EXHIBIT 1.1
SOMANETICS CORPORATION
1,000,000 Common Shares
PLACEMENT AGENCY AGREEMENT
December ___, 2001
XXXXX XXXXXX & CO., INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
SOMANETICS CORPORATION, a Michigan corporation (the "Company"),
proposes to issue and sell an aggregate of 1,000,000 shares (the "Shares") of
its common shares, par value $.01 per share (the "Common Shares"), of the
Company to the public through you (the "Agent") on a "best efforts, all-or-none"
basis (the "Offering"). The words "you" and "your" refer to the Agent.
The Company hereby confirms as follows its agreement with you.
1. Offering; Delivery and Payment.
(a) The Company shall offer the Shares for sale to the public
through you, as Agent, on a "best efforts, all-or-none" basis at an offering
price of $____ per share (the "Offering Price") for a period (the "Offering
Period") commencing on the date hereof and ending on February 28, 2002 (the
"Termination Date"). The Company may extend the Offering Period if all of the
Shares are not sold prior to the Termination Date, and the Offering Period shall
end if all of the Shares are sold prior to the Termination Date. In no event
shall the Offering continue after the Closing (as defined below).
(b) Until all of the Shares have been subscribed and paid for,
all subscription amounts shall be deposited from time to time after the
Effective Date (as defined below), but in no event later than noon on the
business day next following their receipt by the Agent, directly into an escrow
account which shall be established pursuant to the Escrow Agreement of even date
herewith (the "Escrow Agreement") among the Company, the Agent and the Escrow
Agent (as therein defined).
(c) Upon notice by the Escrow Agent that the investors have
deposited the requisite funds in the escrow account, the Company shall instruct
its transfer agent (the "Transfer
Agent") to deliver a certificate(s) evidencing the Shares (or shall
electronically transfer evidence of the Shares) to Depository Trust Company for
the benefit of the purchasers on or prior to the Closing Date (as defined
below).
(d) If all of the Shares have been subscribed for and payment
therefor has been tendered prior to the expiration of the Offering Period, the
Agent promptly shall give written notice to the Company and the Transfer Agent
so indicating and setting forth (i) the amount of the Agent's commission, (ii)
the time and date (which date shall be no later than three (3) business days
after the Effective Date) on which the closing (the "Closing") shall take place
(the "Closing Date"), and (iii) a written statement reflecting each subscription
which identifies, among other things, the name and address of each subscriber,
the number of Shares allocated to each subscriber, and the amount tendered as
payment therefor. The Closing shall take place at the offices of the Agent, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, or at such other place as the
Company shall agree.
(e) At the Closing, (i) the Escrow Agent shall deliver and
remit to the Company from the escrow account the purchase price of such Shares,
less the Placement Agent's Fee (as defined below), in accordance with Section
5(b) of the Escrow Agreement and (ii) the Company shall instruct Depository
Trust Company to credit the accounts of each of the purchasers with the Shares
so purchased.
(f) If all of the Shares are not sold within the Offering
Period (as same may be extended), this Agreement shall terminate, and all
amounts in the Escrow Account shall be returned to the subscribers in accordance
with the Escrow Agreement.
2. Placement Agent Appointment and Compensation. The Company hereby
appoints you, and you hereby agree to act, as exclusive agent to arrange offers
and sales of the Shares on a "best efforts, all-or-none" basis during the
Offering Period. The Company shall pay to you, at the Closing, a placement fee
(the "Placement Agent's Fee") equal to eight percent (8%) of the Offering Price
of all the Shares sold in the Offering. The Company shall also sell to you, at
the Closing, for $100 a five year warrant to purchase 100,000 Common Shares, at
an exercise price equal to 120% of the Offering Price per share, in accordance
with the Warrant Agreement of even date herewith between the Company and you.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to the Agent that:
(a) A registration statement on Form S-1 (Registration No.
333-[ ]) relating to the Shares, including a preliminary prospectus relating to
the Shares and such amendments to such registration statement as may have been
required to the date of this Agreement, has been prepared by the Company under
the provisions of the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
promulgated thereunder and has been filed with the Commission. The Commission
has not issued any order preventing or suspending the use of the Prospectus (as
defined below) or any Preliminary
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Prospectus (as defined below) or instituted or, to the knowledge of the Company,
threatened any proceeding for that purpose. The term "Preliminary Prospectus" as
used herein means a preliminary prospectus relating to the Shares included at
any time as part of the foregoing registration statement or any amendment
thereto before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company pursuant to Rule 424(a) of the Rules
and Regulations. Copies of such registration statement and amendments and of
each related Preliminary Prospectus have been delivered to the Agent. If such
registration statement has not become effective, a further amendment to such
registration statement, including a form of final Preliminary Prospectus,
necessary to permit such registration statement to become effective will be
filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus relating to the Shares
containing information permitted to be omitted at the time of effectiveness by
Rule 430A of the Rules and Regulations will be filed by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations promptly
after execution and delivery of this Agreement. The term "Registration
Statement" means the registration statement at the time such registration
statement becomes or became effective (the "Effective Date"), together with any
registration statement filed by the Company pursuant to Rule 462(b) of the Rules
and Regulations, including all financial statements and schedules and all
exhibits, documents incorporated therein by reference and all information
contained in any final prospectus filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations or in a term sheet described in Rule 434 of
the Rules and Regulations in accordance with Section 5 hereof and deemed to be
included therein as of the Effective Date by Rule 430A of the Rules and
Regulations. The term "Prospectus" means the prospectus relating to the Shares
as first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no such filing is required, the form of final prospectus
relating to the Shares included in the Registration Statement at the Effective
Date. References herein to any document or other information incorporated by
reference in the Registration Statement shall include documents or other
information incorporated by reference in the Prospectus (or if the Prospectus is
not in existence, in the most recent Preliminary Prospectus). References herein
to any Preliminary Prospectus or the Prospectus shall be deemed to include all
documents and information incorporated by reference therein and shall be deemed
to refer to and include any documents and information filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, and so
incorporated by reference, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(b) On the date that any Preliminary Prospectus was filed with
the Commission, the date the Prospectus is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations (if required), at all times
subsequent thereto up to and including the Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement, each Preliminary Prospectus and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment or supplement thereto), including the financial statements
included in the Prospectus, did or will comply in all material respects with all
applicable provisions of the Securities Act and the Rules and Regulations and
did or will contain all material statements required to be stated therein in
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accordance with the Securities Act and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement or any such
amendment did or will contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date, the Prospectus did not or will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The foregoing representations and
warranties in this Section 3(b) do not apply to any statements or omissions made
in reliance on and in conformity with information furnished in writing to the
Company by the Agent specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. There are no contracts or
other documents required to be filed as exhibits to the Registration Statement
by the Securities Act or the Rules and Regulations that have not been so filed.
The documents which are incorporated by reference in any Preliminary Prospectus
or the Prospectus or from which information is so incorporated by reference,
when they became effective or were filed with the Commission, as the case may
be, complied in all material respects with the requirements of the Securities
Act and the Rules and Regulations or the Exchange Act and the rules and
regulations thereunder, as applicable, and did not, when such documents were so
filed, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and any documents so filed and incorporated by reference
subsequent to the Effective Date shall, when they are filed with the Commission,
conform in all material respects with the requirements of the Securities Act and
the Rules and Regulations and the Exchange Act and the rules and regulations
thereunder, as applicable.
(c) The Company has no subsidiaries. The Company does not own
and, at the Closing Date will not own, an interest in any corporation, joint
venture, trust, partnership or other business entity. The Company has been and,
at the Closing Date will be, duly incorporated and validly existing as a
corporation under the laws of the State of Michigan and is, and at the Closing
Date will be, in good standing under the laws of the State of Michigan. The
Company has all corporate power and authority necessary to own its properties
and conduct its business as currently being carried on and as described in the
Registration Statement and Prospectus. The Company is, and at the Closing Date
will be, duly licensed or qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
or use of its property and assets makes such licensing or qualification
necessary. Complete and correct copies of the Company's Restated Articles of
Incorporation and Bylaws, in each case as amended, have been delivered to the
Agent or its counsel, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
(d) The outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable and are not subject to any preemptive or similar rights, and the
holders thereof are not subject to personal liability by reason
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of being such holders. The Shares to be sold hereunder to the public through the
Agent will be duly authorized and, when issued and delivered pursuant to this
Agreement against payment therefor as provided by this Agreement, will be
validly issued, fully paid and nonassessable and will not be subject to any
preemptive or similar rights, and the holders thereof will not be subject to
personal liability by reason of being such holders. The Company has, and, upon
completion of the sale of the Shares, will have, an authorized, issued and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus under the captions "Description of Capital Stock" and
"Capitalization" (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus). The description of the securities of the Company in the
Registration Statement and the Prospectus under the caption "Description of
Capital Stock" (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus) is, and at the Closing Date will be, complete and
accurate in all material respects. Except as set forth or contemplated in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus), the Company does not have
outstanding and, at the Closing Date will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations exchangeable or convertible into, or any contracts or commitments to
issue or sell, any shares of its capital stock or any such options, rights,
warrants, obligations, contracts or commitments. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as contemplated by
this Agreement gives rise to any rights for or relating to the registration of
any Common Shares or other securities of the Company, except such rights as have
been disclosed in the Registration Statement or as have been satisfied, waived
or terminated.
(e) The financial statements and the related notes of the
Company included in the Registration Statement and in the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus) or
incorporated therein by reference comply in all material respects with the
requirements of the Securities Act and the Rules and Regulations, present fairly
the financial condition, results of operations, shareholders' equity and cash
flows of the Company at the dates and for the periods covered thereby and have
been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the entire periods involved
(except as otherwise stated therein), subject to year-end adjustments with
respect to interim information consistent with past practice. Deloitte & Touche
LLP (the "Accountants"), who have reported on those of such financial statements
and related notes which are audited, are independent accountants with respect to
the Company as required by the Securities Act and the Rules and Regulations. The
selected financial information and statistical data set forth under the captions
"Prospectus Summary -- Summary Financial Data" and "Selected Financial Data" in
the Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus) have been prepared on a basis consistent with the
financial statements of the Company.
(f) The Company maintains 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 GAAP and to maintain
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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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(g) Except as set forth or contemplated in the Registration
Statement and Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date (i) there has not been, and will not have been, any material
adverse change in the business, properties, prospects, key personnel, condition
(financial or otherwise), net worth or results of operations of the Company,
(ii) the Company has not, and will not have, incurred any material liabilities
or obligations, direct or contingent, or, entered into any material transactions
not in the ordinary course of business other than pursuant to this Agreement,
(iii) the Company has not, and will not have, paid or declared any dividends or
other distributions of any kind on any class of its capital stock, and (iv)
there has not been, and will not have been, any change in the capital stock, or
a material change in the short-term or long-term debt, or any issuance of
options, warrants, convertible securities or other rights to purchase capital
stock of the Company, other than changes in capital stock and issuances of
rights, options and shares pursuant to the Company's 1983 Stock Option Plan,
1991 Incentive Stock Option Plan, 1993 Director Stock Option Plan and the 1997
Stock Option Plan (collectively, the "Option Plans") or this Agreement.
(h) The Company has good and marketable title to all
properties and assets described in the Registration Statement and Prospectus
(or, if the Prospectus is not in existence, in the most recent Preliminary
Prospectus), as owned by it, free and clear of all liens, security interests,
restrictions, pledges, encumbrances, charges, equities, claims, easements,
leases and tenancies (collectively, "Encumbrances") other than those described
or referred to in the Registration Statement and Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus). The
Company has valid, subsisting and enforceable leases for the properties and
assets described in the Registration Statement and Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary Prospectus) as
leased by it, free and clear of all Encumbrances, other than those described or
referred to in the Registration Statement and Prospectus (or, if the Prospectus
is not in existence, in the most recent Preliminary Prospectus). The Company has
no notice of any claim which has been asserted by anyone adverse to the
Company's rights as lessee or sublessee under the respective lease or sublease,
or affecting or questioning the Company's right to the continued possession of
the leased or subleased premises.
(i) Except as described or referred to in the Registration
Statement or Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus), the Company owns or possesses all patents,
patent applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses, inventions,
trade secrets and other intellectual property rights necessary for the conduct
of the business of the Company as currently carried on and as described in the
Registration Statement and Prospectus
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(or, if the Prospectus is not in existence, in the most recent Preliminary
Prospectus), and except as stated or referred to in the Registration Statement
or Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus), no name which the Company uses and no other aspect of
the business of the Company will involve or give rise to any infringement of or
license or similar fees for, any patents, patent applications, trademarks,
service marks, tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets or other similar rights of
others material to the business or prospects of the Company, and the Company has
not received any notice alleging any such infringement or fee.
(j) Except as set forth or referred to in the Registration
Statement and Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus), there are no actions, suits, arbitrations,
claims, governmental or other proceedings (formal or informal), or
investigations pending or, to the knowledge of the Company, threatened against
or, to the knowledge of the Company, affecting the Company, any of the Company's
officers, directors or shareholders, in its capacity as such, or any of the
properties or assets owned or leased by the Company, before or by any Federal,
state, municipal or foreign court, commission, regulatory body, administrative
agency or other governmental body, including, without limitation, the United
States Food and Drug Administration (the "FDA"), domestic or foreign
(collectively, a "Governmental Body"), which might result in any material
adverse change in the business, properties, prospects, condition (financial or
otherwise), net worth or results of operations of the Company. There are no
actions, proceedings or investigations pending or, to the knowledge of the
Company, threatened by the FDA or any other Governmental Body relating to the
safety, efficacy or recall of any product developed or sold by the Company. The
Company is not in violation of, or in default with respect to, any law, rule or
regulation, or any order, judgment or decree, except as described or referred to
in the Prospectus (or if the Prospectus is not in existence, in the most recent
Preliminary Prospectus) or such as in the aggregate do not now have and can
reasonably be expected in the future not to have a material adverse effect upon
the business, properties, prospects, condition (financial or otherwise), net
worth or results of operations of the Company; nor is the Company presently
required to take any action under any such order, judgment or decree in order to
avoid any such violation or default.
(k) The Company has, and at the Closing Date will have, all
governmental licenses, permits, consents, orders, approvals, franchises,
certificates and other authorizations (collectively, "Licenses") and has made
all requisite declarations, notifications and filings with all Government
Bodies, in each case as are necessary to carry on its business as then currently
conducted and own or lease its properties as contemplated in the Registration
Statement and Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus), and all such Licenses are, and at the Closing
Date will be, in full force and effect. The Company has, and at the Closing Date
will have, complied in all material respects with all laws, regulations and
orders applicable to it or its business, assets and properties. The Company is
not, nor at the Closing Date will it be, in violation of its Restated Articles
of Incorporation or Bylaws, in each case as amended, or in default (nor has any
event occurred which, with notice or lapse of time or both, would constitute a
default) in the due performance and observation of any term, covenant or
condition of any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement,
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bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument (collectively, a "contract or other
agreement") to which it is a party or by which its properties are bound, the
violation of which would individually or in the aggregate have a material
adverse effect on the business, properties, prospects, condition (financial or
otherwise), net worth or results of operations of the Company. There are no
governmental proceedings or actions pending or, to the Company's knowledge,
threatened for the purpose of suspending, modifying or revoking any License held
by the Company and, to the knowledge of the Company, no event has occurred that
allows, or with notice or lapse of time or both would allow, any such
suspension, modification or revocation or any material impairment of the
Company's rights thereunder.
(l) No consent, approval, authorization or order of, or any
filing or declaration with, any Governmental Body is required for the execution,
delivery or performance of this Agreement or for the consummation of the
transactions contemplated hereby or in connection with the sale of the Shares by
the Company, except such as have been obtained and are in full force and effect
and such as may be required under the Securities Act, the Rules and Regulations,
any state securities or Blue Sky laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
Shares to be sold by the Company hereby.
(m) The Company has full power (corporate and other) and
authority to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, and is enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution may be
limited by Federal or state securities laws or the public policy underlying such
laws. Except as disclosed in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, in the most recent Preliminary
Prospectus), the execution, delivery and the performance of this Agreement and
the consummation of the transactions contemplated hereby will not result in the
creation or imposition of any Encumbrance upon any of the properties or assets
of the Company pursuant to the terms or provisions of, or result in a breach or
violation of or conflict with any of the terms or provisions of, or constitute a
default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, (i)
the Restated Articles of Incorporation or Bylaws of the Company, in each case as
amended, or (ii) any contract or other agreement to which the Company is a party
or by which it or any of its assets or properties are bound, or (iii) any
judgment, ruling, decree, order, law, statute, rule or regulation of any
Governmental Body applicable to the Company or its business or properties,
assuming compliance with applicable state securities and Blue Sky laws.
(n) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required
hereby to be delivered to the Agent was or will be, when made, inaccurate,
untrue or incorrect in any material respect. Each certificate signed by an
officer of the Company and delivered to the Agent or counsel for the
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Agent shall be deemed to be a representation and warranty by the Company to the
Agent as to the matters covered thereby.
(o) Neither the Company nor any of its directors, officers or
affiliates (within the meaning of the Rules and Regulations) has taken, nor will
he, she or it take, directly or indirectly, any action designed, or which might
reasonably be expected in the future, to cause or result in, under the
Securities Act or otherwise, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares or otherwise.
(p) The Company is not involved in any material labor dispute
with its employees nor is any such dispute threatened or imminent.
(q) Neither the Company nor, to the Company's knowledge, any
employee or agent of the Company has made any payment of funds of the Company or
received or retained any funds of the Company in violation of any law, rule or
regulation or of a character required to be disclosed in the Registration
Statement and Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus).
(r) The business, operations and facilities of the Company
have been and are being conducted in compliance in all material respects with
all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations or requirements relating to occupational safety
and health, or pollution, or protection of health or the environment (including,
without limitation, those relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants or hazardous or toxic
substances, materials or wastes into ambient air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, gaseous or liquid in nature) of any governmental department, commission,
board, bureau, agency or instrumentality of the United States or any state or
political subdivision thereof, or any foreign jurisdiction, and all applicable
judicial or administrative agency or regulatory decrees, awards, judgments and
orders relating thereto; and the Company has not received any notice from any
Governmental Body or any third party alleging any violation thereof or material
liability thereunder (including, without limitation, liability for costs of
investigating or remediating sites containing hazardous substances and/or
damages to natural resources). The intended use and occupancy of each of the
facilities owned or operated by the Company complies in all material respects
with all applicable codes and zoning laws and regulations, and there is no
pending or, to the Company's knowledge, threatened condemnation, zoning change,
environmental or other proceeding or action that will in any material respect
adversely affect the size of, use of, improvements on, construction on or access
to such facilities.
(s) The Company has filed all foreign, Federal, state and
local tax returns that are required to be filed or has requested extensions
thereof and is not in default in any taxes which were payable pursuant to said
returns.
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(t) Neither the Company nor any of its directors, officers or
employees in such capacity is subject to any order or directive of, or party to
any agreement with, any regulatory agency having jurisdiction with respect to
its business or operations except as disclosed in the Prospectus (or if the
Prospectus is not in existence, in the most recent Preliminary Prospectus).
(u) The Company and each officer and director of the Company
have delivered to the Agent agreements (the "Lockup Agreements") to the effect
that he, she or it will not, for a period of 180 days after the date hereof,
without the prior written consent of the Agent, directly or indirectly, offer,
sell or otherwise dispose (or announce any offer, sale, grant of any option to
purchase or other disposition) of any Common Shares or securities convertible
into, or exercisable or exchangeable for, Common Shares, except pursuant to this
Agreement and except for (i) exercises of options and warrants to acquire Common
Shares, (ii) transfers to the holder's spouse or lineal descendants or
ancestors, natural or adopted (collectively, "Relatives"), or to an inter vivos
trust for the benefit of such holder's Relatives, (iii) transfers upon the death
of such holder pursuant to the laws of descent and distribution or pursuant to
xxxxx or (iv) gifts, provided that, in the case of the foregoing clauses (i)
through (iv), the transferee agrees in writing to be bound by the terms of these
restrictions; and provided further that the Company may grant options and issue
shares pursuant to options granted under the Company's Option Plans and the
Company may issue shares pursuant to warrants outstanding as of the date of this
Agreement.
(v) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the offering and
sale of the Shares other than any Preliminary Prospectus or the Prospectus or
other materials permitted by the Securities Act or the Rules and Regulations to
be distributed by the Company.
(w) The Common Shares of the Company are quoted on The Nasdaq
SmallCap Market.
(x) The Company is not required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(y) The Company has furnished the Agent with true and complete
copies of its report on Form 10-K for the fiscal year ended November 30, 2000,
its Proxy Statement for use in connection with its 2001 Annual Meeting of
Shareholders, its 2000 Annual Report to Shareholders, its reports on Form 10-Q
for the periods ended February 28, 2001, May 31, 2001 and August 31, 2001,
respectively (the "Current Reports"), which Current Reports constitute the only
documents that the Company was required to file with the Commission under the
Exchange Act since November 30, 2000. The Company has also filed all other
reports required to be filed with the Commission prior to November 30, 2000
(such reports, together with the Current Reports are collectively referred to as
the "Commission Reports"). As of their respective filing dates, the Commission
Reports and all other filings made by the Company under the Securities Act or
Exchange Act complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and none of such filings
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or
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necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(z) Since its inception, the Company has not incurred any
material liability resulting from a violation of the provisions of the
Securities Act or any state securities or Blue Sky laws.
(aa) The Company has made available to the Agent a copy of all
premarket notification ("510(k)") and premarket approval ("PMA") concurrence or
clearance letters received from the FDA and all related documents and
information, including device master files and market studies.
(bb) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its business
and the value of its properties.
(cc) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any material liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(dd) Except as disclosed to the Agent or as otherwise provided
in this Agreement, there are no claims, payments, arrangements or
understandings, whether oral or written, for services in the nature of a
finder's or origination fee with respect to the sale of the Shares hereunder.
4. Representations and Warranties of the Agent. In offering the Shares
for sale, the Agent proposes to offer the Shares solely as agent for the Company
for sale to the public upon the terms set forth in the Prospectus. The Agent
represents and warrants to the Company that, assuming compliance by the Company
with all relevant provisions of the Securities Act in connection with the
Registration Statement, the Agent will conduct all offers and sales of the
Shares in compliance with the relevant provisions of the Securities Act and the
Rules and Regulations, all applicable state securities laws and regulations and
the bylaws and rules of the NASD. The Agent represents and warrants to the
Company that the Agent is authorized to enter into this Agreement and to act in
the manner provided in this Agreement.
5. Agreements of the Company. The Company covenants and agrees with the
Agent as follows:
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(a) The Company will not, either prior to the Effective Date
or thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares through the Agent, file
any amendment or supplement to the Registration Statement or the Prospectus,
unless a copy thereof shall first have been submitted to the Agent and the Agent
shall have consented thereto.
(b) If the Registration Statement is not yet effective, the
Company will use its best efforts to cause the Registration Statement to become
effective not later than the time indicated in Section 7(a) hereof. The Company
will notify the Agent promptly, and will confirm such advice in writing, (i)
when the Registration Statement has become effective (if later than the date
hereof) and when any post-effective amendment thereto becomes effective, (ii) of
any request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
suspending the use of any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or the initiation of any proceedings for any
such purpose or the threat thereof, (iv) of the happening of any event during
the period mentioned in the first sentence of Section 5(f) that in the
reasonable judgment of the Company makes any statement of a material fact made
in the Registration Statement or the Prospectus untrue or that requires the
making of any changes in the Registration Statement or the Prospectus in order
to make the statements of material fact therein, in light of the circumstances
in which they are made, not misleading and (v) of receipt by the Company or the
Agent or attorney of the Company during the period mentioned in the first
sentence of Section 5(f) of any other communication from the Commission relating
to the Company, the Registration Statement, any Preliminary Prospectus or the
Prospectus. The Company will use its best efforts to prevent the issuance of any
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or any order suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
and, if any such order is issued, the Company will use its best efforts to
obtain the withdrawal of such order at the earliest possible moment. The Company
will prepare the Prospectus in a form approved by the Agent and will file such
Prospectus pursuant to Rule 424(b) of the Rules and Regulations not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) of the Rules and Regulations. If the Company
has omitted any information from the Registration Statement pursuant to Rule
430A of the Rules and Regulations, the Company will use its best efforts to
comply with the provisions of and make all requisite filings with the Commission
pursuant to Rule 430A of the Rules and Regulations and to notify the Agent
promptly of all such filings.
(c) If, at any time when a Prospectus relating to the Shares
is required to be delivered under the Securities Act, any event has occurred as
a result of which the Prospectus, as then amended or supplemented, would include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or the Registration
Statement, as
-12-
then amended or supplemented, would include any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein
not misleading, or if for any other reason it is necessary at any such time to
amend or supplement the Prospectus or the Registration Statement to comply with
the Securities Act or the Rules and Regulations, the Company will promptly
notify the Agent thereof and, in accordance with Section 5(a) hereof, will
prepare and file with the Commission, at the Company's expense, an amendment to
the Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(d) The Company will furnish to the Agent, without charge, two
signed copies of the Registration Statement and of any post-effective amendment
thereto, including financial statements and schedules, and all exhibits thereto,
other than exhibits incorporated by reference, and will furnish to the Agent,
without charge, copies of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules but without
exhibits.
(e) The Company will comply with all the provisions of all
undertakings contained in the Registration Statement.
(f) On the Effective Date, and thereafter from time to time
for such period as the Prospectus is required by the Securities Act to be
delivered, the Company will deliver to the Agent, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Agent may
reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Agent and by all dealers to whom the
Shares may be sold, both in connection with the offering or sale of the Shares
and for any period of time thereafter during which the Prospectus is required by
law to be delivered in connection therewith. If during such period of time any
event shall occur which in the judgment of the Company or counsel to the Agent
should be set forth in the Prospectus in order to make any statement of a
material fact therein, in the light of the circumstances under which it was
made, not misleading, or in the Registration Statement in order to make any
statement of a material fact therein not misleading, or if it is necessary to
supplement or amend the Prospectus or the Registration Statement to comply with
law, the Company will, in accordance with Section 5(a) hereof, forthwith prepare
and duly file with the Commission an appropriate supplement or amendment thereto
and will deliver to the Agent, without charge, such number of copies thereof as
the Agent may reasonably request.
(g) The Company will (i) take or cause to be taken all such
actions and furnish all such information as the Agent may reasonably request in
order to qualify the Shares for offer and sale under the state securities or
Blue Sky laws of such jurisdictions as the Agent may designate, (ii) continue
such qualifications in effect for as long as may be necessary to complete the
distribution of the Shares but not to exceed one year from the date of this
Agreement and (iii) make such applications, file such documents and furnish such
information as may be required for the purposes set forth in the foregoing
clauses (i) and (ii); provided, that in no event shall the Company be obligated
to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to general service of process or to
taxation in any jurisdiction where it is not now so subject.
-13-
(h) During the period of five years commencing on the
Effective Date, the Company will furnish to the Agent upon request copies of
such financial statements and other periodic and special reports as the Company
may from time to time distribute generally to the holders of any class of its
capital stock and will furnish to the Agent upon request a copy of each annual
or other report it shall be required to file with the Commission.
(i) The Company will make generally available to holders of
its securities, as soon as may be practicable, but in no event later than the
last day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement (which need not be audited
but shall be in reasonable detail) for a period of 12 months commencing after
the Effective Date, and satisfying the provisions of Section 11(a) of the
Securities Act (including Rule 158 of the Rules and Regulations).
(j) The Company will not for a period of 180 days after the
date hereof, without the prior written consent of the Agent, directly or
indirectly, offer, sell or otherwise dispose (or announce any offer, sale, grant
of any option to purchase or other disposition) of any Common Shares or any
securities convertible into, or exercisable or exchangeable for, Common Shares,
except pursuant to Section 1 hereof and except that the Company may grant
options, and issue shares pursuant to the options granted, under the Company's
Option Plans and the Company may issue shares pursuant to warrants outstanding
as of the date of this Agreement.
(k) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the Common
Shares to facilitate the sale or resale of any of the Shares.
(l) The Company shall apply the net proceeds of the sale of
the Shares as set forth in the Prospectus.
(m) The Company shall not invest, or otherwise use, the
proceeds received by the Company from the sale of the Shares through the Agent
in such a manner as would require the Company to register as an investment
company under the Investment Company Act.
(n) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company or if required
by The Nasdaq Stock Market, Inc., a registrar for its Common Shares.
(o) The Company will timely file all such reports, forms or
other documents as may be required from time to time under the Securities Act,
the Rules and Regulations, the Exchange Act, and the rules and regulations
promulgated thereunder, and all such reports, forms and documents filed will
comply in all material respects as to form and substance with the applicable
requirements of the Securities Act, the Rules and Regulations, the Exchange Act,
and the rules and regulations promulgated thereunder.
-14-
6. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Agent, all costs and expenses incident to the
performance of its obligations under this Agreement and the transactions
contemplated by this Agreement, including, but not limited to, costs and
expenses of or relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits thereto, each Preliminary Prospectus, the
Prospectus, any amendment or supplement to the Registration Statement or the
Prospectus, (ii) the preparation and delivery of certificates representing the
Shares, (iii) the printing of this Agreement, (iv) furnishing (including costs
of shipping and mailing) such copies of the Registration Statement, the
Prospectus and any Preliminary Prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Shares through the Agent, (v) the quotation of the Shares on The Nasdaq
Stock Market, (vi) any filings required to be made by the Agent with the NASD,
(vii) the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions designated pursuant to
Section 5(g) hereof, including the reasonable fees, disbursements and other
charges of counsel to the Agent in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (viii)
counsel and accountants to the Company and (ix) the transfer agent, and any
registrar, for the Shares. Whether or not the transactions contemplated by this
Agreement are consummated or if this Agreement shall be terminated by the
Company pursuant to any provisions hereof, the Company will reimburse the Agent
for all of its reasonable and actual documented out-of-pocket expenses incurred
by it in connection with the Offering including, but not limited to, accounting
and legal expenses, payable upon the Agent's request. However, any expenses in
excess of $1,000 will be reimbursed by the Company only if the Company approved
the incurrence of such expenses by the Agent.
7. Conditions to the Obligations of the Agent. The obligations of the
Agent hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Agent not later than 4:00 p.m., New York
time, on the date immediately preceding the date of this Agreement or at such
later date and time as shall be consented to in writing by the Agent and all
filings required prior to such effectiveness by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect, and no proceeding for such purpose shall be
pending before or threatened or contemplated by the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Agent and the
-15-
Agent consented thereto, and the Agent shall have received certificates, dated
the Closing Date, and signed on behalf of the Company by the Chief Executive
Officer of the Company and the Chief Financial Officer of the Company (who may,
as to proceedings threatened, rely upon the best of their information and
belief), to the effect of the foregoing clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise), or
results of operations of the Company, whether or not arising from transactions
in the ordinary course of business, and (ii) the Company shall not have
sustained any material loss or interference with its business, assets or
properties from fire, explosion, flood or other casualty, whether or not covered
by insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, which is not set forth in the Registration
Statement and the Prospectus, if in the judgment of the Agent any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares through the Agent at the public offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers, directors or shareholders in their capacities as such, or any of its
assets or properties, before or by any Governmental Body in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the general affairs, business, properties, prospects, condition
(financial or otherwise), net worth or results of operations of the Company.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the date
hereof, and at the Closing Date, as if made on such date, and all covenants and
agreements contained herein to be performed on the part of the Company and all
conditions contained herein to be fulfilled or complied with by the Company at
or prior to the Closing Date shall have been fully performed, fulfilled or
complied with in all material respects.
(f) The Agent shall have received an opinion, dated the
Closing Date, from Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx LLP, Detroit, Michigan,
counsel for the Company, to the following effect:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of Michigan;
(ii) The description of the Common Shares under the
caption "Description of Capital Stock" in the Prospectus, to the extent that it
constitutes statements of law or legal conclusions, conforms in all material
respects to the terms thereof contained in the Company's Restated Articles of
Incorporation, as amended (the "Articles"). The authorized capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization".
All of the issued and outstanding Common Shares have been, and the Shares, when
issued,
-16-
delivered and paid for in accordance with the terms of this Agreement, will be,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right arising under the Michigan Business
Corporation Act, as amended, the Company's Articles or Bylaws, or any agreement
listed as an Exhibit to the Registration Statement (the "Exhibits"). To such
counsel's actual knowledge, neither the filing of the Registration Statement nor
the offering or sale of the Shares pursuant to this Agreement gives rise to any
rights for the registration of any Common Shares or other securities of the
Company pursuant to any of the Exhibits, except as disclosed in the Registration
Statement, or such rights as have been satisfied, waived or terminated;
(iii) Based solely on such counsel's review of the
minutes of the meetings of the Company's shareholders and board of directors and
committees of the board of directors and a certificate of officers of the
Company (the "Certificate"), except as described in the Registration Statement
and the Prospectus, there are no options, warrants, agreements, contracts or
other rights in existence to purchase or acquire from the Company any shares of
capital stock of the Company;
(iv) The Registration Statement has become effective
under the Securities Act; and, to such counsel's actual knowledge, (i) no stop
order suspending the effectiveness of the Registration Statement or any
amendment thereto has been issued under the Securities Act, and (ii) no
proceedings for that purpose have been instituted, are pending or are threatened
by the Commission under the Securities Act;
(v) The Registration Statement and, if any, each
amendment thereto and the Prospectus and, if any, each amendment and supplement
thereto (except the financial statements, schedules and other financial data
contained therein, as to which such counsel need not express any opinion),
complies as to form in all material respects with the requirements of the
Securities Act and Rules and Regulations;
(vi) The descriptions contained in the Registration
Statement and in the Prospectus under the captions "Risk Factors -- Provisions
of our Articles of Incorporation, Bylaws and corporate law have potential
anti-takeover effects," "Management -- Directors and Executive Officers," and
"-- Compensation," "Description of Capital Stock," and Notes 7, 8, 9 and 11 of
"Notes to Financial Statements" of statutes, contracts and other documents,
insofar as such descriptions relate to matters of law, fairly present in all
material respects summaries of such statutes, litigation, contracts and other
documents;
(vii) To such counsel's actual knowledge, there are
no contracts or documents which are required by the Securities Act to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not so described or filed;
(viii) Based solely on the Certificate and the
results of an inquiry circulated to the partners of such counsel's firm (the
"Inquiry"), such counsel confirms to you that, to such counsel's actual
knowledge, there is not pending or threatened against the Company
-17-
any action, suit, arbitration, claim, governmental or other proceeding (informal
or formal) or investigation before or by any Governmental Body which is required
to be disclosed in the Registration Statement or the Prospectus which is not so
disclosed therein;
(ix) The Company has the corporate power and
authority to execute, deliver and comply with its obligations under this
Agreement and to consummate the transactions provided for herein; and the
execution, delivery and performance by the Company of this Agreement have been
duly authorized by all requisite corporate action on behalf of the Company, and
such counsel shall confirm to you that this Agreement has been executed and
delivered on behalf of the Company by a duly authorized officer of the Company.
(x) If this Agreement were sued upon before a court
of the State of Michigan or before any Federal court with diversity jurisdiction
in the State of Michigan (a "Michigan Court") and assuming that the choice of
the laws of the State of New York ("New York Law") as the law to govern the
obligations of the parties to this Agreement is a valid choice of law under New
York Law, it is such counsel's opinion that, in the context of a properly
presented and argued case under current law, such Michigan Court should give
effect to the parties' choice of law by applying the substantive laws of the
State of New York (rather than the laws of Michigan) in construing and enforcing
those provisions of this Agreement which call for the application of New York
Law, except for (1) the remedy and enforcement provisions in this Agreement, to
the extent that the remedy and enforcement provisions relate to property with
its situs outside the State of New York, (2) such other matters as shall relate
to property having its legal situs outside the State of New York and any matters
relating to the perfection, the effect of perfection or nonperfection and the
priority of security interests in collateral, (3) in rem rights and remedies
under Michigan law, (4) in rem rights and remedies under this Agreement, (5)
procedural matters, (6) revenue or penal laws, and (7) any application of New
York Law that violates a fundamental policy of the State of Michigan. In that
regard, the State of Michigan follows the rule set forth in 1 Restatement
Conflict of Laws, 2d, Section 187, page 561, to the effect that the law chosen
by the parties may not govern their contractual rights and duties if application
of the law of the chosen state would be contrary to a fundamental policy of a
state with a materially greater interest in the issue than the state chosen by
the parties and which, under the rule of Section 188 of the Restatement, would
have been the state of the applicable law absent an effective choice by the
parties. Chrysler v. Skyline, 448 Mich 113 (1995). Nothing has come to such
counsel's attention that would cause such counsel to believe that this
Agreement, in its entirety, would result in a violation of any fundamental
policy of the State of Michigan if the choice of law of the parties were given
effect. However, if this Agreement were stated to be governed by and construed
in accordance with the law of the State of Michigan, or if a Federal court or a
Michigan court were to apply the law of the State of Michigan to this Agreement,
this Agreement would constitute a valid and binding obligation of the Company
and, except for the contribution and indemnification provisions hereof, as to
which such counsel need not express any opinion, would be enforceable against
the Company in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors rights generally or by
general principles of equity relating to the availability of remedies;
-18-
(xi) The execution and delivery of this Agreement by
the Company, and the Company's compliance with the terms of this Agreement (i)
do not result in the creation or imposition of any Encumbrance upon any property
or assets of the Company pursuant to the terms or provisions of, or constitute a
breach of, or default under, any material contract or other material agreement
included as an Exhibit to the Registration Statement, and (ii) do not violate
(A) the Articles or Bylaws of the Company, (B) any laws which are known to such
counsel to be applicable to the Company where such violation would reasonably be
expected to have a material adverse effect on the validity, performance or
enforceability of any of the terms of this Agreement applicable to the Company
or relating to the rights and remedies of the Agent under this Agreement, or (C)
based solely on the Certificate and the Inquiry, any of the Company's existing
obligations under any judgment, decree or order of any arbitrator or
Governmental Body naming the Company; no consent, approval, authorization or
order of, or filing with, any Governmental Body is legally required for the
execution, delivery and performance of this Agreement by the Company, except
such as may be required under the Securities Act and the Rules and Regulations,
such as may be required by the bylaws and rules of the NASD in connection with
the purchase and distribution through the Agent of the Shares and such as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution through the Agent of the Shares;
(xii) To such counsel's actual knowledge, the Company
is not in any breach or violation of any of the terms or provisions of, or in
default under (nor has an event occurred which with notice or lapse of time or
both would constitute a default or acceleration under), the terms of its
Articles or Bylaws, in each case as amended;
(xiii) To such counsel's actual knowledge, the
Company is not an "investment company" as such term is defined in the Investment
Company Act.
In addition, such counsel shall state that, such counsel has
participated in the preparation of the Registration Statement and the Prospectus
and nothing has come to such counsel's attention that causes such counsel to
believe that the Registration Statement as of the Effective Date and as of the
date of such opinion contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus as of the date thereof and as of the date of such opinion, contained
or contains any untrue statement of a material fact or omitted 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 (it being understood that such counsel need not make any
statement with respect to the financial statements, schedules and other
financial data included in the Registration Statement or the Prospectus).
In rendering any such opinion, such counsel may (i) state that such
counsel expresses no opinion as to the laws of any jurisdiction other than the
laws of the State of Michigan and the Federal laws of the United States and
expresses no opinion concerning the FD&C Act (as defined below) or related rules
and regulations or any intellectual property law and (ii) may rely, as to
matters of fact, on certificates of responsible officers of the Company and
public officials.
-19-
References to the Registration Statement and the Prospectus in this
paragraph (f) shall include any amendment or supplement thereto at the date of
such opinion.
(g) The Agent shall have received an opinion, dated the
Closing Date, from Xxxxx & Xxxxxxx L.L.P, Washington, D.C., special FDA counsel
for the Company, to the following effect:
(i) The statements in the Prospectus under the
captions "Risk Factors -- We are subject to extensive government regulation and
could be adversely affected by those regulations" and "Business -- Government
Regulation," insofar as such statements purport to summarize applicable
provisions of the Federal Food, Drug, and Cosmetic Act (the "FD&C Act") and the
regulations promulgated thereunder, are accurate summaries in all material
respects of the provisions purported to be summarized under such captions in the
Prospectus; and
(ii) There are no FDA enforcement actions or
proceedings pending or, to such counsel's knowledge, threatened, against the
Company.
In addition such counsel shall state that, during the course of
preparation of the Registration Statement such counsel participated in certain
discussions with certain officers and employees of the Company as to the FDA
regulatory matters dealt with under the captions "Risk Factors -- We are subject
to extensive government regulation and could be adversely affected by those
regulations" and "Business -- Government Regulation" in the Prospectus. While
such counsel has not undertaken to determine independently, and does not assume
any responsibility for, the accuracy, completeness or fairness of the statements
under such captions in the Prospectus, such counsel may state on the basis of
these discussions and its activities as special FDA regulatory counsel to the
Company in connection with such counsel's review of the statements contained in
such captioned sections that no facts have come to such counsel's attention that
cause such counsel to believe that the statements in the Prospectus under the
captions "Risk Factors -- We are subject to extensive government regulation and
could be adversely affected by those regulations" and "Business -- Government
Regulation," insofar as such statements relate to FDA regulatory matters, at the
time the Registration Statement became effective, contained an untrue statement
of material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that as of
the date of such opinion, contains an untrue statement of material fact or omits
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may (i) state that such
counsel expresses no opinion as to the laws of any jurisdiction other than the
Federal laws of the United States or as to any laws other than the FD&C Act and
the regulations promulgated thereunder and (ii) may rely, as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and public officials and, as to matters involving the application
of laws of any other jurisdiction than the United States.
-20-
References to the Registration Statement and the Prospectus in this
paragraph (g) shall include any amendment or supplement thereto at the date of
such opinion.
(h) The Agent shall have received an opinion, dated the
Closing Date, from Price, Heneveld, Xxxxxx, XxXxxx & Xxxxxx, Grand Rapids,
Michigan, special counsel for the Company, to the following effect:
(i) The statements set forth in the Registration
Statement and the Prospectus pertaining to this offering, under the captions
"Risk Factors -- Others have patents in our field; we could be adversely
affected if we are involved in infringement litigation; our intellectual
property rights might not provide us with competitive advantages" and "Business
-- Proprietary Rights Information" (the "Intellectual Property Portion"),
comprise accurate summaries in all material respects of the provisions purported
to be summarized under such captions, and of any legal matters referred to
therein;
(ii) As of (i.e., on) the date of such opinion, the
Company is recorded in the records of the United States Patent and Trademark
Office as the sole owner or assignee of record of each of the issued patents
noted on an appendix to such opinion (the "Patents"), and each of the patent
applications noted on such appendix was so assigned and recorded at the time of
filing (the "Patent Applications"). To the actual knowledge of such counsel,
there have not been any subsequent recorded assignments and there is no
litigation pending or stated to be threatened (whether orally or in writing) by
any person relating to the ownership of the Patents or Patent Applications, no
material defects of form in the preparation or filing of the Patent Applications
and the applications which led to the Patents and, unless otherwise noted on
such appendix, none of the Patent Applications are on this date under final
rejection; and
(iii) To such counsel's actual knowledge, there is no
material litigation pending or stated to be threatened (whether orally or in
writing) against the Company at this time alleging that any of the Company's
products infringe any patent, copyright, trademark, trade secret or other
intellectual property rights of any third party and no material litigation
pending or stated to be threatened (whether orally or in writing) against the
Company at this time relating to the Patents, the Patent Applications, or to any
copyright, trademark, trade secret or other intellectual property right owned by
the Company.
In rendering any such opinion, such counsel may (i) state that such
counsel expresses no opinion as to the laws of any jurisdiction other than the
United States, or as to any laws other than the Federal intellectual property
laws of the United States and (ii) may rely, as to matters of fact, on
certificates of responsible officers of the Company and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (h) shall include any amendment or supplement thereto at the date of
such opinion.
(i) The Agent shall have received an opinion, dated the
Closing Date, from Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, counsel to the Agent,
which opinion shall be satisfactory in all respects to the Agent.
-21-
(j) Concurrently with the execution and delivery of this
Agreement, or, if the Company elects to rely on Rule 430A of the Rules and
Regulations, on the date of the Prospectus, the Accountants shall have furnished
to the Agent a letter, dated the date of its delivery (the "Original Letter"),
addressed to the Agent and in form and substance satisfactory to the Agent, to
the effect that:
(i) They are independent certified public accountants
with respect to the Company within the meaning of the Securities Act, the Rules
and Regulations, the Exchange Act and the rules and regulations thereunder;
(ii) In their opinion, the audited financial
statements and schedules examined by them and included in the Registration
Statement, or incorporated therein by reference, and in the Prospectus comply as
to form in all material respects with the applicable accounting requirements of
the Securities Act, the Rules and Regulations, the Exchange Act and the rules
and regulations promulgated thereunder;
(iii) On the basis of a reading of the latest
available interim unaudited financial statements of the Company, carrying out
certain specified procedures (which do not constitute an audit made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the comments set
forth in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof of the Company
and inquiries of certain officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that caused
them to believe that at a specific date not more than five business days prior
to the date of such letter, there were any changes in the shares of capital
stock or long-term indebtedness of the Company, in each case compared with
amounts shown on the November 30, 2000 balance sheet included in the
Registration Statement and the Prospectus, or for the period from December 1,
2000 to such specified date there were any decreases, as compared with the
corresponding period of the preceding fiscal year, in net revenues, except in
all instances for changes, decreases or increases set forth in such letter or as
set forth in or contemplated in the Prospectus; and
(iv) They have carried out certain specified
procedures, not constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the general
accounting records of the Company and are included in its Annual Report on Form
10-K for the fiscal year ended November 30, 2000 and have compared such amounts,
percentages and financial information with such records of the Company and with
information derived from such records and have found them to be in agreement,
excluding any questions of legal interpretation.
In the event that the letter referred to above sets forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Agent that (A) such letters shall, if requested by the Agent,
be accompanied by a written explanation of the Company as to the significance
thereof and (B) such changes, decreases or increases do not, in the sole
judgment of the Agent, make it impractical or inadvisable to proceed with the
sale and delivery of the Shares as contemplated by the Registration Statement,
as amended as of the date hereof.
-22-
At the Closing Date, the Accountants shall have furnished to the Agent
a letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the Original Letter, that
nothing has come to their attention during the period from the date of the
Original Letter referred to in the prior sentence to a date (specified in such
letter) not more than five days prior to the Closing Date, which would require
any change in the Original Letter if it were required to be dated and delivered
at the Closing Date.
(k) At the Closing Date, there shall be furnished to the Agent
an accurate certificate, dated the date of its delivery, signed on behalf of the
Company by each of the Chief Executive Officer and the Chief Financial Officer
of the Company, in form and substance satisfactory to the Agent, to the effect
that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and (A) as of the date of
such certificate, (x) neither the Registration Statement, nor any amendment or
supplement thereto, if any, contains any 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 (y) neither the
Prospectus, nor any amendment or supplement thereto, if any, contains any 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, in light of
the circumstances under which they were made, not misleading, and (B) since the
Effective Date, no event has occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect;
(ii) Each of the representations and warranties of
the Company contained in this Agreement were, when originally made, and are, at
the time such certificate is delivered, true and correct in all material
respects; each of the covenants required herein to be performed by the Company
on or prior to the date of such certificate has been duly, timely and fully
performed in all material respects and each condition herein required to be
complied with by the Company on or prior to the delivery of such certificate has
been duly, timely and fully complied with in all material respects.
(iii) The Registration Statement has become effective
and no stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto and no order directed at any document
incorporated by reference in the Registration Statement or any amendment thereto
or the Prospectus has been issued, and no proceedings for that purpose have been
instituted or, to the Company's knowledge, are threatened or contemplated by the
Commission.
(l) The Shares shall have been qualified for sale in such
states as the Agent may reasonably designate and each such qualification shall
be in full force and effect and not subject to any stop order or other
proceeding on the Closing Date.
(m) The Agent shall have received at or prior to the Closing
Date from Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP a memorandum or summary, in form and
substance satisfactory
-23-
to the Agent, with respect to the qualification for offering and sale through
the Agent of the Shares under the state securities or Blue Sky laws of such
jurisdictions as the Agent may reasonably have designated to the Company.
(n) The Company shall have filed a Nasdaq SmallCap Market
Notification Form for the listing of the Shares and shall not have received any
notice of delisting of any Common Shares.
(o) The Lockup Agreements shall be in full force and effect.
(p) The Company shall have furnished to the Agent such
certificates, letters and other documents, in addition to those specifically
mentioned herein, as the Agent may have reasonably requested as to the accuracy
and completeness at the Closing Date of any statement in the Registration
Statement or the Prospectus, as to the accuracy at the Closing Date of the
representations and warranties of the Company, as to the performance by the
Company of its obligations under this Agreement or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the Agent.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.
If any of the conditions hereinabove provided for in this Section 7
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Agent hereunder may be terminated by the Agent
by notifying the Company of such termination in writing at or prior to the
Closing Date.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Agent, the directors, officers, employees and agents of the Agent and each
person, if any, who controls the Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages or liabilities, joint or several (and actions in respect
thereof), to which they, or any of them, may become subject under the Securities
Act or other Federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any misrepresentation or breach of
warranty made by the Company in Section 3 of this Agreement, (ii) any untrue
statement or alleged untrue statement of any material fact contained in (A) any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or (B)
any application or other document, or any amendment or supplement thereto,
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 Shares
under the securities or Blue Sky laws thereof or filed with the Commission, the
NASD or any securities association or securities exchange (each, an
"Application"), or (iii)
-24-
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or any Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse, as incurred, the Agent and each such other
person for any legal or other expenses reasonably incurred by the Agent or such
other person in connection with investigating, defending or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
an untrue statement or omission or alleged untrue statement or omission in any
of such documents made or omitted to be made in reliance upon and in conformity
with information furnished by the Agent in writing to the Company by the Agent
expressly for inclusion therein; provided, further, that such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of the
Agent (or any such other person) through whom the person asserting any such
loss, claim, damage, liability or action purchased Shares which are the subject
thereof to the extent that any such loss, claim, damage or liability (i) results
from the fact that the Agent failed to send or give a copy of the Prospectus (as
amended or supplemented) to such person at or prior to the confirmation of the
sale of such Shares to such person in any case where such delivery is required
by the Securities Act and (ii) arises out of or is based upon an untrue
statement or omission of a material fact contained in such Preliminary
Prospectus that was corrected in the Prospectus (or any amendment or supplement
thereto), unless such failure to deliver the Prospectus (as amended or
supplemented) was the result of noncompliance by the Company with Section 5(f)
hereof. This indemnity agreement will be in addition to any liability that the
Company might otherwise have. The Company will not, without the prior written
consent of the Agent, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not the
Agent or any person who controls the Agent within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act is a party to each claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of the Agent and each such other person from
all liability arising out of such claim, action, suit or proceeding.
(b) The Agent will indemnify and hold harmless the Company,
the directors, officers, employees and agents of the Company and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any and all losses, claims,
damages or liabilities, joint or several (and actions in respect thereof), to
which they, or any of them, may become subject under the Securities Act or other
Federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or any Application, or (ii) the omission or the
alleged omission to state in the Registration Statement, any Preliminary
Prospectus or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or any Application, a material fact required to be
stated therein or necessary to make the statements
-25-
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made or omitted to be made in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly for use
therein; and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, the Company and each such other person for
any legal or other expenses reasonably incurred by the Company and each such
other person in connection with investigating, defending or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or any action in respect thereof. The Company acknowledges that, for all
purposes under this Agreement, the statements set forth under the heading "Plan
of Distribution" and the information set forth in the last paragraph on the
front cover page (insofar as such information relates to the Agent) constitute
the only information furnished in writing to the Company by the Agent expressly
for inclusion in the Registration Statement, any Preliminary Prospectus or the
Prospectus. This indemnity agreement will be in addition to any liability that
the Agent might otherwise have. The Agent will not, without the prior written
consent of the Company, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not the
Company or any person who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act is a party to each
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of the Company and each such other
person from all liability arising out of such claim, action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
or parties under this Section 8, notify such indemnifying party or parties of
the commencement thereof; but the omission so to notify the indemnifying party
or parties will not relieve it or them from any liability which it or they may
have to any indemnified party under the foregoing provisions of this Section 8
or otherwise unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against an indemnified party, the indemnifying party or
parties against which a claim is made will be entitled to participate therein
and, to the extent that it or they may wish, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party or parties and the indemnified party shall have
reasonably concluded that there may be one or more legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party or parties, the indemnifying party or
parties shall not have the right to direct the defense of such action on behalf
of such indemnified party or parties and such indemnified party or parties shall
have the right to select separate counsel to defend such action on behalf of
such indemnified party or parties. After notice from the indemnifying party or
parties to such indemnified party of its or their election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party or parties will not be liable to such
indemnified party under this Section 8 for any legal or other expenses other
than reasonable costs of investigation subsequently incurred by such
-26-
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party or parties shall not be
liable for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Agent in the case of paragraph (a) of this Section 8,
representing the indemnified parties under such paragraph (a) who are parties to
such action or actions), or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party or parties. After such notice from the indemnifying party
or parties to such indemnified party, the indemnifying party or parties will not
be liable for the costs and expenses of any settlement of such action effected
by such indemnified party without the consent of the indemnifying party or
parties.
(d) If the indemnification provided for in the foregoing
paragraphs of this Section 8 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties, on the one hand, and the indemnified party, on the other, from the
offering of the Shares or (ii) if, but only if, the allocation provided by the
foregoing clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the indemnifying party or parties on
the one hand, and the indemnified party, on the other, in connection with the
statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Agent, on the other, shall be deemed to
be in the same proportion as the total proceeds from the offering of the Shares
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by the Agent, in each case as set forth in the table on
the cover page of the Prospectus. Relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Agent, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Agent agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities (or actions in respect thereof) referred to above
in this Section 8(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), the Agent shall not be required to contribute any amount in excess
of the amount by which the discounts and commissions applicable to the Shares
sold
-27-
through the Agent exceeds the amount of any damages that the Agent has otherwise
been required to pay in respect of the same or any substantially similar claim.
Notwithstanding the provisions of this Section 8(d), the Company shall not be
required to contribute any amount in excess of the amount by which the total
proceeds received by it from the sale of the Shares under this Agreement, before
deducting expenses, exceeds the aggregate amount of any damages that the Company
has otherwise been required to pay in respect of the same or any substantially
similar claim. No person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8(d), each person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act will have the same rights to contribution as the
Agent, and each director of the Company, each officer of the Company who signed
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, will have the same rights to contribution as the Company, subject
in each case to the provisions of this Section 8(d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made under this Section 8(d), notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation(s) it or they may have hereunder or otherwise than under this
Section 8(d), or to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may otherwise have.
No party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be unreasonably
withheld).
9. Termination. The obligations of the Agent under this Agreement may
be terminated at any time prior to the Closing Date by notice to the Company
from the Agent, without liability on the part of the Agent to the Company, if,
prior to delivery and payment for the Shares (i) the Company shall have failed,
refused or been unable, at or prior to the Closing Date, to perform all
obligations on its part to be performed under this Agreement, (ii) any of the
representations or warranties of the Company are not accurate in any respect,
(iii) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have occurred any
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise), net worth or results
of operation, whether or not arising in the ordinary course of business, (iv)
trading in the Common Shares or securities generally shall have been suspended
by the Commission or by The Nasdaq Stock Market, (v) minimum or maximum prices
shall have been established for the Common Shares or securities generally on
either The Nasdaq Stock Market or the New York Stock Exchange, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by any such market
or exchange or by order of the Commission or any court or other governmental
authority, (vi) a general banking moratorium shall have been declared by the
United States or New York State authorities, (vii) there shall have been
enacted, published, decreed or otherwise promulgated any statute, regulation,
rule or order of any court or other Governmental Body which in the opinion
-28-
of the Agent materially and adversely affects or may materially and adversely
affect the business or operations of the Company or (viii) any material adverse
change in the financial or securities markets in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred, the effect of any of which is such as to make it, in the sole judgment
of the Agent, impracticable or inadvisable to market the Shares on the terms and
in the manner contemplated by the Prospectus. This Agreement may also be
terminated as provided in Section 7 of this Agreement. Any termination pursuant
to this Section 9 shall be without liability of any party to any other party
except as provided in Sections 6 and 8 hereof.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company and the Agent
pursuant to this Agreement shall remain in full force and effect, regardless of
(i) any investigation made by or on behalf of the Company, any of its officers
or directors, the Agent or any controlling person referred to in Section 8
hereof and (ii) delivery of and payment for the Shares. The respective
agreements, covenants, indemnities and other statements set forth in Sections 6
and 8 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, 0000 Xxxx
Xxxxx Xxxx, Xxxx, Xxxxxxxx 00000-0000, Attention: Chief Executive Officer,
Telephone: (000) 000-0000 and Facsimile: (000) 000-0000, with a copy to Xxxxxxxx
Xxxxxx Xxxxxxxx and Xxxx LLP, 0000 Xxxxx Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx
00000-0000, Attention: Xxxxxx X. Xxxxxxx, Esq., Telephone: (000) 000-0000 and
Facsimile: (000) 000-0000 or (b) if to the Agent, at the offices of Xxxxx Xxxxxx
& Co., Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 Attention: Xx.
X. Xxxxx Xxxxxx, Telephone: (000) 000-0000 and Facsimile: (000) 000-0000, with a
copy to Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxxx Xxxxxxxxxx, Esq., Telephone: (212)
000-0000 and Facsimile: (000) 000-0000. Any such notice shall be effective only
upon receipt. Any notice under Section 8 or 9 hereof may be made by telephone or
facsimile but if so made shall be subsequently confirmed in writing.
12. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the Agent, the Company and their respective successors and legal
representatives, and nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that (i) the indemnities of the
Company contained in Section 8 of this Agreement shall also be for the benefit
of any person or persons who control the Agent within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act and (ii) the indemnities
of the Agent contained in Section 8 of this Agreement shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement and any person or persons who control the
Company within the meaning
-29-
of Section 15 of the Securities Act or Section 20 of the Exchange Act. No
purchaser of Shares through the Agent shall be deemed a successor because of
such purchase. This Agreement shall not be assignable by any party hereto
without the prior written consent of the other parties.
13. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
14. Submission to Jurisdiction. The Company hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of the Supreme Court of the State of New York sitting
in New York County (including its Appellate Division), and of any other
appellate court in the State of New York, for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. The Company irrevocably waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
15. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior arrangements and understandings, both written and oral, expressed or
implied, with respect thereto, including, without limitation, the engagement
letter between us dated as of November 8, 2001.
16. Severability. It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this Agreement would be
held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, will be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it will,
as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
17. Headings. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Remainder of page intentionally left blank.]
-30-
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Agent.
Very truly yours,
SOMANETICS CORPORATION
By:________________________________________
Name:
Title:
Confirmed as of the date first
above mentioned:
XXXXX XXXXXX & CO., INC.
By:_________________________________
A. Xxxxx Xxxxxx
Chairman and Chief Executive Officer
-31-
