon written information furnished by or on behalf of the Company, filed in any jurisdiction in order to qualify the Securities under the securities laws of that jurisdiction, or which arise out of or are based upon the omission or alleged omission to state in any of the foregoing any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the indemnity agreement contained in this Subsection shall not apply to any loss, claim, damage, expense or liability to the extent arising out of any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, Preliminary Prospectus or Prospectus (or the Registration Statement or Prospectus as from time to time amended or supplemented by the Company) or, Application in reliance upon and in conformity with information furnished in writing to the Company in connection therewith by the Representative or any Underwriter directly or through you expressly for use therein; provided, further that the indemnity agreement contained in this Subsection is subject to the condition that, insofar as it relates to any such untrue statement or alleged untrue statement or omission or alleged omission in any Preliminary Prospectus but 18 19 eliminated or remedied in the Prospectus, such indemnity agreement shall not inure to the benefit of any Underwriter or any person controlling such Underwriter from whom the person asserting any such loss, claim, damage, expense, liability or action purchased the Securities if (i) prior to the time such Prospectus was required under the Securities Act to be furnished to such person the Company had furnished copies of the properly corrected or supplemental Prospectus to such Underwriter, (ii) a copy of such Prospectus, as then corrected or supplemented, was not furnished to such person at or prior to the time required under the Securities Act, and (iii) the delivery of such Prospectus would have constituted a complete defense to the claim asserted by such person. Promptly after receipt by any Underwriter or any person controlling such Underwriter of notice of the commencement of any action in respect of which indemnity may be sought against the Company under this Subsection (a), such Underwriter or controlling person shall notify the Company in writing of the commencement of the action and, subject to the provisions hereinafter stated, the Company shall assume the defense of that action (including the employment of counsel who shall be reasonably satisfactory to the Representative (who may be Company counsel)) and the payment of reasonable out-of-pocket expenses insofar as such action shall relate to any alleged liability in respect of which indemnity may be sought against the Company. Any Underwriter or any such controlling person shall have the right to employ separate counsel in any such action and participate in the defense, but the fees and expenses of such counsel shall not be at the expense of the Company unless the employment of such counsel has been specifically authorized by the Company or unless the indemnified party or parties reasonably conclude there may be defenses available to it or them which were not available to the Company (in which case the Company will not have the right to direct the defense of the action on behalf of the indemnified parties), in which event the reasonable expenses of one additional counsel for the Underwriters will be borne by the Company. The Company shall not be liable to indemnify any person for any settlement of any such action effected without the written consent of the Company. The obligations of the Company under the indemnity agreement set forth in this Subsection (a) shall be in addition to any liability the Company may otherwise have under this Agreement. (b) Each Underwriter (including specifically each person who may be substituted for an Underwriter as provided in Section 13 of this Agreement) severally agrees to indemnify and hold harmless the Company, each of its directors, each of its officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, from and against any and all losses, claims, damages, expenses, or liabilities, joint or several, to which they or any of them may become subject under the Acts or under any other statute or at common law or otherwise, and, except as hereinafter provided, will reimburse the Company and each such director, officer or controlling person for any legal or other out-of-pocket expenses reasonably incurred by them or any of them in connection with investigating or defending any claim or action whether or not resulting in any liability, insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, in any Preliminary Prospectus or in the Prospectus (or the Registration Statement or Prospectus as from time to time amended or supplemented) or in any Application, or arise out of or are based upon the omission or alleged omission to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not 19 20 misleading, but only insofar as any such statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company in connection therewith by the Representative or such Underwriter directly or through the Representative expressly for use therein. Promptly after receipt of notice of the commencement of any action in respect of which indemnity may be sought against one or more Underwriters under this Subsection (b), the indemnified party shall notify the Representative Underwriters in writing of the commencement of the action and the Underwriter or Underwriters against whom indemnity may be sought shall, subject to the provisions hereinafter stated, assume the defense of such action (including the employment of counsel who shall be reasonably satisfactory to the Company, and the payment of expenses) and the payment of reasonable out-of-pocket expenses insofar as such action shall relate to an alleged liability in respect of which indemnity may be sought against such Underwriter or Underwriters. The Company and each such director, officer or controlling person shall have the right to employ separate counsel in any such action and participate in the defense, but the fees and expenses of such counsel shall not be at the expense of any Underwriter unless the employment of such counsel has been specifically authorized by the Underwriters obligated to defend such action, unless the indemnified party or parties reasonably conclude there may be defenses available to it or them which are not available to the Underwriters against whom indemnification is sought (in which case those Underwriters will not have the right to direct the defense of the action on behalf of the indemnified party or parties), in which event the reasonable out-of-pocket expenses of one additional counsel for all the indemnified parties will be borne by the indemnifying Underwriters. The Underwriter against whom indemnity may be sought shall not be liable to indemnify any person for any settlement of any action effected without such Underwriter's written consent. The obligations of each Underwriter under the indemnity agreement set forth in this Subsection (b) shall be in addition to any liability each of them may otherwise have under this Agreement. 10. CONTRIBUTION. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 9 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company and the Underwriters shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by said indemnity agreement incurred by the Company, and one or more of the Underwriters, as incurred, in such proportions that the Underwriters are responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to the public offering price appearing thereon, and the Company shall be responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 10, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Firm Securities and Additional Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages of the kind described in Section 9(a) which such Underwriter has otherwise paid in respect of such losses, claims, damages, liabilities and expenses. For purposes of this Section, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who 20 21 signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Company. 11. CONDITIONS OF OBLIGATIONS OF UNDERWRITERS. The obligations of the Underwriters to purchase and pay for the Firm Securities and Additional Securities are subject (as of the date hereof and the Closing Date) to the accuracy in all material respects of the representations and warranties of the Company, the accuracy in all material respects of the statements of officers and directors of the Company made pursuant to the provisions of this Agreement, the performance in all material respects by the Company of its obligations under this Agreement and to the following additional conditions: (a) The Registration Statement shall become effective with the Commission no later than 10:00 A.M., New York City time, on the day following the date of this Agreement, or such later time and date as shall have been consented to by the Underwriters (including you) who are obligated to purchase a majority of the Firm Securities to be purchased by all of the Underwriters pursuant to this Agreement; the Commission shall have taken all required action, if any, with regard to the Registration Statement, and, prior to the Closing Date, no stop order or similar order with regard to the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be pending or, to the knowledge of the Underwriters or the Company, shall be contemplated by the Commission or by any securities, Blue Sky or other regulatory authority of any jurisdiction, and any request on the part of the Commission or such other securities, Blue Sky or regulatory authorities for additional information shall have been complied with to the reasonable satisfaction of Rosenman & Colin LLP, counsel for the Underwriters. (b) Prior to the date of this Agreement, the issuance and sale of the Securities shall have been approved by all requisite corporate action of the Company. (c) The NASD shall have indicated that it had no objection to the underwriting arrangements pertaining to the sale of the Firm Securities and the Additional Securities and the participation by the Underwriters in the sale thereof. (d) No action shall have been taken by the Commission or the NASD the effect of which would make it improper, at any time prior to the Closing Date, for members of the NASD to execute transactions (as principal or agent) in any of the Securities, and no proceedings for the taking of such action shall have been instituted or shall be pending or, to the knowledge of the Underwriters or the Company, shall be contemplated by the Commission or the NASD. The Company represents that at the date hereof it has no knowledge that any such action is in fact contemplated by the Commission or the NASD. (e) Between the date of this Agreement and the Closing Date, none of the Companies shall have sustained any material loss outside the ordinary course of its 21 22 business or of such character as would result in a Material Adverse Change, whether or not that loss is covered by insurance. (f) Between the date of this Agreement and the Closing Date, each of the Companies shall have conducted its business in the usual and ordinary manner, and, except as disclosed in the Prospectus or except in the ordinary course of its business, shall not have incurred any material liabilities or obligations, direct or contingent, or altered in any material respect any material supplier relationship, or disposed of a material amount of its assets, or entered into any material transactions, and shall not have suffered or experienced any Material Adverse Change. At the Closing Date, the capital stock of the Company shall be substantially as set forth in the Registration Statement, except with respect to the Firm Securities to be sold by the Company. (g) At the Closing Date, there shall have been delivered to you a signed opinion of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A. addressed to the Underwriters, dated as of the Closing Date, in form and substance reasonably satisfactory to Rosenman & Colin LLP, counsel for the Underwriters, together with a signed or photostatic copy of that opinion for each of the other Underwriters, substantially to the effect that: (i) Each of the Company and BII has been duly incorporated and is validly existing and in good standing under the laws of its jurisdiction of incorporation and has the corporate power and authority to own and lease its properties and to conduct its business as described in the Registration Statement and Prospectus and is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where, to such counsel's knowledge, it owns or leases properties and where the failure to so qualify would have a material adverse effect on its earnings, business affairs or business prospects. (ii) This Agreement has been duly authorized, executed and delivered by the Company. All corporate action required to be taken by the Board of Directors of the Company and all action required to be taken by the stockholders of the Company, if any, in connection with the authorization, issuance and sale of the Securities to be sold by the Company as contemplated in the Registration Statement and the Prospectus have been duly taken. The Company has the requisite power and authority to enter into and consummate this Agreement. (iii) Neither the issuance by the Company of the Securities to be sold by it under this Agreement, the execution and delivery of this Agreement, the undertakings contained in the Registration Statement or the Prospectus, the consummation of the transactions contemplated in this Agreement or compliance with the terms of this Agreement, will conflict with or result in a breach of any of the terms or provisions of the Certificate of Incorporation, as amended, or the By-laws of the Company, or any material indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other 22 23 agreement or instrument filed as an exhibit to the Registration Statement or to any other filing heretofore made by the Company under the Acts, any applicable federal or State law (other than Blue Sky laws), rule or regulation, or (without search of any court dockets) any judgment, order or decree of any government, governmental agency or instrumentality or court having jurisdiction over any of the Companies or their respective properties or assets, of which such counsel is aware. (iv) To such counsel's knowledge, there are no contracts, indentures, mortgages, notes, leases or other instruments or agreements required to be described or referred to in the Registration Statement or to be filed as exhibits thereto other than those described or referred to therein or filed as exhibits thereto; the descriptions thereof or references thereto in the Prospectus are correct in all material respects and no default exists in the due performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, note, lease or other instrument or agreement so described, referred to or filed. (v) To such counsel's knowledge, the Company has no subsidiaries other than as set forth in Section 1(f) hereof. All of the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and non assessable and, as of the Closing Date, are owned beneficially by the Company, free and clear of any liens, encumbrances, security interests or other restrictions, and no person, firm or corporation has the right, upon the passage of time or otherwise, to acquire any of the stock of any such Subsidiary. (vi) Except as described in the Prospectus, to such counsel's knowledge, the Company and the Subsidiaries hold all material licenses, certificates, permits and other evidence of regulatory compliance issued by appropriate federal, state or local governmental agencies or bodies necessary for the conduct of its business as described in the Prospectus. (vii) The Company's authorized capital stock consists of 7,000,000 shares of Common Stock, par value $.01 per share, 1,000,000 shares of Convertible Preferred Stock, par value $1.25 per share, and 4,000,000 shares of Preferred Stock, par value $2.00 per share. (viii) The outstanding stock options and warrants relating to the Common Stock have been duly authorized and validly issued. (ix) The certificates for the Securities are in proper form and comply with Delaware law. (x) The Firm Shares and Additional Shares to be sold by the Company as contemplated by this Agreement have been duly authorized, and, when issued as provided in this Agreement and any warrant agreement relating 23 24 thereto upon the due exercise of the Warrants, including the payment of the exercise price therefor, will be validly issued, fully paid and non-assessable. The holders of any of the Firm Shares and Additional Shares when issued as contemplated pursuant to this Agreement and any warrant agreement relating thereto upon the due exercise of the Warrants, including the payment of the exercise price therefor, will not be subject to personal liability solely by reason of being such holders and, to such counsel's knowledge, there is no preemptive right of any holder of any securities of the Company applicable to [any outstanding share of Common Stock] and no preemptive right will be applicable to any of the Firm Shares and the Additional Shares to be sold by the Company under this Agreement when issued and sold as contemplated in this Agreement and in the Registration Statement and the Prospectus. (xi) The Warrants have been duly authorized and, when delivered and paid for in accordance with this Agreement will be validly issued and will constitute valid and binding obligations of the Company in accordance with, and will be exercisable in accordance with, their terms; the shares of Common Stock issuable on exercise of the Warrants have been duly and validly reserved for issuance pursuant to the terms of the Warrants and when duly issued and paid for in accordance with the terms of such Warrants, will be duly authorized, validly issued, fully paid and nonassessable, and the holders will not be subject to personal liability by reason of being such holders and such shares will not be subject to the preemptive rights of any stockholder of the Company. (xii) Except for registration or qualification under the Securities Act or under state securities or Blue Sky laws, no authorization, approval, consent or license of any federal, New Jersey or Delaware regulatory body or authority is required for the valid authorization, issuance, sale and delivery of any of the Securities, or, if required, all such authorizations, approvals, consents and licenses have been obtained and are in force and effect. (xiii) The Registration Statement has become effective, and, to such counsel's knowledge, no stop order or similar order has been issued with regard to the Registration Statement or the Prospectus, and no proceedings for that purpose have been instituted or are pending and such counsel has not been notified that any such proceedings are contemplated under the Acts or under any Blue Sky or other securities laws of any jurisdiction. (xiv) The Registration Statement, the Prospectus and each post-effective amendment or supplement thereto complies as to form in all material respects with the requirements of the Securities Act (except that no opinion shall be expressed as to the financial statements, notes related thereto, and other financial or statistical data included therein and information supplied by you as set forth in Section 1(b) hereof). 24 25 (xv) Such counsel has acted as counsel for the Company and has participated in the preparation of the Registration Statement and Prospectus and any post-effective amendments or supplements thereto to the date of such opinion and, during the course of such representation, no facts have come to the attention of such counsel which would lead such counsel to believe that either the Registration Statement or the Prospectus or any post-effective amendment thereto 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, in the light of the circumstances under which they were made, not misleading (except no opinions need be expressed as to the financial statements and notes thereto and other financial or statistical data included therein and information supplied by you as set forth in Section 1(b) hereof). (xvi) To such counsel's knowledge, all statutes or regulations or legal or governmental proceedings required to be described in the Registration Statement or Prospectus are described therein as required, and all such descriptions in the Registration Statement or Prospectus are accurate in all material respects and present fairly the information purported to be shown. (xvii) To such counsel's knowledge, none of the Companies has any outstanding options, warrants or other rights to purchase or acquire any shares of capital stock of any of them except set forth in the Registration Statement or the Prospectus. (xviii) The Common Stock conforms as to legal matters in all material respects with the statements concerning such shares made in the Registration Statement and the Prospectus under the section entitled "Description of Capital Stock", and such statements present fairly the matters respecting such shares required to be set forth in the Registration Statement or the Prospectus. (xix) The Warrants conform as to legal matters in all material respects with the statements concerning such Warrants made in the Registration Statement and the Prospectus under the section entitled "Description of Common Stock Purchase Warrants", and such statements present fairly the matters respecting such Warrants required to be set forth in the Registration Statement or the Prospectus. (xx) Except as set forth in the Registration Statement and Prospectus, to such counsel's knowledge, there is no pending or threatened action, suit or proceeding before any court or before or by any governmental agency or body to which any of the Companies is a party, or of which any of their respective properties or assets are the subject, which is required to be disclosed in the Registration Statement or Prospectus. 25 26 (xxi) The contracts filed as Exhibit Nos. 10.1, 10.2, 10.3, 10.4, 10.10, 10.11, 10.12 and 10.33 to the Registration Statement have been duly authorized, executed and delivered by the Company, and such counsel has not been advised of any assertion that such contracts do not constitute the valid and binding obligation of the other parties thereto. The Forms of Contracts filed as Exhibit Nos. 10.6, 10.7, 10.13, 10.14, 10.31 and 10.34 to the Registration Statement have been duly authorized by the Company. (xxii) Such other legal matters relating to this Agreement, the Companies and the Securities as you and such counsel shall reasonably agree upon. In rendering such opinion, such counsel may rely (a) as to matters involving the application of laws other than the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to counsel for Underwriters) of other counsel reasonably acceptable to counsel for the Underwriters, familiar with the applicable laws; and (b) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and certificates or other written statements of officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Companies, provided that copies of any such statements or certificates shall be delivered to counsel for the Underwriters, and on the representations and warranties of the Company contained in this Agreement. The opinion of such counsel for the Company shall state, in their opinion, you and they are justified in relying on the opinion of such other counsel. (h) At the Closing Date, there shall have been delivered to you a signed opinion of _____________, addressed to the Underwriters, dated as of the Closing Date, in form and substance reasonably satisfactory to Rosenman & Colin LLP, counsel for the Underwriters, together with a signed or photostatic copy of that opinion for each of the other Underwriters, substantially to the effect that: (1) BRL has been duly incorporated and is validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own and lease its properties and to conduct its business as described in the Registration Statement and Prospectus; (2) all of the outstanding shares of capital stock of BRL have been duly authorized and validly issued, are fully paid and nonassessable and, as of the Closing Date, all such shares of capital stock of BRL are owned beneficially by the Company, free and clear of any liens, encumbrances, security interests or other restrictions; 26 27 (3) neither the issuance and sale by the Company of the Securities to be sold by it under this Agreement, the execution and delivery of this Agreement, the undertakings contained in the Registration Statement or the Prospectus, the consummation of the transactions contemplated in this Agreement nor compliance with the terms of this Agreement will conflict with or result in a breach of any of the terms or provisions of BRL's charter or by-laws, or any material indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other agreement or instrument known to such counsel and to which BRL is a party or by which BRL is bound or affected, any applicable law, rule or regulation or (without search of any court dockets) any judgment, order or decree of any government, governmental agency or instrumentality or court having jurisdiction over BRL or any of its property; and (4) The contract filed as Exhibit No. 10.10 to the Registration Statement has been duly authorized, executed and delivered by BRL and such counsel has not been advised of any assertion that such contract does not constitute the valid and binding obligation of the other parties thereto. (i) At the Closing Date, you shall have received a Certificate signed by the President and the Vice President-Finance of the Company, dated as of the Closing Date, to the effect that: Each officer signing the Certificate has carefully examined the Registration Statement and the Prospectus, and, in his opinion, as of the date of the Prospectus, and as of the date of the Certificate, neither the Registration Statement nor the Prospectus, nor any amendment or supplement, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and, since the date of the Prospectus, no event has occurred which should have been set forth in an amendment or a supplement to the Registration Statement or Prospectus which has not been so set forth, and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any material adverse change in the condition of any of the Companies, financial or otherwise, or, as compared with the comparable period in the prior fiscal year, in the earnings of any of the Companies from that set forth in the Registration Statement, whether or not arising in the ordinary course of business. (j) At the Closing Date, you shall have received a Certificate signed by the President of the Company, dated as of the Closing Date, to the effect that: No stop order or similar order with regard to the Registration Statement or Prospectus has been issued and no proceedings for that purpose have been taken or are, to the knowledge of such officer, contemplated by the Commission. 27 28 The Company has complied in all material respects with its obligations under this Agreement, and the representations and warranties set forth in Section 1 of this Agreement are true and correct in all material respects as of the date of the Certificate with the same force and effect as though made on that date (except any such representations and warranties which relate specifically to an earlier date, which shall be true and correct in all material respects as of such earlier date). (k) On the date of this Agreement, you shall have received letters addressed to the Underwriters, the Board of Directors of the Company and the officers signing the Registration Statement, with a signed or photostatic copy for each of the several Underwriters, dated the date it is delivered, in form and substance satisfactory to you and Rosenman & Colin LLP (and substantially in the form of the drafts dated , 1996, previously submitted to Rosenman & Colin LLP), from BDO Seidman, LLP concerning their examination and review of financial statements and various other data contained in the Registration Statement. At the Closing Date, you shall have received a letter addressed to you, the Board of Directors of the Company and the officers signing the Registration Statement, dated as of the Closing Date, with a signed or photostatic copy for each of the several Underwriters from BDO Seidman, LLP confirming, as of the Closing Date, the statements made in the letters furnished by them at the date of this Agreement and advising that as of a date no earlier than three business days prior to the Closing Date they have no reason to believe that there has been any change in the matters described in the prior letters. (l) At the Closing Date there shall have been delivered to you, with a photostatic copy for each of the several Underwriters, a signed opinion of Rosenman & Colin LLP, counsel for the Underwriters, dated as of the Closing Date, with respect to the sufficiency of corporate proceedings and other legal matters in connection with this Agreement, the Securities, Registration Statement, Prospectus and related matters as the Representative may request, and the Company shall have furnished to such counsel all documents such counsel may have reasonably requested for the purpose of enabling them to pass upon those matters. In rendering such opinion, Rosenman & Colin LLP may rely, as to incorporation of the Company and all matters of law governed by the laws of states other than New York and Delaware and as to factual matters, upon the opinion referred to in (g) above. (m) The Representative shall have received the Representative's Warrants described in Section 6 hereof and the Company shall have paid to the Representative a non-accountable expense allowance of 2% of the gross proceeds of the offering of the Firm Securities pursuant to Section 7 hereof, less the sum of $20,000 heretofore advanced to the Representative pursuant to such Section 7. (n) In the event the Underwriters exercise the option granted in Section 4(a) hereof to purchase all or any portion of the Additional Securities, the representations and warranties of the Companies contained in Section 11(a) - (f) herein and the Statements in any certificates furnished by the Companies shall be 28 29 true and correct as of the Option Closing Date and the Representative shall have received: (i) A certificate, dated the Option Closing date, of the Chairman or President of the Company and of the chief financial or chief accounting officer of the Company confirming that the Certificate delivered on the Closing Date pursuant to Section 11(i) remains true as of the Option Closing Date; (ii) A certificate of the Chairman or President of the Company confirming that the Certificate delivered on the Closing Date pursuant to Section 11(j) remains true as of the Option Closing Date; (iii) The favorable opinion of Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A., counsel for the Company, dated the Option Closing Date, relating to the Additional Securities and otherwise to the same effect as the opinion required by Section 11(g), to the extent applicable; (iv) The favorable opinion of Rosenman & Colin LLP, counsel to the Underwriters, dated the Option Closing Date, relating to the Additional Securities and otherwise to the same effect as the opinion required by Section 11(k), to the extent applicable; (v) The favorable opinion of [Canadian counsel], counsel to the company, dated the Option Closing Date, relating to the Additional Securities and otherwise to the same effect as the opinion required by Section 11(h), to the extent applicable; (vi) A letter from BDO Seidman, LLP, in form and substance satisfaction to the Underwriters and dated the Option Closing Date, substantially the same in scope and substance as the letter furnished to the Representative pursuant to Section 11(k), dated not more than five days prior to the Option Closing Date; and (vii) A non-accountable expense allowance of 2% of the gross proceeds of the Additional Securities pursuant to Section 7 hereof. (o) All proceedings in connection with the authorization, issuance and sale of the Securities on the Closing Date and the Option Closing Date shall be reasonably satisfactory in form and substance to you and to your counsel, and your counsel shall have been furnished with all documents, certificates and opinions, including resolutions of the Board of Directors of the Company and minutes of any stockholders' meetings, as may have been reasonably requested in order to evidence the accuracy and completeness of any of the representations, warranties or statements of the Company and the performance of any of the covenants of the Company or the compliance with any of the conditions contained in this Agreement. 29 30 12. CONDITIONS OF OBLIGATIONS OF COMPANY. The obligations of the Company to sell and deliver the Firm Securities to the several Underwriters are subject to the condition that the Registration Statement shall become effective with the Commission not later than 10:00 A.M., New York City time, on the day following the date of this Agreement, or such later date as shall have been consented to by the Underwriters (including you) who are obligated to purchase a majority of the Firm Securities to be purchased by all of the Underwriters pursuant to this Agreement, and that prior to the Closing Date (and, with respect to the Additional Securities, prior the Option Closing Date), no stop order or similar order with regard to the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be pending, or, to your knowledge or to the knowledge of the Company, shall be contemplated by the Commission or any other regulatory agency having jurisdiction with respect to the offer and sales of the Offered Securities. 13. SUBSTITUTION OF UNDERWRITERS. (a) If one or more Underwriters default in its or their obligations to purchase and pay for Firm Securities under this Agreement and if the aggregate amount of the Firm Securities which all Underwriters so defaulting shall have agreed to purchase does not exceed 10% of the Firm Securities, each nondefaulting Underwriter shall have the right and is obligated, severally, to purchase and pay for (in addition to the number of Firm Securities set forth opposite its name in Schedule I) the number of Remaining Firm Securities multiplied by a fraction, the numerator of which is the total number of Firm Securities purchased by such Underwriter and the denominator of which is the total number of Firm Securities purchased by all non-defaulting Underwriters. In that event, the Representative, for the accounts of the several nondefaulting Underwriters, may take up and pay for all or any part of the Remaining Firm Securities to be purchased by each nondefaulting Underwriter under this Subsection (a), and may postpone the Closing Date to a time not exceeding three full business days after the Closing Date determined as provided in Section 3 of this Agreement; or (b) If one or more Underwriters default in its or their obligations to purchase and pay for Firm Securities under this Agreement and if the aggregate amount of the Remaining Firm Securities exceeds 10% of the Firm Securities, or if one or more Underwriters for any reason permitted under this Agreement cancel its or their obligations to purchase and pay for Firm Securities under this Agreement, the noncancelling and nondefaulting Underwriters (hereinafter called the "Remaining Underwriters") shall have the right to purchase such Firm Securities on the Closing Date in the proportion as may be agreed among them. If the Remaining Underwriters do not purchase and pay for all such Firm Securities at the Closing Date, the Closing Date shall be postponed by two business days and the Remaining Underwriters shall have the right to purchase the Firm Securities, or to substitute another person or persons to purchase them, or both, at the postponed Closing Date. If purchasers are not found for such Firm Securities by the postponed Closing Date, the Closing Date shall be postponed for a further five business days and the Company shall have the right to substitute another person or persons, satisfactory to the Representative, to purchase those Firm Securities at the second postponed Closing Date. If the Company does not find the purchasers for those Firm Securities by the second postponed Closing Date, then this 30 31 Agreement shall automatically terminate and neither the Company nor the Remaining Underwriters shall be under any obligation under this Agreement (except that the Company shall remain liable to the extent provided in Sections 7 and 9(a) and the Underwriters shall remain liable to the extent provided in Section 9(b)). As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section 13. Nothing in this Section will relieve a defaulting Underwriter from liability for its default or obligate any Underwriter to purchase or find purchasers for any Firm Securities in excess of those agreed to be purchased by the Underwriter in Sections 2 and 13(a) of this Agreement. If the Representative is the defaulting Underwriter, the right of first refusal set forth in Section 16 hereof shall terminate. 14. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective at whichever of the following times shall first occur: (i) at 10:00 A.M., New York City time, on the next full business day following the date on which the Registration Statement becomes effective or (ii) at such time after the Registration Statement has become effective and the Underwriters shall release the Firm Securities for sale to the public; provided, however, that the provisions of Sections 7, 9, 10, 14 and 19 hereof shall at all times be effective. For purposes of this Section 14, the Firm Securities shall be deemed to have been so released upon the release by the Underwriters for publication, at any time after the Registration Statement has become effective, of any newspaper advertisement relating to the Firm Securities or upon the release by the Underwriters of telegrams offering the Firm Securities for sale to securities dealers, whichever may occur first. 15. TERMINATION OF AGREEMENT. (a) This Agreement may be terminated at any time prior to the Closing Date by you by giving written notice to the Company upon the occurrence of any of the following events: (i) any of the Companies shall have sustained a loss, by reason of fire, flood, accident or other calamity, which in your reasonable judgment, materially affects the aggregate value of the property owned or leased by the Companies taken as a whole or which materially interferes with the operation of the business of the Companies taken as a whole, regardless of whether or not that loss shall have been insured; (ii) any of the Companies has encountered or been threatened with a strike (including but not limited to strikes of stevedores and other transporters of goods) or other labor dispute or been subjected to governmental action or fluctuations in currency or major political upheaval which materially affects the aggregate value of the property owned or leased or which materially interferes with the operation of its business taken as a whole or which in your reasonable judgment makes it impracticable or inadvisable to offer for sale or to enforce contracts made by the Underwriters for the resale of the Firm Securities; (iii) except as set forth in the Prospectus, there shall be pending or threatened against any of the Companies or notification has been received by any of the Companies of the threat of any material legal or governmental proceeding or 31 32 action relating generally to the business or prospects of any of the Companies which could materially adversely affect any of the Companies taken as a whole (including action with respect to credit or interest rates) or which in your reasonable opinion makes it impracticable or inadvisable to proceed with the offering; (iv) any of the certificates, opinions or other documents to be delivered on the date of this Agreement or at the Closing Date are not in form reasonably satisfactory to counsel to the Underwriters; (v) any conditions set forth in Section 11 of this Agreement shall not have been satisfied; (vi) the Company is merged or consolidated or all or substantially all of the capital stock or assets of the Company are acquired by another company or group, or there exists a binding legal commitment for the foregoing or any other material change of ownership or control occurs; (vii) if there has occurred any outbreak of hostilities or escalation of any existing hostilities or other calamity or crisis, the effect of which on the financial markets of the United States is such as to make it impracticable, in the Representative's reasonable judgment, to market any of the Firm Securities or the Additional Securities or to enforce contracts for the sale of any of the Firm Securities or the Additional Securities; (viii) a banking moratorium shall have been declared by either federal or state authorities; (ix) if trading generally on the American Stock Exchange, the New York Stock Exchange or NASDAQ has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by either of said Exchanges or the NASD or by order of the Commission or any other governmental authority; (x) there shall have been a change in the general market, political or economic conditions in the United States, such that in any such case, in the Representative's reasonable judgment, it would be inadvisable to proceed with the offering of the Firm Securities; or (xi) any law shall be enacted or any regulation promulgated relating to the business of any of the Companies which could materially adversely affect any of the Companies. (b) This Agreement may be terminated by the Company by giving written notice to you (i) at any time before this Agreement becomes effective in accordance with Section 14 hereof, or (ii) prior to the Closing Date if the conditions set forth in Section 12 shall not have been satisfied at or prior to such date. 32 33 (c) If this Agreement shall be terminated by the Company pursuant to preceding clause (b)(i) because (x) the Company has made, or proposes to make, a private placement which will provide it with substantial alternative funding through another investment banking agent, the Representative shall be entitled to a cash fee equal to 2% of the gross amount of such funding, whether effectuated by the Company before or after such termination of this Agreement or (y) because the Company is to be sold, whether by merger, sale of stock, sale of assets or otherwise, the Representative shall be paid a cash fee of $200,000 should the acquisition or merger close; provided, however, that if in such event the Company shall choose the Representative as its investment banker in connection therewith, such $200,000 shall be a credit against any services rendered by the Representative in such transaction. (d) If this Agreement shall be terminated pursuant to this Section 15 other than by reason of the fault of the Representative, the Company, in addition to the advance provided for in Section 7 hereof, shall pay to you your accountable expenses, including the reasonable fees and out-of-pocket expenses of your counsel, in an amount not to exceed $30,000. 16. RIGHT OF FIRST REFUSAL. Until January 1, 1998, the Company shall notify you in writing at least thirty (30) days before a proposed public offering by the Company of any of its securities (other than bank debt or similar financing, securities offered solely to Company employees, consultants or representatives, shares issuable pursuant to any dividend reinvestment plan or securities issuable in transactions enumerated in Rule 145(a) under the Securities Act) so that you, or, at your option, together with a group of investment bankers associated with you, shall have the right of first refusal to effect the public offering on terms at least as favorable to the Company as those set forth in such notice (which notice will specify the price to the underwriter or other method of determining the underwriting discount or fee). You will notify the Company if you intend to exercise your right of first refusal within thirty (30) days of receipt by you of such notice from the Company. If you fail to exercise the right of first refusal within the thirty (30) day period and the terms of the proposed subsequent financing thereafter are altered in any material respect less favorable to the Company, the Company shall again offer to you the right of first refusal to effect a subsequent financing upon such terms and you shall have ten (10) days from the date of receipt of such notice to notify the Company of your acceptance. 17. NOTICES. All communications under this Agreement shall be in writing and, except as otherwise provided shall be delivered at or mailed, registered or certified, return receipt requested, or telegraphed to the following addresses: If to you or any other Underwriter: Janney Montgomery Scott Inc. Attention: Ann Green 26 Broadway New York, New York 10004 33 34 Copies to: Janney Montgomery Scott Inc. As Representative of the Several Underwriters Attention: Richard A. Thompson 1801 Market Street 20th Floor Philadelphia, Pennsylvania 19103 and Arthur M. Borden, Esq. Rosenman & Colin LLP 575 Madison Avenue New York, New York 10022 If to the Company: Barringer Technologies Inc. Attention: Stanley S. Binder, President 219 South Street New Providence, N. J. 07974 Copy to: John D. Hogoboom, Esq. Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A. 65 Livingston Avenue Roseland, New Jersey 07068-1791 Any party may change its address by giving notice in accordance with this Section . 18. PARTIES IN INTEREST. This Agreement is made solely for the benefit of the Underwriters, the Company, directors and officers of the Company, and their respective executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term "successor" and "successor and assigns" shall not include any purchaser from the Company or any of the several Underwriters of the Firm Securities or the Additional Securities. All of the obligations of the Underwriters under this Agreement are several and not joint. 19. SURVIVAL CLAUSE. The representations, warranties, indemnities, agreements and other statements of the Underwriters and the Company and its officers set forth in this Agreement and made pursuant to this Agreement will remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or controlling person thereof or by or on behalf of the Company or any of its officers and directors or (ii) any termination of this Agreement and (iii) delivery of and payment for the Firm Securities and the Additional Securities. 34 35 20. REPRESENTATION OF UNDERWRITERS. You will act for the several Underwriters in connection with this financing, and any action under or in respect of this Agreement taken by you as Representative on behalf of the Underwriters will be binding upon all of the Underwriters. 21. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law. 22. COUNTERPARTS. This Agreement may be signed in one or more counterparts and shall be deemed effective when each party hereto has signed a counterpart. If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed duplicate hereof, whereupon it will become a binding agreement among the Company and the Underwriters in accordance with its terms. Very truly yours, BARRINGER TECHNOLOGIES INC. By:______________________ The foregoing Agreement is hereby confirmed and delivered as of the date first above written. JANNEY MONTGOMERY SCOTT INC. By:__________________________________ (Authorized Signature) Acting on their own behalf and as Representative of the several Underwriters named in Schedule I attached hereto. 35 36 SCHEDULE I LIST OF UNDERWRITERS Number of Underwriters Firm Securities ------------ --------------- EX-4.1 3 FORM OF WARRANT AGREEMENT 1 Exhibit 4.1 WARRANT AGREEMENT AGREEMENT, dated as of this ____ day of __________, 1996, by and between BARRINGER TECHNOLOGIES INC., a Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as warrant agent (the "Warrant Agent"). W I T N E S S E T H WHEREAS, the Company proposes to make a public offering (the "Public Offering") of up to 1,953,125 shares (the "Shares") of the common stock, par value $.01 per share ("Common Stock"), of the Company and up to 1,562,500 common stock purchase warrants (the "Warrants") of the Company (hereinafter collectively referred to as the "Shares" and the "Warrants"), each Warrant exercisable to purchase a one-quarter of a share of Common Stock; and WHEREAS, in relation to the Public Offering, the Company has filed a registration statement on Form SB-2 (Registration No. 333-13703) (as amended or supplemented, the "Registration Statement") and a related prospectus (as amended or supplemented, the "Prospectus") with the Securities and Exchange Commission; and WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration, transfer, exchange and redemption of the Warrants, the issuance of certificates representing the Warrants, the exercise of the Warrants, and the rights of the registered holders thereof (the "Registered Holders"); NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth and for the purpose of defining the terms and provisions of the Warrants and the certificates representing the Warrants and the respective rights and obligations thereunder of the Company, the Registered Holders and the Warrant Agent, the parties hereto hereby agree as follows: SECTION 1. Definitions. As used herein, the following terms shall have the following meanings, unless the context shall otherwise require: (a) "Common Stock" shall mean the common stock, par value $.01 per share, of the Company entitling the owners thereof one vote for each share on all matters on which the holders of the Common Stock are entitled to vote, the right to receive dividends subject to holders of convertible preferred and preferred stock of the Company, and certain liquidation and dissolution rights set forth in the Certificate of Incorporation of the Company, as amended (the "Certificate of Incorporation"). 2 (b) "Corporate Office" shall mean the office of the Warrant Agent (or its successor) at which at any particular time its principal business shall be administered, which office is located at the date hereof at 40 Wall Street, New York, New York. (c) "Exercise Date" shall mean, as to any Warrant, the date on which the Warrant Agent shall have received both (a) the Warrant Certificate representing such Warrant, with the exercise form thereon duly executed by the Registered Holder thereof or his attorney duly authorized in writing, and (b) payment in cash, or by official bank or certified check made payable to the Company, of an amount in lawful money of the United States of America equal to the Exercise Price plus transfer taxes, if any. (d) "Exercise Price" shall mean the purchase price to be paid upon exercise of four Warrants (each Warrant exercisable to purchase one-quarter of a share of Common Stock), in accordance with the terms hereof, which price shall be $_____ per share, subject to (i) adjustment from time to time pursuant to the provisions of Section 8 hereof, and (ii) subject to the Company's right to reduce the Exercise Price, upon written notice to all Registered Holders (defined below) of the Warrants, for a period of not less than thirty days. (e) "Redemption Date" shall mean the date fixed for redemption of the Warrants as specified on the Redemption Notice. (f) "Redemption Notice" shall mean the notice provided to the Registered Holder by the Company thirty days before the call for redemption of its Warrants in accordance with the terms of Section 9 herein. (g) "Redemption Notice Date" shall mean the date of the Redemption Notice. (h) "Redemption Price" shall mean the price at which the Company may, at its option, redeem the Warrants, in accordance with the terms of Section 9 herein, which price shall be $.25 per Warrant. (i) "Registered Holder" shall mean the person in whose name any certificate representing Warrants shall be registered on the books maintained by the Warrant Agent pursuant to Section 6. (j) "Transfer Agent" shall mean American Stock Transfer & Trust Company, as the Company's transfer agent, or its authorized successor, as such. (k) "Warrant Expiration Date" shall mean the earlier of 5:00 P.M. (New York time) on __________ ___, 1999 or (ii) Redemption Date, (i) provided that, if in the State of New York, such date shall be a holiday or a day on which banks are authorized to close, then 5:00 P.M. (New York time) on the next following day which in the State of New York is not a holiday or a day on which banks are authorized to close. 2 3 SECTION 2. Warrants and Issuance of Warrant Certificates. (a) A Warrant shall initially entitle the Registered Holder of the Warrant Certificate representing such Warrant to purchase one-quarter of a share of Common Stock upon the exercise thereof, in accordance with the terms hereof, subject to modification and adjustment as provided in Section 8. (b) From time to time, up to the Warrant Expiration Date, the Transfer Agent shall execute and deliver stock certificates in required whole number denominations representing up to an aggregate of 390,625 shares of Common Stock, subject to adjustment as described herein, upon the exercise of Warrants in accordance with this Agreement. (c) From time to time, up to the Warrant Expiration Date, the Warrant Agent shall execute and deliver Warrant Certificates in required whole number denominations to the persons entitled thereto in connection with any transfer or exchange permitted under this Agreement; provided that no Warrant Certificates shall be issued except (i) those initially issued hereunder; (ii) those issued upon the exercise of fewer than all Warrants represented by any Warrant Certificate, to evidence any unexercised Warrants held by the exercising Registered Holder; (iii) those issued upon any transfer or exchange pursuant to Section 6 herein; (iv) those issued in replacement of lost, stolen, destroyed or mutilated Warrant Certificates pursuant to Section 7; and (v) at the option of the Company, in such form as may be approved by its Board of Directors, to reflect (a) any adjustment or change in the Exercise Price or the number of shares of Common Stock purchasable upon exercise of the Warrants made pursuant to Section 8 hereof and (b) other modifications approved by Registered Holders in accordance with Section 16 hereof. SECTION 3. Form and Execution of Warrant Certificates. (a) The Warrant Certificates shall be substantially in the form annexed hereto as Exhibit A (the provisions of which are hereby incorporated herein) and may have such letters, numbers or other marks of identification or designation and such legends, summaries or endorsements printed, lithographed, engraved or typed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or securities association on which or through which the Warrants may be listed, or to conform to usage. The Warrant Certificates shall be dated the date of issuance thereof (whether upon initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen, or destroyed Warrant Certificates) and issued in registered form. Warrants shall be numbered serially with the letter W. (b) Warrant Certificates shall be executed on behalf of the Company by its Chairman of the Board, President or any Vice President and by its Secretary or an Assistant Secretary, by manual signatures or by facsimile signatures printed thereon, shall have imprinted thereon a facsimile of the Company's seal and shall be countersigned by an authorized signatory of the Warrant Agent. In case any officer of the Company who shall 3 4 have signed any of the Warrant Certificates shall cease to be such officer of the Company before the date of issuance of the Warrant Certificates and issue and delivery thereof, such Warrant Certificates may nevertheless be issued and delivered with the same force and effect as though the person who signed such Warrant Certificates had not ceased to be such officer of the Company. After execution by the Company Warrant Certificates shall be delivered by the Warrant Agent to the Registered Holder. SECTION 4. Exercise. Each Warrant may be exercised by the Registered Holder thereof at any time after the effective date of the Registration Statement and until the Warrant Expiration Date, upon the terms and subject to the conditions set forth herein and in the applicable Warrant Certificate. A Warrant shall be deemed to have been exercised immediately prior to the close of business on the Exercise Date and the person entitled to receive the securities deliverable upon such exercise shall be treated for all purposes as the holder of such securities upon exercise of the Warrant Certificate as of the close of business on the Exercise Date. As soon as practicable on or after the Exercise Date, the Warrant Agent shall deposit the proceeds received from the exercise of a Warrant, and promptly after clearance of checks received in payment of the Exercise Price pursuant to such Warrants, cause to be issued and delivered by the Transfer Agent, to the person or persons entitled to receive the same, a certificate or certificates for the securities deliverable upon such exercise (plus a certificate for any remaining unexercised Warrants of the Registered Holder, if applicable). Notwithstanding the foregoing, in the case of payment made in the form of a check drawn on an account of Janney Montgomery Scott Inc. (the "Representative") or such other investment banks and brokerage houses as the Company shall approve, certificates shall immediately be issued without any delay. Upon the exercise of any Warrant and clearance of the funds received, the Warrant Agent shall promptly remit the payment received for the Warrant to the Company or as the Company may direct in writing. SECTION 5. Reservation of Shares; Listing; Payment of Taxes; etc. (a) The Company covenants that it will at all times reserve and keep available out of its authorized Common Stock, solely for the purpose of issuance upon exercise of Warrants, such number of shares of Common Stock as shall then be issuable upon the exercise of all outstanding Warrants. The Company covenants that all shares of Common Stock which shall be issuable upon exercise of the Warrants and payment of the Exercise Price in compliance with this Warrant Agreement and the Warrant Certificate shall, at the time of delivery, be duly and validly issued, fully paid, nonassessable and free from all taxes, liens and charges with respect to the issue thereof (other than those which the Company shall promptly pay or discharge). (b) The Company will use reasonable efforts to obtain appropriate approvals or registrations under state "blue sky" securities laws with respect to the exercise of the Warrants; provided, however, that the Company shall not be obligated to file any general consent to service of process or qualify as a foreign corporation in any jurisdiction. With 4 5 respect to any such securities laws, however, Warrants may not be exercised by, or shares of Common Stock issued to, any Registered Holder in any state in which such exercise would be unlawful. (c) The Company shall pay all documentary, stamp or similar taxes and other governmental charges that may be imposed with respect to the issuance of Warrants, or the issuance, or delivery of any shares upon exercise of the Warrants; provided, however, that if shares of Common Stock are to be delivered in a name other than the name of the Registered Holder of the Warrant Certificate representing any Warrant being exercised, then no such delivery shall be made unless the person requesting the same has paid to the Warrant Agent the amount of transfer taxes or charges incident thereto, if any. (d) The Warrant Agent is hereby irrevocably authorized to requisition the Transfer Agent from time to time for certificates representing shares of Common Stock required upon exercise of the Warrants, and the Company will authorize the Transfer Agent to comply with all such proper requisitions. SECTION 6. Exchange and Recordation of Transfer. Subject to the restrictions on transfer contained in the Warrant Certificates: (a) Warrant Certificates may be exchanged for other Warrant Certificates representing an equal aggregate number of Warrants or may be transferred in whole or in part. Warrant Certificates to be exchanged shall be surrendered to the Warrant Agent at its Corporate Office, and upon satisfaction of the terms and provisions hereof, the Company shall execute, and the Warrant Agent shall countersign, issue and deliver in exchange therefor the Warrant Certificate or Certificates which the Registered Holder making the exchange shall be entitled to receive. (b) The Warrant Agent shall keep books at its office, in which it shall register Warrant Certificates and the transfer thereof in accordance with its regular practice. Upon due presentment for recordation of transfer of any Warrant Certificate at its office, the Company shall execute and the Warrant Agent shall issue and deliver to the transferee or transferees a new Warrant Certificate or Certificates representing an equal aggregate number of Warrants. (c) With respect to all Warrant Certificates presented for recordation of transfer, or for exchange or exercise, the exercise form on the reverse thereof shall be duly endorsed, or be accompanied by a written instrument or instruments of transfer and exercise, in form satisfactory to the Company, duly executed by the Registered Holder or his attorney-in-fact duly authorized in writing. (d) A service charge may be imposed by the Warrant Agent upon the Company for any exchange or recordation of transfer of Warrant Certificates. The Company 5 6 may require payment by a Registered Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. (e) Prior to due presentment for recordation of transfer thereof, the Company and the Warrant Agent may deem and treat the Registered Holder of any Warrant Certificate as the absolute owner thereof and of each Warrant represented thereby (notwithstanding any notations of ownership or writing thereon made by anyone other than a duly authorized officer of the Company or the Warrant Agent) for all purposes and shall not be affected by any notice to the contrary. The Warrants, which the Company intends to publicly offer with the Common Stock, will be separately transferable immediately following the completion of the Public Offering. SECTION 7. Loss or Mutilation. Upon receipt by the Company and the Warrant Agent of evidence satisfactory to them of the ownership and loss, theft, destruction or mutilation of any Warrant Certificate and (in case of loss, theft or destruction) of indemnity satisfactory to them, and (in the case of mutilation) upon surrender and cancellation thereof, the Company shall execute and the Warrant Agent shall (in the absence of notice to the Company and/or Warrant Agent that the Warrant Certificate has been acquired by a bona fide purchaser) countersign and deliver to the Registered Holder in lieu thereof a new Warrant Certificate of like tenor representing an equal aggregate number of Warrants. Registered Holders requesting a substitute Warrant Certificate will be required to comply with such other reasonable regulations and pay such other reasonable charges as the Warrant Agent may prescribe. SECTION 8. Adjustment of Exercise Price and Number of Shares of Common Stock or Warrants. (a) Subject to the exceptions referred to in Section 8(g) below, in the event the Company shall, at any time or from time to time after the date hereof, sell any shares of Common Stock for a consideration per share less than the current fair market value per share of the Common Stock on the date of the sale or issue any shares of Common Stock as a stock dividend to the holders of Common Stock, or subdivide or combine the outstanding shares of Common Stock into a greater or lesser number of shares (any such sale, issuance, subdivision or combination being herein called a "Change of Shares"), then, and thereafter upon each Change of Shares, the Exercise Price in effect immediately prior to such Change of Shares shall be changed to a price (including any applicable fraction of a cent) determined by multiplying the Exercise Price in effect immediately prior thereto by a fraction, the numerator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to the issuance of such additional shares plus the number of shares of Common Stock which the aggregate consideration received (determined as provided in subsection 8(f)(F) below), if any, for the issuance of such additional shares would purchase at such current market price per share of Common Stock, and the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately after the issuance of such additional shares. Such adjustment shall be made successively whenever such an issuance is made. 6 7 Upon each adjustment of the Exercise Price pursuant to this Section 8, the total number of shares of Common Stock purchasable upon the exercise of each Warrant shall (subject to the provisions contained in Section 8(b) hereof) be such number of shares (calculated to the nearest tenth) purchasable at the Exercise Price immediately prior to such adjustment multiplied by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the Exercise Price in effect immediately after such adjustment. (b) The Company may elect, upon any adjustment of the Exercise Price hereunder, to adjust the number of Warrants outstanding, in lieu of the adjustment in the number of shares of Common Stock purchasable upon the exercise of each Warrant as hereinabove provided, so that each Warrant outstanding after such adjustment shall represent the right to purchase one quarter of a share of Common Stock. Each Warrant held of record prior to such adjustment of the number of Warrants shall become that number of Warrants (calculated to the nearest tenth) determined by multiplying the number one by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the Exercise Price in effect immediately after such adjustment. Upon each adjustment of the number of Warrants pursuant to this Section 8, the Company shall, as promptly as practicable, cause to be distributed to each Registered Holder of Warrant Certificates, on the date of such adjustment, Warrant Certificates evidencing, subject to Section 10 hereof, the number of additional Warrants to which such Holder shall be entitled as a result of such adjustment or, at the option of the Company, cause to be distributed to such Holder in substitution and replacement for the Warrant Certificates held by him prior to the date of adjustment (and upon surrender thereof, if required by the Company) new Warrant Certificates evidencing the number of Warrants to which such Holder shall be entitled after such adjustment. (c) In case of any reclassification, capital reorganization or other similar change of outstanding shares of Common Stock, or in case of any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any reclassification, capital reorganization or other change of outstanding shares of Common Stock), or in case of any sale or conveyance to another corporation of the property of the Company as, or substantially as, an entirety (other than a sale/leaseback, mortgage or other financing transaction), the Company shall cause effective provision to be made so that each holder of a Warrant then outstanding shall have the right thereafter, by exercising such Warrant, to purchase the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change, consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock that might have been purchased upon exercise of such Warrant immediately prior to such reclassification, capital reorganization or other similar change, consolidation, merger, sale or conveyance. Any such provision shall include provision for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 8. The foregoing provisions shall similarly apply to successive reclassifications, capital 7 8 reorganizations and other changes of outstanding shares of Common Stock and to successive consolidations, mergers, sales or conveyances. (d) Irrespective of any adjustments or changes in the Exercise Price or the number of shares of Common Stock purchasable upon exercise of the Warrants, the Warrant Certificates theretofore issued, unless the Company shall exercise its option to issue new Warrant Certificates pursuant to Section 2(c) hereof, need not be amended or replaced, but certificates thereafter issued shall bear an appropriate legend or other notice of any adjustments. (e) After each adjustment of the Exercise Price pursuant to this Section 8, the Company will promptly prepare a certificate signed by the Chairman or President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, of the Company setting forth: (i) the Exercise Price as so adjusted, (ii) the number of shares of Common Stock purchasable upon exercise of each Warrant after such adjustment, and, if the Company shall have elected to adjust the number of Warrants, the number of Warrants to which the Registered Holder of each Warrant shall then be entitled, and the adjustment in Redemption Price resulting therefrom, and (iii) a brief statement of the facts accounting for such adjustment. The Company will promptly file such certificate with the Warrant Agent and cause a brief summary thereof to be sent by ordinary first class mail to the Representative and to each Registered Holder at his last address as it shall appear on the registry books of the Warrant Agent. The affidavit of an officer of the Warrant Agent or the Secretary or an Assistant Secretary of the Company that such notice has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein. (f) For purposes of Section 8(a) and 8(b) hereof, the following provisions (A) to (F) shall also be applicable: (A) The number of shares of Common Stock outstanding at any given time shall include shares of Common Stock owned or held by or for the account of the Company and the sale or issuance of such treasury shares or the distribution of any such treasury shares shall not be considered a Change of Shares for purposes of said sections. (B) No adjustment of the Exercise Price shall be made unless such adjustment would require an increase or decrease of at least $.02 in such price; provided that any adjustments which by reason of this clause (B) are not required to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment(s) so carried forward, shall require an increase or decrease of at least $.02 in the Exercise Price then in effect hereunder. (C) In case of (1) the sale by the Company for cash of any rights or warrants to subscribe for or purchase, or any options for the purchase of, Common Stock or any securities convertible into or exchangeable for Common 8 9 Stock without the payment of any further consideration other than cash, if any (such convertible or exchangeable securities being herein called "Convertible Securities"), or (2) the issuance by the Company, without the receipt by the Company of any consideration therefor, of any rights or warrants to subscribe for or purchase, or any options for the purchase of, Common Stock or Convertible Securities, in each case, if (and only if) the consideration payable to the Company upon the exercise of such rights, warrants or options shall consist of cash, whether or not such rights, warrants or options, or the right to convert or exchange such Convertible Securities, are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities (determined by dividing (x) the minimum aggregate consideration payable to the Company upon the exercise of such rights, warrants or options, plus the consideration received by the Company for the issuance or sale of such rights, warrants or options, plus, in the case of such Convertible Securities, the minimum aggregate amount of additional consideration, if any, other than such Convertible Securities, payable upon the conversion or exchange thereof, by (y) the total maximum number of shares of Common Stock issuable upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities issuable upon the exercise of such rights, warrants or options) is less than the market price of the Common Stock on the date of the issuance or sale of such rights, warrants or options, then the total maximum number of shares of Common Stock issuable upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities (as of the date of the issuance or sale of such rights, warrants or options) shall be deemed to be outstanding shares of Common Stock for purposes of Sections 8(a) and 8(b) hereof and shall be deemed to have been sold for cash in an amount equal to such price per share. (D) In case of the sale by the Company for cash of any Convertible Securities, whether or not the right of conversion or exchange thereunder is immediately exercisable, and the price per share for which Common Stock is issuable upon the conversion or exchange of such Convertible Securities (determined by dividing (x) the total amount of consideration received by the Company for the sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, other than such Convertible Securities, payable upon the conversion or exchange thereof, by (y) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of such convertible Securities) is less than the market price of the Common Stock on the date of the sale of such Convertible Securities, then the total maximum number of shares of Common Stock issuable upon the conversion or exchange of such Convertible Securities (as of the date of the sale of such Convertible Securities) shall be deemed to be outstanding shares of Common Stock for purposes of Sections 8(a) and 8(b) 9 10 hereof and shall be deemed to have been sold for cash in an amount equal to such price per share. (E) If the exercise or purchase price provided for in any right, warrant or option referred to in (C) above, or the rate at which any Convertible Securities referred to in (C) or (D) above are convertible into or exchangeable for Common Stock, shall change at any time (other than under or by reason of provisions designed to protect against dilution), the Exercise Price then in effect hereunder shall forthwith be readjusted to such Exercise Price as would have been obtained (1) had the adjustments made upon the issuance or sale of such rights, warrants, options or Convertible Securities been made upon the basis of the issuance of only the number of shares of Common Stock theretofore actually delivered (and the total consideration received therefor) upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities, (2) had adjustments been made on the basis of the Exercise Price as adjusted under clause (1) for all transactions (which would have affected such adjusted Exercise Price) made after the issuance or sale of such rights, warrants, options or Convertible Securities, and (3) had any such rights, warrants, options or Convertible Securities then still outstanding been originally issued or sold at the time of such change. On the expiration of any such right, warrant or option or the termination of any such right to convert or exchange any such Convertible Securities, the Exercise Price then in effect hereunder shall forthwith be readjusted to such Exercise Price as would have been obtained (a) had the adjustments made upon the issuance or sale of such rights, warrants, options or Convertible Securities been made upon the basis of the issuance of only the number of shares of Common Stock theretofore actually delivered (and the total consideration received therefor) upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities and (b) had adjustments been made on the basis of the Exercise Price as adjusted under clause (a) for all transactions (which would have affected such adjusted Exercise Price) made after the issuance or sale of such rights, warrants, options or Convertible Securities. (F) In case of the sale for cash of any shares of Common Stock, any Convertible Securities, any rights or warrants to subscribe for or purchase, or any options for the purchase of, Common Stock or Convertible Securities, the consideration received by the Company therefore shall be deemed to be the gross sales price therefor without deducting therefrom any expense paid or incurred by the Company or any underwriting discounts or commissions or concessions paid or allowed by the Company in connection therewith. (g) No adjustment to the Exercise Price of the Warrants or to the number of shares of Common Stock purchasable upon the exercise of each Warrant will be made, however, 10 11 (i) upon the exercise of any of the options presently outstanding under the Company's 1990 Stock Option Plan (the "1990 Stock Option Plan") for officers, directors and all employees of the Company outstanding as of the date hereof; or (ii) upon the issuance of any warrants issued pursuant to the Company's 1991 Directors' Warrant Plan (the "1991 Warrant Plan"); or (iii) upon the grant or exercise of any other options or warrants which may hereafter be granted or exercised under the 1990 Stock Option Plan or under the 1991 Directors' Warrant Plan; or (iv) upon the sale or exercise of the Warrants issued to the Representative in connection with the Public Offering (the "Underwriter's Warrants") or the exercise of the Warrants issuable upon exercise of the Underwriter's Warrant; or (v) upon the issuance or sale of Common Stock upon the conversion of the Company's Class A Preferred Stock or Class B Preferred Stock outstanding as of the date hereof; or (vi) upon the issuance or sale of Common Stock upon conversion or exchange of any convertible debentures outstanding as of the date hereof; or (vii) upon the issuance or sale of Common Stock upon the exercise of warrants outstanding (other than those granted pursuant to the 1991 Directors' Warrant Plan) as of the date of the Public Offering; or (viii) upon the sale or exercise of the Warrants; or (ix) upon the issuance of any shares of Common Stock declared or paid as dividends with respect to any Preferred Stock of the Company outstanding as of the date hereof; or (x) upon the issuance of any shares of Common Stock issued by the Company pursuant to a Dividend Reinvestment Plan; or (xi) upon the issuance of any shares of Common Stock issued pursuant to the exercise of Options granted under a company Stock Option Plan adopted by the Company for purposes of compensation to the Company's employees, directors and representative] (collectively, the "Exempt Securities") (h) As used in this Section 8, the term "Common Stock" shall mean and include the Common Stock authorized on the date of the original issue of the Shares and Warrants and shall also include any capital stock of any class of the Company thereafter 11 12 authorized which shall not be limited to a fixed sum or percentage in respect of the rights of the holders thereof to participate in dividends and in the distribution of assets upon the voluntary liquidation, dissolution or winding up of the Company; provided, however, that the shares issuable upon exercise of the Warrants shall include only shares of such class designated in the Company's Certificate of Incorporation, as amended, as Common Stock on the date of the original issue of the Shares and Warrants or (i), in the case of any reclassification, change, consolidation, merger, sale or conveyance of the character referred to in Section 8(c) hereof, the stock, securities or property provided for in such section or (ii), in the case of any reclassification or change in the outstanding shares of Common Stock issuable upon exercise of the Warrants as a result of a subdivision or combination or consisting of a change in par value, or from par value to no par value, or from no par value to par value, such shares of Common Stock as so reclassified or changed. (i) Any determination as to whether an adjustment in the Exercise Price in effect hereunder is required pursuant to Section 8, or as to the amount of any such adjustment, if required, shall be binding upon the Registered Holders of the Warrants and the Company if made in good faith by the Board of Directors of the Company. (j) If and whenever the Company shall declare any dividends or distributions or grant to the holders of Common Stock, as such, rights or warrants to subscribe for or to purchase, or any options for the purchase of, Common Stock or securities convertible into or exchangeable for or carrying a right, warrant or option to purchase Common Stock or, (other than Exempt Securities), the Company shall notify each of the then Registered Holders of the Warrants of such event prior to its occurrence to enable such Registered Holders to exercise their Warrants and participate as holders of Common Stock in such event. SECTION 9. Redemption. (a) On not less than thirty days' prior written notice at any time commencing , 1996 and during the time the Warrants are outstanding, all of the outstanding Warrants may be redeemed, at the option of the Company, at the Redemption Price, provided that the closing bid price of the Common Stock as reported by NASDAQ averages in excess of 200% of the Exercise Price of the Warrants in effect at the time of determination for a period of 30 days ending within 15 days of the Redemption Notice Date, subject to certain adjustment as set forth in Section 9(f) below. (b) In the event the conditions set forth in Section 9(a) are met, and the Company shall desire to exercise its right so to redeem the Warrants, it shall request the Warrant Agent to mail a Redemption Notice to each of the Registered Holders of the Warrants to be redeemed, first class, postage prepaid, not later than the thirtieth day before the date fixed for redemption, at his or her last address as shall appear on the records of the Warrant Agent. Any notice mailed in the manner provided herein shall be conclusively presumed to have been duly given whether or not the Registered Holder receives such notice. 12 13 (c) The Redemption Notice shall specify (i) the Redemption Price, (ii) the Redemption Date, (iii) the place where the Warrant Certificates shall be delivered and the Redemption Price to be paid, and (iv) that the right to exercise the Warrant shall terminate at 5:00 P.M. (New York time) on the Redemption Date. An affidavit of the Warrant Agent or of the Secretary or an Assistant Secretary of the Company that the Redemption Notice has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein. (d) Provided that the Company has irrevocably provided for the payment of the Redemption Price, any right to exercise a Warrant shall terminate at 5:00 P.M. (New York time) on the Redemption Date. After 5:00 P.M. on the Redemption Date, Registered Holders of the Warrants shall have no further rights, except to receive upon surrender of the Warrant the Redemption Price. (e) From and after 5:00 P.M. (New York time) on the Redemption Date, the Company shall, at the place specified in the Redemption Notice, upon presentation and surrender to the Company by or on behalf of the Registered Holder thereof of one or more Warrants to be redeemed, deliver or cause to be delivered to or upon the written order of such Registered Holder a sum in cash equal to the Redemption Price of each such Warrant. (f) If the Exercise Price is adjusted pursuant to Section 8 hereof, the Redemption Price shall be proportionately adjusted by the ratio by which the total number of shares of Common Stock outstanding immediately prior to such event bears to the total number of shares of Common Stock to be outstanding immediately after such event. SECTION 10. Fractional Warrants and Fractional Shares. (a) Regardless of whether or not the number of shares of Common Stock purchasable upon the exercise of each Warrant is adjusted pursuant to Section 8 hereof, the Company shall nevertheless not be required to issue fractions of shares upon exercise of the Warrants or otherwise, or to distribute certificates that evidence fractional shares. With respect to any fraction of a share called for upon any exercise hereof, the Company shall pay to the Registered Holder an amount in cash equal to such fraction multiplied by the current market value of such fractional share, determined as follows: (1) if the Common Stock is listed on a national securities exchange or admitted to unlisted trading privileges on such exchange or listed for trading on the Nasdaq National Market System ("NMS"), the current market value shall be the last reported sale price of the Common Stock on such exchange or system on the last business day prior to the date of exercise; or (2) if the Common Stock is listed in the over-the-counter market (other than on NMS) or admitted to unlisted trading privileges thereon, the current market value shall be the mean of the last reported bid and asked prices reported by the National Quotation Bureau, Inc. on the last business day prior to the date of the exercise; or 13 14 (3) if the Common Stock is not so listed or admitted to unlisted trading privileges and bid and asked prices are not so reported, the current market value shall be an amount determined in such reasonable manner as may be prescribed by the Board of Directors of the Company. SECTION 11. Warrant Holders Not Deemed Stockholders. No Registered Holder shall, as such, be entitled to vote or to receive dividends or be deemed the holder of Common Stock that may at any time be issuable upon exercise of such Warrants for any purpose whatsoever, nor shall anything contained herein be construed to confer upon the holder of Warrants, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issue or reclassification of stock, change of par value or change of stock to no par value, consolidation, merger or conveyance or otherwise), or to receive notice of meetings, or to receive dividends or subscription rights, until such Registered Holder shall have exercised such Warrants and been issued shares of Common Stock in accordance with the provisions hereof. SECTION 12. Rights of Action. All rights of action with respect to this Agreement are vested in the respective Registered Holders of the Warrants, and any Registered Holder of a Warrant, without consent of the Warrant Agent or of the holder of any other Warrant, may, on his own behalf and for his own benefit, enforce against the Company his right to exercise his Warrants for the purchase of shares of Common Stock in the manner provided in the Warrant Certificate and this Agreement. SECTION 13. Agreement of Warrant Holders. Every holder of a Warrant, by his acceptance thereof, consents and agrees with the Company, the Warrant Agent and every other holder of a Warrant that: (a) The Warrants are transferable only on the registry books of the Warrant Agent by the Registered Holder thereof in person or by his attorney-in-fact duly authorized in writing and only if the Warrant Certificates representing such Warrants are surrendered at the office of the Warrant Agent, duly endorsed or accompanied by a proper instrument of transfer satisfactory to the Warrant Agent and the Company in their sole discretion, together with payment of any applicable transfer taxes; and (b) The Company may deem and treat the person in whose name the Warrant Certificate is registered as the Registered Holder thereof and as the absolute, true and lawful owner of the Warrants represented thereby for all purposes, and the Company shall not be affected by any notice or knowledge to the contrary, except as otherwise expressly provided in Section 7 hereof. SECTION 14. Cancellation of Warrant Certificates. If the Company shall purchase or acquire any Warrant or Warrants, whether upon exercise thereof open market purchase, redemption or otherwise, the Warrant Certificate or Warrant Certificates 14 15 evidencing the same shall thereupon be cancelled by the Warrant Agent and retired. The Warrant Agent shall also cancel Warrant Certificates surrendered to the Warrant Agent following exercise of any or all of the Warrants represented thereby or delivered to it for transfer, splitup, combination or exchange. SECTION 15. Concerning the Warrant Agent. The Warrant Agent acts hereunder as agent and in a ministerial capacity for the Company, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not, by issuing and delivering Warrant Certificates or by any other act hereunder be deemed to make any representations as to the validity, value or authorization of the Warrant Certificates or the Warrants represented thereby or of any securities or other property delivered upon exercise of any Warrant or whether any stock issued upon exercise of any Warrant is fully paid and nonassessable. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay the Company, as provided in Section 4, all moneys received by the Warrant Agent upon the exercise of such Warrants. The Warrant Agent shall, upon request of the Company from time to time, deliver to the Company such complete reports of registered ownership of the Warrants and such complete records of transactions with respect to the Warrants and the shares of Common Stock as the Company may request. The Warrant Agent shall also make available to the Company for inspection by their agents or employees, from time to time as either of them may request, such original books of accounts and record as may be maintained by the Warrant Agent in connection with the issuance and exercise of Warrants hereunder, such inspections to occur at the Warrant Agent's office as specified in Section 17, during normal business hours. The Warrant Agent shall not at any time be under any duty or responsibility to any Registered Holder to make or cause to be made any adjustment of the Exercise Price provided in this Agreement, or to determine whether any fact exists which may require any such adjustments, or with respect to the nature or extent of any such adjustment, when made, or with respect to the method employed in making the same. It shall not (i) be liable for any recital or statement of facts contained herein or for any action taken, suffered or omitted by it in reliance on any Warrant Certificate or other document or instrument believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties, (ii) be responsible for any failure on the part of the Company to comply with any of its covenants and obligations contained in this Agreement or in any Warrant Certificate, or (iii) be liable for any act or omission in connection with this Agreement except for its own negligence or wilful misconduct. The Warrant Agent may at any time consult with counsel satisfactory to it (who may be counsel for the Company) and shall incur no liability or responsibility for any action taken, suffered or omitted by it in good faith in accordance with the opinion or advice of such counsel. 15 16 Any notice, statement, instruction, request, direction, order or demand of the Company shall be sufficiently evidenced by an instrument signed by the Chairman of the Board, President, any Vice President, its Secretary, or Assistant Secretary (unless other evidence in respect thereof is herein specifically prescribed). The Warrant Agent shall not be liable for any action taken, suffered or omitted by it in accordance with such notice, statement, instruction, request, direction, order or demand believed by it to be genuine. The Company agrees to pay the Warrant Agent reasonable compensation for its services hereunder and to reimburse it for its reasonable expenses hereunder; it further agrees to indemnify the Warrant Agent and save it harmless against any and all losses, expenses and liabilities, including judgments, costs and counsel fees, for anything done or omitted by the Warrant Agent in the execution of its duties and powers hereunder except losses, expenses and liabilities arising as a result of the Warrant Agent's negligence or wilful misconduct. The Warrant Agent may resign its duties and be discharged from all further duties and liabilities hereunder (except liabilities arising as a result of the Warrant Agent's own negligence or wilful misconduct), upon 30 days' prior written notice to the Company and the Company may discharge the Warrant Agent from its duties and liabilities hereunder upon 30 days' prior written notice to the Warrant Agent. At least 15 days prior to the date such resignation or discharge is to become effective, the Warrant Agent shall cause a copy of such notice of resignation or discharge to be mailed to the Registered Holder of each Warrant Certificate at the Company's expense. Upon such resignation or discharge, or any inability of the Warrant Agent to act as such hereunder, the Company shall appoint a new warrant agent in writing. If the Company shall fail to make such appointment within a period of 15 days after it has been notified in writing of such resignation by the resigning Warrant Agent, or within a period of 15 days after the Warrant Agent has been notified by the Company of such discharge, then the Registered Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new warrant agent. Any new warrant agent, whether appointed by the Company or by such a court, shall be a bank or trust company having a capital and surplus, as shown by its last published report to its stockholders, of not less than $10,000,000 or a stock transfer company. After acceptance in writing of such appointment by the new warrant agent is received by the Company, the Warrant Agent's resignation or discharge shall be deemed to be effective and such new warrant agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as the Warrant Agent, without any further assurance, conveyance, act or deed; but if for any reason it shall be necessary or expedient to execute and deliver any further assurance, conveyance, act or deed, the same shall be done at the expense of the Company and shall be legally and validly executed and delivered by the resigning Warrant Agent. Not later than the effective date of any such appointment the Company shall file notice thereof with the resigning Warrant Agent and shall forthwith cause a copy of such notice to be mailed to the Registered Holder of each Warrant Certificate. Any corporation into which the Warrant Agent or any new warrant agent may be converted or merged or any corporation resulting from any consolidation to which the Warrant Agent or any new warrant agent shall be a party or any corporation succeeding to the 16 17 trust business of the Warrant Agent shall be a successor warrant agent under this Agreement without any further act, provided that such corporation is eligible for appointment as successor to the Warrant Agent under the provisions of the preceding paragraph. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed to the Company and to the Registered Holder of each Warrant Certificate. The Warrant Agent, its subsidiaries and affiliates, and any of its or their officers or directors, may buy and hold or sell Warrants or other securities of the Company and otherwise deal with the Company in the same manner and to the same extent and with like effects as though it were not Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity. SECTION 16. Modification of Agreement. (a) Subject to the provisions of Section 4(b), the parties hereto may by supplemental agreement make any changes or corrections in this Agreement (i) that they shall deem appropriate to cure any ambiguity or to correct any defective or inconsistent provision or manifest mistake or error herein contained; (ii) to reflect an increase in the number of Warrants which are to be governed by this Agreement resulting from an increase in the size of the Public Offering; or (iii) that they may deem necessary or desirable and which shall not adversely affect the interests of the holders of Warrant Certificates; provided, however, that except as otherwise indicated in this Section and this Agreement, this Agreement shall not otherwise be modified, supplemented or altered in any respect except with the consent in writing of the Registered Holders of Warrant Certificates representing not less than two-thirds of the Warrants then outstanding. (b) The Company, shall have the right to reduce the Exercise Price for a period of not less than thirty days on not less than thirty days, prior written notice to the Registered Holders of the Warrants. SECTION 17. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been made when delivered or mailed first class registered or certified mail, postage prepaid as follows: if to the Registered Holder of a Warrant Certificate, at the address of such holder as shown on the registry books maintained by the Warrant Agent; if to the Company, at 219 South Street, New Providence, New Jersey, 07974, Attention: Richard S. Rosenfeld, Chief Financial Officer; if to the Warrant Agent, at its Corporate Office. SECTION 18. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without reference to principles of conflict of laws. SECTION 19. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and the Warrant Agent (and their respective successors and assigns) and the holders from time to time of Warrant Certificates. Nothing in 17 18 this Agreement is intended or shall be construed to confer upon any other person any right, remedy or claim, in equity or at law, or to impose upon any other person any duty, liability or obligation. SECTION 20. Termination. This Agreement shall terminate on the earliest to occur of (i) the Expiration Date of all the Warrants, (ii) the date upon which all Warrants have been exercised and (iii) the date on which the Company certifies to the Warrant Agent that no Warrants are outstanding; provided however, that notwithstanding any such termination, the Warrant Agent shall be obligated to deliver funds to the Company in accordance with this Agreement. SECTION 21. Counterparts. This Agreement may be executed in all counterparts, all of which taken together shall constitute a single document. 18 19 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. BARRINGER TECHNOLOGIES INC. By: ___________________________ Stanley S. Binder President and Chief Executive Officer AMERICAN STOCK TRANSFER & TRUST COMPANY By: _______________________________ Authorized Officer 19 20 _____________ WARRANTS WARRANT NO.____ NOT EXERCISABLE AFTER 5:00 P.M., (NEW YORK CITY TIME), ON __________ ___, 1999, OR SUCH EARLIER DATE AS PROVIDED HEREIN BARRINGER TECHNOLOGIES INC. COMMON STOCK NASDAQ: BARRW PURCHASE WARRANTS CUSIP 068509140 THIS CERTIFIES THAT: or registered assigns is the registered holder (the "Registered Holder") of the number of Warrants set forth above, each of which represents the right to purchase one-quarter of a fully paid and nonassessable share of common stock, par value $.01 per share (the "Common Stock"), of Barringer Technologies Inc., a Delaware corporation (the "Company"), at any time until the Expiration Date hereinafter referred to, by surrendering this Warrant Certificate, with the exercise form set forth hereon duly executed with signatures guaranteed as provided below, at the office maintained pursuant to the Warrant Agreement hereinafter referred to for that purpose by American Stock Transfer & Trust Company, or its successor as warrant agent (any such warrant agent being herein called the "Warrant Agent"), and by paying in full the Exercise Price, plus transfer taxes, if any. Payment of the Exercise Price shall be made in United States currency, by certified check or money order payable to the order of the Company. Upon certain events provided for in the Warrant Agreement, the Exercise Price and the number of shares of Common Stock issuable upon the exercise of each Warrant are required to be adjusted. The Warrants are subject to call for redemption by the Company at a price of $0.25 per Warrant (the "Redemption Price") commencing on , 1997 provided that (i) the Company provides written notice (the "Redemption Notice") of redemption to the Registered Holder and the Warrant Agent at least thirty days' prior to the redemption date , and (ii) the average bid price per share of the Common Stock as reported by NASDAQ exceeds 200% of the then current Exercise Price for a period of 30 days ending within 15 days of the date that the Redemption Notice is given by the Company to the Warrant Agent and Registered Holders. No Warrant may be exercised after 5:00 P.M. (New York City time) on the expiration date (the "Expiration Date") which will be the earlier of (i) __________ ___, 1999 and (ii) the business day preceding the redemption date specified in a Redemption Notice. After the Expiration Date, all Warrants evidenced hereby shall thereafter become void, and the holders thereof shall have not rights thereunder, except for the right to receive the Redemption Price, if applicable. 21 Prior to the Expiration Date, subject to any applicable laws, rules or regulations restricting transferability and to any restriction on transferability that may appear on this Warrant Certificate in accordance with the terms of the Warrant Agreement hereinafter referred to, the Registered Holder shall be entitled to transfer this Warrant Certificate in whole or in part upon surrender of this Warrant Certificate at the office of the Warrant Agent maintained for that purpose with the form of assignment set forth hereon duly executed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank, a savings bank or a savings and loan association or a trust company located in the United States, a member of the National Association of Securities Dealers, Inc. or other eligible guarantor institution which is a participant in a signature guarantee program (as such terms are defined in Reg. 240.17Ad-15 under the Securities Exchange Act of 1934) applicable to the Warrant Agent. Upon any such transfer, a new Warrant Certificate or Warrant Certificates representing the same aggregate number of Warrants will be issued in accordance with the instructions in the form of assignment. Upon the exercise of less than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the Registered Holder a new Warrant Certificate in respect of the Warrants not exercised. Prior to the Expiration Date, the Registered Holder shall be entitled to exchange this Warrant Certificate, with or without other Warrant Certificates, for another Warrant Certificate or Warrant Certificates for the same aggregate number of Warrants, upon surrender of this Warrant Certificate at the office maintained for such purpose by the Warrant Agent. No fractional shares will be issued upon the exercise of Warrants. As to any final fraction of a share, which the registered holder of one or more Warrant Certificates, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay the cash value thereof determined as provided in the Warrant Agreement. This Warrant Certificate is issued under and in accordance with a Warrant Agreement between the Company and the Warrant Agent (the "Warrant Agreement") and is subject to the terms and provisions contained in said Warrant Agreement, to all of which terms and provisions the Registered Holder consents by acceptance hereof. This Warrant Certificate shall not entitle the Registered Holder to any of the rights of a stockholder of the Company, including, without limitation, the right to vote, to receive dividends and other distributions, or to attend or receive any notice of meetings of stockholders or any other proceedings of the Company. This Warrant Certificate shall not be valid for any purpose until it shall have been countersigned by the Warrant Agent. 22 IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed under its corporate seal. COUNTERSIGNED: DATED: AMERICAN STOCK TRANSFER & TRUST COMPANY NEW YORK, NEW YORK WARRANT AGENT BARRINGER TECHNOLOGIES, INC. _____________________________ BY:__________________________________ SECRETARY AUTHORIZED SIGNATURE CHAIRMAN OF THE BOARD 23 EXERCISE FORM To Be Executed by the Registered Holder in Order to Exercise Warrants The undersigned Registered Holder hereby irrevocably elects to exercise Warrants represented by this Warrant Certificate, and to purchase the securities issuable upon the exercise of such Warrants, and requests that certificates for such securities shall be issued in the name of PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER ____________________________ ____________________________ ____________________________ ____________________________ [please print or type name and address] and be delivered to ____________________________ ____________________________ ____________________________ ____________________________ [please print or type name and address] and if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Registered Holder at the address stated above. Accepted and Agreed To: X______________________________ A-1 24 Address: - ------------------------------- - ------------------------------- - ------------------------------- - ------------------------------- Tax Payer Identification Number - ------------------------------- Signature Guaranteed - ------------------------------- A-2 25 ASSIGNMENT To Be Executed by the Registered Holder in Order to Assign Warrants FOR VALUE RECEIVED, ____________________ hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER ___________________________ ___________________________ ___________________________ ___________________________ [please print or type name and address] _________________________ of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitutes and appoints _____________________________________________________________________ Attorney-in-fact to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises. Dated:_________________________________________ Signed: _______________________________________ Signature Guaranteed: _________________________ THE SIGNATURE TO THE ASSIGNMENT OR THE EXERCISE FORM MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK, TRUST COMPANY SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR MIDWEST STOCK EXCHANGE. A-3 EX-4.2 4 WARRANT AGRMT. TO BE ISSUED TO JANNEY MONTGOMERY 1 Exhibit 4.2 UNDERWRITER'S WARRANT VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON OR IF NOT A BUSINESS DAY AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK CITY TIME, ON THE NEXT FOLLOWING BUSINESS DAY, UNLESS EXTENDED BY BARRINGER TECHNOLOGIES INC., AS PROVIDED HEREIN. No. Date: WARRANT TO PURCHASE SHARES OF COMMON STOCK AND WARRANTS OF BARRINGER TECHNOLOGIES INC. Securities Subject to this Warrant: 125,000 Shares and 125,000 Underlying Warrants This certifies that, for $________ and other value received, ____________, or registered assigns (the "Warrant Holder") is entitled to purchase from BARRINGER TECHNOLOGIES INC., a corporation incorporated under the laws of the State of Delaware (the "Company"), subject to the terms and conditions hereof: (a) the number of shares of Common Stock of the Company ("Common Stock") stated above at the Share Purchase Price (as defined and specified herein) at any time on or after 9:00 A.M. New York City time on _________________, 1997 and before the Common Share Expiration Date (as defined herein), and (b) the number of Underlying Warrants (as defined herein) of the Company set forth above, at the Warrant Purchase Price (as defined and specified herein) at any time on or after 9:00 A.M. New York City time on _____________________, 1997 and before the Warrant Expiration Date (as defined herein). The Share Purchase Price and the number of Common Shares purchasable hereunder are subject to adjustment as provided below. The exercise price of the Underlying Warrants and the number of shares purchasable on exercise of such warrants are subject to adjustment as provided in such warrants. 2 ARTICLE I DEFINITIONS Section 1.01. The following terms as used in this Agreement shall have the meanings set forth below: (1) "Business Day" means a day other than a Saturday, Sunday or other day on which banks in the State of New York are authorized by law to remain closed; (2) "Common Stock Expiration Date" means 5:00 P.M., New York City time, on ________________________, 2001 or such later date to which the right to purchase Common Shares pursuant to this Warrant shall be extended by the Company by corporate resolution adopted prior to such date, or if any such expiration date is not a Business Day, at or before 5:00 P.M. New York City time on the next following Business Day; (3) "Effective Date" means the effective date of the Offering; (4) "Offering" means the public offering of 1,250,000 shares of Common Stock and 1,250,000 Common Stock Purchase Warrants of the Company underwritten by Janney Montgomery Scott, Inc. ("JMS") pursuant to Registration Statement No. 333-13703 filed with the Securities and Exchange Commission (the "Offering"); (5) "Representative's Warrants" means this warrant and all warrants of like tenor (together evidencing the right to purchase an aggregate of 125,000 shares of Common Stock and 125,000 Underlying Warrants originally issued to Janney Montgomery Scott Inc. ("JMS") or its designees in connection with the Offering; (6) "Securities" shall mean collectively the Shares of Common Stock and Underlying Warrants purchasable on exercise of this Warrant and the shares of Common Stock issuable upon exercise of the Underlying Warrants; (7) "Stock Exercise Purchase Price" shall mean 115% of the Initial Offering Price of the Common Stock, pursuant to the Offering; (8) "Underlying Warrant" means a warrant identical in form with the Common Stock Purchase Warrants offered by the Company in the Offering (the "Public Warrants"); (9) "Warrant Exercise Price" shall mean 115% of the Initial Offering Price of the Warrants, pursuant to the Offering, as of the date hereof and until the Warrant Expiration date; 2 3 (10) "Warrant Expiration Date" means 5:00 P.M. New York City time on _________, 1999, or such later date to which the right to exercise this Warrant to purchase Underlying Warrants shall be extended by the Company by corporate resolution adopted prior to ____________ or, if such Expiration Date is not a Business Day, at or before 5:00 P.M. New York time on the next following Business Day; (11) "Warrant Holder" means the person or entity named above or any person or entity in whose name this Warrant shall be registered upon the books to be maintained by the Company for that purpose; and (12) "Warrant Purchase Prices" means the Stock Exercise Price and the Warrant Exercise Price, collectively, including their payment provisions. ARTICLE II DURATION AND EXERCISE OF REPRESENTATIVE'S COMMON SHARE WARRANT Section 2.01. Subject to the provisions of Section 4.01 hereof, this Representative's Warrant may be exercised at any time after 9:00 A.M., New York City time, on or after 9:00 A.M., New York City time, on _______________________, 1997 (a) before the Common Stock Expiration Date to purchase shares of Common Stock, and (b) before the Warrant Expiration Date to purchase Warrants. The Company shall give the Warrant Holder prompt written notice of any such extension of the then Expiration Date. If this Warrant is not exercised at or before the Warrant Expiration Date, it shall no longer entitle the Warrant Holder to purchase Underlying Warrants and all rights hereunder to purchase such Underlying Warrants shall thereupon cease. If not exercised at or before the Common Stock Expiration Date, the Warrants shall become void and all rights hereunder shall thereupon cease. Section 2.02. (1) The Warrant Holder may exercise this Warrant, in whole or in part, to purchase shares of Common Stock or Underlying Warrants, or both, in such amounts as may be elected upon surrender of this Warrant with the Subscription Form hereon duly executed, to the Company at its corporate office at 212 South Street, New Providence, New Jersey 07974, together with the full Warrant Purchase Price for each share of Common Stock and for each Underlying Warrant to be purchased in lawful money of the United States, or by certified check, bank draft or postal or express money order payable in United States Dollars to the order of the Company and upon compliance with and subject to the conditions set forth herein. (2) Upon receipt of this Warrant with the Subscription Form hereon duly executed and accompanied by payment of the Stock Exercise Price for the number of shares of Common Stock and/or the Warrant Exercise Price for the number for Underlying 3 4 Warrants for which this Warrant is then being exercised, the Company, subject to Section 4.04, will cause to be issued and delivered to the Warrant Holder, certificates for such securities in such denominations as are requested by the Warrant Holder. (3) In case the Warrant Holder shall exercise this Warrant with respect to less than all of the shares of Common Stock and/or Underlying Warrants which may be purchased pursuant to this Warrant, the Company will execute a new Representative's Warrant exercisable for the balance of the Common Shares and/or Underlying Warrants that may be purchased upon exercise of this Warrant and deliver such new Representative's Warrant to the Warrant Holder. (4) The Company covenants and agrees that it will pay when due and payable any and all taxes which may be payable in respect of the issue of this Warrant or the issue of any Security. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer of this Warrant or of any Security to a name other than that of the Warrant Holder at the time of surrender, and until the payment of such tax, shall not be required to issue such Security. ARTICLE III ADJUSTMENT OF SHARE PURCHASE PRICES AND NUMBER OF COMMON SHARES Section 3.01. The Share Purchase Price at which this Warrant may be exercised at any time specified in Section 1.01( ) to purchase Common Shares shall be subject to adjustment from time to time as follows: (1) If the Company shall (i) pay a dividend on its Common Shares, (ii) subdivide its outstanding Common Shares or (iii) combine its outstanding Common Shares into a smaller number of shares, the Share Purchase Prices in effect immediately prior to each of those events shall be adjusted proportionately so that the adjusted Share Purchase Prices will bear the same relation to the Share Purchase Prices in effect immediately prior to the event as the total number of Common Shares outstanding immediately prior to the event will bear to the total number of Common Shares outstanding immediately after the event. An adjustment made pursuant to this clause (1) shall become effective immediately after the record date in the case of a dividend and immediately after the effective date in the case of a subdivision or combination. (2) If the Company hereafter (i) issues shares of Common Stock for a consideration less than the then current market price per Share (as defined in clause (4) below), (b) issues rights or warrants entitling the holders to subscribe for or to purchase Common Shares at a price per Share less than such market price, or (c) issues convertible securities convertible into Shares of Common Stock at a price per Share less than such market price, then at the record date of such event the Share Purchase Prices shall be 4 5 adjusted so that it will equal the price determined by multiplying the Share Purchase Prices in effect immediately prior to the adjustment by a fraction, of which the numerator shall be (i) the number of Common Shares outstanding on the record date plus (ii) the number of additional Common Shares issued for such consideration below such market price or a number of additional Common Shares which the aggregate exercise price of such rights or warrants would be purchased at such market price, or which would be received on the conversion of such convertible securities the aggregate exercise price of the rights or warrants or conversion price of such convertible securities would purchase at the current market price per Common Share (as determined in accordance with the provisions of clause (4) below), issued for such consideration below such market price or a number of additional Common Shares which the aggregate exercise price of such rights or warrants would be purchased at such market price, or which would be received on the conversion of such convertible securities and of which the denominator shall be (x) the number of Common Shares outstanding on the record date plus (y) the number of Common Shares offered for subscription purchase or issuable on conversion of such convertible securities. Each adjustment shall become effective retroactively immediately after the record date for the determination of Common Shares entitled to receive the rights or warrants. (3) Except in the case of distributions of Common Shares subject to preceding clause (1), or of rights or cash, or of warrants to purchase Common Shares subject to preceding clause (2), if the Company distributes to all holders of shares evidences of its indebtedness or assets (excluding cash dividends or distributions) or rights or warrants to subscribe for or to purchase shares, evidences of indebtedness or assets, then in each such case the Share Purchase Prices shall be adjusted so it will be equal to the price determined by multiplying the Share Purchase Prices in effect immediately prior to the adjustment by a fraction, of which the numerator shall be (i) the total number of outstanding Common Shares, multiplied by (ii) the current market price per Common Share (as determined in accordance with the provisions of clause (4) be on the record date mentioned below, or less (iii) the fair market value (as determined by the Board of Directors, whose determination shall be deemed conclusive, unless arbitrary or unreasonable, described in a statement mailed to the Warrant Holder) of the capital stock, assets or evidences of indebtedness, or rights or warrants, so distributed, and of which the denominator shall be (x) the total number of outstanding Common Shares multiplied by (y) the current market price per Common Share. Each adjustment shall become effective retroactively immediately after the record date for the determination of stockholders entitled to receive a distribution. (4) For the purpose of any computation under clause (2) or clause (3) above, the current market price per Common Share at any date shall be deemed to be the average of the daily closing prices for the thirty consecutive business days commencing forty-five business days before the day in question. The closing price for each day shall be the last reported sales price regular way or, in case no such reported sale takes place on that day, the average of reported closing bid and asked prices regular way, either on the New York Stock Exchange or the American Stock Exchange, or, if at any time the Common 5 6 Shares are not listed or fitted to trading on such Exchanges, on the principal national cities exchange on which the Common Shares are listed or admitted to trading, or if not listed or admitted to trading on national securities exchange, the average of the highest reported bid and lowest reported asked prices as furnished by the National Association of Securities Dealers Inc.'s Automated Quotations System, or the nearest comparable system or, in the absence of either, the fair market value as determined by the Board of Directors (whose determination shall be deemed conclusive, unless arbitrary or unreasonable) and described in a statement mailed to the Warrant Holder. No adjustment of the Share Purchase Prices shall be made if the amount of the adjustment would be less than $.05, but any adjustment which would otherwise be required to be made will be carried forward and be made at the time of and together with the next subsequent adjustment which, together with all adjustments so carried forward, amounts to $.05 or more. Section 3.02. Upon each adjustment pursuant to this Article III of the Share Purchase Prices for any period specified in Section 1.01( ), the number of Common Shares purchasable in any such period shall be adjusted to the number of shares of Common Shares, calculated to the nearest one hundredth of a share, obtained by multiplying the number of Common Shares purchasable in such period on exercise of the Warrant immediately prior to the adjustment by the Share Purchase Price for that period in effect prior to the Adjustment and dividing the product so obtained by the new Share Purchase Price for that period. In case of such adjustment, this Warrant will represent, for each of the aforesaid periods the right to purchase at the original Share Purchase Price for the Common Shares for the applicable period the number of Common Shares or fraction of such Share (depending on whether such Price is reduced or increased) provided to be issued pursuant to the adjustment specified in this Section 3.02, each of such Shares to be purchased at the Share Purchase Price for such period provided for by the aforesaid adjustments to such Share Purchase Price. Section 3.03. In case of any capital reorganization of the Company or of any reclassification of the Common Shares, or the consolidation of the Company with any other corporation or entity, or sale of the properties and assets of the Company as, or substantially as, an entirety to any other entity, this Warrant will be exercisable after such capital reorganization, reclassification, consolidation or sale, upon the terms and conditions specified in this Agreement, for the number of Common Shares, other securities or property which the Warrant Holder would have been entitled to receive upon the capital reorganization, reclassification, consolidation or sale if this Warrant had been exercised immediately before the first such capital reorganization, reclassification, consolidation or sale. In the case of a merger of the Company into or with any other corporation or entity (provided that on such merger securities of the Company are changed into, changed for, or converted into securities of any other issuer), after such merger, this Warrant shall be 6 7 exercisable, upon the terms and conditions specified in this Agreement. The subdivision or combination of Common Shares at any time outstanding into a greater or lesser number of Shares shall not be deemed to be a reclassification of the Common Shares of the Company for the purposes of this Section 3.03. The Company shall not effect any consolidation, merger or sale unless prior to or simultaneously with its consummation the successor entity (if other than the Company) resulting from the consolidation or merger or the entity purchasing the Company's assets and any other entity the shares of stock or other securities or property of which are receivable as a result of the transaction agree, by written instrument executed and delivered to the Warrant Holder, to (i) the obligation to deliver to the Warrant Holder the Common Shares or other securities or property to which the Warrant Holder will be entitled on exercise of this Warrant, and (ii) all other obligations of the Company under this Agreement. Section 3.04. Whenever the Share Purchase Prices and the number of Common Shares purchasable are adjusted as provided in this Article, the Company shall compute the adjustment of the Share Purchase Prices and number of such shares purchasable in each such period in accordance with Sections 3.01 and 3.02 and shall prepare a certificate signed by its President or a Vice President and its principal accounting officer setting forth the adjusted Share Purchase Prices and number of such shares purchasable in each such period and showing in reasonable detail the method of calculation of the adjustment and the facts requiring the adjustment and upon which the calculation is based, and that certificate shall forthwith be mailed to the Warrant Holder. Section 3.05. If at any time after the date of this Agreement: (1) the Company shall declare a dividend (or any other distribution) on its Common Shares payable otherwise than in cash out of its earned surplus; or (2) the Company shall authorize the granting to the Holders of its Common Shares of rights to subscribe for or purchase any shares of capital stock of any class or of any other rights; or (3) the Company shall authorize any reclassification of its Common Shares (other than a subdivision or combination of its outstanding Common Shares), any capital reorganization, or any consolidation or merger to which it is a party and for which approval of any stockholder of the Company is required, or the sale or transfer of all or substantially all of its assets; or (4) events shall have occurred resulting in the voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause to be mailed to the Warrant Holder at least 20 days (or 10 days in any case specified in clause (1) or (2) above) prior to the applicable record date, 7 8 a notice stating the date on which a record is to be taken for the purpose of the dividend, distribution or rights, or, if a record is not to be taken, the date as of which the holders of record of Common Shares shall become or be entitled to such dividend, distribution or rights or the date on which the reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Shares of record shall be entitled to exchange their shares for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give any such notice or any defect therein shall not affect the validity of the proceeding referred to in clauses (1), (2), (3) and (4) above. Section 3.06. The form of this Warrant need not be changed because any change in the Share Purchase Prices or in the number of Common Shares purchasable upon exercise of this Warrant pursuant to this Article and Warrants issued after such change may state the same Share Purchase Prices and the same number of Common Shares as are stated in the form of warrant initially issued pursuant to this Agreement. However, the Company may at any time in its sole discretion (which shall be conclusive) make any change in the form of this Warrant that it may deem appropriate and that does not affect the substance thereof; and any Representative's Warrant thereafter issued, whether in exchange or substitution for an outstanding Representative's Warrant or otherwise, may be in the form as so changed. ARTICLE IV OTHER PROVISIONS RELATING TO RIGHTS OF WARRANT HOLDER Section 4.01. The Warrant Holder, as such, shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Warrant Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any action by the Company (whether upon any recapitalization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings or other action affecting stockholders (except for notices provided for in this Warrant), receive dividends or subscription rights, or otherwise until this Warrant shall have been exercised to purchase Common Stock or to purchase Underlying Warrants and such Underlying Warrants shall have become exercisable and the Common Stock shall have become deliverable as provided in Article II or pursuant to the terms of the Underlying Warrants, at which time the person or persons in whose name or names the certificate or certificates for the Common Stock being purchased shall be deemed the holder or holders of record of such Common Stock for all purposes; provided, however, that any such exercise on any date when the stock transfer books of the Company shall be closed shall constitute the person or persons in whose name or names the certificate or certificates for such shares 8 9 of Common Stock are to be issued as the record holder or holders thereof for all purposes at the opening of business on the next succeeding day on which such stock transfer books are open and this Warrant shall not be deemed to have been exercised, in whole or in part as the case may be, until such next succeeding day on which stock transfer books are open for the purpose of determining entitlement to dividends on such shares of Common Stock, and such exercise shall be at the actual Exercise Prices in effect at such date. Section 4.02. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as it may in its discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as, and in substitution for, this Warrant. Section 4.03. (1) The Company covenants and agrees that at all times it shall reserve and keep available for the exercise of this Warrant such number of authorized shares of Common Stock as are sufficient to permit the exercise in full of this Warrant. (2) Prior to the issuance of any Common Stock upon exercise of this Warrant, the Company covenants and agrees to secure the listing of such shares of Common Shares upon any securities exchange or automated quotation system upon which such Common Stock is then listed. (3) The Company covenants that all Common Stock issued on exercise of this Warrant, will be validly issued, fully paid, nonassessable and free of preemptive rights. Section 4.04. Anything contained herein to the contrary notwithstanding, the Company shall not be required to issue any fractional shares of Common Stock in connection with the exercise of this Warrant and other Warrants of like tenor submitted for exercise concurrently herewith. In any case where the Warrant Holder would, except for the provisions of this Section 4.04, be entitled under the terms of this Warrant to receive a fraction of a share of Common Stock upon the exercise of this Warrant, the Company shall, upon the exercise of this Warrant and receipt of the Warrant Prices, issue the largest number of whole shares purchasable upon exercise of this Warrant and any other like Warrants tendered for exercise at the same time. The Warrant Holder, by the acceptance of the Warrant, expressly waives his right to receive a certificate of any fraction of a Common Share upon the exercise hereof. However with respect to any fraction of a share called for upon any exercise hereof, the Company shall pay to the Registered Holder an amount in cash equal to such fraction multiplied by the current market value of such fractional share, determined as follows: (1) if the Common Stock is listed on a national securities exchange or admitted to unlisted trading privileges on such exchange or listed for trading on the Nasdaq National Market System ("NMS"), the current market 9 10 value shall be the last reported sale price of the Common Stock on such exchange or system on the last business day prior to the date of exercise; or (2) if the Common Stock is listed in the over-the-counter market (other than on NMS) or admitted to unlisted trading privileges thereon, the current market value shall be the mean of the last reported bid and asked prices reported by the National Quotation Bureau, Inc. on the last business day prior to the date of the exercise; or (3) if the Common Stock is not so listed or admitted to unlisted trading privileges and bid and asked prices are not so reported, the current market value shall be an amount determined in such reasonable manner as may be prescribed by the Board of Directors of the Company. Section 4.05. Notices to the Warrant Holder provided for in this Warrant shall be deemed given or made by the Company if delivered or sent by mail, certified or registered, return receipt requested, postage prepaid, addressed to the Warrant Holder at his last known address as it shall appear on the books of the Company. ARTICLE V TREATMENT OF WARRANT HOLDER Section 5.01. Prior to due presentment for registration of transfer of this Warrant, the Company may deem and treat the Warrant Holder as the absolute owner of this Warrant (notwithstanding any notation of ownership or other writing hereon) for the purpose of any exercise hereof and for all other purposes and the Company shall not be affected by any notice to the contrary. ARTICLE VI SPLIT-UP, COMBINATION, EXCHANGE AND TRANSFER OF WARRANTS Section 6.01. This Warrant may be split up, combined or exchanged for another Warrant or Warrants of like tenor to purchase a like aggregate number of shares of Common Stock. If the Warrant Holder desires to split up, combine or exchange this Warrant, he shall make such request in writing delivered to the Company at its office in New Providence, New Jersey and shall surrender this Warrant and any other Warrants to be so split up, combined or exchanged at said office. Upon any such surrender for a split-up, combination or exchange, the Company shall execute and deliver to the person entitled thereto a Warrant or Warrants, as the case may be, as so requested. The Company 10 11 may require such Warrant Holder to pay a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any split-up, combination or exchange of Warrants. Section 6.02. Any assignment permitted hereunder shall be made by surrender of this Warrant to the Company at its principal office with the Form of Assignment annexed hereto duly executed and with funds sufficient to pay any transfer tax. In such event the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. This Warrant may be divided or combined with other Warrants which carry the same rights upon presentation thereof at the principal office of the Company together with a written notice signed by the Warrant Holder, specifying the names and denominations in which new Warrants are to be issued. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen or destroyed Warrant shall thereupon become void. Any such new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not the Warrant so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone. ARTICLE VII REGISTRATION UNDER THE SECURITIES ACT OF 1933 Section 7.01. (1) If at any time, prior to , the Company proposes to register pursuant to a registration statement to become effective on or after , 1997 any of its securities (other than in connection with a merger, acquisition or pursuant to Form S-8) it will give written notice by registered mail, at least sixty (60) days prior to the filing of each such registration statement, to the holders of this Warrant of the Underlying Warrants, and of any shares of Common Stock issued on exercise of this Warrant or the Underlying Warrants (collectively, the "Representative's Securities") of its intention to do so. If any of the holders of such securities shall notify the Company within twenty (20) days after receipt of any such notice of their desire to include any such securities (including shares of Common Stock issuable on exercise of any Warrants included in such Representative's Securities) in such proposed registration statement, the Company shall afford such holders the opportunity to have any such securities registered under such registration statement. The Company agrees to give written notice of any such proposed registration statement to any registered holder of any then outstanding Representative's Securities and to JMS, at least (30) days prior to filing any such post-effective amendment or registration statement. 11 12 (2) Upon the written request of the then holders of at least fifty percent (50%) in interest (taken as a single group) of the registered holders of the Representative's Securities (the holder of any Warrant being deemed for such purpose the holder of the Common Shares purchasable on exercise of such Warrant) made not before ___________________ and not after __________________, the Company shall file one post-effective amendment or new registration statement as may be appropriate to cover a public offering of such Securities (including any shares of Common Stock issuable on exercise of any Warrants included in such Representative's Securities). (3) The following provisions shall also be applicable to any such post-effective amendment or registration statement: (a) The holders whose Representative's Securities are to be included therein (the "Sellers") shall furnish the Company with such appropriate information (relating to the intentions of such holders) in connection therewith as the Company shall reasonably request in writing. Following the effective date of such post-effective amendment or registration statement, the Company shall upon the request of any Seller forthwith supply such number of prospectuses meeting the requirements of the Act as shall be requested by such Seller to permit such Seller to make a public offering of all the Representative's Securities held by such Seller or underlying any Warrants held by such Seller. The Company shall use its best efforts to register such securities for sale under the securities laws in such states as the Sellers shall reasonably designate. (b) All expenses incident to effectiveness of the Registration Statement referred to in Section 7.01 including, but not limited to, all registration and filing fees payable to the Securities and Exchange Commission and the National Association of Securities Dealers, Inc., fees and disbursements of counsel and independent public accountants printing and other expenses, (excluding underwriting commissions and any fees and disbursements of any counsel employed by any selling shareholders on their own behalf), shall be borne (i) in the case of a Registration Statement filed pursuant to Section 7.01(1) by the Company, any other selling stockholder and any Seller in proportion to the number of shares of Common Stock respectively offered by them therein (Warrants for such purpose being considered the equivalent of the shares of Common Stock purchasable on exercise of such Warrants), and (ii) in the case of a Registration Statement filed pursuant to Section 7.01 (2), by the Company to the extent of $25,000 and the balance by the Sellers whose securities are included in such registration statement pro rata in accordance with the shares of Common Stock included by them therein (Warrants for such purpose being considered equivalent to the Common Shares purchasable on exercise of such Warrants). (c) Prior to any public offering pursuant to Section 7.01, the Company will register or qualify the securities under the securities or Blue Sky laws of such jurisdictions as any Seller or any underwriter may reasonably request in writing, and keep such registration or qualification effective during the period such 12 13 Registration Statement is required to be kept effective, and do any and all acts or things necessary or advisable to enable the disposition of the Representative's Securities covered by the applicable Registration Statement, provided that the Company shall not be required generally to do business in any jurisdiction where it has not been so qualified, or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject. (d) The Company shall indemnify and hold harmless each Seller and each underwriter, within the meaning of the Act, that may purchase from or sell for any Seller any Representative's Securities from and against any and all losses, claims, damages and liabilities caused by any true statement or alleged untrue statement of a material fact in any registration statement under the Act or any prospectus included therein required to be filed or furnished pursuant to this Section 7.01, or caused by omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission based upon information furnished or required to be furnished in writing to the Company by such Seller or underwriter expressly for use therein, which indemnification shall include each person, if any, who controls any such Seller or underwriter within the meaning of such Act; provided, however, that the Company shall not be obliged to indemnify any such Seller or underwriter or controlling person unless such Seller or underwriter shall at the same time indemnify the Company, its directors, each officer signing the related registration statement and each person, if any, who controls the Company within the meaning of the Act from and against any and all losses, claims, damages and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement or any prospectus required to be filed or furnished by reason of this Section 7.01 or caused by any omission or alleged omission to state therein a material fact or required to be stated therein or necessary to make the statements therein not misleading, insofar as such losses, claims, damages or liabilities are caused by any untrue statement or alleged untrue statement or omission or alleged omission based upon information furnished in writing to the Company by any such Seller or underwriter expressly for use therein. The Company's agreements in this Section 7.01 shall continue in effect regardless of the exercise and surrender of this Warrant. Section 7.02. Neither this Warrant nor the Securities issuable on exercise t hereof may be sold or otherwise disposed of except as follows: (a) to a person, who, in the opinion of counsel reasonably satisfactory to the Company, is a person to whom such securities may legally be transferred without registration and without the delivery of a current prospectus under the Act with respect thereto and then only against receipt of an agreement of such person to comply with the provisions of this Warrant with respect to any resale or owner disposition of such securities; or 13 14 (b) to any person upon delivery of a prospectus then meeting the requirements of the Act relating to such securities (as to which a registration statement under the Act shall then be in effect) and the offering thereof for such sale or disposition. Notwithstanding the above, this Warrant will be restricted from sale, transfer, assignment or hypothecation for a period of one (1) year from the effective date of the registration statement except to officers or partners of JMS. ARTICLE VIII OTHER MATTERS Section 8.01. The Company will from time to time promptly pay, subject to the provisions of paragraph (4) of Section 2.02, all taxes and charges that may be imposed upon the Company in respect of the issuance or delivery, but not the transfer, of Representative's Securities. Section 8.02. All the covenants and provisions of this option by or for the benefit of the Company shall bind and inure to the benefit of its successors and assigns hereunder. Section 8.03. Notice or demand pursuant to this Warrant to be given or made by the Warrant Holder to or on the Company shall be sufficiently given or made if delivered or sent by registered or certified mail, postage prepaid, return receipt requested, and addressed, until another address is designated in writing by the Company, as follows: Barringer Technologies Inc. 219 South Street New Providence, N. J. 07974 Attention: Stanley S. Binder, President Any notice or demand authorized by this Warrant to be given or made by the Company to or on the Warrant Holder shall be given in accordance with the provisions of Section 4.05. Section 8.04. The validity, interpretation and performance of this Warrant shall be governed by the laws of the State of New York without giving effect to the conflict of Law principles thereof. Section 8.05. Nothing in this Warrant expressed or nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the Company and the Warrant Holder any right, remedy or claim hereunder, and all covenants, conditions, stipulations, promises and 14 15 agreements in this Warrant contained shall be for the sole and exclusive benefit of the Company and its successors and of the Warrant Holder. Section 8.06. The Article headings herein are for convenience only and are not part of this Warrant and shall not affect the interpretation thereof. IN WITNESS WHEREOF, this Warrant has been duly executed by the Company under its corporate seal as of the __ day of . Barringer Technologies Inc. By:_________________________________ Name: Title: Attest: _______________________ Secretary 15 16 FORM OF ASSIGNMENT (To Be Signed Only Upon Assignment) FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _______________________________ the right to purchase Common Shares and Underlying Warrants evidenced by the within Warrant, and to transfer same on the books of Barringer Technologies Inc. with full power of substitution. Dated: ___________ By: ________________________________ Name: Title: (Signature must conform in all respects to the name of Warrant Holder as specified on the face of the Warrant, without alteration, enlargement or any change whatsoever, and the signature must be guaranteed in the usual manner) Signature Guaranteed: _____________________ 17 SUBSCRIPTION FORM (To be Executed By A Warrant Holder Who Desires To Exercise The Warrant In Whole Or In Part) Barringer Technologies Inc. Undersigned____________________________________________ (________________________________) Please insert Social Security or other identifying number of Subscriber hereby irrevocably elects to exercise the right to purchase Common Shares and Underlying Warrants to the extent represented by (all) (__________) of the Warrants represented by the Warrant Certificate to which this Subscription form is attached and tenders payments herewith to the order of Barringer Technologies Inc. in the amount of ______________. The undersigned requests that certificates for such Common Shares and Underlying Warrants be issued as follows: Name: ______________________________________ Address: ______________________________________ Deliver to: ______________________________________ Address: ______________________________________ Social Security (or other identifying) Number: ______________________________________ and, if said number of shares of Common Stock and Underlying Warrants shall not be all such shares of Common Stock and Warrants purchasable hereunder, that a new Warrant for the balance remaining of the shares of Common Stock and Underlying Warrants purchasable under the within Warrant be registered in the name of, and delivered to, the undersigned at the address stated below: Address: ______________________________________ Date:__________________ Signature_________________________________ (Signature must conform in all respects to the name of Warrant Holder as specified on the face of the Warrant, without alteration , enlargement or any change whatsoever.) EX-5.1 5 OPINION 1 Exhibit 5.1 [LOWENSTEIN, SANDLER, KOHL, FISHER & BOYLAN LETTERHEAD] October 31, 1996 Barringer Technologies Inc. 219 South Street New Providence, New Jersey 07974 Dear Sirs: In connection with the registration under the Securities Act of 1933, as amended (the "Act"), of (i) 1,437,500 shares (the "Shares") of the Common Stock, par value $.01 per share (the "Common Stock"), of Barringer Technologies Inc., a Delaware corporation (the "Company"), (ii) 1,437,500 warrants to purchase shares of Common Stock (the "Purchase Warrants"), (iii) 359,375 shares of Common Stock issuable upon the exercise of the Purchase Warrants (together with such indeterminate number of additional shares of Common Stock as may become issuable pursuant to the anti-dilution provisions of the Purchase Warrants, the "Purchase Warrant Shares"), (iv) 125,000 warrants to purchase shares of Common Stock and Purchase Warrants (the "Underwriter's Warrants"), (v) 125,000 shares of Common Stock issuable upon the exercise of the Underwriter's Warrants (together with such indeterminate number of additional shares of Common Stock as may become issuable pursuant to the anti-dilution provisions of the Underwriter's Warrants, the "Underwriter's Warrant Shares"), (vi) 125,000 Purchase Warrants issuable upon the exercise of the Underwriter's Warrants (together with such indeterminate number of additional Purchase Warrants as may become issuable pursuant to the anti-dilution provisions of the Underwriter's Warrants, the "Underwriter's Purchase Warrants"), and (vii) 31,250 shares of Common Stock issuable upon the exercise of the Underwriter's Purchase Warrants (together with such indeterminate number of additional shares of Common Stock as may become issuable pursuant to the anti-dilution provisions of the Underwriter's Purchase Warrants, the "Underwriter's Purchase Warrant Shares"), we have 2 Barringer Technologies Inc. October 31, 1996 Page 2 examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion. Upon the basis of such examination, we advise you that, in our opinion: 1. When the Registration Statement has become effective under the Act, the terms of the issue and sale of the Shares have been duly established in conformity with the Company's Certificate of Incorporation, as amended, so as not to violate any applicable law or result in a breach of any agreement or instrument binding on the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, and the Shares have been duly issued and sold as contemplated in the Registration Statement, the Shares will be validly issued, fully paid and non-assessable. 2. When the Registration Statement has become effective under the Act, the Warrant Agreement relating to the Purchase Warrants has been duly authorized, executed and delivered, the terms of the Purchase Warrants and of their issuance and sale have been duly established in conformity with the Warrant Agreement so as not to violate any applicable law or result in a breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, and the Purchase Warrants have been duly executed and authenticated in accordance with the Warrant Agreement and issued and sold as contemplated by the Registration Statement, the Purchase Warrants will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. 3. When the Registration Statement has become effective under the Act, the terms of the Underwriter's Warrants and of their issuance and sale have been duly established so as not to violate any applicable law or result in a breach of any agreement or instrument binding upon the Company and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company, and the Underwriter's Warrants have been duly executed and authenticated in accordance with the terms of the Underwriter's Warrants and issued and sold as contemplated by the Registration Statement, the Underwriter's Warrants will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. 4. Subject to the opinion set forth in paragraph 2 above, when the Underwriter's Purchase Warrants have been duly issued as contemplated in the Registration Statement upon the due exercise of the Underwriter's Warrants, and the Company has received payment in full of the exercise price therefor, the Underwriter's Purchase Warrants will constitute valid and legally binding obligations of the Company, subject to bankruptcy, insolvency, 3 Barringer Technologies Inc. October 31, 1996 Page 3 fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. 5. When the Purchase Warrant Shares, the Underwriter's Warrant Shares and the Underwriter's Purchase Warrant Shares have been duly issued as contemplated in the Registration Statement and the Warrant Agreement upon the due exercise of the Purchase Warrants, the Underwriter's Warrants and the Underwriter's Purchase Warrants so that the number of shares of Common Stock then outstanding does not exceed the number of shares of Common Stock then authorized, and the Company has received payment in full of the exercise price therefor, the Purchase Warrant Shares, the Underwriter's Warrant Shares and the Underwriter's Purchase Warrant Shares will be duly authorized, validly issued, fully paid and non-assessable. The foregoing opinion is limited to the Federal laws of the United States, the laws of the State of New Jersey and the General Corporation Law of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction. In rendering this opinion, we have relied as to certain matters on information obtained from public officials, officers of the Company and other sources believed by us to be responsible. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to us under the heading "Legal Matters" in the Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A. EX-10.2 6 FORM OF AGRMT. RICHARD ROSENFELD 1 EXHIBIT 10.2 EMPLOYMENT AGREEMENT THIS AGREEMENT, effective as specified herein, between Barringer Technologies Inc., a Delaware corporation (including any of its subsidiaries, collectively the "Company"), located at 219 South Street, New Providence, New Jersey 07974 and ("Executive") residing at . NOW, THEREFORE, in consideration of the terms and mutual undertakings herein contained, it is agreed by and between the Company and Executive as follows: 1. Effective Date and Term of Employment: This Agreement shall become effective on November 1, 1996 and shall supersede any other agreements, if any, now in effect. This Agreement shall remain in effect until the close of business one year from such effective date ("Agreement Expiration Date"); provided, however, that on the Agreement Expiration Date and on each anniversary of the Agreement Expiration Date (a "Renewal Date"), this Agreement shall be renewed for a period of one additional consecutive year unless either the Company or Executive provides written notice to the other party at least ninety (90) days prior to a Renewal Date that the Agreement shall terminate without renewal as of the corresponding Agreement Expiration Date. When the Agreement extends for a period of one additional consecutive year, the Agreement Expiration Date shall also extend by one year. 2. Duties and Responsibilities: 2.1 Executive will continue to serve as of the Company and, as such, shall have such functions, duties and responsibilities, not inconsistent with his title and office, as may be assigned to him by or under the authority of the Board of Directors of the Company, and shall have such authority and power as is necessary or appropriate to carry out his assigned duties. 2.2 During the term of this Agreement the Executive shall, without compensation other than that herein provided, also serve and continue to serve, if and when elected and re-elected, as a director or member of any committee of the Company and as an officer, director and/or member of any committee of any subsidiary or affiliate of the Company. 2.3 During the term of this Agreement the Executive shall devote his full time and undivided attention during normal business hours to the business and affairs of the Company; provided however, that the Executive may engage in charitable, educational, religious, civic and similar types of activities (all of which shall be deemed to benefit the Company), speaking engagements, memberships on the board of directors of other organizations, and similar activities to the extent that such activities do not inhibit or prohibit the performance of his duties hereunder or inhibit or conflict in any material way with the business of the Company. Page 1 of 10 2 2.4 The Executive's principal place of employment shall be at the Company's principal executive offices in New Providence, New Jersey, or at such other location in the New Jersey/New York metropolitan area as the Company may determine to relocate its principal executive offices. 3. Compensation and Benefits: 3.1 For all services rendered by the Executive in any capacity during the term of this Agreement, the Executive shall be paid as compensation a base salary, payable semi-monthly, at the rate of $ per annum ("Base Salary"), which amount shall be reviewed by the Board of Directors annually as of January 1, of each year and which may be increased at the discretion of the Board of Directors. Such increased amount to be referred to hereinafter as Current Salary. 3.2 The Executive shall be eligible to participate in the Company's management cash bonus incentive arrangement from time to time in effect and payable with respect to the immediately preceding full calendar year on or before April 1 of each year; provided that for the purposes of this Section 3.2 the term of this Agreement shall be deemed to have commenced on January 1, 1996. 3.3 During the term of this Agreement the Executive shall be entitled to all benefits, including without limitation, a private office, secretarial, computer and other support services and facilities consistent with his title and office, and to all fringe benefits generally made available to executive officers of the Company. The Executive shall also be entitled to reimbursement in accordance with the policies of the Company, upon proper accounting, of ordinary and necessary expenses and disbursements reasonably incurred by him in the course of his duties, to paid holidays in accordance with the policies of the Company, and to paid vacation of four (4) weeks per year. Should the Executive not use his entire annual vacation, he will be allowed to carry over to the next year up to two (2) weeks of such unused vacation. 4. Employee Benefit Plans: The Executive, his dependents and beneficiaries shall be entitled to participate in all employee benefit plans to which officers of the Company, their dependents and beneficiaries, are entitled during the term of this Agreement, including, without limitation, medical and health insurance and welfare plans, pension plans and other present or equivalent successor plans and practices of the Company for which officers, their dependents and beneficiaries are eligible, and to all payments or other benefits under any such plan or practices subsequent to the term of this Agreement as a result of participation in such plan or practice during the term of this Agreement. 5. Termination of Employment: 5.1 The Executive's employment under this Agreement shall terminate upon the Executive's death or legal incapacity. In such event, the Executive or his legal representative shall be entitled to that portion of his Current Salary accrued to or payable as of the end of the month Page 2 of 10 3 during which such termination occurs. In addition, the Executive or his legal representative shall be entitled to any accrued and unpaid vacation including any allowable carry over, and to the pro-rata portion of any compensation due pursuant to Section 3.2 that is earned in the year of death or legal incapacity. 5.2 The Company, may at its option, terminate the Executive's employment under this Agreement if the Executive shall fail, or if the Board of Directors shall find on the basis of medical evidence reasonably satisfactory to it that the Executive is unable, by virtue or reason of physical injury or physical or mental illness, to perform his duties hereunder on a full-time basis for a period of ninety (90) consecutive days or more during any two hundred seventy (270) day period or that the Executive's group and supplemental long-term disability coverage, if any, as provided by the Company, commences the payment of benefits. In such event, the Executive shall be entitled to that portion of his Current Salary accrued to or payable as of the date of such termination. In addition, the Executive shall be entitled to any accrued and unpaid vacation including allowable carry over, and to the pro-rata portion of any compensation due pursuant to Section 3.2 that is earned in the year of such termination. 5.3 (a) The Company may terminate the Executive's employment hereunder at any time for "cause", which includes but is not limited to the following reasons: i. an act or acts of dishonesty on the part of the Executive constituting a felony or resulting or intended to result directly or indirectly in gains or personal enrichment at the expense of the Company; ii. the continued willful failure by the Executive to perform substantially his duties with the Company (other than any such failure resulting from his incapacity due to physical injury or physical or mental illness) or a continuing material breach by the Executive of his obligations hereunder for a period of thirty (30) days after a demand for substantial performance is delivered to the Executive on behalf of the Board of Directors which specifically identifies the manner in which the Board of Directors believes that the Executive has not substantially performed his duties; iii. willful abuse of corporate power, willful neglect or willful misconduct in the performance of the Executive's duties and obligations to the Company. (b) For purposes of clauses ii and iii of Section 5.3(a), no act, or failure to act, on the part of the Executive shall be considered "willful" unless done or omitted to be done by the Executive without reasonable belief in good faith that his action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to have been done or omitted to have been done by the Executive in good faith and in the best interests of the Company, unless such action by the Board of Directors was taken upon the recommendation of the Executive upon information provided by the Executive which the Executive knew to be false or upon the omission of material facts by the Executive, which facts Page 3 of 10 4 would have been adverse to the Executive's recommendation. In such event, the Executive or his legal representative shall be entitled to that portion of his Current Salary accrued to or payable as of the date of termination. In addition, the Executive shall be entitled to any accrued and unpaid vacation including any allowable carryover. 5.4 The Company may terminate the Executive's employment hereunder at any time, with or without cause, upon at least thirty (30) days prior written notice to the Executive. In such event, the Executive or his legal representative shall be entitled to receive his Current Salary until the applicable Agreement Expiration Date and the pro-rata portion of any compensation due pursuant to Section 3.2 that is earned in the year of such termination. In addition, the Executive shall be entitled to any accrued and unpaid vacation including any allowable carryover. 5.5 The Executive may voluntarily terminate the Executive's employment hereunder at any time without cause upon at least ninety (90) days prior written notice to the Company. Upon receipt of the ninety (90) day notice, the Company may, at its option, terminate the Executive during such ninety (90) day period. In such event, the Executive or his legal representative shall be entitled to that portion of his Current Salary accrued to or payable as of the date of termination. In addition, the Executive shall be entitled to any accrued and unpaid vacation including any allowable carry over. 5.6 The severance payments described in Section 6 ("Severance Award") shall be payable to the Executive if Executive's employment with the Company terminates during the term of this Agreement or, if the Company does not renew this agreement such non-renewal will be deemed to be a termination without cause, or for any of the following reasons: (a) involuntarily, other than pursuant to Sections 5.1, 5.2, 5.3 and 5.5; or (b) voluntarily within 90 days, following: i. any reduction in Executive's Current Salary other than pursuant to a general reduction of Executives' salaries; or ii. any material reduction in the benefits provided to the Executive pursuant to Sections 3.2, 3.3 and 4. It is the intent that this provision will in no way limit the ability of the Company to reasonably alter, which would include a reasonable reduction in benefits on account of a Change in Control without triggering the Severance Award, provided that any such alteration is uniformly applied to all similarly situated executives; or iii. any relocation to which Executive has not agreed to an office of the Company or related entity more than sixty (60) miles from the office where the Executive was located at the time of the Change in Control or any increase in Executive's required travel amounting to a constructive relocation; or Page 4 of 10 5 iv. following a Change in Control, any material reduction in the level of responsibility, position (including status, office, title, reporting relationships or working conditions), authority or duties of the Executive with the Company from that as existed within ninety (90) days preceding the date of Change in Control. The intent of this provision is that the Executive, following a Change in Control, will have a materially comparable position with the Company or a successor or related entity as existed within ninety (90) days preceding the date of Change in Control and that changes in level of responsibility, position, authority or duties which are consistent with the Change in Control will not be construed as constituting a material reduction. If Executive believes that a material change has occurred, Executive shall provide the Company or a successor or related entity with a notice and a reasonable opportunity to cure (not to exceed forty-five (45) business days); or (c). voluntarily within 90 days if, following a Change in Control, the Company or any successor of the Company either announces that it will not honor or cause the Company or any successor of the Company to not honor the terms of this Agreement, or if the Company or any successor of the Company or related entity at any time fails to confirm in writing to Executive, within forty-five (45) business days of a request by the Executive, that it will honor the terms of this agreement. 6. Severance Award: The Severance Award, which shall be in lieu of additional payments under this Agreement, shall consist of the following: 6.1 The Executive will be paid a sum (in equal monthly installments) equal to the product of one month's Current Salary times the number of years, including fractional years, employed by the Company or any of its successor or affiliates not to exceed six (6) months Current Salary; provided that, in the event the Executive's employment is terminated pursuant to Section 5.6(b) or 5.6(c), the Executive will be paid a sum (in equal monthly installments) equal to the product of two months Current Salary times the number of years, including fractional years, employed by the Company or any of its successor or affiliates. Such amount not to exceed twelve (12) months Current Salary. Payments shall commence not later than thirty (30) days after the Executive's date of termination. 6.2 All payments received pursuant to Section 5 or this Section 6 shall be treated as salary for purposes of the Company's 401(k) Savings Plan to the extent permitted by law. 6.3 Any amounts owed to the Company or any of its successors, pursuant to the Employee Stock Option Exercise Plan, shall be canceled as to interest and principal upon return by the Executive of the common stock securing such obligations. 6.4 The Executive will receive continuation of all benefits being provided at the time of termination pursuant to Section 4 for the number of months computed by multiplying the number of full and fractional years employed by the Company times two (2) but not to exceed twelve (12) Page 5 of 10 6 months. 6.5 Following a Change in Control, the Executive will fully vest in any stock options or equity equivalents held by the Executive that are not fully vested and exercisable on the Executive's date of termination. Should any stock option or equity equivalent document contain a Change in Control clause, then such clause shall supercede this clause 6.5. 7. Confidential Information: 7.1 The Executive agrees not to disclose, either while in the Company's employ or at any time thereafter, to any person not employed by the Company or not engaged to render services to the Company, except with the prior consent of the Board of Directors of the Company, any confidential information obtained by him while in the employ of the Company, including, without limitation, information relating to any of the Company's inventions, processes, plans, devices, compilations of information, methods of distribution, customers, client relationships, marketing strategies or trade secrets; provided, however, that this provision shall not apply to any information or data which hereafter becomes public information and shall not preclude the Executive from use or disclosure of information for proper business purposes during the term of his employment or from disclosure required by law or court order. This Section 7.1 shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law upon the Executive in respect of confidential information and trade secrets of the Company. 7.2 The Executive also agrees that, upon leaving the Company's employ, he will not take with him, without the prior written consent of an officer authorized to act in the matter by the Board of Directors of the Company, and he will surrender to the Company, any record, list, drawing, blueprint, specification or other document or property of the Company, together with any copy and reproduction thereof, mechanical or otherwise, which is of a confidential nature relating to the Company, or, without limitation, relating to its or their methods of distribution, client relationships, marketing strategies or any description of inventions, devices or processes, or which was produced, developed or obtained by him or entrusted to him during the course of his employment with the Company. 7.3 Should the Executive breach the terms and conditions of Sections 7.1 and 7.2, then all amounts being paid pursuant to Section 6 shall be terminated. 8. Competition: 8.1 The Executive agrees that he will not engage in Competition, as defined in Section 8.2 below, during the period immediately following the Executive's date of termination for the period over which the Executive is entitled to receive severance payments pursuant to Section 6.1. Should the Executive breach this section all amounts being paid pursuant to Section 6 shall be terminated. 8.2 The word "Competition" for purposes of this Section 8 shall mean (a) directly or Page 6 of 10 7 indirectly, as a principal, partner, agent, director, employee, consultant, or in any other capacity, to engage, participate or become interested in, affiliated with or connected with, or render services to, furnish any aid, assistance or advice to any person, corporation, firm or other organization which is engaged in any business competitive with any type of business conducted by the Company during the term of the Executive's employment (hereinafter a "Competitor"), in any geographical area in which the Company is engaging in business or is soliciting business; provided, however, that in no event shall ownership of less than five (5%) of the outstanding capital stock of a corporation in the management of which the Executive is not active be deemed Competition with the Company within the meaning of this Section 8; or (b) solicit any person who is a customer of the businesses conducted by the Company, or that is solicited by the Company at any time during the term of Executive's employment, to do business with a Competitor; or (c)induce or attempt to persuade any employee of the Company to terminate his employment relationship in order to enter into employment with a Competitor. 9. Injunctive Relief: The Executive acknowledges that monetary damages will not adequately compensate the Company for any violation of Sections 7 and 8 hereof and consents to the entry of an injunction in any court of competent jurisdiction to enforce the provision of Section 7 and 8 hereof. 10. Withholding: Anything to the contrary notwithstanding, all payments required to be made by the Company under this Agreement to the Executive or his estate or beneficiaries shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. 11. Nonassignability: No right or benefit under this Agreement shall be assigned, transferred, pledged or encumbered (a) by the Executive, or (b) by the Company, except that the Company may assign this Agreement and all of its rights hereunder to any entity with which it may merge or consolidate or to which it may sell all or substantially all of its assets provided said entity shall assume (by contract or by operation of law) the Company's obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and the Executive, his heirs and legal representatives. 12. Notices: Any notice, request, or other communication given hereunder shall be in writing and, if given by the Executive to the Company, shall be delivered personally or sent by telefax, by overnight delivery, or by certified or registered mail, postage prepaid, addressed to the Company at its executive offices located at the address hereinabove specified, Attention: President; and, if given Page 7 of 10 8 by the Company to Executive, shall be delivered personally or sent by telefax, by overnight delivery, or by certified or registered mail, postage prepaid, addressed to the Executive at his residence address hereinabove specified. Either party may change the address to which notices, requests and other communications are to be addressed by notice given to the other in accordance with the provisions of this Section 12. Notices, requests and other communications shall be deemed to be given when received, which, in the case of notice given by mail, shall be the time indicated on the receipt thereof. 13. Amendment or Modification; Waiver: No provision of this Agreement may be amended, modified or waived unless such amendment, modification or waiver shall be authorized by the Board of Directors of the Company or any authorized committee of the Board of Directors and shall be agreed to in writing, signed by the Executive and by an officer of the Company thereunto duly authorized. No waiver by either party hereto of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a subsequent breach of such condition or provision or a waiver of a similar or dissimilar provision or condition at the same time or at any prior or subsequent time. 14. Severability: Anything in this Agreement to the contrary notwithstanding: 14.1 In the event that any provision of this Agreement, or portion thereof, shall be determined to be invalid or unenforceable for any reason, in whole or in part, such provision or portion thereof shall be deemed modified to the extent necessary to render it valid while most nearly preserving its original intent, and the remaining provisions of this Agreement and parts of such provision not so invalid or unenforceable shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law; 14.2 Any provision of this Agreement, or portion thereof, which may be invalid or unenforceable in any jurisdiction shall be limited by construction thereof, to the end that such provision, or portion thereof, shall be valid and enforceable in such jurisdiction; and 14.3 Any provision of this Agreement, or portion thereof, which may for any reason be invalid or unenforceable in any jurisdiction shall remain in effect and be enforceable in any jurisdiction in which such provision, or portion thereof, shall be valid and enforceable. 15. Entire Agreement: This Agreement constitutes the entire agreement of the parties to this Agreement with respect to its subject matter, supersedes all prior agreements, if any, of the parties to this Agreement with respect to its subject matter, and may not be amended except as may be provided for in Section 13. Page 8 of 10 9 16. Applicable Law: This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to contracts made and performed in New Jersey. 17. Change in Control: For purposes of this Agreement, "Change in Control" shall be deemed to have occurred if: i. any person, firm or corporation acquires directly or indirectly the Beneficial Ownership (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended) of any voting security of the Company and immediately after such acquisition, the acquirer has Beneficial Ownership of voting securities representing 50% or more of the total voting power of all the then-outstanding voting securities of the Company; ii. the individuals (a) who, as of the date of this Agreement constitute the Board of Directors of the Company (the "Original Directors") or (b) who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of at least 2/3 of the Original Directors then still in office (such Directors being called "Additional Original Directors") or (c)who are elected to the Board and whose election or nomination for election to the Board was approved by a vote of at least 2/3 of the Original Directors and Additional Original Directors then still in office, cease for any reason to constitute at least 3 of the members of the Board; iii. the stockholders of the Company shall approve a merger, consolidation, recapitalization or reorganization of the Company or consummation of any such transaction if stockholder approval is not sought or obtained, other than any such transaction which would result in at least 51% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being Beneficially Owned by holders of the outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to such other continuing holder being not altered substantially in the transaction; or iv. the stockholders of the Company shall approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company's assets (i.e. 50% or more in value of the total assets of the Company). v. the Chief Executive Officer of the Company, at the time of the execution of this Employment Agreement, ceases to be employed by the Company. IN WITNESS WHEREOF, this Agreement has been duly executed by the Executive and on behalf of the Company by its duly authorized officer, all as of the date and year first above written. Page 9 of 10 10 BARRINGER TECHNOLOGIES INC. BY: ------------------------------------- Name: Title: ---------------------------------------- EXECUTIVE Page 10 of 10 EX-10.3 7 FORM OF EMP. AGRMT. KENNETH WOOD 1 EXHIBIT 10.3 EMPLOYMENT AGREEMENT THIS AGREEMENT, effective as specified herein, between Barringer Technologies Inc., a Delaware corporation (including any of its subsidiaries, collectively the "Company"), located at 219 South Street, New Providence, New Jersey 07974 and ("Executive") residing at . NOW, THEREFORE, in consideration of the terms and mutual undertakings herein contained, it is agreed by and between the Company and Executive as follows: 1. Effective Date and Term of Employment: This Agreement shall become effective on November 1, 1996 and shall supersede any other agreements, if any, now in effect. This Agreement shall remain in effect until the close of business one year from such effective date ("Agreement Expiration Date"); provided, however, that on the Agreement Expiration Date and on each anniversary of the Agreement Expiration Date (a "Renewal Date"), this Agreement shall be renewed for a period of one additional consecutive year unless either the Company or Executive provides written notice to the other party at least ninety (90) days prior to a Renewal Date that the Agreement shall terminate without renewal as of the corresponding Agreement Expiration Date. When the Agreement extends for a period of one additional consecutive year, the Agreement Expiration Date shall also extend by one year. 2. Duties and Responsibilities: 2.1 Executive will continue to serve as of the Company and, as such, shall have such functions, duties and responsibilities, not inconsistent with his title and office, as may be assigned to him by or under the authority of the Board of Directors of the Company, and shall have such authority and power as is necessary or appropriate to carry out his assigned duties. 2.2 During the term of this Agreement the Executive shall, without compensation other than that herein provided, also serve and continue to serve, if and when elected and re-elected, as a director or member of any committee of the Company and as an officer, director and/or member of any committee of any subsidiary or affiliate of the Company. 2.3 During the term of this Agreement the Executive shall devote his full time and undivided attention during normal business hours to the business and affairs of the Company; provided however, that the Executive may engage in charitable, educational, religious, civic and similar types of activities (all of which shall be deemed to benefit the Company), speaking engagements, memberships on the board of directors of other organizations, and similar activities to the extent that such activities do not inhibit or prohibit the performance of his duties hereunder or inhibit or conflict in any material way with the business of the Company. Page 1 of 10 2 2.4 The Executive's principal place of employment shall be at the Company's principal executive offices in New Providence, New Jersey, or at such other location in the New Jersey/New York metropolitan area as the Company may determine to relocate its principal executive offices. 3. Compensation and Benefits: 3.1 For all services rendered by the Executive in any capacity during the term of this Agreement, the Executive shall be paid as compensation a base salary, payable semi-monthly, at the rate of $ per annum ("Base Salary"), which amount shall be reviewed by the Board of Directors annually as of January 1, of each year and which may be increased at the discretion of the Board of Directors. Such increased amount to be referred to hereinafter as Current Salary. 3.2 The Executive shall be eligible to participate in the Company's management cash bonus incentive arrangement from time to time in effect and payable with respect to the immediately preceding full calendar year on or before April 1 of each year; provided that for the purposes of this Section 3.2 the term of this Agreement shall be deemed to have commenced on January 1, 1996. 3.3 During the term of this Agreement the Executive shall be entitled to all benefits, including without limitation, a private office, secretarial, computer and other support services and facilities consistent with his title and office, and to all fringe benefits generally made available to executive officers of the Company. The Executive shall also be entitled to reimbursement in accordance with the policies of the Company, upon proper accounting, of ordinary and necessary expenses and disbursements reasonably incurred by him in the course of his duties, to paid holidays in accordance with the policies of the Company, and to paid vacation of four (4) weeks per year. Should the Executive not use his entire annual vacation, he will be allowed to carry over to the next year up to two (2) weeks of such unused vacation. 4. Employee Benefit Plans: The Executive, his dependents and beneficiaries shall be entitled to participate in all employee benefit plans to which officers of the Company, their dependents and beneficiaries, are entitled during the term of this Agreement, including, without limitation, medical and health insurance and welfare plans, pension plans and other present or equivalent successor plans and practices of the Company for which officers, their dependents and beneficiaries are eligible, and to all payments or other benefits under any such plan or practices subsequent to the term of this Agreement as a result of participation in such plan or practice during the term of this Agreement. 5. Termination of Employment: 5.1 The Executive's employment under this Agreement shall terminate upon the Executive's death or legal incapacity. In such event, the Executive or his legal representative shall be entitled to that portion of his Current Salary accrued to or payable as of the end of the month Page 2 of 10 3 during which such termination occurs. In addition, the Executive or his legal representative shall be entitled to any accrued and unpaid vacation including any allowable carry over, and to the pro-rata portion of any compensation due pursuant to Section 3.2 that is earned in the year of death or legal incapacity. 5.2 The Company, may at its option, terminate the Executive's employment under this Agreement if the Executive shall fail, or if the Board of Directors shall find on the basis of medical evidence reasonably satisfactory to it that the Executive is unable, by virtue or reason of physical injury or physical or mental illness, to perform his duties hereunder on a full-time basis for a period of ninety (90) consecutive days or more during any two hundred seventy (270) day period or that the Executive's group and supplemental long-term disability coverage, if any, as provided by the Company, commences the payment of benefits. In such event, the Executive shall be entitled to that portion of his Current Salary accrued to or payable as of the date of such termination. In addition, the Executive shall be entitled to any accrued and unpaid vacation including allowable carry over, and to the pro-rata portion of any compensation due pursuant to Section 3.2 that is earned in the year of such termination. 5.3 (a) The Company may terminate the Executive's employment hereunder at any time for "cause", which includes but is not limited to the following reasons: i. an act or acts of dishonesty on the part of the Executive constituting a felony or resulting or intended to result directly or indirectly in gains or personal enrichment at the expense of the Company; ii. the continued willful failure by the Executive to perform substantially his duties with the Company (other than any such failure resulting from his incapacity due to physical injury or physical or mental illness) or a continuing material breach by the Executive of his obligations hereunder for a period of thirty (30) days after a demand for substantial performance is delivered to the Executive on behalf of the Board of Directors which specifically identifies the manner in which the Board of Directors believes that the Executive has not substantially performed his duties; iii. willful abuse of corporate power, willful neglect or willful misconduct in the performance of the Executive's duties and obligations to the Company. (b) For purposes of clauses ii and iii of Section 5.3(a), no act, or failure to act, on the part of the Executive shall be considered "willful" unless done or omitted to be done by the Executive without reasonable belief in good faith that his action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to have been done or omitted to have been done by the Executive in good faith and in the best interests of the Company, unless such action by the Board of Directors was taken upon the recommendation of the Executive upon information provided by the Executive which the Executive knew to be false or upon the omission of material facts by the Executive, which facts Page 3 of 10 4 would have been adverse to the Executive's recommendation. In such event, the Executive or his legal representative shall be entitled to that portion of his Current Salary accrued to or payable as of the date of termination. In addition, the Executive shall be entitled to any accrued and unpaid vacation including any allowable carryover. 5.4 The Company may terminate the Executive's employment hereunder at any time, with or without cause, upon at least thirty (30) days prior written notice to the Executive. In such event, the Executive or his legal representative shall be entitled to receive his Current Salary until the applicable Agreement Expiration Date and the pro-rata portion of any compensation due pursuant to Section 3.2 that is earned in the year of such termination. In addition, the Executive shall be entitled to any accrued and unpaid vacation including any allowable carryover. 5.5 The Executive may voluntarily terminate the Executive's employment hereunder at any time without cause upon at least ninety (90) days prior written notice to the Company. Upon receipt of the ninety (90) day notice, the Company may, at its option, terminate the Executive during such ninety (90) day period. In such event, the Executive or his legal representative shall be entitled to that portion of his Current Salary accrued to or payable as of the date of termination. In addition, the Executive shall be entitled to any accrued and unpaid vacation including any allowable carry over. 5.6 The severance payments described in Section 6 ("Severance Award") shall be payable to the Executive if Executive's employment with the Company terminates during the term of this Agreement or, if the Company does not renew this agreement such non-renewal will be deemed to be a termination without cause, or for any of the following reasons: (a) involuntarily, other than pursuant to Sections 5.1, 5.2, 5.3 and 5.5; or (b) voluntarily within 90 days, following: i. any reduction in Executive's Current Salary other than pursuant to a general reduction of Executives' salaries; or ii. any material reduction in the benefits provided to the Executive pursuant to Sections 3.2, 3.3 and 4. It is the intent that this provision will in no way limit the ability of the Company to reasonably alter, which would include a reasonable reduction in benefits on account of a Change in Control without triggering the Severance Award, provided that any such alteration is uniformly applied to all similarly situated executives; or iii. any relocation to which Executive has not agreed to an office of the Company or related entity more than sixty (60) miles from the office where the Executive was located at the time of the Change in Control or any increase in Executive's required travel amounting to a constructive relocation; or Page 4 of 10 5 iv. following a Change in Control, any material reduction in the level of responsibility, position (including status, office, title, reporting relationships or working conditions), authority or duties of the Executive with the Company from that as existed within ninety (90) days preceding the date of Change in Control. The intent of this provision is that the Executive, following a Change in Control, will have a materially comparable position with the Company or a successor or related entity as existed within ninety (90) days preceding the date of Change in Control and that changes in level of responsibility, position, authority or duties which are consistent with the Change in Control will not be construed as constituting a material reduction. If Executive believes that a material change has occurred, Executive shall provide the Company or a successor or related entity with a notice and a reasonable opportunity to cure (not to exceed forty-five (45) business days); or (c). voluntarily within 90 days if, following a Change in Control, the Company or any successor of the Company either announces that it will not honor or cause the Company or any successor of the Company to not honor the terms of this Agreement, or if the Company or any successor of the Company or related entity at any time fails to confirm in writing to Executive, within forty-five (45) business days of a request by the Executive, that it will honor the terms of this agreement. 6. Severance Award: The Severance Award, which shall be in lieu of additional payments under this Agreement, shall consist of the following: 6.1 The Executive will be paid a sum (in equal monthly installments) equal to the product of one month's Current Salary times the number of years, including fractional years, employed by the Company or any of its successor or affiliates not to exceed six (6) months Current Salary; provided that, in the event the Executive's employment is terminated pursuant to Section 5.6(b) or 5.6(c), the Executive will be paid a sum (in equal monthly installments) equal to the product of two months Current Salary times the number of years, including fractional years, employed by the Company or any of its successor or affiliates. Such amount not to exceed twelve (12) months Current Salary. Payments shall commence not later than thirty (30) days after the Executive's date of termination. 6.2 All payments received pursuant to Section 5 or this Section 6 shall be treated as salary for purposes of the Company's 401(k) Savings Plan to the extent permitted by law. 6.3 Any amounts owed to the Company or any of its successors, pursuant to the Employee Stock Option Exercise Plan, shall be canceled as to interest and principal upon return by the Executive of the common stock securing such obligations. 6.4 The Executive will receive continuation of all benefits being provided at the time of termination pursuant to Section 4 for the number of months computed by multiplying the number of full and fractional years employed by the Company times two (2) but not to exceed twelve (12) Page 5 of 10 6 months. 6.5 Following a Change in Control, the Executive will fully vest in any stock options or equity equivalents held by the Executive that are not fully vested and exercisable on the Executive's date of termination. Should any stock option or equity equivalent document contain a Change in Control clause, then such clause shall supercede this clause 6.5. 7. Confidential Information: 7.1 The Executive agrees not to disclose, either while in the Company's employ or at any time thereafter, to any person not employed by the Company or not engaged to render services to the Company, except with the prior consent of the Board of Directors of the Company, any confidential information obtained by him while in the employ of the Company, including, without limitation, information relating to any of the Company's inventions, processes, plans, devices, compilations of information, methods of distribution, customers, client relationships, marketing strategies or trade secrets; provided, however, that this provision shall not apply to any information or data which hereafter becomes public information and shall not preclude the Executive from use or disclosure of information for proper business purposes during the term of his employment or from disclosure required by law or court order. This Section 7.1 shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law upon the Executive in respect of confidential information and trade secrets of the Company. 7.2 The Executive also agrees that, upon leaving the Company's employ, he will not take with him, without the prior written consent of an officer authorized to act in the matter by the Board of Directors of the Company, and he will surrender to the Company, any record, list, drawing, blueprint, specification or other document or property of the Company, together with any copy and reproduction thereof, mechanical or otherwise, which is of a confidential nature relating to the Company, or, without limitation, relating to its or their methods of distribution, client relationships, marketing strategies or any description of inventions, devices or processes, or which was produced, developed or obtained by him or entrusted to him during the course of his employment with the Company. 7.3 Should the Executive breach the terms and conditions of Sections 7.1 and 7.2, then all amounts being paid pursuant to Section 6 shall be terminated. 8. Competition: 8.1 The Executive agrees that he will not engage in Competition, as defined in Section 8.2 below, during the period immediately following the Executive's date of termination for the period over which the Executive is entitled to receive severance payments pursuant to Section 6.1. Should the Executive breach this section all amounts being paid pursuant to Section 6 shall be terminated. 8.2 The word "Competition" for purposes of this Section 8 shall mean (a) directly or Page 6 of 10 7 indirectly, as a principal, partner, agent, director, employee, consultant, or in any other capacity, to engage, participate or become interested in, affiliated with or connected with, or render services to, furnish any aid, assistance or advice to any person, corporation, firm or other organization which is engaged in any business competitive with any type of business conducted by the Company during the term of the Executive's employment (hereinafter a "Competitor"), in any geographical area in which the Company is engaging in business or is soliciting business; provided, however, that in no event shall ownership of less than five (5%) of the outstanding capital stock of a corporation in the management of which the Executive is not active be deemed Competition with the Company within the meaning of this Section 8; or (b) solicit any person who is a customer of the businesses conducted by the Company, or that is solicited by the Company at any time during the term of Executive's employment, to do business with a Competitor; or (c)induce or attempt to persuade any employee of the Company to terminate his employment relationship in order to enter into employment with a Competitor. 9. Injunctive Relief: The Executive acknowledges that monetary damages will not adequately compensate the Company for any violation of Sections 7 and 8 hereof and consents to the entry of an injunction in any court of competent jurisdiction to enforce the provision of Section 7 and 8 hereof. 10. Withholding: Anything to the contrary notwithstanding, all payments required to be made by the Company under this Agreement to the Executive or his estate or beneficiaries shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. 11. Nonassignability: No right or benefit under this Agreement shall be assigned, transferred, pledged or encumbered (a) by the Executive, or (b) by the Company, except that the Company may assign this Agreement and all of its rights hereunder to any entity with which it may merge or consolidate or to which it may sell all or substantially all of its assets provided said entity shall assume (by contract or by operation of law) the Company's obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and the Executive, his heirs and legal representatives. 12. Notices: Any notice, request, or other communication given hereunder shall be in writing and, if given by the Executive to the Company, shall be delivered personally or sent by telefax, by overnight delivery, or by certified or registered mail, postage prepaid, addressed to the Company at its executive offices located at the address hereinabove specified, Attention: President; and, if given Page 7 of 10 8 by the Company to Executive, shall be delivered personally or sent by telefax, by overnight delivery, or by certified or registered mail, postage prepaid, addressed to the Executive at his residence address hereinabove specified. Either party may change the address to which notices, requests and other communications are to be addressed by notice given to the other in accordance with the provisions of this Section 12. Notices, requests and other communications shall be deemed to be given when received, which, in the case of notice given by mail, shall be the time indicated on the receipt thereof. 13. Amendment or Modification; Waiver: No provision of this Agreement may be amended, modified or waived unless such amendment, modification or waiver shall be authorized by the Board of Directors of the Company or any authorized committee of the Board of Directors and shall be agreed to in writing, signed by the Executive and by an officer of the Company thereunto duly authorized. No waiver by either party hereto of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a subsequent breach of such condition or provision or a waiver of a similar or dissimilar provision or condition at the same time or at any prior or subsequent time. 14. Severability: Anything in this Agreement to the contrary notwithstanding: 14.1 In the event that any provision of this Agreement, or portion thereof, shall be determined to be invalid or unenforceable for any reason, in whole or in part, such provision or portion thereof shall be deemed modified to the extent necessary to render it valid while most nearly preserving its original intent, and the remaining provisions of this Agreement and parts of such provision not so invalid or unenforceable shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law; 14.2 Any provision of this Agreement, or portion thereof, which may be invalid or unenforceable in any jurisdiction shall be limited by construction thereof, to the end that such provision, or portion thereof, shall be valid and enforceable in such jurisdiction; and 14.3 Any provision of this Agreement, or portion thereof, which may for any reason be invalid or unenforceable in any jurisdiction shall remain in effect and be enforceable in any jurisdiction in which such provision, or portion thereof, shall be valid and enforceable. 15. Entire Agreement: This Agreement constitutes the entire agreement of the parties to this Agreement with respect to its subject matter, supersedes all prior agreements, if any, of the parties to this Agreement with respect to its subject matter, and may not be amended except as may be provided for in Section 13. Page 8 of 10 9 16. Applicable Law: This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to contracts made and performed in New Jersey. 17. Change in Control: For purposes of this Agreement, "Change in Control" shall be deemed to have occurred if: i. any person, firm or corporation acquires directly or indirectly the Beneficial Ownership (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended) of any voting security of the Company and immediately after such acquisition, the acquirer has Beneficial Ownership of voting securities representing 50% or more of the total voting power of all the then-outstanding voting securities of the Company; ii. the individuals (a) who, as of the date of this Agreement constitute the Board of Directors of the Company (the "Original Directors") or (b) who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of at least 2/3 of the Original Directors then still in office (such Directors being called "Additional Original Directors") or (c)who are elected to the Board and whose election or nomination for election to the Board was approved by a vote of at least 2/3 of the Original Directors and Additional Original Directors then still in office, cease for any reason to constitute at least 3 of the members of the Board; iii. the stockholders of the Company shall approve a merger, consolidation, recapitalization or reorganization of the Company or consummation of any such transaction if stockholder approval is not sought or obtained, other than any such transaction which would result in at least 51% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being Beneficially Owned by holders of the outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to such other continuing holder being not altered substantially in the transaction; or iv. the stockholders of the Company shall approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company's assets (i.e. 50% or more in value of the total assets of the Company). v. the Chief Executive Officer of the Company, at the time of the execution of this Employment Agreement, ceases to be employed by the Company. IN WITNESS WHEREOF, this Agreement has been duly executed by the Executive and on behalf of the Company by its duly authorized officer, all as of the date and year first above written. Page 9 of 10 10 BARRINGER TECHNOLOGIES INC. BY: ------------------------------------- Name: Title: ---------------------------------------- EXECUTIVE Page 10 of 10 EX-21 8 LIST OF SUBSIDIARIES OF THE COMPANY 1 EXHIBIT 21 BARRINGER TECHNOLOGIES INC. LIST OF SUBSIDIARIES Name Jurisdiction of Incorporation ---- ----------------------------- Barringer Instruments, Inc. Delaware Barringer Consumer Products, LLC New Jersey Barringer Research Ltd. Ontario, Canada Barringer Europe, SARL France Barringer Instruments UK, Ltd. United Kingdom Barringer Instruments Ltd. Ontario, Canada -----END PRIVACY-ENHANCED MESSAGE-----