EXHIBIT 1.1
1,700,000 Shares
FUSION MEDICAL TECHNOLOGIES, INC.
Common Stock
PLACEMENT AGENCY AGREEMENT
___________, 1999
ING Baring Xxxxxx Xxxx LLC
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Fusion Medical Technologies, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell (the "Offering") up to an aggregate of 1,700,000
shares (the "Shares") of common stock, par value $0.001 per share (the "Common
Stock"), principally to selected institutional investors (collectively,
"Investors"). The Company desires to engage you as its placement agent (the
"Placement Agent") in connection with the Offering.
The Company hereby confirms its agreements with the Placement Agent as
follows:
1. Agreement To Act As Placement Agent. On the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions of this Agreement, the Placement Agent agrees to act as the
Company's exclusive placement agent, on a best efforts basis, in connection with
the issuance and sale by the Company of the Shares to Investors. The Company
shall pay to the Placement Agent in the aggregate 6% of the proceeds received by
the Company from the sale of the Shares in the Offering. If the Placement Agent
presents to the Company Qualified Indications of Interest (defined hereinafter)
from one or several Investors, which, in the aggregate, amount to $10.0 million
or greater, and the Company does not accept at least $10.0 million of such
funds, then the Cash Placement Fee set forth in the preceding sentence shall
amount to $600,000. For purpose of this Agreement, a Qualified Indication of
Interest shall mean an oral or written proposal to purchase securities of the
Company offered pursuant to the Offering at a price per share equal to or in
excess of 85% of the average closing price of the Company's common stock (as
traded on the
1.
Nasdaq National Market) for (i) the ten (10) trading days immediately preceding
the presentation by the Placement Agent to the Company of the list of the
minimum amount of Qualified Indications of Interest (the "Presentation Date") or
(ii) the trading days from January 1, 1999 to the Presentation Date, whichever
is higher. The Company will also reimburse the Placement Agent for certain out-
of-pocket expenses up to a maximum of $75,000 in accordance with Section 5 of
this Agreement.
2. Delivery and Payment. On or prior to the Effective Date (as defined
below), the Company, the Placement Agent and ________________________, as escrow
agent (the "Escrow Agent"), shall enter into an escrow agreement in customary
form mutually acceptable to the Company, the Placement Agent and the Escrow
Agent (the "Escrow Agreement"), pursuant to which an escrow account will be
established, at the Company's expense, for the benefit of Investors (the "Escrow
Account"). The Escrow Agreement will provide that, prior to the Closing Date,
(i) each Investor will deposit in the Escrow Account an amount equal to the
price per Share multiplied by the number of Shares purchased by it, and (ii) the
Escrow Agent will notify the Company and the Placement Agent in writing whether
such Investors have deposited in the Escrow Account funds in an amount which
shall equal the proceeds of the sale of not fewer than _________ of the Shares
offered in the Offering (the "Requisite Funds"). At 9:00 a.m., New York City
time, on such date as may be agreed upon by the Company and the Placement Agent
(such date is hereinafter referred to as the "Closing Date"), the Escrow Agent
will release the Requisite Funds from the Escrow Account for collection by the
Company and the Placement Agent as provided in the Escrow Agreement and the
Company shall deliver the Shares to Investors, which delivery may be made
through the facilities of the Depository Trust Company. The closing of the
Offering (the "Closing") shall take place at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Palo Alto, California. All actions taken at the Closing shall
be deemed to have occurred simultaneously.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Placement Agent as follows:
(a) A registration statement on Form S-l (File No. 333-72001) under the
Securities Act of 1933 as amended (the "Act"), with respect to the Shares,
including a form of prospectus subject to completion, has been prepared by the
Company in conformity with the requirements of the Act and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder (the "Rules and Regulations"). Such registration statement has been
filed with the Commission under the Act, and one or more amendments to such
registration statement (including any post-effective amendment thereto and any
registration statement filed under Rule 462(b) of the Commission relating
thereto) may also have been so filed. After the execution of this Agreement, the
Company shall file with the Commission either (i) if such registration
statement, as it may have been amended, has been declared by the Commission to
be
2.
effective under the Act, a prospectus in the form most recently included in
an amendment to such registration statement filed with the Commission (or, if no
such amendment shall have been filed, in such registration statement), with such
insertions and changes as are required by Rule 430A under the Act or permitted
by Rule 424(b) under the Act as shall have been provided to and approved by the
Placement Agent prior to the filing thereof, or (ii) if such registration
statement, as it may have been amended, has not been declared by the Commission
to be effective under the Act, an amendment to such registration statement,
including a form of prospectus, a copy of which amendment has been furnished to
and approved by the Placement Agent prior to the filing thereof. As used in this
Agreement, the term "Registration Statement" means such registration statement,
as amended at the time when it was or is declared effective, including all
financial schedules and exhibits thereto; the Registration Statement shall be
deemed to include any information omitted therefrom pursuant to Rule 430A under
the Act and included in the Prospectus (as hereinafter defined) and shall also
mean any registration statement filed pursuant to Rule 462(b) under the Act; the
term "Preliminary Prospectus" means each prospectus subject to completion
contained in such registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration Statement
or any amendment thereto or filed pursuant to Rule 424(a) under the Act at the
time it was or is declared effective); and the term "Prospectus" means the
prospectus first filed with the Commission pursuant to Rule 424(b) under the Act
or, if no prospectus is required to be filed pursuant to said Rule 424(b), such
term means the prospectus included in the Registration Statement.
(b) Neither the Commission nor any state securities commission has issued
any order preventing or suspending the use of any Preliminary Prospectus or has
instituted or threatened to institute any proceedings with respect to such an
order. When any Preliminary Prospectus was filed with the Commission it (i)
contained all statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act and the
Rules and Regulations and (ii) did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. When the Registration Statement or any amendment thereto
was or is declared effective, it (A) contained or will contain all statements
required to be stated therein in accordance with, and complied or will comply in
all material respects with the requirements of, the Act and the Rules and
Regulations and (B) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus and when any amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required to be so filed,
when the Registration Statement and when any amendment thereto containing such
amendment or supplement to the Prospectus was or is declared effective) and at
all times
3.
subsequent thereto up to and including the Closing Date (as defined in
Section 2 hereof), the Prospectus, as amended or supplemented at any such time,
(I) contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the Rules and Regulations and (II) did not or will
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) shall not apply to statements or omissions made
in any Preliminary Prospectus which have been corrected in a subsequent
Preliminary Prospectus or the Prospectus or to statements or omissions made in
any Preliminary Prospectus, the Registration Statement or any amendment thereto
or the Prospectus or any amendment or supplement thereto in reliance upon, and
in conformity with, information furnished in writing to the Company by the
Placement Agent expressly for use therein.
(c) The Company and each of its subsidiaries (i) is a duly incorporated
and validly existing corporation in good standing under the laws of its
jurisdiction of incorporation, with full power and authority, corporate and
other, to own or lease its properties and to conduct its business as described
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus); and (ii) is duly
qualified to do business as a foreign corporation and is in good standing in
California and in each other jurisdiction (A) in which the conduct of its
business requires such qualification (except for those jurisdictions in which
the failure so to qualify has not had and will not have a Material Adverse
Effect (as hereinafter defined)) and (B) in which it owns or leases property.
"Material Adverse Effect" means, when used in connection with the Company or its
subsidiaries, any development, change or effect that is materially adverse to
the business, properties, assets, net worth, condition (financial or other),
results of operations or prospects of the Company and its subsidiaries taken as
a whole.
(d) The Company has the duly authorized and validly outstanding
capitalization set forth under the caption "Capitalization" in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and will have the adjusted capitalization set forth therein on the
Closing Date, based on the assumptions set forth therein. The securities of the
Company conform to the descriptions thereof contained in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus). The
outstanding shares of Common Stock have been duly authorized and validly issued
by the Company and are fully paid and nonassessable. Except as created hereby or
referred to in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), there are no outstanding options, warrants,
rights or other arrangements requiring the Company or any subsidiary at any time
to issue any capital stock. No holders of outstanding shares of capital stock of
the Company are entitled as such to any preemptive or other rights to subscribe
for any of the
4.
Shares, and neither the filing of the Registration Statement nor the offering or
sale of the Shares as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating to, the
registration of any securities of the Company. The Shares have been duly
authorized, on the Closing Date, after payment therefor in accordance with the
terms of this Agreement, (A) the Shares to be sold by the Company hereunder will
be validly issued, fully paid and nonassessable, and (B) good and marketable
title to the Shares will pass to the Investors on the Closing Date free and
clear of any lien, encumbrance, security interest, claim or other restriction
whatsoever. All the outstanding shares of capital stock of each subsidiary has
been duly authorized and validly issued, are fully paid and nonassessable and
are owned directly by the Company, free and clear of any lien, encumbrance,
security interest, claim or other restriction whatsoever. The Shares have been
listed for quotation on the Nasdaq National Market.
(e) The consolidated financial statements and the related notes and
schedules thereto included in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present the consolidated financial condition, results of operations,
stockholders' equity and cash flows of the Company and its subsidiaries at the
dates and for the periods specified therein. Such financial statements and the
related notes and schedules thereto have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein) and such financial
statements as are audited have been examined by PricewaterhouseCoopers LLP, who
are independent public accountants within the meaning of the Act and the Rules
and Regulations, as indicated in their reports filed therewith. The selected
financial information and statistical data set forth under the caption "Selected
Financial Information" in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) have been prepared on a basis
consistent with the consolidated financial statements of the Company and its
subsidiaries.
(f) The Company and each of its subsidiaries have filed all necessary
federal, state and local income, franchise and other material tax returns and
have paid all taxes shown as due thereunder, and the Company has no knowledge of
any tax deficiency which might be assessed against the Company which, if so
assessed, may have a Materially Adverse Effect.
(g) The Company and each of its subsidiaries maintain insurance of the
types and in amounts which they reasonably believe to be adequate for their
business in such amounts and with such deductibles as is customary for companies
in the same or similar business, all of which insurance is in full force and
effect.
5.
(h) Except as disclosed in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), there is no action, suit,
proceeding or investigation pending or threatened before or by any court,
regulatory body or administrative agency or any other governmental agency or
body, domestic or foreign, which (i) questions the validity of the capital stock
of the Company or this Agreement or of any action taken or to be taken by the
Company pursuant to or in connection with this Agreement, (ii) is required to be
disclosed in the Registration Statement which is not so disclosed (and such
proceedings, if any, as are summarized in the Registration Statement are
accurately summarized in all material respects), or (iii) may have a Material
Adverse Effect.
(i) The Company has full legal right, power and authority to enter into
this Agreement and the Escrow Agreement and to consummate the transactions
provided for herein and therein. Each of this Agreement and the Escrow Agreement
has been duly authorized, executed and delivered by the Company and, assuming
they are binding agreements of yours, constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms (except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of equitable principles relating to the availability of remedies and
except as rights to indemnity or contribution may be limited by federal or state
securities laws and the public policy underlying such laws), and none of the
Company's execution or delivery of this Agreement or the Escrow Agreement, its
performance hereunder or thereunder, its consummation of the transactions
contemplated herein or therein, its application of the net proceeds of the
offering in the manner set forth under the caption "Use of Proceeds" or the
conduct of its business as described in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), conflicts or will
conflict with or results or will result in any breach or violation of any of the
terms or provisions of, or constitutes or will constitute a default under,
causes or will cause (or permits or will permit) the maturation or acceleration
of any liability or obligation or the termination of any right under, or result
in the creation or imposition of any lien, charge, or encumbrance upon, any
property or assets of the Company or any of its subsidiaries pursuant to the
terms of (i) the certificate of incorporation or by-laws of the Company or any
of its subsidiaries, (ii) any indenture, mortgage, deed of trust, voting trust
agreement, stockholders' agreement, note agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them are or may be bound or to which any of their respective
property is or may be subject or (iii) any statute, judgment, decree, order,
rule or regulation applicable to the Company or any of its subsidiaries of any
government, arbitrator, court, regulatory body or administrative agency or other
governmental agency
6.
or body, domestic or foreign, having jurisdiction over the Company, any of its
subsidiaries or any of their respective activities or properties.
(j) All executed agreements or copies of executed agreements filed or
incorporated by reference as exhibits to the Registration Statement to which the
Company or any of its subsidiaries is a party or by which any of them are or may
be bound or to which any of their assets, properties or businesses is or may be
subject have been duly and validly authorized, executed and delivered by the
Company or such subsidiary, as the case may be, and constitute the legal, valid
and binding agreements of the Company or such subsidiary, as the case may be,
enforceable against it in accordance with their respective terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to enforcement of creditors'
rights generally, and general equitable principles relating to the availability
of remedies, and except as rights to indemnity or contribution may be limited by
federal or state securities laws and the public policy underlying such laws).
The descriptions in the Registration Statement of contracts and other documents
are accurate and fairly present the information required to be shown with
respect thereto by the Act and the Rules and Regulations, and there are no
contracts or other documents which are required by the Act or the Rules and
Regulations to be described in the Registration Statement or filed as exhibits
to the Registration Statement which are not described or filed as required or
incorporated therein by reference, and the exhibits which have been filed are
complete and correct copies of the documents of which they purport to be copies.
(k) Subsequent to the most recent respective dates as of which
information is given in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), and except as expressly
contemplated therein, neither the Company nor any of its subsidiaries has
incurred, other than in the ordinary course of its business, any material
liabilities or obligations, direct or contingent, purchased any of its
outstanding capital stock, paid or declared any dividends or other distributions
on its capital stock or entered into any material transactions not in the
ordinary course of business, and there has been no material change in capital
stock or debt or any material adverse change in the business, properties,
assets, net worth, condition (financial or other), or results of operations or
prospects of the Company and its subsidiaries taken as a whole. Neither the
Company nor any of its subsidiaries (or the manner in which either of them
conducts its business) is in breach or violation of, or in default under, any
term or provision of (i) its certificate of incorporation or bylaws, (ii) any
indenture, mortgage, deed of trust, voting trust agreement, stockholders'
agreement, note agreement or other agreement or instrument to which it is a
party or by which it is or may be bound or to which any of its property is or
may be subject, or any indebtedness, the effect of which breach or default
singly or in the aggregate may have a Material Adverse Effect, or (iii) any
statute, judgment, decree, order, rule or regulation applicable to the Company
or any of its subsidiaries or of any arbitrator, court, regulatory body,
administrative agency or
7.
any other governmental agency or body, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their respective
activities or properties and the effect of which breach or default singly or in
the aggregate may have a Material Adverse Effect.
(l) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or is imminent which may have a Material Adverse
Effect.
(m) Since its inception, the Company has not incurred any material
liability arising under or as a result of the application of the provisions of
the Act.
(n) (i) The Company and its subsidiaries own or possess valid and
enforceable licenses for all inventions, patents, patent applications,
trademarks (registered or unregistered), trademark applications, tradenames,
copyrights, manufacturing processes, formulae, trade secrets, know-how, and
other intangible property and assets necessary to the conduct of their business
now conducted as described in the Prospectus (collectively, "Intellectual
Property") and the Company does not know of any facts which would form a
reasonable basis for a claim that the Company or any of its Subsidiaries do not
own or possess valid and enforceable licenses for all Intellectual Property
necessary to the conduct of their business proposed to be conducted as described
in the Prospectus; (ii) the Company has no knowledge that it or any of its
subsidiaries lack or will be unable to obtain any rights or licenses to use any
of the Intellectual Property; (iii) the Company does not know of any third
parties who have or will be able to establish rights to any of the Intellectual
Property; (iv) to the Company's knowledge, there is no infringement by third
parties of any of the Intellectual Property; (v) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's or any subsidiary's rights of title or other interest
in or to any Intellectual Property, and the Company does not know of any facts
which would form a reasonable basis for any such claim; (vi) except as disclosed
in the Prospectus, there is no pending, or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the validity
and scope of any Intellectual Property, and the Company does not know of any
facts which would form a reasonable basis for any such claim; (vii) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others that the Company or any of its subsidiaries or any of their
products or processes infringe or otherwise violate any patent, trademark,
copyright, trade secret or other proprietary right of others, and the Company is
unaware of any facts which would form a reasonable basis for any such claim;
(viii) except as disclosed in the Prospectus, to the Company's knowledge, there
are no grounds for an interference proceeding before the United States Patent
and Trademark Office in relation to any of the patents or patent applications
currently owned by the Company or any of its subsidiaries; (ix) to the Company's
knowledge, there are no facts which would bar the grant of a patent from each of
the patent applications within the Intellectual Property; (x) there is no
pending or, to
8.
the Company's knowledge, threatened action, suit, proceeding or claim by any
current or former employee, consultant or agent of the Company or any of its
subsidiaries seeking either ownership rights to any invention or compensation
from the Company or any of its subsidiaries for any invention made by such
employee, consultant or agent in the course of his/her employment with the
Company or any of its subsidiaries, nor, to the Company's knowledge, can any
such action, suit, proceeding or claim, if instituted, be sustained; and (xi)
there is no act or omission by the Company or its agents or representatives of
which the Company has knowledge that may render any patent or patent application
within the Intellectual Property unpatentable, unenforceable or invalid. The
Prospectus fairly and accurately describes in all material respects the
Company's and its subsidiaries' rights with respect to the Intellectual
Property.
(o) To the best of the Company's knowledge, the issued patents owned by,
or licensed to, the Company and described in the Registration Statement and
Prospectus are valid and enforceable patents. Except as described in the
Registration Statement and Prospectus and in the agreements referred to therein,
no other entity or individual has any right or claim in any of such issued
patents. The patent applications owned by, or licensed to, the Company and
described in the Registration Statement and Prospectus have been properly
prepared and filed and are being diligently pursued on behalf of the Company,
and each of such patent applications is owned or controlled by the Company, and
no other entity or individual has any right or claim in any of the patent
applications or any patent to be issued therefrom, except as described in the
Registration Statement and Prospectus and in the agreements referred to therein.
To the best of the Company's knowledge, each patent application owned by or
licensed to the Company and described in the Registration Statement and
Prospectus discloses patentable subject matter.
(p) The human clinical trials conducted by the Company or in which the
Company has participated that are described in the Registration Statement and
Prospectus or the results of which are referred to in the Registration Statement
and Prospectus, and, to the best of the Company's knowledge, such studies and
tests conducted on behalf of the Company, were and, if still pending, are being
conducted in accordance with experimental protocols, procedures and controls
pursuant to accepted professional scientific standards for the clinical study of
new medical devices; the descriptions of the results of such studies, tests and
trials contained in the Registration Statement and Prospectus are accurate and
complete in all material respects, and the Company has no knowledge of any other
trials, studies or tests, the results of which reasonably call into question the
results described or referred to in the Registration Statement and Prospectus;
and the Company has not received any notices or correspondence from the Food and
Drug Administration ("FDA") or any other governmental agency requiring the
termination, suspension or modification of any clinical trials conducted by, or
on behalf of, the Company or in which the Company has participated that are
described in the
9.
Registration Statement and Prospectus or the results of which are referred to in
the Registration Statement and Prospectus.
(q) No consent, approval, authorization or order of or filing with any
court, regulatory body, administrative agency or any other governmental agency
or body, domestic or foreign, is required for the performance of this Agreement
or the consummation of the transactions contemplated hereby, except such as have
been or may be obtained under the Act or may be required under state securities
or Blue Sky laws in connection with the transactions contemplated by this
Agreement and the Escrow Agreement.
(r) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the Company to
include such securities under the Registration Statement (other than those that
have been disclosed in the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), that have not been waived with respect
to the Registration Statement.
(s) Neither the Company nor any of its officers, directors or affiliates
(within the meaning of the Rules and Regulations) has taken, directly or
indirectly, any action designed to stabilize or manipulate the price of any
security of the Company, or which has constituted or which might in the future
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company, to facilitate the sale or resale of
the Shares or otherwise.
(t) Each of the Company and its subsidiaries has good and marketable
title to, or valid and enforceable leasehold interests in, all properties and
assets owned or leased by it, free and clear of all liens, encumbrances,
security interests, claims, restrictions, equities, claims and defects, except
(i) such as are described in the Registration Statement and Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus), or
such as do not materially adversely affect the value of any of such properties
or assets taken as a whole and do not materially interfere with the use made and
proposed to be made of any of such properties or assets, and (ii) liens for
taxes not yet due and payable as to which appropriate reserves have been
established and reflected in the financial statements included in the
Registration Statement. The Company owns or leases all such properties as are
necessary to its operations as now conducted, and as proposed to be conducted as
set forth in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus); and the
properties and business of the Company and its subsidiaries conform in all
material respects to the descriptions thereof contained in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary
10.
Prospectus). All the material leases and subleases of the Company and its
subsidiaries, and under which the Company or any subsidiary holds properties or
assets as lessee or sublessee, constitute valid leasehold interests of the
Company or such subsidiary free and clear of any lien, encumbrance, security
interest, restriction, equity, claim or defect, are in full force and effect,
and neither the Company nor any subsidiary is in default in respect of any of
the material terms or provisions of any such material leases or subleases, and
neither the Company nor any subsidiary has notice of any claim which has been
asserted by anyone adverse to the Company's or any of its subsidiary's rights as
lessee or sublessee under either the material lease or sublease, or affecting or
questioning the Company's or any subsidiary's right to the continued possession
of the leased or subleased premises under any such material lease or sublease,
which may have a Material Adverse Effect.
(u) Neither the Company nor any subsidiary has violated any applicable
environmental, safety, health or similar law applicable to the business of the
Company, nor any federal or state law relating to discrimination in the hiring,
promotion, or pay of employees, nor any applicable federal or state wages and
hours law, nor any provisions of ERISA or the rules and regulations promulgated
thereunder, the consequences of which violation may have a Material Adverse
Effect.
(v) Each of the Company and its subsidiaries holds all franchises,
licenses, permits, approvals, certificates and other authorizations from
federal, state and other governmental or regulatory authorities, including, but
not limited to the FDA and any foreign regulatory authorities performing
functions similar to those performed by the FDA, necessary to the ownership,
leasing and operation of its properties or required for the present conduct of
its business, and such franchises, licenses, permits, approvals, certificates
and other governmental authorizations are in full force and effect and the
Company and its subsidiaries are in compliance therewith in all material
respects except where the failure so to obtain, maintain or comply with would
not have a Material Adverse Effect. All of the descriptions in the Registration
Statement and Prospectus of the legal and governmental proceedings by and before
the FDA or any foreign state or local government body exercising comparable
authority are true, complete and accurate in all material respects.
(w) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
11.
(x) Neither the Company nor any of its subsidiaries is (i) in violation
of its certificate of incorporation or bylaws, (ii) in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of indebtedness, which
default would have a Material Adverse Effect, (iii) in default in the
performance or observance of any contract, indenture, mortgage, loan agreement
joint venture or other agreement or instrument to which it is a party or by
which its or any of its properties are bound, which default would have a
Material Adverse Effect, or (iv) in violation of any law, order, rule,
regulation, writ, injunction, judgment or decree of any court of government
agency or body to which the Company is subject, including, but not limited to,
the FDA, which violation would have a Material Adverse Effect.
(y) The Company and its subsidiaries are (i) in compliance with any and
all applicable United States, foreign, state and local environmental laws,
rules, regulations, treaties, statutes and codes promulgated by any and all
governmental authorities relating to the protection of human health and safety,
the environment or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct their
business as currently conducted, and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except, in the case of each
of clauses (i) through (iii), above, where such noncompliance with Environmental
Laws, failure to receive required permit licenses or other approvals would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect. No action, proceeding, revocation proceeding, writ, injunction
or claim is pending or, to the Company's knowledge, threatened against the
Company or its subsidiaries relating to the Environmental Laws or to their
activities involving Hazardous Materials. "Hazardous Materials" means for
purposes of this Agreement any material or substance (i) that is prohibited or
regulated by any environmental law, rule, regulation, order, treaty, statute or
code promulgated by any governmental authority, or any amendment or modification
thereto, or (ii) that has been designated or regulated by any governmental
authority as radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment. The Company and its subsidiaries have not
engaged in the generation, use, manufacture, transportation or storage of any
Hazardous Materials on any of their properties or former properties, except
where such use, manufacture, transportation or storage is in compliance in all
material respects with Environmental Laws. The Company and its subsidiaries have
not disposed of any, and to the Company's knowledge, no parties other than the
Company and its subsidiaries have disposed of, Hazardous Materials on any of
their properties or on properties formerly owned or leased by them during the
time of such ownership or lease, except in compliance in all material respects
with Environmental Laws. To the Company's knowledge, no spills, discharges,
releases, deposits, emplacements, leaks or disposal of any Hazardous Materials
have occurred on
12.
or under or have emanated from any of the Company's or its subsidiaries'
properties or former properties during the time of their ownership or lease
thereof except in compliance in all respects with Environmental Laws or that
would not be reasonably likely to have a Material Adverse Effect, and except as
disclosed in the Prospectus, the Company has no knowledge of any spills,
discharges, releases, deposits, emplacements, leaks or disposal of any Hazardous
Materials that have occurred on or under or have emanated from any of the
Company's or subsidiaries' properties or former properties prior to the
Company's or subsidiaries' ownership or lease thereof.
(z) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed therein by
Item 404 of Regulation S-K of the Commission.
(aa) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(bb) The Company and its subsidiaries have not 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 foreign, United States 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.
4. Covenants of the Company. The company covenants and agrees as follows:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as practicable. If required,
the Company will file the Prospectus and any amendment or supplement thereto
with the Commission in the manner and within the time period required by Rule
424(b) under the Act. During any time when a prospectus relating to the Shares
is required to be delivered under the Act, the Company (i) will comply with all
requirements imposed upon it by the Act and the Rules and Regulations to the
extent necessary to permit the continuance of sales of or dealings in the Shares
in accordance with the provisions hereof and of the
13.
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the prospectus or the amendment referred to in the third sentence of
Section 3(a) hereof, any amendment or supplement to such prospectus or any
amendment to the Registration Statement of which the Placement Agent shall not
previously have been advised and furnished with a copy a reasonable period of
time prior to the proposed filing and as to which filing the Placement Agent
shall not have given their consent.
(b) As soon as the Company is advised or obtains knowledge thereof, the
Company will advise the Placement Agent (i) when the Registration Statement, as
amended, has become effective; if the provisions of Rule 430A promulgated under
the Act will be relied upon, when the Prospectus has been filed in accordance
with said Rule 430A and when any post-effective amendment to the Registration
Statement becomes effective; (ii) of any request made by the Commission for
amending the Registration Statement, for supplementing any Preliminary
Prospectus or the Prospectus or for additional information, or (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto or the institution or threat of any
investigation or proceeding for that purpose, and will use its best efforts to
prevent the issuance of any such order and, if issued, to obtain the lifting
thereof as soon as possible.
(c) The Company will (i) use its best efforts to arrange for the
qualification of the Shares for offer and sale under the state securities or
blue sky laws of such jurisdictions as the Placement Agent may designate, (ii)
continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Shares, and (iii) make such applications, file
such documents and furnish such information as may be required for the purposes
set forth in clauses (i) and (ii); provided, however, that the Company shall not
be required to qualify as a foreign corporation or file a general or unlimited
consent to service of process in any such jurisdiction.
(d) The Company consents to the use of the Prospectus (and any amendment
or supplement thereto) by the Placement Agent in connection with the offering or
sale of the Shares and for such period of time thereafter as the Prospectus is
required by law to be delivered in connection therewith. If, at any time when a
prospectus relating to the Shares is required to be delivered under the Act, any
event occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading,
or if it becomes necessary at any time to amend or supplement the Prospectus to
comply with the Act or the Rules and Regulations, the Company promptly will so
notify the Placement Agent and, subject to Section 4(a) hereof, will prepare and
file with the Commission an amendment to the
14.
Registration Statement or an amendment or supplement to the Prospectus which
will correct such statement or omission or effect such compliance, each such
amendment or supplement to be reasonably satisfactory to counsel to the
Placement Agent.
(e) As soon as practicable, but in any event not later than 45 days after
the end of the 12-month period beginning on the day after the end of the fiscal
quarter of the Company during which the effective date of the Registration
Statement occurs (90 days in the event that the end of such fiscal quarter is
the end of the Company's fiscal year), the Company will make generally available
to its security holders, in the manner specified in Rule 158(b) of the Rules and
Regulations, and to the Placement Agent, an earnings statement which will be in
the detail required by, and will otherwise comply with, the provisions of
Section 11(a) of the Act and Rule 158(a) of the Rules and Regulations, which
statement need not be audited unless required by the Act or the Rules and
Regulations, covering a period of at least 12 consecutive months after the
effective date of the Registration Statement.
(f) During a period of five years after the date hereof, the Company will
furnish to its stockholders, as soon as practicable, annual reports (including
financial statements audited by independent public accountants) and unaudited
quarterly reports of earnings, and will deliver to the Placement Agent:
(i) concurrently with furnishing such quarterly reports to its
stockholders, statements of income of the Company for each quarter in the form
furnished to the Company's stockholders and certified by the Company's principal
financial or accounting officer;
(ii) concurrently with furnishing such annual reports to its
stockholders, a balance sheet of the Company as at the end of the preceding
fiscal year, together with statements of operations, stockholders' equity, and
cash flows of the Company for such fiscal year, accompanied by a copy of the
report thereon of independent public accountants;
(iii) as soon as they are available, copies of all information
(financial or other) mailed to stockholders;
(iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, the National
Association of Securities Dealers, Inc. ("NASD") or any securities exchange;
(v) every press release and every material news item or article of
interest to the financial community in respect of the Company or its affairs
which was released or prepared by the Company; and
15.
(vi) any additional information of a public nature concerning the
Company or its business which the Placement Agent may reasonably request.
During such five-year period, if the Company has active subsidiaries, the
foregoing financial statements will be on a consolidated basis to the extent
that the accounts of the Company and its subsidiaries are consolidated, and will
be accompanied by similar financial statements for any significant subsidiary
which is not so consolidated.
(g) The Company will maintain a Transfer Agent and, if necessary under
the jurisdiction of incorporation of the Company, a Registrar (which may be the
same entity as the Transfer Agent) for its Common Stock.
(h) The Company will furnish, without charge, to the Placement Agent or
on the Placement Agent's order, at such place as the Placement Agent may
designate, copies of each Preliminary Prospectus, the Registration Statement and
any pre-effective or post-effective amendments thereto (two copies of which will
be signed and will include all financial statements and exhibits) and the
Prospectus, and all amendments and supplements thereto, in each case as soon as
available and in such quantities as the Placement Agent may reasonably request.
(i) The Company will not, directly or indirectly, without the prior
written consent of the Placement Agent, issue, offer, sell, grant any option to
purchase or otherwise dispose (or announce any issuance, offer, sale, grant of
any option to purchase or other disposition) of any shares of Common Stock or
any securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date hereof, except for issuances
pursuant to the exercise of stock options outstanding on or granted subsequent
to the date hereof, pursuant to a stock option or other employee benefit plan in
existence on the date hereof and except as contemplated by the Prospectus.
(j) The Company will cause the Shares to be duly included for quotation
on the Nasdaq National Market prior to the Closing Date.
(k) Neither the Company nor any of its officers or directors, nor
affiliates of any of them (within the meaning of the Rules and Regulations) will
take, directly or indirectly, any action designed to, or which might in the
future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any securities of the Company.
(l) The Company will apply the net proceeds of the offering received by
it in the manner set forth under the caption "Use of Proceeds" in the
Prospectus.
(m) The Company will timely file all such reports, forms or other
documents as may be required from time to time, under the Act, the Rules and
16.
Regulations, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations thereunder, and all such reports, forms and
documents filed will comply as to form and substance with the applicable
requirements under the Act, the Rules and Regulations, the Exchange Act and the
rules and regulations thereunder.
5. Expenses. Regardless of whether the transactions contemplated in this
Agreement are consummated, and regardless of whether for any reason this
Agreement is terminated, the Company will pay, and hereby agrees to indemnify
the Placement Agent against, all fees and expenses incident to the performance
of the obligations of the Company under this Agreement, including, but not
limited to, (i) fees and expenses of accountants and counsel for the Company,
(ii) all costs and expenses incurred in connection with the preparation,
duplication, printing, filing, delivery and shipping of copies of the
Registration Statement and any pre-effective or post-effective amendments
thereto, any Preliminary Prospectus and the Prospectus and any amendments or
supplements thereto (including postage costs related to the delivery by the
Placement Agent of any Preliminary Prospectus or Prospectus, or any amendment or
supplement thereto), this Agreement, the Escrow Agreement and all other
documents in connection with the transactions contemplated herein, including the
cost of all copies thereof, (iii) fees and expenses relating to qualification of
the Shares under state securities or blue sky laws, including the cost of
preparing and mailing the preliminary and final blue sky memoranda and filing
fees and disbursements and fees of counsel and other related expenses, if any,
in connection therewith, (iv) filing fees of the Commission and the NASD
relating to the Shares and reasonable fees of counsel to the Placement Agent in
connection with NASD filings, (v) any fees and expenses in connection with the
listing for quotation of the Shares on the Nasdaq National Market, (vi) costs
and expenses incident to the preparation, issuance and delivery to the escrow
Agent of any certificates evidencing the shares, including transfer agent's and
registrar's fees and any applicable transfer taxes incurred in connection with
the delivery to the Escrow Agent of the Shares to be sold by the company
pursuant to this Agreement and (vii) the fees of the Escrow Agent. In addition,
the Company shall reimburse the Placement Agent, upon invoice on a monthly
basis, for all actual, accountable travel, legal (including fees and expenses of
counsel to the Placement Agent) and other out-of-pocket expenses incurred in
connection with their engagement hereunder up to a maximum of $75,000.
6. Conditions of the Placement Agent's Obligations. The obligations of the
Placement Agent under this Agreement are subject to the continuing accuracy of
the representations of the Company herein as of the date hereof and as of the
Closing Date as if they had been made on and as of the Closing Date; the
accuracy on and as of the Closing Date of the statements of officers of the
Company made pursuant to the provisions hereof; the performance by the Company
on and as of the Closing Date of its covenants and agreements hereunder; and the
following additional conditions:
17.
(a) If the Company has elected to rely on Rule 430A under the Act, the
Registration Statement shall have been declared effective, and the Prospectus
(containing the information omitted pursuant to Rule 430A) shall have been filed
with the Commission not later than the Commission's close of business on the
second business day following the date hereof or such later time and date to
which the Placement Agent shall have consented; if the Company does not elect to
rely on Rule 430A, the Registration Statement shall have been declared effective
not later than 11:00 A.M., New York time, on the date hereof or such later time
and date to which the Placement Agent shall have consented; if required, in the
case of any changes in or amendments or supplements to the Prospectus in
addition to those contemplated above, the Company shall have filed such
Prospectus as amended or supplemented with the Commission in the manner and
within the time period required by Rule 424(b) under the Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto shall have been issued, and no proceedings for that purpose shall have
been instituted or threatened or, to the knowledge of the Company or the
Placement Agent, shall be contemplated by the Commission; and the Company shall
have complied with any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise).
(b) The Placement Agent shall not have advised the Company that the
Registration Statement, or any amendment thereto, contains an untrue statement
of fact which, in the Placement Agent's opinion, is material, or omits to state
a fact which, in the Placement Agent's opinion, is material and is required to
be stated therein or is necessary to make the statements therein not misleading,
or that the Prospectus, or any supplement thereto, contains an untrue statement
of fact which, in the Placement Agent's opinion, is material, or omits to state
a fact which, in the Placement Agent's opinion, is material and is required to
be stated therein or is necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(c) On or prior to the Closing Date, the Placement Agent shall have
received from counsel to the Placement Agent, such opinion or opinions with
respect to the issuance and sale of the Shares, the Registration Statement and
the Prospectus and such other related matters as the Placement Agent reasonably
may request and such counsel shall have received such documents and other
information as they request to enable them to pass upon such matters.
(d) On the Closing Date, the Placement Agent shall have received the
opinion, dated the Closing Date, of (i) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
counsel to the Company ("Company Counsel"), and (ii) Xxxxxxxx and Xxxxxxxx and
Crew, patent counsel to the Company ("Patent Counsel"), in the forms attached
hereto as Exhibit A and Exhibit B, respectively.
18.
(e) On or prior to the Closing Date, counsel to the Placement Agent shall
have been furnished such documents, certificates and opinions as they may
reasonably require in order to evidence the accuracy, completeness or
satisfaction of any of the representations or warranties of the Company or
conditions herein contained.
(f) At the time that this Agreement is executed by the Company the
Placement Agent shall have received from PricewaterhouseCoopers LLP a letter as
of the date this Agreement is executed by the Company in form and substance
satisfactory to the Placement Agent (the "Original Letter"), and on the Closing
Date the Placement Agent shall have received from such firm a letter dated the
Closing Date stating that, as of a specified date not earlier than five (5) days
prior to the Closing Date, nothing has come to the attention of such firm to
suggest that the statements made in the Original Letter are not true and
correct. The letter shall not disclose any change, or any development involving
a prospective change, in or affecting the business or properties of the Company
which, in the Placement Agent reasonable judgment, makes it impracticable or
inadvisable to proceed with the offering of the Shares as contemplated by the
Prospectus.
(g) On the Closing Date, the Placement Agent shall have received a
certificate, dated the Closing Date, of the principal executive officer and the
principal financial or accounting officer of the Company to the effect that each
of such persons has carefully examined the Registration Statement and the
Prospectus and any amendments or supplements thereto and this Agreement, and
that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the Closing Date, and
the Company has complied with all agreements and covenants and satisfied all
conditions contained in this Agreement on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or are pending or, to the best knowledge of each of such persons are
contemplated or threatened under the Act and any and all filings required by
Rule 424 and Rule 430A have been timely made;
(iii) The Registration Statement and Prospectus and, if any, each
amendment and each supplement thereto, contain all statements and information
required to be included therein, and neither the Registration Statement nor any
amendment thereto includes any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and neither the Prospectus (or any supplement
thereto) or any Preliminary Prospectus includes or included any untrue statement
of a material fact or omits or omitted to state
19.
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus up to and including the
Closing Date, neither the Company nor any of its subsidiaries has incurred,
other than in the ordinary course of its business, any material liabilities or
obligations, direct or contingent; neither the Company nor any of its
subsidiaries has purchased any of its outstanding capital stock or paid or
declared any dividends or other distributions on its capital stock; neither the
Company nor any of its subsidiaries has entered into any transactions not in the
ordinary course of business; and there has not been any change in the capital
stock or consolidated long-term debt or any increase in the consolidated short-
term borrowings (other than any increase in short-term borrowings in the
ordinary course of business) of the Company or any material adverse change to
the business properties, assets, net worth, condition (financial or other),
results of operations or prospects of the Company and its subsidiaries taken as
a whole; neither the Company nor any of its subsidiaries has sustained any
material loss or damage to its property or assets, whether or not insured; there
is no litigation which is pending or threatened against the Company or any of
its subsidiaries which is required under the Act or the Rules and Regulations to
be set forth in an amended or supplemented Prospectus which has not been set
forth; and there has not occurred any event required to be set forth in an
amended or supplemented Prospectus which has not been set forth therein.
References to the Registration Statement and the Prospectus in this paragraph
(g) are to such documents as amended and supplemented at the date of the
certificate.
(h) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus up to and including the Closing
Date there has not been (i) any change or decrease specified in the letter or
letters referred to in paragraph (f) of this Section 6 or (ii) any change, or
any development involving a prospective change, in the business or properties of
the Company or its subsidiaries which change or decrease in the case of clause
(i) or change or development in the case of clause (ii) makes it impractical or
inadvisable in the Placement Agent's judgment to proceed with the public
offering or the delivery of the Shares as contemplated by the Prospectus.
(i) No order suspending the sale of the Shares in any jurisdiction
designated by you pursuant to Section 4(c) hereof has been issued on or prior to
the Closing Date and no proceedings for that purpose have been instituted or, to
your knowledge or that of the Company, have been or are contemplated.
(j) The Placement Agent shall have received from each person who is a
director or officer of the Company or a principal stockholder of the Company an
20.
agreement to the effect that such person will not, directly or indirectly,
without the prior written consent of the Placement Agent, offer, sell, grant any
option to purchase or otherwise dispose (or announce any offer, sale, grant of
an option to purchase or other disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date of this Agreement.
(k) The Shares have been duly authorized for quotation on the Nasdaq
National Market.
(l) The Company shall have furnished the Placement Agent with such
further opinions, letters, certificates or documents as the Placement Agent or
counsel for the Placement Agent may reasonably request. All opinions,
certificates, letters and documents to be furnished by the Company will comply
with the provisions hereof only if they are reasonably satisfactory in all
material respects to the Placement Agent and to counsel for the Placement Agent.
The Company shall furnish the Placement Agent with conformed copies of such
opinions, certificates, letters and documents in such quantities as you
reasonably request. The certificates delivered under this Section 6 shall
constitute representations, warranties and agreements of the Company as to all
matters set forth therein as fully and effectively as if such matters had been
set forth in Section 2 of this Agreement.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Placement Agent
and each person, if any, who controls such Placement Agent within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, against any and all
losses, claims, damages or liabilities, joint or several (and actions in respect
thereof), to which such Placement Agent or such controlling person may become
subject, under the Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements, in light of the circumstances under which they were made, not
misleading and will reimburse, as incurred, such Placement Agent or such
controlling persons for any legal or other expenses incurred by such Placement
Agent or such controlling persons in connection with investigating, defending or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon any untrue
21.
statement or alleged untrue statement or omission or alleged omission made in
any of such documents in reliance upon and in conformity with information
furnished in writing to the Company by the Placement Agent expressly for use
therein, and provided, further, that such indemnity with respect to any
Preliminary Prospectus shall not inure to the benefit of the Placement Agent (or
to the benefit of any person controlling such Placement Agent) from whom the
person asserting any such loss, claim, damage, liability or action purchased
Shares which are the subject thereof to the extent that any such loss, claim,
damage, liability or action (i) results from the fact that such Placement Agent
failed to send or give a copy of the Prospectus (as amended or supplemented) to
such person at or prior to the confirmation of the sale of such Shares to such
person in any case where such delivery is required by the Act and (ii) arises
out of or is based upon an untrue statement or omission of a material fact
contained in such Preliminary Prospectus that was corrected in the Prospectus
(as amended and supplemented), unless such failure resulted from non-compliance
by the Company with Section 4(h) hereof. The indemnity agreement in this
paragraph (a) shall be in addition to any liability which the Company may have
at common law or otherwise.
(b) The Placement Agent agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
and all losses, claims, damages or liabilities (and actions in respect thereof)
to which the Company or any such director, officer, or controlling person may
become subject, under the Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or the Prospectus or any Preliminary Prospectus, or any amendment or
supplement thereto or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
information furnished in writing by the Placement Agent to the Company expressly
for use therein; and will reimburse, as incurred, all legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action. The Company acknowledges that the statements with
respect to the public offering of the Shares set forth under the heading "Plan
of Distribution" in the Prospectus have been furnished by the Placement Agent to
the Company expressly for use therein and constitute the only information
furnished in writing by or on behalf of the Placement Agent for inclusion in the
Prospectus. The indemnity agreement contained in
22.
this subsection (b) shall be in addition to any liability which the Placement
Agent may have at common law or otherwise.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against one or more indemnifying parties
under this Section 7, notify such indemnifying party or parties of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) of this Section 7 or to the extent
that the indemnifying party was not adversely affected by such omission. In case
any such action is brought against an indemnified party and it notifies an
indemnifying party or parties of the commencement thereof, the indemnifying
party or parties against which a claim is to be made will be entitled to
participate therein and, to the extent that it or they may wish, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party has
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and otherwise
to participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses (other than the reasonable costs of investigation) subsequently
incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party has employed such counsel in connection with the
assumption of such different or additional legal defenses in accordance with the
proviso to the immediately preceding sentence, (ii) the indemnifying party has
not employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, or (iii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party.
(d) If the indemnification provided for in this Section 7 is unavailable
to hold harmless an indemnified party under paragraph (a) or (b) above in
respect of any losses, claims, damages, expenses or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
(i) in such proportion as is appropriate to reflect the relative benefits
received by each of the contributing parties, on the one hand, and the party to
be indemnified, on the other hand, from the offering of the Shares or (ii) if
the allocation
23.
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each of the contributing
parties, on the one hand, and the party to be indemnified, on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. In any case where the Company is a contributing party and the
Placement Agent is the indemnified party, the relative benefits received by the
Company, on the one hand, and the Placement Agent, on the other, shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Shares (before deducting expenses) bear to the total placement agent commissions
and fees received by the Placement Agent hereunder, in each case as set forth in
the table on the cover page of the Prospectus. 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 Company or by the
Placement Agent, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this paragraph (d), no Placement Agent shall be required to
contribute any amount in excess of the placement agent commissions applicable to
the Shares paid to such Placement Agent hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), (i) each
person, if any, who controls the Placement Agent within the meaning of Section
15 of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Placement Agent, and (ii) each director of the Company,
each officer of the Company who has signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as the Company, subject in each case to this paragraph (d). Any party entitled
to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect to which a claim for
contribution may be made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation (x) it or
they may have hereunder or otherwise than under this paragraph (d) or (y) to the
extent that such party or parties were not adversely affected by such omission.
The contribution agreement set forth above shall be
24.
in addition to any liabilities which any indemnifying party may have at common
law or otherwise.
8. Representations, etc. to Survive Delivery. The respective
representations, warranties, agreements, covenants, indemnities and statements
of, and on behalf of, the Company and its officers and the Placement Agent,
respectively, set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
the Placement Agent, and will survive delivery of and payment for the Shares.
Any successors to the Placement Agent shall be entitled to the indemnity,
contribution and reimbursement agreements contained in this Agreement.
9. Termination.
(a) This Agreement (except for the provisions of Sections 5 and 7 hereof)
may be terminated by the Placement Agent by notice to the Company in the event
that the Company has failed to comply in any respect with any of the provisions
of this Agreement required on it to be performed at or prior to the Closing
Date, or if any of the representations or warranties of the Company is not
accurate in any respect or if the covenants, agreements or conditions of, or
applicable to the Company herein contained have not been complied with in any
respect or satisfied within the time specified on the Closing Date or if prior
to the Closing Date:
(i) the Company or any of its subsidiaries shall have sustained a
loss by strike, fire, flood, accident or other calamity of such a character as
to interfere materially with the conduct of the business and operations of the
Company and its subsidiaries takes as a whole regardless of whether or not such
loss was insured;
(ii) trading in the Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or a material limitation on such trading shall have been imposed or
minimum or maximum prices shall have been established on any such exchange or
market system;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been an outbreak or escalation of hostilities
between the United States and any foreign power or an outbreak or escalation of
any other insurrection or armed conflict involving the United States; or
(v) there shall have been a material adverse change in (A) general
economic, political or financial conditions or (B) the present or prospective
business or condition (financial or other) of the Company and its subsidiaries
taken as a whole that, in
25.
each case, in the Placement Agent's judgment, makes it impracticable or
inadvisable to make or consummate the public offering, sale or delivery of the
Shares on the terms and in the manner contemplated in the Prospectus and the
Registration Statement.
(b) This Agreement may be terminated by either party in the event that
the Requisite Funds shall not have been deposited by Investors by the close of
business thirty (30) days after the Effective Date.
(c) Termination of this Agreement shall be without liability of any party
to any other party other than as provided in Sections 5 and 7 hereof.
10. Notices. All communications hereunder shall be in writing and if sent to
the Placement Agent shall be mailed or delivered or telegraphed and confirmed by
letter or telecopied and confirmed by letter to ING Baring Xxxxxx Xxxx
Incorporated at 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department or, if sent to the Company, shall be mailed or
delivered or telegraphed and confirmed to the Company at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxx Xxxx, XX 00000, Attention: Chief Executive Officer.
11. Successors. This agreement shall incur to the benefit of and be binding
upon the Company and the Placement Agent and the Company's and the Placement
Agent's respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person, except
that the representations, warranties, indemnities and contribution agreements of
the Company contained in this Agreement shall also be for the benefit of any
person or persons, if any, who control the Placement Agent within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and except that the
Placement Agent's indemnity and contribution agreements shall also be for the
benefit of the directors of the Company, the officers of the Company who have
signed the Registration Statement and each person or persons, if any, who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act.
12. Applicable Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the choice of law or conflict of law principles thereof. Each party
hereto consents to the jurisdiction of each court in which any action is
commenced seeking indemnity or contribution pursuant to Section 7 above and
agrees to accept, either directly or through an agent, service of process of
each such court.
26.
13. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
27.
If the foregoing correctly sets forth our understanding, please indicate the
Placement Agent's acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
FUSION MEDICAL TECHNOLOGIES, INC.
By:
--------------------------------------
Xxxxxx Xxxxxx
Chief Executive Officer and President
Accepted as of the date
first above written:
ING Baring Xxxxxx Xxxx LLC
By:
-----------------------------------
Title:
--------------------------------
28.
Exhibit B
MATTERS TO BE COVERED IN THE OPINION OF
WILSON, SONSINI, XXXXXXXX & XXXXXX
Counsel for the Company
1. Each of the Company and its subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign corporation
and in good standing in each jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such qualification (except
where the failure to be so qualified would not have a Material Adverse Effect,
and has full corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement.
2. The authorized, issued and outstanding capital stock of the Company is as
set forth in the Registration Statement and the Prospectus under the caption
"Capitalization" as of the dates stated therein; proper corporate proceedings
have been taken validly to authorize such authorized capital stock; all of the
outstanding shares of such capital stock (including the Shares) have been duly
authorized and validly issued and are fully paid and nonassessable; and no
preemptive rights or rights of refusal in favor of, stockholders exist with
respect to the Shares, or the issue and sale thereof, pursuant to the
certificate of incorporation or bylaws of the Company and, to such counsel's
knowledge, there are no contractual preemptive rights, rights of first refusal
or rights of co-sale which exist with respect to the issue and sale of the
Shares that have not expired or been waived in writing.
3. The Registration Statement has become effective under the Act and no stop
order suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus has been issued or is in effect and no
proceedings for that purpose have been instituted or are pending or, to such
counsel's knowledge, contemplated by the Commission.
4. The Registration Statement and the Prospectus (except as to the financial
statements and schedules and financial data derived therefrom contained therein,
as to which such counsel need express no opinion) comply and as of the Effective
Date complied as to form in all material respects with the requirements of the
Act and with the Rules and Regulations, and to such counsel's knowledge, there
are no agreements, contracts, leases, documents or legal proceedings, pending or
threatened, that are of a character required to be described in, or filed as an
exhibit to, the Registration Statement which are not described or filed as
required by the Act and the applicable Rules and Regulations.
5. The form of certificate evidencing the Common Stock complies with the
applicable provisions of Delaware law.
6. The statements under the captions "Management -- Limitations on Directors
Liability and Indemnification," "Description of Capital Stock -- Certain Change
of Control Provisions," and "Shares Eligible for Future Sale," in the
Registration Statement and the Prospectus insofar as such statements constitute
a summary of statutes, rules and regulations, including the Delaware General
Corporation Law and the description of the certificate of incorporation and
bylaws, are accurate summaries and fairly and correctly present the information
required to be presented by the Act or the Rules and Regulations in all material
respects; and, to such counsel's knowledge, there are no statutes, rules or
regulations required to be described in the Registration Statement or the
Prospectus that are not described or referred to therein as required.
7. The Company and each of its subsidiaries has the corporate power and
authority to own or lease all of the assets owned or leased by it and to conduct
its business, in each case as described in the Registration Statement and the
Prospectus, except where failure to have such power and authority would not have
a Material Adverse Effect.
8. No authorization, approval, consent, order, designation or declaration of
or filing by or with any governmental authority or agency is necessary in
connection with the execution and delivery of this Agreement by the Company and
the consummation of the transactions therein contemplated except such as may
have been obtained under the Act and the Rules and Regulations or such as may be
required under state securities or Blue Sky laws or by the bylaws and rules of
the NASD.
9. Each of the Placement Agency Agreement and the Escrow Agreement and the
transaction contemplated thereby, including the issuance and sale of the shares,
have been duly authorized by all necessary corporate action on the part of the
Company; each of the Placement Agency Agreement and the Escrow Agreement has
been duly executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Representatives, is a valid and binding agreement
of the Company, except insofar as indemnification and contribution provisions
may be limited by applicable law or equitable principles, and except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by general
equitable principles.
10. Except as set forth in the Registration Statement and Prospectus, no
holders of the Company's Common Stock or other securities have registration
rights with respect to securities of the Company, and all holders of securities
of the Company having rights
to the registration of shares of Common Stock, or other securities, because of
the filing of the Registration Statement by the Company have waived such rights
or such rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement.
11. The Shares issued and sold by the Company has been approved for quotation
on the Nasdaq National Market, subject to official notice of issuance.
12. Any required filing of the Prospectus and any supplement thereto pursuant
to Rule 424(b) of the Rules and Regulations has been made in the manner and
within the time period required by such Rule 424(b).
13. The statements under the captions "Management -- Incentive Stock Plans,"
"Management -- 401(k) Plan," "Certain Transactions," "Description of Capital
Stock" and "Shares Eligible For Future Sale" in the Prospectus, insofar as such
statements constitute a summary of documents referred to therein or matters of
law, are accurate summaries and fairly and correctly present, in all material
respects, the information called for with respect to such documents and matters,
provided, however, that such counsel shall be entitled to rely on
representations of the Company with respect to certain factual matters contained
in such statements, and provided further that such counsel shall state that
nothing has come to the attention of such counsel which leads them to believe
that such representations are not true and correct in all material respects.
14. The execution, delivery and performance of the Agreement and the
consummation of the transactions therein contemplated do not and will not (a)
conflict with or result in a breach of any of the terms or provisions of or,
constitute a default under, the certificate of incorporation or bylaws of the
Company or any of its subsidiaries, any agreement or document filed as an
exhibit to the Registration Statement, or, to such counsel's knowledge, any
statute, rule or regulation applicable to the Company or any of its subsidiaries
(except that no opinion need to be expressed with respect to compliance with
federal and state securities laws), or (b) result in the creation or imposition
of any lien or encumbrance upon any of the assets of the Company or any of its
subsidiaries 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 or
result in the acceleration of any obligation under, any indenture, mortgage,
deed of trust, loan agreement, bond, debenture, note agreement, other evidence
of indebtedness, or material lease, contract or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which its property is bound, or (c) to such counsel's knowledge, conflict with
or result in a violation or breach of, or constitute a default under, any
applicable license, authorization, approval, permit, judgment, franchise, order,
writ or decree of any court or governmental agency or body.
15. Neither the Company or any of its subsidiaries is in violation of its
certificate of incorporation or bylaws, and, to such counsel's knowledge,
neither the Company or any of its subsidiaries is in breach of, or default with
respect to, any provision of any agreement that was filed as an exhibit to the
Registration Statement, and the Company and its subsidiaries are compliance with
all laws, rules, regulations, judgments, decrees, orders and statutes of any
court or jurisdiction to which it is subject, except where noncompliance would
not have a Material Adverse Effect.
16. To such counsel's knowledge, there are no pending or threatened actions,
suits, claims, proceedings or investigations that, if successful, would have a
Material Adverse Effect, or would limit, revoke, cancel, suspend, or cause not
to be renewed any existing license, certificate, registration, approval or
permit, known to such counsel, from any state, federal, or regulatory authority
that is material to the conduct of the business of the Company as presently
conducted, or that is of a character otherwise required to be disclosed in the
Registration Statement or the Prospectus under the Act or the applicable Rules
and Regulations.
17. The Company will not, upon consummation of the transactions contemplated
by this Agreement, be an "investment company," or a "promoter" or "principal
underwriter" for, a "registered investment company," as such terms are defined
in the Investment Company Act of 1940, as amended.
In addition, such counsel shall include a statement to the effect that such
counsel has participated in conferences with officers and other representatives
of the Company, the Placement Agent, Placement Agent's counsel and the
independent accountants of the Company, concerning the Registration Statement
and the Prospectus and has considered the matters required to be stated therein
and the statements contained therein, and that, although such counsel does not
assume responsibility for and has not independently verified the accuracy,
completeness or fairness of such statements, nothing has come to such counsel's
attention that causes such counsel to believe that (1) the Registration
Statement (other than the financial statements, financial data and supporting
schedules included therein, as to which such counsel need express no opinion or
belief), at the time it was declared 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 (2) the
Prospectus (other than the financial statements and financial data included
therein, as to which such counsel need express no opinion or belief), at the
time the Registration Statement was declared effective (unless the term
"Prospectus" refers to a prospectus that has been provided to the Placement
Agent by the Company for use in connection with the offering of the Shares that
differs from the Prospectus on file at the Commission at the time the
Registration Statement was declared effective, in which case at the time such
Prospectus
was first provided to the Placement Agent for such use), or at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States, the laws of the State of California, or
the Delaware General Corporation Law upon opinions of local counsel satisfactory
in form and scope to counsel for the Placement Agent. A copy of each such
opinion so relied upon shall include a statement that the Placement Agent are
entitled to rely on such opinion and shall be delivered to the Placement Agent
and to the Placement Agent's Counsel concurrently with the opinion above set
forth.
Exhibit C
MATTERS TO BE COVERED IN THE OPINION OF
XXXXXXXX AND XXXXXXXX AND CREW
1. Such counsel has no reason to believe that the Registration Statement or
the Prospectus (a) contains any untrue statement of a material fact with respect
to the Intellectual Property owned or used by the Company, or the manner of its
use thereof, or any allegation on the part of any person that the Company is
infringing any intellectual property rights of any such person or (b) omits to
state any material fact relating to the Intellectual Property owned or used by
the Company, or the manner of its use thereof, or any allegation of which such
counsel have knowledge, that is required to be stated in the Registration
Statement or the Prospectus or is necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
2. To the best of such counsel's knowledge, there are no legal or
governmental proceedings relating to the Intellectual Property owned or used by
the Company pending against the Company, or any third party; there are no legal
or governmental proceedings relating to a third party's intellectual property
rights pending against the Company; and no such proceedings are threatened or
contemplated by governmental authorities or others.
3. To the best of such counsel's knowledge, the Company is not infringing or
otherwise violating any intellectual property rights of others, and there are no
infringements by others of any intellectual property rights owned or used by the
Company that, in the judgment of such counsel, could affect materially the use
thereof by the Company.
4. Based on such counsel's representation of the Company and patent searches
related to the Company's freedom to operate, such counsel does not know of any
intellectual property licenses or other rights not possessed by the Company
which would be necessary to conduct the business now being or proposed to be
conducted by the Company as described in the Prospectus.
5. Such statements in the Registration Statement and Prospectus as the
Placement Agent's counsel shall have reasonably determined relate to the
Intellectual Property (including, without limitation, all statements under the
captions "Risk Factors We Face Risks Related to Intellectual Property Rights"
and "Business -- Patents and Proprietary Rights"), insofar as such statements
constitute summaries of matters of law, are accurate and complete statements or
summaries of such matters of law set forth therein.
6. Based on such counsel's representation of the Company and patent searches
related to the Company's freedom to operate, such counsel has no knowledge of
any facts that would preclude the Company from having valid license rights or
clear title to the patents referenced in the Prospectus. Counsel is unaware of
any facts that form a basis for a finding of unenforceability or invalidity of
any of the Company's Intellectual Property.
7. Subject to any disclosure to the contrary in the Prospectus, such counsel
is not aware of any material defects with respect to the Company's patent
applications presently on file that (a) would preclude the issuance of patents
with respect to such applications or (b) would lead such counsel to conclude
that such patents, if issued, would not be valid and enforceable in accordance
with applicable regulations.
Such counsel may advise the Representatives that, in rendering their opinion,
they have relied on certain factual representations of the Company and that they
have not independently verified the accuracy and completeness of such
representations.
