EXHIBIT 1.1
1,600,000 Shares*
Boston Biomedica, Inc.
Common Stock
UNDERWRITING AGREEMENT
___________, 1996
XXXXX XXXXX & SON INCORPORATED
XXXXXXX BROS., L.P.
c/o Xxxxx Xxxxx & Son Incorporated
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Boston Biomedica, Inc., a Massachusetts corporation (the "COMPANY"),
proposes to issue and sell 1,600,000 shares (the "FIRM SHARES") of Common Stock
of the Company, $.01 par value (the "COMMON STOCK"), to you (the "UNDERWRITERS")
as set forth on Schedule I hereto. In addition, the Company has agreed to grant
to you an option (the "OPTION") to purchase up to an additional 240,000 shares
of Common Stock (the "OPTION SHARES") on the terms and for the purposes set
forth in Section 1(b) below. The Firm Shares and the Option Shares are referred
to collectively herein as the "SHARES."
It is understood that, subject to the conditions hereinafter stated,
the Firm Shares will be sold to you. The Company confirms its agreement with the
Underwriters as follows:
--------
* Plus an option to purchase up to an additional 240,000 shares to cover over-
allotments.
1. AGREEMENT TO SELL AND PURCHASE
a. On the basis of the representations, warranties and agreements
herein contained and subject to all the terms and conditions of this Agreement,
(i) the Company agrees to issue and sell the Firm Shares to the several
Underwriters and (ii) each of the Underwriters, severally and not jointly,
agrees to purchase from the Company the respective number of Firm Shares set
forth opposite that Underwriter's name in Schedule I hereto, at the purchase
price of $______ for each Firm Share.
b. Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to purchase, severally and
not jointly, up to the maximum number of Option Shares at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement upon
written or telegraphic notice (the "OPTION SHARES NOTICE") by the Underwriters
to the Company no later than 12:00 noon, New York City time, at least two and no
more than three business days before the date specified for closing in the
Option Shares Notice (the "OPTION CLOSING DATE"), setting forth the aggregate
number of Option Shares to be purchased and the time and date for such purchase.
On the Option Closing Date, the Company will sell to the Underwriters the number
of Option Shares set forth in the Option Shares Notice, and each Underwriter
will purchase such percentage of the Option Shares as is equal to the percentage
of the Firm Shares that such Underwriter is purchasing, as adjusted by the
Underwriters in such manner as they deem advisable to avoid fractional shares.
c. Subject to the terms and conditions herein set forth, on the Closing
Date (as defined below), the Company shall issue to Xxxxx Xxxxx & Son
Incorporated ("XXXXX XXXXX") and Xxxxxxx Bros., L.P., in their individual
capacity, warrants in the form attached hereto as Exhibit A (the
"REPRESENTATIVES' WARRANTS") to purchase ___________ and __________ shares of
Common Stock, respectively [an aggregate of 160,000 shares], at an exercise
price equal to 135% of the price per Firm Share.
-2-
2. DELIVERY AND PAYMENT
Delivery of the Firm Shares shall be made to the Underwriters against
payment of the purchase price by certified or official bank check payable in New
York Clearing House (next-day) funds to the order of the Company at the offices
of Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 a.m., New York Time, on the third (or, if the Firm Shares are priced, as
contemplated by Rule 15c6-1(c) under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), after 4:30 p.m. New York Time, the fourth) full
business day following the commencement of the offering contemplated by this
Agreement, or at such time on such other date, not later than five business days
after the date of this Agreement, as may be agreed upon by the Company and the
Underwriters (such date is hereinafter referred to as the "CLOSING DATE").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the Underwriters
shall request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or the sale
to such Underwriter of the Shares sold by such entity.
-3-
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents, warrants and covenants to each Underwriter
that:
a. A registration statement (Registration No. 333-10759) on Form S-1
relating to the Shares, including a preliminary prospectus 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 "ACT"), and the rules and regulations
(collectively referred to as the "RULES AND REGULATIONS") of the Securities and
Exchange Commission (the "COMMISSION") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a preliminary
prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations
included at any time as part of the registration statement. Copies of such
registration statement, amendments and exhibits thereto and of each related
preliminary prospectus have been delivered to the Representatives. If such
registration statement has not become effective, a further amendment to such
registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective will be filed promptly by
the Company with the Commission. If the registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule 424(b)
of the Rules and Regulations. The term "REGISTRATION STATEMENT" means the
registration statement as amended at the time it becomes or became effective
(the "EFFECTIVE DATE"), including financial statements and all exhibits and any
information deemed to be included by Rule 430A. If an abbreviated registration
statement is prepared and filed with the Commission in accordance with Rule
462(b) under the Act (an "ABBREVIATED REGISTRATION STATEMENT"), the term
"Registration Statement" as used in this Agreement includes the Abbreviated
Registration Statement. The term "PROSPECTUS" means (i) if the Company relies on
Rule 434 of the Rules and Regulations, the Term Sheet that is first filed
pursuant to Rule 424(b)(7) under the Act, together with the preliminary
prospectus identified therein that such Term Sheet supplements, (ii) if the
Company does not rely on Rule 434 of the Rules and Regulations, the prospectus
first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations; or (iii) if the Company does not rely on Rule 434 of the Rules and
Regulations and if no prospectus is required to be filed pursuant to Rule 424(b)
of the Rules and Regulations, the prospectus
-4-
included in the Registration Statement. The term "TERM SHEET" means any term
sheet that satisfies the requirements of Rule 434 of the Rules and Regulations.
b. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. When any Preliminary Prospectus was filed
with the Commission it complied in all material respects with the applicable
requirements of the Act and the Rules and Regulations and did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. On the
Effective Date, the date the Term Sheet, if utilized, is first filed with the
Commission pursuant to Rule 424(b), the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) (if required), at all times subsequent to
and including the Closing Date and, if later, the Option 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 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 and
will comply with all applicable provisions of the Act and the Rules and
Regulations and will contain all statements required to be stated therein in
accordance with the Act and the Rules and Regulations. At the Effective Date and
when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement, the Prospectus or any such
amendment or supplement did or will contain an 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 Term Sheet, the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date and, if later,
the Option Closing Date, the Prospectus did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in 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 relating to any Underwriter furnished in writing
to the Company by the Underwriters specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. The
Company acknowledges that the statements set forth in the first two paragraphs
under the heading "Underwriting" in the Prospectus
-5-
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Underwriters specifically for inclusion in the
Registration Statement.
c. The Company is, and each of BTRL Contracts and Services, Inc. and
BBI North American Clinical Laboratories, Inc. (collectively, the
"SUBSIDIARIES") are, and at the Closing Date and, if later, the Option Closing
Date will be, duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts. The Company and the Subsidiaries
have, and at the Closing Date and, if later, the Option Closing Date will have,
full power and authority to conduct all the activities conducted by them, to own
or lease all the assets owned by or leased by them, and to conduct their
business as described in the Registration Statement and the Prospectus. The
Company is, and the Subsidiaries are, and at the Closing Date and, if later, the
Option Closing Date they will be, duly licensed or qualified to do business and
in good standing as foreign corporations in all jurisdictions in which the
nature of the activities conducted by them or the character of the assets owned
or leased by them makes such license or qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not
materially and adversely affect the Company and its Subsidiaries, taken as a
whole, their business, properties, business prospects, condition (financial or
otherwise) net worth or results of operations. The Subsidiaries are the only
subsidiaries (as defined in the Act) of the Company. Except as set forth in the
Prospectus, the Company and the Subsidiaries (i) do not own, and at the Closing
Date and, if later, the Option Closing Date will not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation (except, in the case of the Company, for the Subsidiaries) or
have any equity interest in any corporation, firm, partnership, joint venture,
association or other entity and (ii) are not, and at the Closing Date and, if
later, the Option Closing Date will not be, engaged in any discussions or a
party to any agreement or understanding, written or oral, regarding the
acquisition of an interest in any corporation, firm, partnership, joint venture,
association or other entity where such discussions, agreements or understandings
would require amendment to the Registration Statement pursuant to applicable
securities laws. Complete and correct copies of the articles of incorporation,
the bylaws or other organizational documents of the Company and the Subsidiaries
and all amendments thereto have been delivered to the Representatives, and no
changes therein will be made subsequent to the date hereof and prior to Closing
Date or, if later, the Option Closing Date.
-6-
d. The Company has authorized, issued and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus. All of the
outstanding shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable, were issued in compliance with
all applicable state and federal securities laws, were not issued in violation
of or subject to any preemptive rights or other rights to subscribe for or
purchase securities, and conform to the description thereof contained in the
Prospectus; the Shares have been duly authorized and when issued and paid for as
contemplated herein will be validly issued, fully paid and nonassessable and the
Shares will conform to the description thereof contained in the Prospectus; the
shares of Common Stock issuable by the Company upon the exercise of the
Representatives' Warrants have been duly authorized, and, when issued and paid
for in accordance with the terms of the Representatives' Warrants, will be
validly issued, fully paid and nonassessable; and no preemptive rights or other
rights to subscribe for or purchase exist with respect to the issuance and sale
of the Shares or with respect to the Common Stock issuable upon the exercise of
the Representatives' Warrants. The Company has reserved and will keep available
for the exercise of the Representatives' Warrants such number of authorized but
unissued shares of Common Stock to permit the exercise in full of the
Representatives' Warrants. The description of the capital stock of the Company
in the Registration Statement and the Prospectus is, and at the Closing Date
and, if later, the Option Closing Date will be, complete and accurate in all
respects. Except as set forth in the Prospectus, the Company does not have
outstanding, and at the Closing Date and, if later, the Option Closing Date will
not have outstanding, any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any shares of Common Stock, or any
such warrants, convertible securities or obligations. The description of the
Company's stock option and other stock plans or arrangements, and the options or
other rights granted or exercised thereunder, set forth in the Prospectus,
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights. No further approval or
authority of the shareholders or the Board of Directors of the Company will be
required for the issuance and sale of the Shares by the Company as contemplated
herein. The Company owns of record and beneficially, free and clear of any lien,
adverse claim, security interest, equity or other encumbrance, the capital stock
of the Subsidiaries and there are no other owners of any securities of any kind
issued by or related to the Subsidiaries.
-7-
e. The financial statements and schedules included in the Registration
Statement or the Prospectus comply in all material respects with the
requirements of the Act and the Rules and Regulations, and present fairly the
financial condition of the Company and the Subsidiaries as of the respective
dates thereof and the results of operations, changes in shareholders' equity and
cash flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved. No other financial statements or
schedules of the Company are required by the Act or the Rules and Regulations to
be included in the Registration Statement or the Prospectus. Coopers & Xxxxxxx
L.L.P., who have reported on such financial statements and schedules, are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations. The summary financial and statistical data included
in the Registration Statement present fairly the information shown therein and
have been compiled on a basis consistent with the financial statements presented
therein.
f. Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date
and, if later, the Option Closing Date, except as set forth in or contemplated
by the Registration Statement and the Prospectus, (i) there has not been and
will not have been any change in the capitalization of the Company (other than
in connection with the exercise of outstanding options to purchase the Company's
Common Stock granted pursuant to the Company's stock option plans from the
reserves as described in the Registration Statement, which shares received upon
exercise will be subject to the lock-up agreements described in Section 5(i)
below), or any material adverse change, or any development which could
reasonably be expected to involve a prospective material adverse change, in the
business, properties, business prospects, condition (financial or otherwise),
net worth or results of operations of the Company and the Subsidiaries, taken as
a whole, arising for any reason whatsoever, (ii) the Company and the
Subsidiaries, taken as a whole, have not incurred nor will they incur, except in
the ordinary course of business as described in the Prospectus, any material
liabilities or obligations, direct or contingent, nor have they entered into nor
will they enter into, except in the ordinary course of business as described in
the Prospectus, any material transactions other than pursuant to this Agreement
and the transactions referred to herein, and (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.
-8-
g. Neither the Company nor any of the Subsidiaries is, and upon the
sale of the Shares to be issued and sold by it hereunder and application of the
net proceeds from such sale as described in the Prospectus under the caption
"Use of Proceeds" will be, an "investment company" or an "affiliated person" of,
or "promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
h. There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary, or any of their officers in their capacity as such, nor any basis
therefor, before or by any federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding would materially and adversely affect
the Company and the Subsidiaries, taken as a whole, or their respective,
business, properties, business prospects, condition (financial or otherwise),
net worth or results of operations. Neither the Company nor any of the
Subsidiaries is involved in any strike, job action or labor dispute, and to the
Company's best knowledge no such action or dispute is threatened.
i. The Company and the Subsidiaries have, and at the Closing Date and,
if later, the Option Closing Date will have, performed all their obligations
required to be performed by them as of such date, and neither the Company nor
any Subsidiary is, and at the Closing Date nor, if later, the Option Closing
Date will be, nor with the passage of time or the giving of notice or both would
be, in violation of its certificate of incorporation or by-laws or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any Subsidiary, or
of any judgment, order or decree of any court or governmental agency or body or
of any arbitrator having jurisdiction over the Company or the Subsidiaries, or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any mortgage, loan agreement, note, bond,
debenture, credit agreement or any other evidence of indebtedness to which any
of them a party or by which their property is bound or affected, which violation
or default might materially and adversely affect the Company and the
Subsidiaries, taken as a whole, or their business, properties, business
prospects, condition (financial or otherwise), net worth or results of
operations. To the Company's best knowledge, no other party under any contract
or other instrument to which the Company or its Subsidiaries are a party is in
default in any respect thereunder, which default would materially and
-9-
adversely affect the Company and the Subsidiaries, taken as a whole, or their
business, properties, business prospects, condition (financial or otherwise),
net worth or results of operations. The Company and the Subsidiaries are not,
and at the Closing Date and, if later, the Option Closing Date will not be, in
violation of any provision of their respective articles of incorporation, bylaws
or other organizational documents.
j. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
issuance and sale of the Shares and the Representatives' Warrants by the
Company, the execution, delivery or performance of the Agreement and the
Representatives' Warrants by the Company or the consummation by the Company of
the transactions on its part contemplated herein and in the Representatives'
Warrants, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under 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 purchase and distribution by the
Underwriters of the Shares.
k. The Company has full corporate power and authority to enter into
this Agreement and the Representatives' Warrants, to issue and sell the Shares
and the Representatives' Warrants and to perform its respective obligations
thereunder. The execution, delivery and performance of this Agreement and the
Representatives' Warrants has been duly and validly authorized by the Company,
and each of this Agreement and the Representatives' Warrants has been duly
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms. The performance of this Agreement and the Representatives' Warrants and
the consummation of the transactions contemplated hereby and thereby will not,
with or without notice, the passage of time or both, result in the imposition of
any lien, charge or encumbrance upon any of the assets of the Company or any
Subsidiary pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any party a right to terminate any of its obligations under, or result
in the acceleration of any obligation under the articles of incorporation,
bylaws or other organizational documents of the Company and any Subsidiary, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to
-10-
which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any of their properties is bound or affected, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or regulation
of any court or other governmental agency or body applicable to the business or
properties of the Company and any Subsidiary, presently in effect, a breach or
violation of which, a default under which, a termination of which, an
acceleration under which, or a conflict with which would materially and
adversely affect the Company and any Subsidiary, taken as a whole, and their
business, properties, business prospects, condition (financial or otherwise),
net worth or results of operations.
l. The Company and the Subsidiaries have good and marketable title to
all properties and assets described in the Prospectus as owned by them, free and
clear of all liens, charges, encumbrances or restrictions, except such liens,
charges, encumbrances or restrictions as are described in the Prospectus and
those which, individually and in the aggregate, are not material in amount or
which, individually and in the aggregate, do not adversely affect the use made
or proposed to be made of such properties and assets by the Company and the
Subsidiaries. The Company and the Subsidiaries, as lessees, have valid,
subsisting and enforceable leases for the properties described in the Prospectus
as leased by them. The agreements to which the Company or any Subsidiary are a
party described in the Prospectus are valid agreements, enforceable by the
Company or any Subsidiary (as applicable), except as the enforcement thereof may
be limited by bankruptcy and laws relating to the rights and remedies of
creditors generally or by the availability of general equitable remedies. The
Company any the Subsidiaries own or lease all such properties as are necessary
to their operations as now conducted or as proposed to be conducted.
m. There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or any Subsidiary is a party
have been duly authorized, executed and delivered by the Company or the
Subsidiary, constitute valid and binding agreements of the Company or the
Subsidiary and are enforceable against the Company or the Subsidiary and by the
Company or the Subsidiary against the other parties thereto in accordance with
the terms thereof, except as to (i) bankruptcy and laws relating to the rights
and remedies of creditors generally and (ii) the availability of equitable
remedies.
-11-
n. No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
Section 5 of this Agreement to be delivered to the Underwriters was or will be,
when made, inaccurate, untrue or incorrect.
o. Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action designed, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, 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.
p. No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement or consummation of the transactions contemplated by this
Agreement which rights have not been validly waived by the holder or otherwise
satisfied as of the date hereof. Except as disclosed in the Prospectus under the
caption "Shares Eligible For Future Sale," no person has the right to require
registration under the Act of any Common Stock or other securities of the
Company.
q. The Common Stock is listed and duly admitted to trading on the
Nasdaq National Market (the "NASDAQ NATIONAL MARKET"), and the Company has
received notification that the quotation by the Nasdaq National Market of the
Shares has been approved, subject to official notice of issuance of the Shares.
r. (i) The Company and the Subsidiaries, taken as a whole, have all
trademarks, trade names, patent rights, copyrights, licenses, approvals and
governmental authorizations necessary to conduct their business as now
conducted, except where the failure to have any such right would not have a
material and adverse effect on the Company and the Subsidiaries, taken as a
whole, or their respective business, properties, business prospects, condition
(financial or otherwise), net worth or results of operations; (ii) the Company
and the Subsidiaries are not infringing any copyrights, trade secrets or other
similar rights, trademarks, trade name rights or patent rights of others where
such infringement would have a material and adverse effect on the Company and
the Subsidiaries, taken as a whole, or their respective business, properties,
business prospects, condition (financial or otherwise), net worth or results of
operations; and (iii) no claim has been made against the Company regarding
trademark, trade name, patent, copyright, license, trade secret or other
infringement which would have a
-12-
material and adverse effect on the Company and the Subsidiaries, taken as a
whole, or their respective business, properties, business prospects, condition
(financial or otherwise), net worth or results of operations.
s. The Company has filed all federal, state, local and foreign income
tax returns which have been required to be filed, which returns are complete and
correct in all material respects, and has paid all taxes and assessments
received by it to the extent that such taxes or assessments have become due. All
payroll withholdings required to be made by the Company or any Subsidiary with
respect to employees have been made. The charges, accruals and reserves on the
books of the Company and the Subsidiaries in respect of any tax liability for
any years not finally determined are adequate to meet any assessments or
reassessments for additional taxes. The Company has no tax deficiency which has
been or might be asserted or threatened against the Company which could have a
material and adverse effect on the Company or its business, properties, business
prospects, condition (financial or otherwise), net worth or results of
operations.
t. The Company and its Subsidiaries own or possess all authorizations,
approvals, orders, licenses, registrations, certificates and permits of and
from, and have made all declarations and filings with, all governmental
regulatory officials and bodies necessary to conduct their business as
contemplated in the Prospectus, except where the failure to own or possess all
such authorizations, approvals, orders, licenses, registrations, certificates
and permits or make such declarations and filings would not, individually or in
the aggregate, materially and adversely affect the Company and the Subsidiaries,
taken as a whole, or their respective business, properties, business prospects,
condition (financial or otherwise), net worth or results of operations. There is
no proceeding pending or, to the knowledge of the Company, threatened, or any
basis therefor known to the Company, which may cause or allow any such
authorization, approval, order, license, registration, certificate or permit to
be revoked, withdrawn, canceled, suspended or not renewed or result in any
material impairment of the rights thereunder; and the Company and its
Subsidiaries are conducting their business in compliance with all laws, rules
and regulations applicable thereto, except where any such failure to comply
would not have a material adverse effect on the Company and the Subsidiaries,
taken as a whole, or their respective business, properties, business prospects,
condition (financial or otherwise), net worth or results of operations. Except
as described in the Registration Statement and the Prospectus, none of such
authorizations, approvals, orders, licenses, registrations, certificates or
permits
-13-
contains any restriction that is materially burdensome to the Company and the
Subsidiaries, taken as a whole.
u. The Company and the Subsidiaries maintain insurance of the types and
in the amounts generally deemed adequate for their respective business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and the Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect. The Company and the
Subsidiaries are in compliance with the terms of such policies in all material
respects. The Company and the Subsidiaries have not been refused any insurance
coverage sought or applied for; and the Company has no reason to believe that it
and the Subsidiaries will not be able to renew their existing insurance coverage
as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue their business at a cost that would not
have a material adverse effect on the Company and the Subsidiaries, taken as a
whole, or their business, properties, business prospects, condition (financial
or otherwise), net worth or results of operations. There are no material claims
by the Company or any of the Subsidiaries under any such policy as to which any
insurance company is denying liability or defending under a reservation of
rights clause.
v. The Company and the Subsidiaries are (i) in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective business and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries, taken as a whole, or their respective business,
properties, business prospects, condition (financial or otherwise), net worth or
results of operations.
w. In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and the Subsidiaries in the course of which it
-14-
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a material adverse effect on the Company and
the Subsidiaries, taken as a whole, or their respective business, properties,
business prospects, condition (financial or otherwise), net worth or results of
operations.
x. Neither the Company nor any Subsidiary nor, to the Company's
knowledge, any employee or agent of the Company or any Subsidiary, has at any
time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
y. The Company has not distributed and, prior to the later to occur of
(i) the Closing Date or (ii) completion of the distribution of the Shares, will
not distribute without the prior written consent of the Underwriters any
offering material in connection with the offering and sale of the Shares other
than the Registration Statement, any Preliminary Prospectus, the Prospectus or
other materials, if any, permitted by the Act and the Rules and Regulations. The
Company is not involved in any labor dispute and, to the knowledge of the
Company, no such dispute is threatened.
z. Neither the Company nor its officers, directors, employees or agents
have taken or will take, directly or indirectly, (i) any action designed to
cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares, or (ii)
since the filing of the Registration Statement, except in connection with the
sale of the Shares, (A) sold, bid for, purchased, attempted to induce any person
to purchase, or paid anyone any compensation for soliciting the purchase of, the
Shares or (B) paid or agreed to pay any person any compensation for soliciting
another to purchase any other securities of the Company.
-15-
aa. The Company has obtained from each of its directors, officers and
the other shareholders specified by the Representatives a written agreement
that, for a period of 180 days from the date of the Prospectus, he, she or it
will not, without the prior written consent of Xxxxx Xxxxx, offer, sell,
contract to sell, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any shares of Common Stock or any security convertible
into, or exchangeable or exercisable for, shares of Common Stock or other
securities of the Company.
bb. The Company has complied with all provisions of Florida Statutes,
ss. 517.075, relating to issuers doing business with Cuba.
cc. The Company has no liability or obligation of any nature (absolute,
accrued, contingent or otherwise) which is not fully reflected or adequately
reserved against in the balance sheet at June 30, 1996, except for liabilities
(i) incurred in the ordinary course of business and not required under generally
accepted accounting procedures to be reflected on the balance sheet, (ii)
incurred since June 30, 1996 in the ordinary course of business and consistent
with past practice, or (iii) described in the Prospectus. The Company maintains
a system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with management's
general or specific authorizations; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accounting for assets; (C) access
to assets is permitted only in accordance with management's general or specific
authorization; (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences and (E) reserves for obsolete inventory, bad debts
and sales returns and allowances are adequate.
Any certificate signed by an officer of the Company and delivered to
the Underwriters or counsel for the Underwriters at a closing hereunder shall be
deemed a representation and warranty of the Company to each Underwriter as to
the matters covered thereby as of the date thereof.
4. AGREEMENTS OF THE COMPANY
The Company agrees with the several Underwriters as follows:
-16-
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 by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Underwriters within a reasonable period of time prior to the filing thereof and
the Underwriters shall not have objected thereto in good faith.
b. The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Underwriters and will confirm
such advice in writing, (i) when the Registration Statement has become effective
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 the initiation of any proceedings for that purpose or
the threat thereof, (iv) of the happening of any event during the period
mentioned in the third sentence of Section 4(e) that makes any statement 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 therein not misleading, and (v) of receipt by the Company or any
representative or attorney of the Company of any other communication from the
Commission relating to the Company, the Registration Statement, any preliminary
prospectus, the Term Sheet or the Prospectus. If at any time the Commission
shall issue any order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible moment. 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, said Rule 430A and, if a Term Sheet is used, Rule 434 and to notify the
Underwriters promptly of all such filings.
c. The Company will furnish to the Underwriters without charge three
signed copies of the Registration Statement and of any post-effective amendment
thereto, including financial statements and schedules, and all exhibits thereto,
and will furnish to the Underwriters, without charge, for transmittal to each of
the other Underwriters, such number of conformed copies of the Registration
Statement and
-17-
any post-effective amendment thereto, including financial statements and
schedules, but without exhibits, as you may reasonably request.
d. The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
e. On the Effective Date, and thereafter from time to time, the Company
will deliver to each of the Underwriters, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request. The Company consents, subject to the provisions of the
following sentence, to the use of the Prospectus or any amendment or supplement
thereto by the several Underwriters 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 the nine-month period referred to
in Section 10(a)(3) of the Act any event shall occur which in the judgment of
the Company or counsel to the Underwriters should be set forth in the Prospectus
in order to make any statement therein, in light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such number of copies
of such supplement or amendment to the Prospectus as the Representatives may
reasonably request and, in case any Underwriter is required to deliver a
prospectus after such nine month period, the Company upon request, but at the
expense of such Underwriter, will promptly prepare such amendment or amendments
to the Registration Statement and Prospectus as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act.
f. Prior to any public offering of the Shares, the Company will
cooperate with the Underwriters and counsel to the Underwriters in connection
with the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Underwriters may
request; 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 in any jurisdiction
where it is not now so subject.
-18-
g. During the period of five years commencing on the Effective Date,
the Company will furnish to the Representatives, and each other Underwriter who
may so 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
Representatives, and each other Underwriter who may so request, a copy of each
annual or other report it shall be required to file with the Commission.
h. 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 the applicable 12-month period after the Effective
Date, satisfying the provisions of Section 11(a) of the Act (including Rule 158
of the Rules and Regulations).
i. 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 Underwriters all costs and expenses incident to the performance
of the obligations of the Company under 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 to it, each preliminary
prospectus, Term Sheet, Prospectus and any amendment or supplement to the
Registration Statement or Prospectus, (ii) the preparation and delivery of
certificates representing the Shares, (iii) the printing of this Agreement, the
Agreement among Underwriters, any Dealer Agreements and any Underwriters'
Questionnaires, (iv) furnishing (including costs of shipping and mailing) such
copies of the Registration Statement, the Prospectus, the Term Sheet 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 by the
Underwriters or by dealers to whom Shares may be sold, (v) the listing of the
Shares on the Nasdaq National Market, (vi) any filings required to be made by
the Underwriters with the NASD, including the fees, disbursements and other
charges of counsel for the Underwriters in connection therewith, (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
4(f), including the fees, disbursements and other charges of counsel to the
Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (viii) fees,
disbursements
-19-
and other charges to the Company (but not those of counsel for the Underwriters,
except as otherwise provided herein), (ix) the transfer agent for the Shares,
(x) informational meetings and (xi) the "tombstone" advertisement with respect
to the Shares. In addition to the Company's responsibility for payment of the
foregoing expenses, the Company shall pay to the Underwriters a non-accountable
expense allowance equal to one percent (1%) of the gross proceeds from the sale
of the Shares (including in such amount the proceeds from any sale of the Option
Shares), of which $40,000 has been paid to date. If the offering is not
consummated, the Underwriters will be entitled to reimbursement for actual
out-of-pocket expenses, and will return to the Company any unused portion of the
$40,000. If the Offering is not consummated, the Underwriters will return to the
Company any unused portion of the pre-paid expense allowance.
j. If this Agreement shall be terminated by the Company pursuant to any
of the provisions hereof (otherwise than pursuant to Section 8 hereof) or if for
any reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse the several Underwriters for all reasonable out-of-pocket
expenses (including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith. The Company
shall reimburse Xxxxx Xxxxx within five days of termination of this Agreement.
k. The Company will not at any time, directly or indirectly, take any
action designed, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
l. The Company will apply the net proceeds from the offering and sale
of the Shares in the manner set forth in the Prospectus under "Use of Proceeds,"
and shall file such reports with the Commission with respect to the sale of the
Company Shares and the application of the proceeds therefrom as may be required
in accordance with Rule 463 under the Act.
m. During the period of 180 days commencing at the Closing Date,
without the prior written consent of Xxxxx Xxxxx, which consent may be withheld
in the sole discretion of Xxxxx Xxxxx and other than pursuant to the exercise of
outstanding warrants and stock options or otherwise pursuant to the Company's
stock option plan disclosed in the Prospectus, the Company will not issue,
offer, sell, grant options to purchase or otherwise dispose of any of the
Company's equity
-20-
securities or any other securities convertible into or exchangeable with its
Common Stock or other equity security. During a period of 180 days after the
Closing Date, the Company will not file a registration statement for the purpose
of registering any securities of the Company without the prior written consent
of Xxxxx Xxxxx, which consent may be withheld in its sole discretion. The
Company will not, for a period of two years from the date hereof, without the
prior written approval of Xxxxx Xxxxx, propose or enter into any arrangement not
existing on the date hereof, for the granting or awarding of the stock options.
n. The Company will cause each of its officers, directors, and
shareholders holding in the aggregate at least ______ shares of Common Stock to
enter into lock-up agreements with the Underwriters to the effect that they will
not, without the prior written consent of Xxxxx Xxxxx, sell, contract to sell or
otherwise dispose of any shares of Common Stock or rights to acquire such shares
according to the terms set forth in Exhibit B hereto.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS
The obligations of each Underwriter hereunder are subject to the
following conditions:
a. Notification that the Registration Statement has become effective
shall be received by the Underwriters not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Underwriters and all filings required by Rule
424, Rule 430A and Rule 434 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 the 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 Commission or 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
-21-
unless a copy thereof was first submitted to the Underwriters and the
Underwriters do not object thereto in good faith, and the Underwriters shall
have received certificates, dated the Closing Date and the Option Closing Date
and signed by the Chief Executive Officer and the Chief Financial Officer of the
Company (who may, as to proceedings threatened, rely upon the best of their
knowledge), to the effect of clauses (i), (ii) and (iii) of this Section 5(b).
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, or any development involving a prospective material
adverse change, in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise), net worth or results
of operations of the Company or any Subsidiary, whether or not arising from
transactions in the ordinary course of business, in each case other than as
described in or contemplated by the Registration Statement and the Prospectus,
and (ii) neither the Company nor any Subsidiary shall have sustained any
material loss or interference with its business or properties from fire,
explosion, flood, earthquake or other casualty, whether or not covered by
insurance, or from any labor dispute or any court of legislative or other
governmental action, order or decree, which is not described in the Registration
Statement and the Prospectus, if in the judgment of the Underwriters any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters 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 or threatened against the Company or any
Subsidiary or any of their respective officers or directors in their capacities
as such, before or by any federal, state or local court, commission, regulatory
body, administrative agency or other governmental body, domestic or foreign, in
which litigation or proceeding an unfavorable ruling, decision or finding would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise), net worth or results of operations of the
Company and the Subsidiaries, taken as a whole.
e. Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing Date
and, with respect to the Option Shares, at the Option Closing Date, and all
-22-
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 and, with respect to the Option
Shares, at or prior to the Option Closing Date, shall have been duly performed,
fulfilled or complied with.
f. The Underwriters shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, from Brown, Rudnick, Freed & Gesmer, P.C., counsel to the Company,
covering the following matters:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Massachusetts, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification except where the failure so to qualify does not have a material
adverse effect on the business, properties, business prospects, condition
(financial or otherwise), net worth or results of operations of the Company;
(ii) each of the Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under its jurisdiction of
organization and is qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification except where the failure so to
qualify does not have a material adverse effect on the business, properties,
business prospects, condition (financial or otherwise), net worth or results of
operations of such Subsidiary. Except for the Subsidiaries, the Company does not
have any active subsidiaries or own or control any other corporation,
association, or other business entity;
(iii) the authorized capital stock of the Company conforms to
the description thereof contained in the Prospectus;
(iv) the authorized, issued and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the Prospectus
as of the date therein; the shares of Common Stock outstanding prior to the
issuance
-23-
of the Firm Shares (or, with respect to the opinion to be delivered on the
Option Closing Date, prior to the issuance of the Company Option Shares) have
been duly authorized and are validly issued, fully paid and nonassessable, have
been issued pursuant to exemptions from the registration and qualification
requirements of federal and applicable state securities laws, were not issued in
violation of or subject to any preemptive rights or, to the best of such
counsel's knowledge, other rights to subscribe for or purchase any securities,
and conform to the description thereof contained in the Prospectus;
(v) the specimen certificate evidencing the Company's Common
Stock filed as an exhibit to the Registration Statement is in due and proper
form under Massachusetts law; the Shares have been duly authorized and, when the
certificates evidencing the Shares have been issued and delivered in accordance
with the terms of this Agreement, the Shares will be validly issued, fully paid
and nonassessable; the issuance of such Shares is not subject to any preemptive
rights or, to the best of such counsel's knowledge, other rights to subscribe
for or purchase securities; and the Common Stock conforms in all material
respects to the description thereof contained in the Prospectus;
(vi) the Representatives' Warrants have been duly authorized,
executed and delivered by the Company and the Company has all requisite
corporate power and authority to execute the Representatives' Warrants; the
Representatives' Warrants are enforceable against the Company in accordance with
their terms; the shares of Common Stock issuable upon the exercise of the
Representatives' Warrants have been reserved for such issuance and, when issued
in accordance with the terms of the Representatives' Warrants, will be duly
authorized, validly issued, fully paid and nonassessable and free of preemptive
rights and, to the best of such counsel's knowledge, other rights to subscribe
for or purchase securities; and the Representatives' Warrants conform in all
material respects to the description thereof contained in the Prospectus;
(vii) the Registration Statement has become effective under
the Act, and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are pending or, to the best of such counsel's knowledge,
threatened by the Commission; any required filing of the Prospectus or of the
Term Sheet and any supplement thereto pursuant to Rule 424(b) or Rule 434 of the
Rules and
-24-
Regulations has been made in the manner and within the time period required by
such Rule 424(b) and Rule 434;
(viii) the Registration Statement and the Prospectus and any
supplements or amendments thereto (except for financial statements, schedules
and financial information included therein, as to which such counsel need not
express any opinion) comply as to form in all material respects with the Act and
the Rules and Regulations.
(ix) this Agreement has been duly authorized, executed and
delivered by the Company, and the Company has all requisite corporate power and
authority to enter into this Agreement and consummate the transactions
contemplated hereby;
(x) this Agreement is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
to (A) rights to indemnity and contribution thereunder which may be limited by
applicable law, (B) bankruptcy and laws relating to the rights and remedies of
creditors generally, and (C) the availability of equitable remedies; the
execution and delivery by the Company of, and the performance by the Company of
its obligations under, this Agreement and the Representatives' Warrants do not
contravene any provision of applicable law, statute, rule or regulation or the
articles of incorporation, bylaws or other organizational documents of the
Company and the Subsidiaries or any agreement or other instrument binding upon
the Company or any Subsidiary that is filed as an exhibit to the Registration
Statement or is known to such counsel, or any judgment or decree known to such
counsel of any governmental body, agency or court having jurisdiction over the
Company or any Subsidiary, presently in effect and a breach or violation of
which, a default under which, a termination of which, an acceleration under
which, or a conflict with which would materially and adversely affect the
Company and the Subsidiaries, taken as a whole, or their business, properties,
business prospects, financial condition or results of operations, and no
consent, approval or authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement and the Representatives' Warrants, except
such as may have been obtained under the Act and the Exchange Act and such as
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares by the Underwriters;
-25-
(xi) the statements in the Prospectus insofar as such
statements constitute a summary of documents referred to therein or matters of
law, fairly summarize in all material respects the information called for with
respect to such documents and matters of law;
(xii) each of the Company and each Subsidiary has all
necessary approvals, orders, licenses, registrations, certificates and permits
of and from and have made all declarations and filings with all governmental
regulatory officials and bodies necessary to conduct their business as described
in the Prospectus, except where the failure to have all such authorizations,
approvals, orders, licenses, registrations, certificates and permits or make
such declarations or filings would not, individually or in the aggregate, have a
material adverse effect on the business, properties, business prospects,
condition (financial or otherwise), net worth or results of operations of the
Company and the Subsidiaries taken as a whole.
(xiii) neither the Company nor any of the Subsidiaries is an
"investment company" or a person "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(xiv) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or any
Subsidiary are a party or to which any of the properties of the Company is
subject that are required to be described in the Registration Statement or the
Prospectus and are not so described;
(xv) to such counsel's knowledge, no holder of securities of
the Company has rights which have not been waived to require the Company to
register with the Commission shares of Common Stock or other securities as part
of the offering contemplated hereby;
(xvi) such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or described in
the Registration Statement or Prospectus or any supplements or amendments
thereto which are required to be filed and are not so filed as required, and
each description of such contracts and documents as is contained in the
Registration Statement and Prospectus fairly presents in all material respects
the information required under the Act and the Rules and Regulations;
-26-
(xvii) as of the Effective Date, the Shares were duly
authorized for quotation on the Nasdaq National Market upon official notice of
issuance.
Such counsel shall also state that such counsel has participated in
conferences with representatives of the Underwriters, officers and
representatives of the Company and representatives of the independent certified
public accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed and
that, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as set forth
in Section 5(f)(xi)), on the basis of the foregoing, nothing has come to the
attention of such counsel that leads them to believe that (except for financial
statements, schedules and financial information, as to which such counsel need
not express any belief), the Registration Statement and the Prospectus, as
amended, included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus, as amended or
supplemented, if applicable, as of the date it was filed pursuant to the Rules
and Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
In rendering the foregoing opinions, counsel may rely, to the extent
they deem such reliance proper, on the opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States and the Commonwealth of
Massachusetts, and as to matters of fact, upon certificates of officers of the
Company and of government officials; provided that such counsel shall state that
the opinion of any other counsel is in form satisfactory to such counsel and, in
such counsel's opinion, such counsel and the Underwriters are justified in
relying on such opinions of other counsel. Copies of all such opinions and
certificates shall be furnished to counsel to the Underwriters on the Closing
Date or the Option Closing Date, as the case may be.
-27-
g. The Underwriter shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, from Buc and Xxxxxxxxx, regulatory counsel for the Company,
covering the following matters:
(i) Any statements set forth in the Registration Statement and
the Prospectus under the captions "Risk Factors -- Stringent Government
Regulation" and "Business -- Government Regulation" (collectively, the "FDA
PORTION") constitute an accurate summary in all material respects of
restrictions applicable to the business of the Company arising under the Federal
Food, Drug, and Cosmetic Act (the "FFDCA") or the regulations thereunder or the
FDA regulation of the business or operations of the Company, or of any legal
matters, documents or proceedings referred to therein and relating to the FFDCA
or the FDA's regulation of the business or operations of the Company or the
Company's compliance therewith.
(ii) To counsel's knowledge, the Company has filed with the
FDA for and received approval of all applications, licenses, registrations, and
permits ("REGULATORY AUTHORIZATIONS") necessary to conduct the business of the
Company described in the Registration Statement and the Prospectus.
(iii) Based upon a review of the FDA Portion, counsel has no
reason to believe that the information contained in the FDA Portion of the
Registration Statement and the Prospectus at the time it became effective
contained any untrue statement of a 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 on the Closing Date or the Option Closing Date, as the
case may be, the information contained in the FDA Portion of the Prospectus or
any amendments or supplements to the FDA Portion of the Prospectus contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein not misleading.
h. The Underwriters shall have received from the Company the duly
executed Representatives' Warrants.
i. The Underwriters shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date, from
Fulbright & Xxxxxxxx L.L.P., counsel to the Underwriters, with respect to the
-28-
Registration Statement, the Prospectus and this Agreement, which opinion shall
be satisfactory in all respects to the Underwriters.
j. The Underwriters shall have received, on or prior to the date
hereof, agreements from all directors, officers and certain shareholders of the
Company in the form attached as Exhibit B hereto holding in the aggregate at
least ____ shares of Common Stock, stating that each of such persons, without
the prior written consent of Xxxxx Xxxxx, will not offer to sell, contract to
sell, sell, distribute, grant any option to purchase, pledge, hypothecate or
otherwise dispose of, directly or indirectly, any Common Stock, or any
securities convertible into or exchangeable for Common Stock of the Company
(including, without limitation, Common Stock of the Company that may be deemed
to be beneficially owned by the undersigned in accordance with the rules and
regulations of the Commission and Common Stock that may be issued upon exercise
of a stock option or warrant), or rights to acquire such Common Stock, for a
period of 180 days from the date hereof.
k. At the Effective Date and concurrently with the execution and
delivery of this Agreement, Coopers & Xxxxxxx L.L.P. shall have furnished to the
Underwriters a letter, dated the date of its delivery, addressed to the
Underwriters and in form and substance satisfactory to the Underwriters
confirming that they are independent accountants with respect to the Company as
required by the Act and the Rules and Regulations and with respect to certain
financial and other statistical and numerical information contained in the
Registration Statement. At the Closing Date, and, as to the Option Shares, the
Option Closing Date, Coopers & Xxxxxxx L.L.P. shall have furnished to the
Underwriters 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 letter
from each accountant, that nothing has come to their attention during the period
from the date of each letter referred to in the prior sentence to a date
(specified in each letter) not more than five days prior to the Closing Date and
the Option Closing Date, as the case may be, which would require any change in
their letter dated the date hereof if it were required to be dated and delivered
at the Closing Date and the Option Closing Date.
l. Concurrently with the execution and delivery of this Agreement and
at the Closing Date and, with respect to the Option Shares, the Option Closing
Date, there shall be furnished to the Underwriters a certificate, dated the date
of its delivery, signed by the Chief Executive Officer and the Chief Financial
Officer of
-29-
the Company, in form and substance satisfactory to the Underwriters, 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, the Registration Statement and the Prospectus do not 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 and (B) in the case of the certificate delivered at the Closing Date
and the Option Closing Date, 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.
(iii) Each of the covenants required to be performed by the
Company herein on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be satisfied or
fulfilled on or prior to the date of such certificate has been duly, timely and
fully satisfied or fulfilled.
m. The Shares shall be qualified for sale in such jurisdictions as the
Underwriters may, pursuant to the provisions of Section 4(f), reasonably
request, and each such qualification shall be in effect and not subject to any
stop order or other proceeding on the Closing Date or the Option Closing Date.
n. Prior to the Closing Date, the Shares shall have been duly
authorized for listing on the Nasdaq National Market upon official notice of
issuance.
o. The Company shall have furnished to the Underwriters such
certificates, in addition to those specifically mentioned herein, as the
Underwriters may have reasonably requested as to the accuracy and completeness
at the Closing Date and the Option Closing Date of any statement in the
Registration Statement or the Prospectus, as to the accuracy at the Closing Date
and the Option Closing Date of the representations and warranties of the Company
herein, as to the performance by the Company of its obligations hereunder, or as
to the fulfillment
-30-
of the conditions concurrent and precedent to the obligations hereunder of the
Underwriters.
6. INDEMNIFICATION
a. The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls, within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, each Underwriter, from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted) to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages (i)
arise out of or are based on 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 the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading, (ii) arise out of or are based in whole or
in part on any inaccuracy in the representations and warranties of the Company
contained herein, or (iii) arise out of or are based upon any failure of the
Company to perform its obligations hereunder or under law in connection with the
transactions contemplated hereby; provided that the Company will not be liable
to the extent that such loss, claim, liability, expense or damage arises from
the sale of the Shares in the public offering to any person by an Underwriter
and is based on an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus, or any
amendment or supplement thereto. The Company acknowledges that the statements
set forth in the first two paragraphs under the heading "Underwriting" in the
preliminary prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company expressly for
inclusion in the Registration Statement, the preliminary prospectus or the
Prospectus. This indemnity will be in addition to any liability that the Company
might otherwise have.
-31-
b. Each Underwriter will indemnify and hold harmless the Company, each
director of the Company and each officer of the Company who signs the
Registration Statement and each person, if any, who controls, within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, the Company, to the
same extent as the foregoing indemnity from the Company to each Underwriter, as
set forth in Section 6(a), but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company expressly for use in the Registration Statement, the preliminary
prospectus or the Prospectus, or any amendment or supplement thereto. The
Company acknowledges that the statements set forth in the first two paragraphs
under the heading "Underwriting" in the preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have.
c. Any party that proposes to assert the right to be indemnified under
this Section 6 shall, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified
-32-
party will have the right to employ its own counsel in any such action, but the
fees, expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) there are legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (iii) the indemnified
party has reasonably concluded that a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party), or (iv) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. Any indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld or delayed).
d. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms, but for
any reason is held to be unavailable from the Company or the Underwriters, the
indemnifying party will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Underwriters,
such as persons who control the Company within the meaning of the Act, officers
of the Company who signed the Registration Statement and directors of the
Company, who also may be liable for contribution) to which the Company and any
one or more of the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company and the
Underwriters. The relative benefits received by the Company and the Underwriters
shall be deemed to be in the same proportion
-33-
as the total net proceeds from the offering (before deducting expenses) received
by the Company bears to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. If, but only if, the allocation provided by the
foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence, but also the
relative fault of the Company and the Underwriters with respect to the
statements or omissions which resulted in such loss, claim, liability, expense
or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) 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 loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 6(d) shall be deemed to include, for
purpose of this Section 6(d), 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 6(d), no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 6(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against any such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or
-34-
parties from whom contribution may be sought from any other obligation it or
they may have under this Section 6(d). 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 or delayed).
e. The indemnity and contribution agreements contained in this Section
6 and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Shares and payment therefor, or (iii) any termination of this
Agreement
7. REIMBURSEMENT OF CERTAIN EXPENSES
In addition to its other obligations under Section 6(a) of this
Agreement, the Company hereby agrees to reimburse the Underwriters on a
quarterly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon in whole or part, (i)
as described in Section 6(a), 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 the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading, (ii) any inaccuracy in the representations
and warranties of the Company contained herein, or (iii) any failure of the
Company to perform its obligations hereunder or under law in connection with the
transactions contemplated hereby, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 7 and the possibility that such payment might later be held to be
improper; provided, however, that, to the extent any such payment is ultimately
held to be improper, the persons receiving such payments shall promptly refund
them.
8. TERMINATION
The obligations of the several Underwriters under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with respect to the
Option Shares, on or prior to the Option Closing Date), by notice to the Company
from the Underwriters, without liability on the part of any Underwriter to the
-35-
Company if, prior to delivery and payment for the Firm Shares or Option Shares,
as the case may be, in the sole judgment of the Underwriters, (a) trading in any
of the equity securities of the Company shall have been suspended by the
Commission or by the Nasdaq National Market, (b) trading in securities generally
on the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum or maximum prices shall have been generally
established on such 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 such exchange or by order of the Commission or any
court or other governmental authority, (c) a general banking moratorium shall
have been declared by either Federal or New York State authorities, (d) any
material adverse change in the financial or securities markets in the United
States, or in political, financial or economic conditions in the United States
or any outbreak or material escalation of hostilities or other calamity or
crises, shall have occurred, the effect of which is such as to make it, in the
sole judgment of the Underwriters, impracticable to market the Shares, (e) there
has been a material adverse change since the respective dates as of which
information is given in the Registration Statement and the Prospectus in the
general affairs, business, business prospects, properties, management, condition
(financial or otherwise), net worth or results of operations of the Company or
any Subsidiary, whether or not arising from transactions in the ordinary course
of business, in each case other than as described in or contemplated by the
Registration Statement and the Prospectus, or (f) the Company or any Subsidiary
has sustained any material loss or interference with its business or properties
from fire, explosion, flood, earthquake or other casualty, whether or not
covered by insurance, or from any labor dispute or any court or legislative or
other government action, order or decree, which is not described in the
Registration Statement and the Prospectus, if in the judgment of the
Underwriters any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the public
offering price.
9. SUBSTITUTION OF UNDERWRITERS
If any one or more of the Underwriters shall fail or refuse to purchase
the Shares which it or they have agreed to purchase hereunder, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of Shares, the other Underwriters shall be obligated, severally, to purchase the
-36-
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Shares which they
have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Shares which all such nondefaulting Underwriters have so
agreed to purchase, or in such other proportions as the Underwriters may
specify, provided that in no event shall the maximum number of Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by more than one-ninth of such number of Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Shares and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase exceeds one-tenth of the aggregate number of the
Shares and arrangements satisfactory to the Underwriters and the Company for the
purchase of such Shares are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any nondefaulting
Underwriter or the Company for the purchase or sale of any Shares under this
Agreement. In any such case which does not result in termination of this
Agreement, either the Underwriters or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. MISCELLANEOUS
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 offices of the Company, 000 Xxxx Xxxxxx, Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 02379,, Attention: President, with a copy to Xxxxxx
X. London, Esq., Brown, Rudnick, Freed & Gesmer, Xxx Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, and (b) if to the Underwriters, c/o Xxxxx Xxxxx & Son
Incorporated, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
XxXxxxx, Managing Director, with a copy to Xxxx Xxxxxx, Esq., Fulbright &
Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any such notice
shall be effective only upon receipt. Any notice may be made by telex or
telephone, but if so made shall be subsequently confirmed in writing.
-37-
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and the controlling persons, directors and
officers referred to in Section 6, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "SUCCESSORS AND ASSIGNS" as used in this Agreement shall not
include a purchaser, as such, of Shares from any of the several Underwriters.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
This Agreement may not be amended or modified except in a writing
signed by both parties.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Please confirm that the foregoing correctly sets forth the Agreement
among the Company and the several Underwriters.
-38-
Very truly yours,
BOSTON BIOMEDICA, INC.
By: ____________________________________
Title: _________________________________
The foregoing Agreement is hereby confirmed
and accepted as of the date first above
written on behalf of themselves and the
other several Underwriters named in Schedule
I hereto.
XXXXXXX BROS., L.P.
As Representatives of the several Underwriters
By: XXXXX XXXXX & SON INCORPORATED
By: _______________________________
Title: _______________________________
-39-
SCHEDULE I
SCHEDULE OF UNDERWRITERS
NUMBER OF
FIRM
SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Xxxxx Xxxxx & Son Incorporated...............................
Xxxxxxx Bros., L.P...........................................
---------
Total...................................... 1,600,000
=========
-40-
EXHIBIT A
[REPRESENTATIVES' WARRANT]
WARRANT
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON [insert date of fifth
anniversary of closing] _______________, 2001, OR IF NOT A BUSINESS
DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT
FOLLOWING BUSINESS DAY.
WARRANT TO PURCHASE
[-----------------]
SHARES OF COMMON STOCK
OF
BOSTON BIOMEDICA, INC.
No. W-___
This certifies that, for and in consideration of services rendered and
in connection with the initial public offering of Common Stock of the Company
named below (the "OFFERING") and other good and valuable consideration, [Xxxxx
Xxxxx & Son Incorporated/Xxxxxxx Bros., L.P.] and its registered, permitted
assigns (collectively, the "WARRANTHOLDER"), is entitled to purchase from Boston
Biomedica, Inc., a corporation incorporated under the laws of the Commonwealth
of Massachusetts (the "COMPANY"), subject to the terms and conditions hereof, at
any time on or after 9:00 a.m., New York time, on [insert date of closing]
_____________,
A-1
1997 and before 5:00 p.m., New York time on [insert date of fifth anniversary at
closing] ______________, 2001 (or, if such day is not a Business Day, at or
before 5:00 p.m., New York time, on the next following Business Day), up to
160,000 fully paid and nonassessable shares of Common Stock of the Company at
the Exercise Price (as defined herein). The Exercise Price and the number of
shares purchasable hereunder are subject to adjustment from time to time as
provided in Article 3 hereof.
ARTICLE 1
DEFINITION OF TERMS
As used in this Warrant, the following capitalized terms shall have the
following respective meanings:
(a) Business Day: A day other than a Saturday, Sunday or other day on
which banks in the State of New York are authorized by law to remain closed.
(b) Common Stock: Common Stock, $.01 par value per share, of the
Company.
(c) Common Stock Equivalents: Securities that are convertible into or
exercisable for shares of Common Stock.
(d) Demand Registration: See Section 6.2.
(e) Exchange Act: The Securities Exchange Act of 1934, as amended.
(f) Exercise Price: $___ per Warrant Share, equal to 135% of the
initial price to public in the offering as set forth on the cover page of the
prospectus, dated _____, 1996, with respect to the initial public offering of
the Company's Common Stock, as such price may be adjusted from time to time
pursuant to Article 3 hereof.
(g) Expiration Date: 5:00 p.m., New York time, on [fifth anniversary of
closing] _____________, 2001, or if such day is not a Business Day, the next
succeeding day which is a Business Day.
(h) Holder: A Holder of Registrable Securities.
A-2
(i) NASD: National Association of Securities Dealers, Inc.
(j) Net Issuance Exercise Date: See Section 2.3.
(k) Net Issuance Right: See Section 2.3.
(l) Net Issuance Warrant Shares: See Section 2.3.
(m) Person: An individual, partnership, joint venture, corporation,
trust, unincorporated organization or government or any department or agency
thereof.
(n) Piggyback Registration: See Section 6.1.
(o) Prospectus: Any prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, or to which a Term
Sheet (as defined in Rule 434 under the Securities Act) relates, with respect to
the terms of the offering of any portion of the Registrable Securities covered
by such Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all materials incorporated
by reference in such Prospectus.
(p) Public Offering: A public offering of any of the Company's equity
or debt securities pursuant to Registration Statement under the Securities Act.
(q) Registrable Securities: Any Warrant Shares issued to __________
[Xxxxx Xxxxx & Son Incorporated/Xxxxxxx Bros., L.P.] and/or its designees or
transferees and/or other securities that may be or are issued by the Company
upon exercise of the Warrants, including those which may thereafter be issued by
the Company in respect of any such securities by means of any stock splits,
stock dividends, recapitalizations, reclassifications or the like, and as
adjusted pursuant to Article 3 hereof; provided, however, that as to any
particular security contained in Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement; or (ii) they shall have been sold to the
public pursuant to Rule 144 (or any successor provision) under the Securities
Act.
A-3
(r) Registration Expenses: Any and all expenses incurred in connection
with any registration or action incident to performance of or compliance by the
Company with Article 6, including, without limitation, (i) all SEC, national
securities exchange and NASD registration and filing fees; all listing fees and
all transfer agent fees; (ii) all fees and expenses of complying with state
securities or blue sky laws (including the fees and disbursements of counsel of
the underwriters in connection with blue sky qualifications of the Registrable
Securities); (iii) all printing, mailing, messenger and delivery expenses; (iv)
all fees and disbursements of counsel for the Company and of its accountants,
including the expenses of any special audits and/or "cold comfort" letters
required by or incident to such performance and compliance; and (v) any
disbursements of underwriters customarily paid by issuers or sellers of
securities including the reasonable fees and expenses of any special experts
retained by the underwriters in connection with the requested registration, but
excluding underwriting discounts and commissions, brokerage fees and transfer
taxes, if any, and fees of counsel or accountants retained by the holders of
Registrable Securities to advise them in their capacity as Holders of
Registrable Securities.
(s) Registration Statement: Any registration statement of the Company
filed or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including all amendments
(including post-effective amendments) and supplements thereto, all exhibits
thereto and all material incorporated therein by reference.
(t) SEC: The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act and the Exchange Act.
(u) Securities Act: The Securities Act of 1933, as amended.
(v) 25% Holders: At any time as to which a Demand Registration is
requested, the Holder and/or the holders of any other Warrants and/or the
holders of Warrant Shares who have the right to acquire or hold, as the case may
be, not less than 25% of the combined total of Warrant Shares issuable and
Warrant Shares outstanding (other than Warrant Shares which are no longer
Registrable Securities by reason of the proviso to the definition of the term
"Registrable Securities") at the time such Demand Registration is requested.
A-4
(w) Warrant Shares: Common Stock, Common Stock Equivalents and other
securities purchased or purchasable upon exercise or conversion of the Warrants.
(x) Warrantholder: The person(s) or entity(ies) to whom this Warrant is
originally issued, or any successor in interest thereto, or any assignee or
transferee thereof, in whose name this Warrant is registered upon the books to
be maintained by the Company for that purpose.
(y) Warrants: This Warrant, all other warrants issued on the date
hereof and all other warrants that may be issued in its or their place (together
evidencing the right to purchase an aggregate of up to 160,000 shares of Common
Stock), originally issued as set forth in the definition of Registrable
Securities.
ARTICLE 2
DURATION AND EXERCISE OF WARRANT
2.1 DURATION OF WARRANT
The Warrantholder may exercise this Warrant at any time and from time
to time after 9:00 a.m., New York time, on ____________, 1997 [one year after
the date of closing] and before 5:00 p.m., New York time, on the Expiration
Date. If this Warrant is not exercised on the Expiration Date, it shall become
void, and all rights hereunder shall thereupon cease.
2.2 METHOD OF EXERCISE
(a) The Warrantholder may exercise this Warrant, in whole or
in part, by presentation and surrender of this Warrant to the Company at its
corporate office at 000 Xxxx Xxxxxx, Xxxx Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000, or
at the office of its stock transfer agent, if any, with the Exercise Form
annexed hereto duly executed and, in the event of an exercise for cash pursuant
to Section 2.3(a), accompanied by payment of the full Exercise Price for each
Warrant Share to be purchased.
(b) Upon receipt of this Warrant with the Exercise Form fully
executed and, in the event of an exercise for cash pursuant to Section 2.3(a),
A-5
accompanied by payment of the aggregate Exercise Price for the Warrant Shares
for which this Warrant is then being exercised, the Company shall cause to be
issued certificates for the total number of whole shares of Common Stock for
which this Warrant is being exercised (adjusted to reflect the effect of the
anti-dilution provisions contained in Article 3 hereof, if any, and as provided
in Section 2.4 hereof) in such denominations as are requested for delivery to
the Warrantholder, and the Company shall thereupon deliver such certificates to
the Warrantholder. A net issuance exercise pursuant to Section 2.3(b) shall be
effective upon receipt by the Company of this Warrant together with the
aforesaid written statement, or on such later date as is specified therein (the
"NET ISSUANCE EXERCISE DATE"), and, at the election of the Holder hereof, may be
made contingent upon the closing of the sale of the Warrant Shares in a Public
Offering. The Warrantholder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise as of the time of receipt of
the Exercise Form and payment in accordance with the preceding sentence, in the
case of an exercise for cash pursuant to Section 2.3(a), or as of the Net
Issuance Exercise Date, in the case of a net issuance exercise pursuant to
Section 2.3(b), notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such shares of Common
Stock shall not then be actually delivered to the Warrantholder. If at the time
this Warrant is exercised, a Registration Statement is not in effect to register
under the Securities Act the Warrant Shares issuable upon exercise of this
Warrant, the Company may, in the case of an exercise for cash pursuant to
Section 2.3(a) or in the case of a net issuance exercise prior to the
satisfaction of any holding period required by Rule 144 promulgated under the
Securities Act, require the Warrantholder to make such representations, and may
place the legends on certificates representing the Warrant Shares, as may be
reasonably required in the opinion of counsel to the Company to permit the
Warrant Shares to be issued without such registration.
(c) In case the Warrantholder shall exercise this Warrant with
respect to less than all of the Warrant Shares that may be purchased under this
Warrant, the Company shall execute as of the exercise date (or, if later, the
Net Issuance Exercise Date) a new warrant in the form of this Warrant for the
balance of such Warrant Shares and deliver such new warrant to the Warrantholder
within 10 days following the exercise date (or, if later, the Net Issuance
Exercise Date).
(d) The Company shall pay any and all stock transfer and
similar taxes which may be payable in respect of the issuance of any Warrant
Shares.
A-6
2.3 EXERCISE OF WARRANT
(a) Right to Exercise for Cash. This Warrant may be exercised
by the Holder by delivery of payment to the Company, for the account of the
Company, by cash, by certified or bank cashier's check or by wire transfer, of
the Exercise Price for the number of Warrant Shares specified in the Exercise
Form in lawful money of the United States of America.
(b) Right to Exercise on a Net Issuance Basis. In lieu of
exercising this Warrant for cash pursuant to Section 2.3(a), the Holder shall
have the right to exercise this Warrant or any portion thereof (the "NET
ISSUANCE RIGHT") into shares of Common Stock as provided in this Section 2.3(b)
at any time or from time to time during the period specified in Section 2.1
hereof by the surrender of this Warrant to the Company with a duly executed and
completed Exercise Form marked to reflect net issuance exercise. Upon exercise
of the Net Issuance Right with respect to a particular number of shares subject
to this Warrant and noted on the Exercise Form (the "NET ISSUANCE WARRANT
SHARES"), the Company shall deliver to the Holder (without payment by the Holder
of any Exercise Price or any cash or other consideration) (X) that number of
shares of fully paid and nonassessable Common Stock equal to the quotient
obtained by dividing the value of this Warrant (or the specified portion hereof)
on the Net Issuance Exercise Date, which value shall be determined by
subtracting (A) the aggregate Exercise Price of the Net Issuance Warrant Shares
immediately prior to the exercise of the Net Issuance Right from (B) the
aggregate fair market value of the Net Issuance Warrant Shares issuable upon
exercise of this Warrant (or the specified portion hereof) on the Net Issuance
Exercise Date (as herein defined) by (Y) the fair market value of one share of
Common Stock on the Net Issuance Exercise Date (as herein defined).
Expressed as a formula, such net issuance exercise shall be computed as
follows:
X = B-A
Y
Where: X = the number of shares of Common Stock that may be
issued to the Holder
A-7
Y = the fair market value ("FMV") of one share of Common
Stock as of the Net Issuance Exercise Date
A = the aggregate Exercise Price (i.e., the product
determined by multiplying the Net Issuance Warrant
Shares by the Exercise Price)
B = the aggregate FMV (i.e., the product determined by
multiplying the FMV by the Net Issuance Warrant
Shares)
(c) Determination of Fair Market Value. For purposes of this
Section 2.3, "FAIR MARKET VALUE" of a share of Common Stock as of the Net
Issuance Exercise Date shall mean:
(i) if the Net Issuance Right is exercised in
connection with and contingent upon a Public Offering, and if the Company's
Registration Statement relating to such Public Offering has been declared
effective by the SEC, then the initial "Price to Public" specified in the final
Prospectus with respect to such offering.
(ii) if the Net Issuance Right is not exercised in
connection with and contingent upon a Public Offering, then as follows:
(A) If traded on a securities exchange, the fair
market value of the Common Stock shall be deemed to be the average of
the closing prices of the Common Stock on such exchange over the 30-day
period ending five business days prior to the Net Issuance Exercise
Date;
(B) If traded on the Nasdaq National Market or the
Nasdaq SmallCap Market, the fair market value of the Common Stock shall
be deemed to be the average of the last reported sales prices of the
Common Stock on such Market over the 30-day period ending five business
days prior to the Net Issuance Exercise Date;
(C) If traded over-the-counter other than on the
Nasdaq National Market or the Nasdaq SmallCap Market, the fair market
value of the Common Stock shall be deemed to be the average of the
closing bid
A-8
prices of the Common Stock over the 30-day period ending five business
days prior to the Net Issuance Exercise Date; and
(D) If there is no public market for the Common
Stock, then fair market value shall be determined by mutual agreement
of the Warrantholder and the Company, and if the Warrantholder and the
Company are unable to so agree, at the Company's sole expense, by an
investment banker of national reputation selected by the Company and
reasonably acceptable to the Warrantholder.
2.4 RESERVATION OF SHARES
The Company hereby agrees that at all times there shall be reserved for
issuance and delivery upon exercise of this Warrant such number of shares of
Common Stock or other shares of capital stock of the Company from time to time
issuable upon exercise of this Warrant. All such shares shall be duly
authorized, and when issued upon such exercise, shall be validly issued, fully
paid and non-assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale (except as contemplated
by Sections 2.2(b) and 5.2) and free and clear of all preemptive and other
similar rights.
2.5 FRACTIONAL SHARES
The Company shall not be required to issue any fraction of a share of
its capital stock in connection with the exercise of this Warrant, and in any
case where the Warrantholder would, except for the provisions of this Section
2.5, be entitled under the terms of this Warrant to receive a fraction of a
share upon the exercise of this Warrant, the Company shall, upon the exercise of
this Warrant, pay to the Warrantholder an amount in cash equal to the fair
market value of such fractional share as of the exercise date (or, if applicable
and a later date, the Net Issuance Exercise Date).
2.6 LISTING
Prior to the issuance of any shares of Common Stock upon exercise of
this Warrant, the Company shall secure the listing of such shares of Common
Stock upon each national securities exchange or automated quotation system, if
any, upon which shares of Common Stock are then listed (subject to official
notice of
A-9
issuance upon exercise of this Warrant) and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all shares of Common
Stock from time to time issuable upon the exercise of this Warrant; and the
Company shall so list on each national securities exchange or automated
quotation system, and shall maintain such listing of, any other shares of
capital stock of the Company issuable upon the exercise of this Warrant if and
so long as any shares of the same class shall be listed on such national
securities exchange or automated quotation system.
ARTICLE 3
ADJUSTMENT OF SHARES OF COMMON STOCK
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article 3.
3.1 MECHANICAL ADJUSTMENTS
(a) If at any time prior to the exercise of this Warrant in
full, the Company shall (i) declare a dividend or make a distribution on the
Common Stock payable in shares of its capital stock (whether shares of Common
Stock or of capital stock of any other class); (ii) subdivide, reclassify or
recapitalize its outstanding Common Stock into a greater number of shares; (iii)
combine, reclassify or recapitalize its outstanding Common Stock into a smaller
number of shares; or (iv) issue any shares of its capital stock by
reclassification of its Common Stock (including any such reclassification in
connection with a consolidation or a merger in which the Company is the
continuing corporation), the number of Warrant Shares issuable upon exercise of
the Warrant and/or the Exercise Price in effect at the time of the record date
of such dividend, distribution, subdivision, combination, reclassification or
recapitalization shall be adjusted so that the Warrantholder shall be entitled
to receive the aggregate number and kind of shares which, if this Warrant had
been exercised in full immediately prior to such event, the Warrantholder would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, distribution, subdivision, combination, reclassification or
recapitalization. Any adjustment required by this Section 3.1(a) shall be made
successively immediately after the record date, in the case of a
A-10
dividend or distribution, or the effective date, in the case of a subdivision,
combination, reclassification or recapitalization, to allow the purchase of such
aggregate number and kind of shares.
(b) If any time prior to the exercise of this Warrant in full,
the Company shall fix a record date for the issuance or making of a distribution
to all holders of the Common Stock (including any such distribution to be made
in connection with a consolidation or merger in which the Company is to be the
continuing corporation) of evidences of its indebtedness, any other securities
of the Company or any cash, property or other assets (excluding a combination,
reclassification or recapitalization referred to in Section 3.1(a), regular cash
dividends or cash distributions paid out of net profits legally available
therefor and in the ordinary course of business if the full amount thereof,
together with the value of other dividends and distributions made substantially
concurrently therewith or pursuant to a plan which includes payment thereof, is
equivalent to not more than 5% of the Company's net worth, or subscription
rights, options or warrants for Common Stock or Common Stock Equivalents
(excluding those referred to in Section 3.1(b)) (any such nonexcluded event
being herein called a "SPECIAL DIVIDEND")), the Exercise Price shall be
decreased immediately after the record date for such Special Dividend to a price
determined by multiplying the Exercise Price then in effect by a fraction, the
numerator of which shall be the then current market price of the Common Stock
(as defined in Section 3.1(e)) on such record date less the fair market value
(as determined in good faith by the Board of Directors of the Company) of the
evidences of indebtedness, securities or property, or other assets issued or
distributed in such Special Dividend applicable to one share of Common Stock or
of such subscription rights or warrants applicable to one share of Common Stock
and the denominator of which shall be the then current market price per share of
Common Stock (as so determined). Any adjustments required by this Section 3.1(b)
shall be made successively whenever such a record date is fixed and in the event
that such distribution is not so made, the Exercise Price shall again be
adjusted to be the Exercise Price that was in effect immediately prior to such
record date.
(c) If at any time prior to the exercise of this Warrant in
full, the Company shall make a distribution to all holders of the Common Stock
of stock of a subsidiary or securities convertible into or exercisable for such
stock, then in lieu of an adjustment in the Exercise Price or the number of
Warrant Shares purchasable upon the exercise of this Warrant, each
Warrantholder, upon the exercise hereof
A-11
at any time after such distribution, shall be entitled to receive from the
Company, such subsidiary or both, as the Company shall determine, the stock or
other securities to which such Warrantholder would have been entitled if such
Warrantholder had exercised this Warrant immediately prior thereto, all subject
to further adjustment as provided in this Article 3, and the Company shall
reserve, for the life of the Warrant, such securities of such subsidiary or
other corporation; provided, however, that no adjustment in respect of dividends
or interest on such stock or other securities shall be made during the term of
this Warrant or upon its exercise.
(d) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to one or more of paragraphs (a) and (b) of this
Section 3.1, the Warrant Shares shall simultaneously be adjusted by multiplying
the number of Warrant Shares initially issuable upon exercise of each Warrant by
the Exercise Price in effect on the date thereof and dividing the product so
obtained by the Exercise Price, as adjusted.
(e) For the purpose of any computation under this Section 3.1,
the current market price per share of Common Stock at any date shall be deemed
to be the average of the daily closing prices for 20 consecutive trading days
commencing 30 trading days before such date. The closing price for each day
shall be the last sale price regular way or, in case no such reported sales take
place on such day, the average of the last reported bid and asked prices regular
way, in either case on the principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the representative closing bid price as reported by
Nasdaq, or other similar organization if Nasdaq is no longer reporting such
information, or if not so available, the fair market price as determined in good
faith by the Board of Directors of the Company.
(f) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least five
cents ($.05) in such price; provided, however, that any adjustments which by
reason of this paragraph (f) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 3.1 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. Notwithstanding anything in this
Section 3.1 to the contrary, the
A-12
Exercise Price shall not be reduced to less than the then existing par value of
the Common Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any
adjustment made pursuant to Section 3.1(a), the Warrantholder thereafter shall
become entitled to receive any shares of the Company other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in this Section 3.1.
(h) In case any event shall occur as to which the other
provisions of this Article 3 are not strictly applicable but as to which the
failure to make any adjustment would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles hereof then, in each such case, the Warrantholders representing the
right to purchase a majority of the Warrant Shares subject to all outstanding
Warrants may appoint a firm of independent public accountants of recognized
national standing reasonably acceptable to the Company, which shall give their
opinion as to the adjustment, if any, on a basis consistent with the essential
intent and principles established herein, necessary to preserve the purchase
rights represented by the Warrants. Upon receipt of such opinion, the Company
will promptly mail a copy thereof to the Warrantholder and shall make the
adjustments described therein. The fees and expenses of such independent public
accountants shall be borne by the Company.
(i) If, as a result of an adjustment made pursuant to this
Article 3, the Holder of any Warrant thereafter surrendered for exercise shall
become entitled to receive shares of two or more classes of capital stock or
shares of Common Stock and other capital stock of the Company, the Board of
Directors (whose determination shall be conclusive and shall be described in a
written notice to the Holder of any Warrant promptly after such adjustment)
shall determine the allocation of the adjusted Exercise Price between or among
shares or such classes of capital stock or shares of Common Stock and other
capital stock.
3.2 NOTICES OF ADJUSTMENT
A-13
Whenever the number of Warrant Shares or the Exercise Price is adjusted
as herein provided, the Company shall prepare and deliver forthwith to the
Warrantholder a certificate signed by its President, and by any Vice President,
Treasurer or Secretary, setting forth the adjusted number of shares purchasable
upon the exercise of this Warrant and the Exercise Price of such shares after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which adjustment was made.
3.3 NO ADJUSTMENT FOR DIVIDENDS
Except as provided in Section 3.1 of this Agreement, no adjustment in
respect of any cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.
3.4 PRESERVATION OF PURCHASE RIGHTS IN CERTAIN TRANSACTIONS
In case of any reclassification, capital reorganization or other change
of outstanding shares of Common Stock (other than a subdivision or combination
of the outstanding Common Stock and other than a change in the par value of the
Common Stock) or in case of any consolidation or merger of the Company with or
into another corporation (other than merger with a subsidiary in which the
Company is the continuing corporation and that does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant) or in the
case of any sale, lease, transfer or conveyance to another corporation of the
property and assets of the Company as an entirety or substantially as an
entirety, the Holder of this Warrant shall have the right thereafter to receive
on the exercise of this Warrant the kind and amount of securities, cash or other
property which the Holder would have owned or have been entitled to receive
immediately after such reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance had this Warrant been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Article 3 with respect to the
rights and interests thereafter of the Holder of this Warrant to the end that
the provisions set forth in this Article 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the exercise of
this
A-14
Warrant. The provisions of this Section 3.4 shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, statutory
exchanges, sales or conveyances. The issuer of any shares of stock or other
securities or property thereafter deliverable on the exercise of this Warrant
shall be responsible for all of the agreements and obligations of the Company
hereunder. Notice of any such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance and of said provisions so
proposed to be made, shall be mailed to the Holders of the Warrants not less
than 30 days prior to such event. A sale of all or substantially all of the
assets of the Company for a consideration consisting primarily of securities
shall be deemed a consolidation or merger for the foregoing purposes.
3.5 FORM OF WARRANT AFTER ADJUSTMENTS
The form of this Warrant need not be changed because of any adjustments
in the Exercise Price or the number or kind of the Warrant Shares, and Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in this Warrant, as initially issued.
3.6 TREATMENT OF WARRANTHOLDER
Prior to due presentment for registration of transfer of this Warrant,
the Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
all purposes and shall not be affected by any notice to the contrary.
ARTICLE 4
OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDER
4.1 NO RIGHTS AS SHAREHOLDERS; NOTICE TO WARRANTHOLDERS
Nothing contained in this Warrant shall be construed as conferring upon
the Warrantholder or his, her or its transferees the right to vote or to receive
dividends or to consent or to receive notice as a shareholder in respect of any
meeting of shareholders for the election of directors of the Company or of any
other matter, or any rights whatsoever as shareholders of the Company. The
Company shall give
A-15
notice to the Warrantholder by registered mail if at any time prior to the
expiration or exercise in full of the Warrants, any of the following events
shall occur:
(a) the Company shall authorize the payment of any dividend
payable in any securities upon shares of Common Stock or authorize the
making of any distribution (other than a cash dividend subject to the
parenthetical set forth in Section 3.1(b)) to all holders of Common
Stock;
(b) the Company shall authorize the issuance to all holders of
Common Stock of any additional shares of Common Stock or Common Stock
Equivalents or of rights, options or warrants to subscribe for or
purchase Common Stock or Common Stock Equivalents or of any other
subscription rights, options or warrants;
(c) a dissolution, liquidation or winding up of the Company
shall be proposed; or
(d) a capital reorganization or reclassification of the Common
Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common
Stock) or any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the
Company is the continuing corporation and that does not result in any
reclassification or change of Common Stock outstanding) or in the case
of any sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety.
Such notice shall be given (i) at least 10 Business Days prior to the
date fixed as a record date or effective date or the date of closing of the
Company's stock transfer books for the determination of the shareholders
entitled to such dividend, distribution or subscription rights, or for the
determination of the shareholders entitled to vote on such proposed merger,
consolidation, sale, conveyance, dissolution, liquidation or winding up. Such
notice shall specify such record date or the date of closing the stock transfer
books, as the case may be. Failure to provide such notice shall not affect the
validity of any action taken in connection with such dividend, distribution or
subscription rights, or proposed merger, consolidation, sale, conveyance,
dissolution, liquidation or winding up.
A-16
4.2 LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS
If this Warrant is lost, stolen, mutilated or destroyed, the Company
may, on such terms as to indemnity or otherwise as it may in its reasonable
judgment impose (which shall, in the case of a mutilated Warrant, include the
surrender thereof), issue a new Warrant of like denomination and tenor as, and
in substitution for, this Warrant.
ARTICLE 5
SPLIT-UP, COMBINATION, EXCHANGE AND
TRANSFER OF WARRANTS AND WARRANT SHARES
5.1 SPLIT-UP, COMBINATION AND EXCHANGE OF WARRANTS
This Warrant may be split up, combined or exchanged for another Warrant
or Warrants containing the same terms to purchase a like aggregate number of
Warrant Shares. If the Warrantholder desires to split up, combine or exchange
this Warrant, he, she or it shall make such request in writing delivered to the
Company and shall surrender to the Company this Warrant and any other Warrants
to be so split up, combined or exchanged. Upon any such surrender for a
split-up, combination or exchange, the Company shall execute and deliver to the
person entitled thereto a Warrant or Warrants, as the case may be, as so
requested. The Company shall not be required to effect any split-up, combination
or exchange which will result in the issuance of a Warrant entitling the
Warrantholder to purchase upon exercise a fraction of a share of Common Stock or
a fractional Warrant. The Company may require such Warrantholder to pay a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any split-up, combination or exchange of Warrants.
5.2 RESTRICTIONS ON TRANSFER, RESTRICTIVE LEGENDS
Except as otherwise permitted by this Section 5.2, each Warrant shall
(and each Warrant issued upon direct or indirect transfer or in substitution for
any Warrant issued pursuant to Section 5.1 shall) be stamped or otherwise
imprinted with a legend in substantially the following form:
A-17
"THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT."
Except as otherwise permitted by this Section 5.2, each stock
certificate for Warrant Shares issued upon the exercise of any Warrant and each
stock certificate issued upon the direct or indirect transfer of any such
Warrant Shares shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UwNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT."
Notwithstanding the foregoing, the Warrantholder may require the
Company to issue a Warrant or a stock certificate for Warrant Shares, in each
case without a legend, if (i) the issuance of such Warrant Shares has been
registered under the Securities Act, (ii) such Warrant or such Warrant Shares,
as the case may be, have been registered for resale under the Securities Act or
sold pursuant to Rule 144 under the Securities Act (or a successor thereto) or
(iii) the Warrantholder has received an opinion of counsel (who may be house
counsel for such Warrantholder) reasonably satisfactory to the Company that such
registration is not required with respect to such Warrant or such Warrant
Shares, as the case may be.
ARTICLE 6
REGISTRATION UNDER THE SECURITIES ACT OF 1933
6.1 PIGGYBACK REGISTRATION
(a) Right to Include Registrable Securities. If at any time or
from time to time prior to the second anniversary of the Expiration Date, the
Company proposes to register any of its securities under the Securities Act on
any form for the registration of securities under such Act, whether or not for
its own account (other
A-18
than by a registration statement on Form S-8 or other form which does not
include substantially the same information as would be required in a form for
the general registration of securities or would not be available for the
Registrable Securities) (a "PIGGYBACK REGISTRATION"), it shall as expeditiously
as possible give written notice to all Holders of its intention to do so and of
such Holders' rights under this Section 6.1. Such rights are referred to
hereinafter as "PIGGYBACK REGISTRATION RIGHTS." Upon the written request of any
such Holder made within 20 days after receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by such
Holder), the Company shall include in the Registration Statement the Registrable
Securities which the Company has been so requested to register by the Holders
thereof and the Company shall keep such registration statement in effect and
maintain compliance with each federal and state law or regulation for the period
necessary for such Holder to effect the proposed sale or other disposition (but
in no event for a period greater than 90 days).
(b) Withdrawal of Piggyback Registration by Company. If, at
any time after giving written notice of its intention to register any securities
in a Piggyback Registration but prior to the effective date of the related
Registration Statement, the Company shall determine for any reason not to
register such securities, the Company shall give notice of such determination to
each Holder and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such Piggyback Registration. All best
efforts obligations of the Company pursuant to Section 6.4 shall cease if the
Company determines to terminate prior to such effective date any registration
where Registrable Securities are being registered pursuant to this Section 6.1.
(c) Piggyback Registration of Underwritten Public Offering. If
a Piggyback Registration involves an offering by or through underwriters, then
(i) all Holders requesting to have their Registrable Securities included in the
Company's Registration Statement must sell their Registrable Securities to the
underwriters selected by the Company on the same terms and conditions as apply
to other selling shareholders and (ii) any Holder requesting to have his, her or
its Registrable Securities included in such Registration Statement may elect in
writing, not later than three Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
his or its Registrable Securities so included in connection with such
registration.
A-19
(d) Payment of Registration Expenses for Piggyback
Registration. The Company shall pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to a Piggyback
Registration Right contained in this Section 6.1.
(e) Priority in Piggyback Registration. If a Piggyback
Registration involves an offering by or through underwriters, the Company,
except as otherwise provided herein, shall not be required to include
Registrable Shares therein if and to the extent the underwriter managing the
offering reasonably believes in good faith and advises each Holder requesting to
have Registrable Securities included in the Company's Registration Statement
that such inclusion would materially adversely affect such offering; provided,
that (i) if other selling shareholders without contractual registration rights
have requested registration of securities in the proposed offering, the Company
will reduce or eliminate such securities held by selling shareholders without
registration rights before any reduction or elimination of Registrable
Securities; and (ii) any such reduction or elimination (after taking into
account the effect of clause (i)) shall be pro rata to all other selling
shareholders with contractual registration rights.
6.2 DEMAND REGISTRATION
(a) Request for Registration. If, at any time prior to the
Expiration Date, any 25% Holders request that the Company file a registration
statement under the Securities Act, as soon as practicable thereafter the
Company shall use its best efforts to file a registration statement with respect
to all Warrant Shares that it has been so requested to include and obtain the
effectiveness thereof, and to take all other action necessary under federal or
state law or regulation to permit the Warrant Shares that are held and/or that
may be acquired upon the exercise of the Warrants specified in the notices of
the Holders or holders hereof to be sold or otherwise disposed of, and the
Company shall maintain such compliance with each such federal and state law and
regulation for the period necessary for such Holders or holders to effect the
proposed sale or other disposition; provided, however, the Company shall be
entitled to defer such registration for a period of up to 60 days if and to the
extent that its Board of Directors shall determine in good faith that such
registration would require disclosure of information not then otherwise required
to be disclosed and that such disclosure would adversely affect any material
business situation, transaction or negotiation then proposed, contemplated or
being engaged in by the Company. The Company shall also
A-20
promptly give written notice to the Holders and the holders of any other
Warrants and/or the holders of any Warrant Shares who or that have not made a
request to the Company pursuant to the provisions of this Section 6.2(a) of its
intention to effect any required registration or qualification, and shall use
its best efforts to effect as expeditiously as possible such registration or
qualification of all such other Warrant Shares that are then held and/or that
may be acquired upon the exercise of the Warrants, the Holders or holders of
which have requested such registration or qualification, within 15 days after
such notice has been given by the Company, as provided in the preceding
sentence. The Company shall be required to effect a registration or
qualification pursuant to this Section 6.2(a) on one occasion only.
(b) Payment of Registration Expenses for Demand Registration.
The Company shall pay all Registration Expenses in connection with the Demand
Registration.
(c) Selection of Underwriters. If any Demand Registration is
requested to be in the form of an underwritten offering, the managing
underwriter shall be Xxxxx Xxxxx & Son Incorporated and the co-manager (if any)
and the independent price required under the rules of the NASD (if any) shall be
selected and obtained by the Holders of a majority of the Warrant Shares to be
registered. Such selection shall be subject to the Company's consent, which
consent shall not be unreasonably withheld. All fees and expenses (other than
Registration Expenses otherwise required to be paid) of any managing
underwriter, any co-manager or any independent underwriter or other independent
price required under the rules of the NASD shall be paid for by such
underwriters or by the Holders or holders whose shares are being registered. If
Xxxxx Xxxxx & Son Incorporated should decline to serve as managing underwriter,
the Holders of a majority of the Warrant Shares to be registered may select and
obtain one or more managing underwriters. Such selection shall be subject to the
Company's consent, which shall not be unreasonably withheld.
(d) Procedure for Requesting Demand Registration. Any request
for a Demand Registration shall specify the aggregate number of the Registrable
Securities proposed to be sold and the intended method of disposition. Within 10
days after receipt of such a request the Company will give written notice of
such registration request to all Holders, and, subject to the limitations of
Section 6.2(b), the Company will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15
A-21
Business Days after the date on which such notice is given. Each such request
shall also specify the aggregate number of Registrable Securities to be
registered and the intended method of disposition thereof.
6.3 BUY-OUTS OF REGISTRATION DEMAND
In lieu of carrying out its obligations to effect a Piggyback
Registration or Demand Registration of any Registrable Securities pursuant to
this Article 6, the Company may carry out such obligation by offering to
purchase and purchasing such Registrable Securities requested to be registered
in an amount in cash equal to the difference between (a) 95% of the last sale
price of the Common Stock on the day the request for registration is made and
(b) the Exercise Price in effect on such day; provided, however, that the Holder
or Holders may withdraw such request for registration rather than accept such
offer by the Company.
6.4 REGISTRATION PROCEDURES
If and whenever the Company is required to use its best efforts to take
action pursuant to any Federal or state law or regulation to permit the sale or
other disposition of any Registrable Securities that are then held or that may
be acquired upon exercise of the Warrants in order to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Article 6, the Company shall, as expeditiously as practicable:
(a) prepare and file with the SEC, as soon as practicable
within 60 days after the end of the period within which requests for
registration may be given to the Company (but subject to the provision for
deferral contained in Section 6.2(a) hereof) a Registration Statement or
Registration Statements relating to the registration on any appropriate form
under the Securities Act, which form shall be available for the sale of the
Registrable Securities in accordance with the intended method or methods of
distribution thereof, and use its best efforts to cause such Registration
Statements to become effective; provided, that before filing a Registration
Statement or Prospectus or any amendment or supplements thereto, including
documents incorporated by reference after the initial filing of any Registration
Statement, the Company will furnish to the Holders of the Registrable Securities
covered by such Registration Statement and the underwriters, if any, copies of
all such documents proposed to be filed, which documents will be subject to the
review of such Holders and underwriters;
A-22
(b) prepare and file with the SEC such amendments and
post-effective amendments to a Registration Statement as may be necessary to
keep such Registration Statement effective for 180 days if the offering is not
underwritten, provided, that such 180 day period shall be extended by the number
of days a Prospectus is not available pursuant to Section 6.4(k) because of the
occurrence of an event set forth in Section 6.4(c)(vi); cause the related
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement or supplement to such Prospectus;
(c) notify the selling Holders of Registrable Securities and
the managing underwriters, if any, promptly, and (if requested by any such
Person) confirm such advice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related Prospectus or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose; (iv) if at any time the representations and warranties of the Company
contemplated by paragraph (m) below ceases to be true and correct in all
material respects; (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purposes; and (vi) of the happening of any event that makes
any statement of a material fact made in the Registration Statement, the
Prospectus or any document incorporated therein by reference untrue or which
requires the making of any changes in the Registration Statement or Prospectus
so that they will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading:
(d) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
A-23
(e) if reasonably requested by the managing underwriters,
immediately incorporate in a Prospectus supplement or post-effective amendment
such information as the managing underwriters believe (on advice of counsel)
should be included therein as required by applicable law relating to such sale
of Registrable Securities, including, without limitation, information with
respect to the purchase price being paid for the Registrable Securities by such
underwriters and with respect to any other terms of the underwritten (or
"best-efforts" underwritten) offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(f) furnish to each selling Holder of Registrable Securities
and each managing underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(g) deliver to each selling Holder of Registrable Securities
and the underwriters, if any, without charge, as many copies of the Prospectus
or Prospectuses (including each preliminary prospectus) any amendment or
supplement thereto as such Persons may reasonably request; the Company consents
to the use of such Prospectus or any amendment or supplement thereto by each of
the selling Holders of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities,
cooperate with the selling Holders of Registrable Securities, the underwriters,
if any, and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any selling Holder or underwriter reasonably requests in writing, keep each such
registration or qualification effective during the period such Registration
Statement is required to be kept effective and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the applicable Registration Statement;
provided that the Company will not be required to qualify to do business in any
jurisdiction where it not then so qualified or to take any action which would
subject the Company to general service of process in any jurisdiction where it
is not at the time so subject;
A-24
(i) cooperate with the selling Holders of Registrable
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends; and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters may request at least two Business Days prior to any sale
of Registrable Securities to the underwriters;
(j) use its best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities within the United
States as may be necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(k) upon the occurrence of any event contemplated by Section
6.4(c)(vi) above, prepare a supplement or post-effective amendment to the
applicable Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(l) with respect to each issue or class of Registrable
Securities, use its best efforts to cause all Registrable Securities covered by
the Registration Statements to be listed on each securities exchange or
automated quotation system, if any, on which similar securities issued by the
Company are then listed if requested by the Holders of a majority of such issue
or class of Registrable Securities;
(m) enter into such agreements (including an underwriting
agreement) and take all such other action reasonably required in connection
therewith in order to expedite or facilitate the disposition of such Registrable
Securities and in such connection, if the registration is in connection with an
underwritten offering (i) make such representations and warranties to the
underwriters (or the Holders of the Registrable Securities if such offering is
not underwritten), in such form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and updates
thereof
A-25
(which counsel and opinions in form, scope and substance shall be reasonably
satisfactory to the underwriters) addressed to the underwriters (or the Holders
of the Registrable Securities if such offering is not underwritten) covering the
matters customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such underwriters (or the
Holders of the Registrable Securities if such offering is not underwritten);
(iii) obtain "cold comfort" letters and updates thereof from the Company's
accountants addressed to the underwriters (or the Holders of the Registrable
Securities if such offering is not underwritten), such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters by underwriters in connection with underwritten offerings; (iv)
set forth in full in any underwriting agreement entered into the indemnification
provisions and procedures of Section 6.5 hereof with respect to all parties to
be indemnified pursuant to said Section; and (v) deliver such documents and
certificates as may be reasonably requested by the underwriters to evidence
compliance with clause (i) above and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company; the
above shall be done at each closing under such underwriting or similar agreement
or as and to the extent required hereunder;
(n) make available for inspection by one or more
representatives of the Holders of Registrable Securities being sold, any
underwriter participating in any disposition pursuant to such registration, and
any attorney or accountant retained by such Holders or underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such representatives, in connection with
such; and
(o) otherwise use its best efforts to comply with all
applicable Federal and state regulations; and take such other action as may be
reasonably necessary to or advisable to enable each such Holder and each such
underwriter to consummate the sale or disposition in such jurisdiction or
jurisdiction in which any such Holder or underwriter shall have requested that
the Registrable Securities be sold.
Except as otherwise provided in this Agreement, the Company shall have
sole control in connection with the preparation, filing, withdrawal, amendment
or supplementing of each Registration Statement, the selection of underwriters,
and
A-26
the distribution of any preliminary prospectus included in the Registration
Statement, and may include within the coverage thereof additional shares of
Common Stock or other securities for its own account or for the account of one
or more of its other security holders.
The Company may require each Seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such securities and such other
information as may otherwise be required by the Securities Act to be included in
such Registration Statement.
6.5 INDEMNIFICATION
(a) Indemnification by Company. In connection with each
Registration Statement relating to disposition of Registrable Securities, the
Company shall indemnify and hold harmless each Holder, its officers, directors
and agents and each underwriter of Registrable Securities and each Person, if
any, who controls such Holder or underwriter (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) against any and all
losses, claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement, Prospectus or
preliminary prospectus or any amendment thereof or supplement thereto, or arise
out of or are based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that such indemnity shall not inure
to the benefit of any Holder or underwriter (or any Person controlling such
Holder or underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) on account of any losses, claims, damages or
liabilities arising from the sale of the Registrable Securities if such untrue
statement or omission or alleged untrue statement or omission was made in such
Registration Statement, Prospectus or preliminary prospectus, or such amendment
or supplement, in reliance upon and in conformity with information furnished in
writing to the Company by such Holder or underwriter specifically for
A-27
use therein. The Company shall also indemnify selling brokers, dealer managers
and similar securities industry professionals participating in the distribution,
their officers and directors and each Person who controls such Persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holders of Registrable Securities, if requested. This indemnity agreement
shall be in addition to any liability which the Company may otherwise have.
(b) Indemnification by Holder. In connection with each
Registration Statement, each Holder shall indemnify, to the same extent as the
indemnification provided by the Company in Section 6.5(a), the Company, its
directors and each officer who signs the Registration Statement and each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) but only insofar as such losses, claims,
damages and liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration Statement, the Prospectus or preliminary prospectus or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
information furnished in writing by such Holder to the Company specifically for
use therein. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation. The Company shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above, with respect to information
so furnished in writing by such Persons specifically for inclusion in any
Prospectus, Registration Statement or preliminary prospectus or any amendment
thereof or supplement thereto.
(c) Conduct of Indemnification Procedure. Any party that
proposes to assert the right to be indemnified hereunder will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all papers
served. No indemnification provided for in Section 6.5(a) or 6.5(b) shall be
available to any party who shall fail to give notice as provided in this Section
6.5(c) if the party to whom notice was not given was unaware of the proceeding
to which such notice
A-28
would have related and was prejudiced by the failure to give such notice, but
the omission so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to any
indemnified party for contribution otherwise than under this Section. In case
any such action, suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties,
(ii) the indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified party
in the conduct of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying parties. An
indemnified party shall not be liable for any settlement of any action, suit,
proceeding or claim effected without its written consent.
(d) Contribution. In connection with each Registration
Statement relating to the disposition of Registrable Securities, if the
indemnification provided for in subsection (a) hereof is unavailable to an
indemnified party thereunder in respect to any losses, claims, damages or
liabilities referred to therein, then the indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in paragraph (a) or (b) of this
Section 6.5 in such proportion as is appropriate to reflect the relative fault
of the indemnifying party on the one hand and of the indemnified party on the
other in connection with the statements or omissions that
A-29
resulted in such losses, claims, damages or liabilities, or actions in respect
thereof, as well as any other relevant equitable considerations. Relative fault
shall be determined by reference to, among other things, 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 indemnifying
party or the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. Notwithstanding anything to the contrary in this Section
6.5(d), no selling Holder of Registrable Securities shall be required to
contribute any amount in excess of the net proceeds it received in connection
with its sale of Registrable Securities.
(e) Underwriting Agreement to Control. Notwithstanding the
foregoing provisions of this Section 6.5, to the extent that the provisions on
indemnification and contribution contained in any underwriting agreement entered
into in connection with the underwritten public offering of the Registrable
Securities are in conflict with the foregoing provisions, the provisions in such
underwriting agreement shall control.
(f) Specific Performance. The Company and the Holder
acknowledge that remedies at law for the enforcement of this Section 6.5 may be
inadequate and intend that this Section 6.5 shall be specifically enforceable.
(g) Survival of Obligations. The obligations of the Company
and the Holder under this Section 6.5 shall survive the completion of any
offering of Registrable Securities pursuant to a Registration Statement under
this Article 6, and otherwise.
6.6 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of the Company to the
public without registration or pursuant to a registration on Form S-3, the
Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined us SEC Rule 144, at all times after 90 days after the
A-30
effective date of the first registration statement filed by the Company for the
offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after 90 days after the effective date of the first registration
statement filed by the Company), the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
ARTICLE 7
OTHER MATTERS
7.1 BINDING EFFECTS; BENEFITS
This Warrant shall inure to the benefit of and shall be binding upon
the Company and the Warrantholder and their respective heirs, legal
representatives, successors and assigns. Nothing in this Warrant, expressed or
implied, is intended to or shall confer on any person other than the Company and
the Warrantholder, or their respective heirs, legal representatives, successors
or assigns, any rights, remedies, obligations or liabilities under or by reason
of this Warrant.
A-31
7.2 NO INCONSISTENT AGREEMENTS
The Company will not on or after the date of this Warrant enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders in this Warrant or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to holders of the
Company's securities under any other agreements.
7.3 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES
The Company will not take any action outside the ordinary course of
business, or permit any change within its control to occur outside the ordinary
course of business, with respect to the Registrable Securities which is without
a bona fide business purpose, and which is intended to interfere with the
ability of the Holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement.
7.4 INTEGRATION/ENTIRE AGREEMENT
This Warrant is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the Warrants.
This Warrant supersedes all prior agreements and understandings between the
parties with respect to such subject matter (other than warrants previously
issued by the Company to the Warrantholder).
7.5 AMENDMENTS AND WAIVERS
The provisions of this Warrant, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given unless the Company has
obtained the written consent of holders of at least a majority of the
outstanding Registrable Securities. Holders shall be bound by any consent
authorized by this
A-32
Section whether or not certificates representing such Registrable Securities
have been marked to indicate such consent.
7.6 COUNTERPARTS
This Warrant may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
7.7 GOVERNING LAW
This Warrant shall be governed by and construed in accordance with the
laws of the State of New York.
7.8 SEVERABILITY
In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provisions
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
7.9 ATTORNEYS' FEES
In any action or proceeding brought to enforce any provisions of this
Warrant, or where any provision hereof is validly asserted as a defense, the
successful party shall be entitled to recover reasonable attorneys' fees and
disbursements in addition to its costs and expenses and any other available
remedy.
7.10 COMPUTATIONS OF CONSENT
Whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities held by
the Company or its affiliates (other than the Warrantholder or subsequent
Holders if they are deemed to be such affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
A-33
7.11 NOTICE
Any notices or certificates by the Company to the Holder and by the
Holder to the Company shall be deemed delivered if in writing and delivered in
person or by registered mail (return receipt requested) to the Holder addressed
to him in care of [Xxxxx Xxxxx & Son Incorporated, 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000] [Xxxxxxx Bros., L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000], or, if the Holder has designated, by notice in writing to the Company,
any other address, to such other address, and if to the Company, addressed to it
at: 000 Xxxx Xxxxxx, Xxxx Xxxxxxxxxxx, massachusetts 02379, Attention:
Secretary, with a copy to Brown, Rudnick, Freed & Gesmer, P.C., Xxx Xxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X. London, Esq. or if the
Company has designated, by notice in writing to the Holder, any other address,
to such other address.
7.12 TRANSFER
Notwithstanding anything to the contrary contained herein, the
Warrantholder will not sell, assign, pledge, or transfer this Warrant, except to
its officers or partners, or to the officers or partners of an underwriter of
the Offering for a period of one year from the date hereof.
The Company may change its address by written notice to the Holder and
the Holder may change its address by written notice to the Company.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the ____ day of _______________, 1996.
BOSTON BIOMEDICA, INC.
By: ______________________________
Title: ___________________________
Attest: _______________________
X-00
Xxxxx
X-00
XXXXXXXX FORM
(To be executed upon exercise of Warrant)
Boston Biomedica, Inc.
000 Xxxx Xxxxxx
Xxxx Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase Warrant Shares and (check one):
_
|_| herewith tenders payment for ______________ of the Warrant
Shares to the order of Boston Biomedica, Inc. in the amount of
$______ in accordance with the terms of this Warrant; or
_
|_| herewith tenders this Warrant for ______________ Warrant
Shares pursuant to the net issuance exercise provisions of
Section 2.3(b) of this Warrant.
Please issue a certificate or certificates for such Warrant Shares in
the name of, and pay any cash for any fractional share to:
Name ______________________________________
______________________________________
______________________________________
______________________________________
(Please print Name, Address and Social
Security No.)
Signature____________________________
Note: The above signature should
correspond exactly with the
name on the first page of this
Warrant Certificate or with
the name of the
A-36
assignee appearing in the
assignment form below.
If said number of shares shall not be all the shares purchasable under
the within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder.
A-37
ASSIGNMENT
(To be executed only upon assignment of Warrant)
For value received, ___________________ hereby sells, assigns and
transfers unto __________________ the within Warrant, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
______________________ attorney, to transfer said Warrant on the books of the
within-named Company with respect to the number of Warrant Shares set forth
below, with full power of substitution in the premises:
Name(s) of No. of
Assignee(s) Address Warrant Shares
----------- ------- --------------
And if said number of Warrant Shares shall not be all the Warrant Shares
represented by the Warrant, a new Warrant is to be issued in the name of said
undersigned for the balance remaining of the Warrant Shares registered by said
Warrant.
Dated: ________________ Signature ______________________________
Note: The above signature should
correspond exactly with the
name on the face of this
Warrant
A-38
EXHIBIT B
FORM OF LOCK-UP AGREEMENT
__________________, 1996
Xxxxx Xxxxx & Son Incorporated
Xxxxxxx Bros., L.P.
As Representative of the several Underwriters
c/o Xxxxx Xxxxx & Son Incorporated
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you propose to enter into an
Underwriting Agreement (the "Underwriting Agreement") with Boston Biomedica,
Inc. (the "Company") providing for the purchase by you and certain other firms
(the "Underwriters") of shares (the "Shares") of Common Stock, par value $0.01
per share (the "Common Stock"), of the Company and that the Underwriters propose
to offer the Shares to the public. The undersigned further understands that the
proposed sale of such Shares is the subject of a Registration Statement on Form
S-1 which will be filed with the Securities and Exchange Commission and which
will include a form of preliminary prospectus to be used in offering such Shares
to the public.
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that without the prior written consent of Xxxxx Xxxxx
& Son Incorporated, which consent may be withheld in the sole discretion of
Xxxxx Xxxxx & Son Incorporated, the undersigned will not (i) offer to sell,
contract to sell, sell, distribute, grant any option to purchase, pledge,
hypothecate, or otherwise dispose of, directly or indirectly, any shares of
Common Stock, or any securities convertible into, or exercisable or exchangeable
for, shares of Common Stock for a period of 180 days after the date of the final
prospectus relating to the offering
B-1
of the Shares to the public by the Underwriter except for the exercise by the
undersigned of outstanding options granted by the Company or pursuant to any
options granted or to be granted pursuant to employee stock option plans (but
not the sale, distribution, pledge, hypothecation or other disposition of Common
Stock received upon such exercise) or (ii) in connection with the offering of
the Shares to the public by the Underwriter and for 365 days after the date of
the final prospectus relating thereto exercise any registration rights, whether
held by the undersigned on the date hereof or hereafter acquired, with respect
to any shares of Common Stock, or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock. Prior to the expiration
of such periods, the undersigned will not announce or disclose any intention to
do anything after the expiration of such periods which the undersigned is
prohibited, as provided in the preceding sentence, from doing during such
periods. After such periods, all shares of Common Stock owned by the undersigned
may be sold or registered, as the case may be, without restriction hereunder,
subject to applicable securities laws and regulations.
The undersigned agrees that the provisions of this Agreement shall be
binding upon the successors, assigns, heirs and personal representatives of the
undersigned.
In furtherance of the foregoing, the undersigned agrees that the
Company and its transfer agent are hereby authorized to decline to make any
transfer of securities if such transfer would constitute a violation or breach
of this Agreement.
It is understood that, if the Underwriting Agreement does not become
effective prior to ________________, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Shares, the undersigned's
obligations under this Agreement shall terminate.
Very truly yours,
By:____________________________
B-2
-------------------------------
Print name and title
(if applicable)
B-3
