EXHIBIT 1.1
3,000,000 Shares
ANIKA THERAPEUTICS, INC.
Common Stock
Par Value $0.01 Per Share
FORM OF UNDERWRITING AGREEMENT
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[Insert date]
XXXXXX XXXX LLC
VOLPE, BROWN, XXXXXX & COMPANY LLC
LEERINK, SWANN, GARRITY, SALLAMI,
XXXXXX & XXXX, INC.
As Representatives of the
several Underwriters
c/o Xxxxxx Xxxx Incorporated
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introduction. Anika Therapeutics, Inc., a Massachusetts corporation
(the "Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters"), for which Xxxxxx Xxxx LLC, Volpe, Brown,
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Xxxxxx & Company LLC and Leerink, Swann, Garrity, Sallami, Xxxxxx & Xxxx, Inc.
are acting as representatives (the "Representatives"), an aggregate of 2,500,000
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock"). The stockholders listed in Schedule II hereto (the "Selling
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Stockholders") propose severally to sell to the several Underwriters an
aggregate of 500,000 outstanding shares of Common Stock. The 2,500,000 shares
of Common Stock to be sold by the Company and the 500,000 shares of Common Stock
to be sold by the Selling Stockholders are referred to herein as the "Firm
Shares." The Company and the Selling Stockholders also propose to issue and
sell to the several Underwriters an aggregate of not more than _________ and
_________ additional shares of Common Stock, respectively, if requested by the
Underwriters in accordance with Section 9 hereof. The [__________] additional
shares of Common Stock to be sold by the Company and the [____________]
additional shares of Common Stock to be sold by the Selling Stockholders are
collectively referred to herein as the "Additional Shares"). The Firm Shares
and the Additional Shares are collectively referred to herein as the "Shares."
The words "you" and "your" refer to the Representatives of the Underwriters.
The Company and each of the Selling Stockholders hereby severally agree
with the several Underwriters as follows:
2. Representations and Warranties.
(a) The Company and the Selling Stockholders represent, warrant and agree
with each of the Underwriters that:
(i) A registration statement on Form SB-2 (File No. 333-_____)
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 may also have been so filed.
After the execution of this Agreement, the Company shall file with the
Commission either (A) if such registration statement, as it may have been
amended, has been declared by the Commission to be 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 Representatives prior to the filing thereof, or (B) 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 Representatives 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 and all documents incorporated by reference therein; 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 at the time such Registration
Statement becomes effective.
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus and has not instituted or
threatened to institute any proceedings with respect to such an order.
When any Preliminary Prospectus was filed with the Commission it (A)
contained all statements required to be stated therein in
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accordance with, and complied in all material respects with the
requirements of, the Act and the Rules and Regulations and (B) 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 subsequent thereto up to and
including the Closing Date (as defined in Section 3 hereof) and the Option
Closing Date (as defined in Section 9 hereof), the Prospectus, as amended
or supplemented at any such time, (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 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 (ii) shall not apply 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 or on behalf of the Underwriters through the
Representatives expressly for use therein.
(iii) The Company (A) 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; and (B) is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction (x) 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 on the
business, properties, financial condition or results of operations of the
Company (a "Material Adverse Effect") and (y) in which it owns or leases
property. The Company has no subsidiaries.
(iv) The Company has full legal right, power and authority to
enter into this Agreement and to consummate the transactions provided for
herein. This Agreement has been duly authorized, executed and delivered by
the Company and, assuming it is a binding agreement 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
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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, its performance hereunder, its consummation of
the transactions contemplated herein, 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 Registration 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 pursuant to the terms of (A) the certificate of
incorporation or by-laws of the Company, (B) any indenture, mortgage, deed
of trust, voting trust agreement, stockholders' agreement, note agreement
or other agreement or instrument to which the Company 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 (C) any statute, judgment, decree, order, rule or regulation
applicable to the Company of any government, arbitrator, court, regulatory
body or administrative agency or other governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
activities or properties.
(v) 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 Underwriters' purchase and distribution of the Shares.
(vi) All executed agreements or copies of executed agreements
filed or incorporated by reference as exhibits to the Registration
Statement to which the Company is a party or by which it is or may be bound
or to which any of its assets, properties or businesses is or may be
subject have been duly and validly authorized, executed and delivered by
the Company and constitute the legal, valid and binding agreements of the
Company 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
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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.
(vii) 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, the Company has not 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. The Company (and the manner in which it conducts its
business) is not in breach or violation of, or in default under, any term
or provision of (A) its certificate of incorporation or bylaws, (B) 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
(C) any statute, judgment, decree, order, rule or regulation applicable to
the Company or of any arbitrator, court, regulatory body, administrative
agency or any other governmental agency or body, domestic or foreign,
having jurisdiction over the Company or any of its activities or properties
and the effect of which breach or default singly or in the aggregate may
have a Material Adverse Effect.
(viii) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
there is no pending action, suit, proceeding or investigation or threatened
action, suit, proceeding or investigation before or by any court,
regulatory body or administrative agency or any other governmental agency
or body, domestic or foreign, which (A) 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,
(B) 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 respects), or (C)
may have a Material Adverse Effect.
(ix) The Company holds and at the Closing Date and any later
Option Closing Date, as the case may be, will hold, all franchises,
licenses, permits, approvals, certificates and other authorizations from
federal, state and foreign 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 is
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
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descriptions in the Registration Statement and Prospectus of the legal and
governmental proceedings by or before the FDA or any foreign, state or
local government body exercising comparable authority are true, complete
and accurate in all material respects.
(x) The Company is not (i) in violation of its certificate of
incorporation or bylaws, or (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, or (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 their or any of their 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
or government agency or body to which the Company is subject, including,
but not limited to, the United States Food and Drug Administration (the
"FDA").
(xi) The Company has the duly authorized and validly outstanding
capitalization set forth under the caption "Capitalization" in the
Registration Statement and Prospectus and will have the adjusted
capitalization set forth therein on the Closing Date and the Option Closing
Date, as the case may be, based on the assumptions set forth therein. The
authorized and outstanding capital stock of the Company conforms to the
description thereof contained in the Registration Statement and Prospectus
(and such description correctly states the substance of the provisions of
the instruments defining the capital stock of the Company). The
outstanding shares of capital stock outstanding have been duly authorized
and validly issued by the Company and are fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws,
were not issued in violation of any preemptive right, resale right, right
of first refusal or similar right. Except as created hereby or referred to
in the Prospectus, there are no outstanding options, warrants, rights or
other arrangements requiring the Company at any time to issue any capital
stock. Except as set forth in the Prospectus, no holders of outstanding
shares of capital stock of the Company are entitled as such to any
preemptive right, co-sale right, right of first refusal or other rights to
subscribe for any of the 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; and on the Closing Date or
the Option Closing Date (as the case may be), after payment therefor in
accordance with the terms of this Agreement, (A) the Firm Shares and the
Additional 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 Underwriters on the Closing Date or the Option
Closing Date (as the case may be) free and clear of any lien, encumbrance,
security interest, claim or other restriction whatsoever. The Common Stock
is registered pursuant to Section 12(g) of the Exchange Act. The Company
has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act,
nor has the Company received any notification that the Commission is
contemplating terminating
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such registration or listing. The Company has received, subject to notice
of issuance, approval to have the Shares quoted on the National Market
System of the National Association of Securities Dealers' Automated
Quotation System and the Company knows of no reason or set of facts which
is likely to adversely affect such approval.
(xii) The financial statements and the related notes and
schedules thereto included in the Registration Statement and the Prospectus
fairly present the financial condition, results of operations,
stockholders' equity and cash flows of the Company 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 KPMG Peat Marwick 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 included in the
Registration Statement and the Prospectus present fairly the information
shown and have been prepared on a basis consistent with the financial
statements presented therein.
(xiii) Except as set forth in the Prospectus under the captions
"Risk Factors - Dependence on Patents and Proprietary Rights" and "Business
- Patents and Proprietary Rights," (i) the Company owns or possesses 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 (collectively,
"Intellectual Property") necessary to the conduct of its business now
conducted as described in the Prospectus and the Company is not aware of
any facts which would form a reasonable basis for a claim that the Company
does not own or possess valid and enforceable licenses for all Intellectual
Property necessary to the conduct of the Company's business proposed to be
conducted as described in the prospectus; (ii) the Company has no knowledge
that it lacks or will be unable to obtain any rights or licenses to use any
of the Intellectual Property necessary to conduct the businesses now
conducted or proposed to be conducted by it as described in the Prospectus;
(iii) the Company believes that there are no third parties who have or will
be able to establish rights to any of the Intellectual Property, except for
the ownership rights of the owners of the Intellectual Property which is
licensed to the Company and except for the rights of secured parties under
security interests disclosed in the Prospectus; (iv) the Company's rights
in patents which it co-owns with Research Foundation of State University of
New York (the "Foundation"), namely Nos. 5,356 and 5,502,081 (the "Co-Owned
Patents") arose out of the certain Research Agreement dated February 3,
1987, between Medchem Products, Inc. and the Foundation, out of which the
Company now holds an undivided one-half ownership interest in the Co-Owned
Patents, as well as a worldwide, exclusive license to make, use, sell and
sublicense the technologies covered by the Co-Owned Patents; (v) to the
Company's knowledge, there is no infringement by third parties of any of
the Intellectual Property; (vi) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights of title or other interest in or to any
Intellectual Property, and the Company is unaware of any facts
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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 challenging the validity and scope of any
Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (viii) there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company or its 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; (ix) to the Company's knowledge, there
are no grounds for an interference proceeding before the USPTO in relation
to any of the patents or patent applications currently owned by the
Company; (x) 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; (xi) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by any current or
former employee, consultant or agent of the Company seeking either
ownership rights to any invention or compensation from the Company for any
invention made by such employee, consultant or agent in the course of
his/her employment with the Company, nor, to the Company's knowledge, can
any such action, suit, proceeding or claim, if instituted, be sustained;
and (xii) there is no act or omission of which the Company is aware that
may render any patent or patent application within the Intellectual
Property unpatentable, unenforceable or invalid. The Prospectus fairly and
accurately describes the Company's rights with respect to the Intellectual
Property.
(xiv) 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.
(xv) 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.
(xvi) 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.
(xvii) The Company 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 (A)
such as are described in the Registration Statement and Prospectus, or such
as do not materially adversely affect the value of any of such properties
or assets
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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 (B) 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;
and the properties and business of the Company conform in all material
respects to the descriptions thereof contained in the Registration
Statement and the Prospectus. All the material leases and subleases of the
Company, and under which the Company holds properties or assets as lessee
or sublessee, constitute valid leasehold interests of the Company free and
clear of any lien, encumbrance, security interest, restriction, equity,
claim or defect, are in full force and effect, and the Company is not in
default in respect of any of the material terms or provisions of any such
material leases or subleases, and the Company does not have notice of any
claim which has been asserted by anyone adverse to the Company's rights as
lessee or sublessee under either the material lease or sublease, or
affecting or questioning the Company'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.
(xviii) The Company is (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) has received all permits,
licenses or other approvals required of it under applicable Environmental
Laws to conduct its business as currently conducted, and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permit licenses or other approvals would not,
individually or in the aggregate, have a Material Adverse Effect. No
action, proceeding, revocation proceeding, writ, injunction or claim is
pending or threatened relating to the Environmental Laws or to the
Company's activities involving Hazardous Materials. "Hazardous Materials"
means 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 has not engaged in the
generation, use, manufacture, transportation or storage of any Hazardous
Materials on any of the Company's properties or former properties, except
where such use, manufacture, transportation or storage is in compliance
with Environmental Laws. No Hazardous Materials have been treated or
disposed of on any of the Company's properties or on properties formerly
owned or leased by the Company or Subsidiaries during the time of such
ownership or lease, except in compliance with Environmental Laws. No
spills, discharges, releases, deposits, emplacements, leaks or disposal of
any Hazardous Materials have occurred on or under or have emanated from any
of the Company's properties or former properties during the time of the
Company's ownership or lease thereof and except as disclosed in the
Prospectus, the Company is not
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aware 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.
(xix) The Company has obtained agreements from each person who
is a director or officer of the Company or who owns more than 5% of the
outstanding shares of Common Stock and each Selling Stockholder providing
that such person will not, for a period of 180 days after the date of the
Prospectus (the "Lock-up Period"), without the prior written consent of
Xxxxxx Xxxx LLC, directly or indirectly, offer, sell, solicit an offer to
buy, make any short sale, pledge, contract to sell, grant any option to
purchase, or otherwise dispose of or transfer, any shares of Common Stock
beneficially owned as of the date such lockup agreement is executed
(including, without limitation, shares of Common Stock which may be deemed
to be beneficially owned in accordance with the Rules and Regulations and
shares of Common Stock which may be issued upon exercise of a stock option
or warrant) or any securities convertible into or exercisable or
exchangeable for, or any rights to purchase or acquire, shares of Common
Stock now owned or hereafter acquired directly by such beneficial owner or
with respect to which such beneficial owner has or acquired the power of
disposition, otherwise than by (a) as a distribution to partners or
stockholders of such beneficial owner, provided that the distributees
thereof agree in writing to be bound by the terms of this restriction or
(b) pursuant to a bona fide gift to any person or other entity which agrees
in writing to be bound by this restriction. Furthermore, such person or
entity has also agreed and consented to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
shares of Common Stock held by such person or entity, except in compliance
with the foregoing restriction. The Company has provided to counsel for
the Underwriters a complete and accurate list of all stockholders of the
Company and the number and type of securities held by each securityholder.
The Company has provided to counsel for the Underwriters true, accurate and
complete copies of all of the agreements pursuant to which its officers,
directors and stockholders have agreed to such or similar restrictions
(individually, a "Lock-up Agreement," and together, the "Lock-up
Agreements") presently in effect or effected hereby. The Company hereby
represents and warrants that it will not release any of its officers,
directors or other stockholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of Xxxxxx
Xxxx LLC.
(xx) The Company has timely and properly filed with the
Commission all reports and other documents required to have been filed by
it with the Commission pursuant to the Act and the Rules and Regulations.
True and complete copies of all such reports and other documents have been
delivered to you.
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(xxi) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company or the Subsidiaries to or for the
benefit of any of the officers or directors of the Company or any of the
members of the families of any of them that are required to be disclosed in
the Registration Statement, the Offering Memorandum and the Prospectus that
are not so disclosed. Except as disclosed in 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.
(xxii) The Company maintains insurance of the types and in
amounts which it reasonably believes to be adequate for its 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.
(xxiii) The Company maintains 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.
(xxiv) No labor disturbance by the employees of the Company
exists or is imminent which may have a Material Adverse Effect.
(xxv) The Company is in compliance with all provisions of
Florida Statutes (S)517.075 and the regulations thereunder, relating to
issuers doing business with Cuba.
(xxvi) The Company has 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 of quasi-public duties, other than payments required or permitted by
the laws of the United States.
(xxvii) The Company has filed all necessary federal, state and
local income, franchise and other material tax returns and has 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.
(b) Each Selling Stockholder severally represents and warrants
to, and agrees with, the several Underwriters that:
11
(i) Such Selling Stockholder has full legal right, power and
authority to enter into this Agreement, the Power of Attorney in the form
heretofore furnished to you (the "Power of Attorney") and the Custody
Agreement in the form heretofore furnished to you (the "Custody
Agreement"). Each of this Agreement, the Power of Attorney and the Custody
Agreement has been duly executed and delivered by such Selling Stockholder,
and (assuming this Agreement is a binding agreement of yours) constitutes
the valid and binding agreement of such Selling Stockholder, enforceable
against such Selling Stockholder in accordance with their respective 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 creditor's 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 law and the public policy underlying such
laws).
(ii) None of the execution, delivery or performance of this
Agreement, the Power of Attorney and the Custody Agreement and the
consummation of the transactions herein and therein contemplated, will
conflict with or result in a breach of, or default under, any indenture,
mortgage, deed of trust, voting trust agreement, stockholders' agreement,
note agreement, or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is or may be
bound or to which any of his or its property is or may be subject, or any
statute, judgment, decree, order, rule or regulation applicable to such
Selling Stockholder of any government, arbitrator, court, regulatory body
or administrative agency or other governmental agency or body, domestic or
foreign, having jurisdiction over such Selling Stockholder or any of his
activities or properties.
(iii) At the date hereof such Selling Stockholder has, and at
the time of delivery of the Shares to be sold by such Selling Stockholder
to the several Underwriters, such Selling Stockholder will have, full
right, power and authority to sell, assign, transfer and deliver the Shares
to be sold by such Selling Stockholder hereunder. At the date hereof such
Selling Stockholder is, and at the time of delivery of the Shares to be
sold by such Selling Stockholder, such Selling Stockholder will be, the
lawful owner of and has and will have, good and marketable title to such
Shares free and clear of any liens, encumbrances, security interests,
claims, community property rights, restrictions on transfer or other
defects in title. Upon delivery of and payment for the Shares to be sold
by such Selling Stockholder hereunder, good and marketable title to such
Shares will pass to the Underwriters, free and clear of any liens,
encumbrances, security interests, claims, community property rights,
restrictions on transfer or other defects in title. Except as described in
the Registration Statement and the Prospectus (or, if there is no
Prospectus, the most recent Preliminary Prospectus) or created hereby,
there are no outstanding options, warrants, rights, or other agreements or
arrangements requiring such Selling Stockholder at any time to transfer any
Common Stock to be sold hereunder by such Selling Stockholder.
(iv) Such Selling Stockholder will not, without the prior
written consent of Xxxxxx Xxxx LLC, during the Lock-up Period, directly or
indirectly, offer, sell, solicit
12
an offer to buy, make any short sale, pledge, grant any option to purchase,
contract to sell or otherwise dispose of, or transfer (collectively, a
"Disposition") any Common Stock now owned or hereafter acquired by such
Selling Stockholder or with respect to which such Selling Stockholder has
or hereafter acquires the power of disposition, otherwise than (i) as a
bona fide gift or gifts, provided the donee or donees thereof agree in
writing to be bound by this restrictions or (ii) as a distribution to
partners or stockholders of the undersigned, provided that the distributees
thereof agree in writing to be bound by the terms of this restriction. The
foregoing restriction is expressly agreed to preclude the holder of the
Common Stock from engaging in any hedging, equity swap or other transaction
which is designed to or reasonably expected to lead to or result in a
Disposition during the Lock-up Period, even if such Common Stock would be
disposed of by someone other than the Selling Stockholder. Such prohibited
hedging, equity swap, or other transactions would including, without
limitation, any short sale (whether or not against the box), or any
purchase, sale or grant of any right (including, without limitation, any
put or call option) with respect to any Common Stock or with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from the Common
Stock. Such Selling Stockholder also agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent against the
transfer of the securities held by such Selling Stockholder except in
compliance with this restriction.
(v) Certificates in negotiable form for all Shares to be sold
by such Selling Stockholder under this Agreement, together with a stock
power or powers duly endorsed in blank by such Selling Stockholder,
signature guaranteed by an eligible guarantor institution (bank,
stockbroker, savings and loan association or credit union with membership
in an approved Medallion Program) pursuant to rule 17Ad-15 promulgated
under the Act, have been placed in custody with the custodian for the
purpose of effecting delivery hereunder .
(vi) Such Selling Stockholder has not distributed and will not
distribute offering material in connection with the offering and sale of
the Shares.
(vii) Such Selling Stockholder will review the Prospectus and
will comply with all agreements and satisfy all conditions on its part to
be complied with or satisfied pursuant to this Agreement on or prior to the
Closing Date, or any later date on which Option Shares are to be purchased,
as the case may be, and will advise one of its Attorneys and Xxxxxx Xxxx
LLC prior to the Closing Date or such later date on which Option Shares are
to be purchased, as the case may be, if any statement to be made on behalf
of such Selling Stockholder in the certificate contemplated by Section 7(j)
hereof would be inaccurate if made as of the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be.
(viii) Such Selling Stockholder does not have, or has waived
prior to the date hereof, any preemptive right, co-sale right or right of
first refusal or other similar right to purchase any of the Shares that are
to be sold by the Company or any of the other Selling Stockholders to the
Underwriters pursuant to this Agreement; such Selling
13
Stockholder does not have, or has waived prior to the date hereof, any
registration right or other similar right to participate in the offering
made by the Prospectus, other than such rights of participation as have
been satisfied by the participation of such Selling Stockholder in the
transactions to which this Agreement relates in accordance with the terms
of this Agreement; and such Selling Stockholder does not own any warrants,
options or similar rights to acquire, and does not have any right or
arrangement to acquire, any capital stock, rights, warrants, options or
other securities from the Company, other than those described in the
Registration Statement and the Prospectus.
(ix) At the time when the Registration Statement becomes or
became effective, and at all times subsequent thereto up to and including
the Closing Date and the Option Closing Date, the Registration Statement
and any amendments thereto will not contain any untrue statement of a
material fact regarding such Selling Stockholder or omit to state a
material fact regarding such Selling Stockholder required to be stated
therein or necessary in order to make the statements therein regarding such
Selling Stockholder not misleading, and the Prospectus (and any supplements
thereto) (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) will not contain any untrue statement of a material
fact regarding such Selling Stockholder or omit to state a material fact
regarding such Selling Stockholder required to be stated therein or
necessary in order to make the statements therein regarding such Selling
Stockholder, in light of the circumstances under which they were made, not
misleading, and such Selling Stockholder is unaware of any material
misstatement in or omission from the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) or of any material adverse information regarding
the business or operations of the Company which is not set forth in the
Registration Statement and the Prospectus (or, if the Prospectus is not
then in existence, in the most recent Preliminary Prospectus).
(x) Such Selling Stockholder has not 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.
(xi) Nothing has come to the attention of such Selling
Stockholder to cause each Selling Stockholder to believe that the Company's
representations and warranties contained in this Agreement are not
accurate.
(xii) Each Selling Stockholder consents to the use of the
Prospectus and any amendment or supplement thereto by the Underwriters and
all dealers to whom the Shares may be sold, both 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.
(xiii) There is not pending or threatened against such Selling
Stockholder any action, suit or proceeding which (A) questions the validity
of this Agreement or of
14
any action taken or to be taken by such Selling Stockholder pursuant to or
in connection with this Agreement or (B) is required to be disclosed in the
Registration Statement which is not so disclosed, and such actions, suits
or proceedings as are summarized in the Registration Statement, if any, are
accurately summarized.
3. Purchase, Sale and Delivery of the Shares. On the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, (A) the Company agrees to
sell to each Underwriter and each Underwriter, severally and not jointly, agrees
to purchase from the Company at a purchase price of $___________ per Share, the
number of Firm Shares set forth opposite the name of such Underwriter in Column
(1) of Schedule I hereto and (B) each Selling Stockholder, severally and not
----------
jointly, agrees to sell to each Underwriter, and each Underwriter, severally and
not jointly, agrees to purchase from such Selling Stockholder at a purchase
price of $______ per Share, the number of Firm Shares equal to the number of
Firm Shares set forth opposite the name of such Underwriter in Column (2) of
Schedule I, multiplied by the number of Firm Shares set forth opposite the name
----------
of such Selling Stockholder in Column (1) of Schedule II and divided by the
-----------
total number of Firm Shares to be sold by all Selling Stockholders, in each case
subject to such adjustments to eliminate any fractional shares as the
Representatives in their sole discretion shall make.
Certificates in negotiable form (endorsed in blank or accompanied by
stock powers in blank, with signatures appropriately guaranteed, and any funds
necessary for the purchase of stock transfer stamps) representing all of the
Shares to be sold by the Selling Stockholders have been placed in custody under
a Custody Agreement and each Selling Stockholder has duly executed and delivered
a Power of Attorney appointing [_______________] and [____________________] and
each of them as such Selling Stockholder's attorney-in-fact (the "Attorney-in-
Fact") with authority to execute this Agreement and to deliver this Agreement on
behalf of such Selling Stockholder, to authorize the delivery of the Shares to
be sold by such Selling Stockholder hereunder and otherwise to act on behalf of
such Selling Stockholder in connection with the transactions contemplated by
this Agreement and the Custody Agreement. Each Selling Stockholder agrees that
the shares represented by the certificates held in custody for such Selling
Stockholder under the Custody Agreement are subject to the interests of the
Underwriters hereunder and the arrangements made by such Selling Stockholder for
such custody, as well as the appointment by such Selling Stockholder of the
Attorney-in-Fact, are, to that extent, irrevocable. Each Selling Stockholder
specifically agrees that the obligations of such Selling Stockholder hereunder
shall not be terminated, except as otherwise provided herein, by any act of such
Selling Stockholder, operation of law or otherwise, whether by the death or
incapacity of such Selling Stockholder, if an individual, or by the occurrence
of any other event. If any Selling Stockholder, if an individual, should die or
become incapacitated, or if any other such event should occur, before the
delivery of the Shares hereunder, certificates representing the shares held in
custody for such Selling Stockholder shall be delivered pursuant to the terms
and conditions of this Agreement and the Custody Agreement, and the actions
taken by the Attorney-in-Fact pursuant to the Power of Attorney shall be as
valid as if such death, incapacity or other event had not occurred, whether or
not the Custodian or the Attorneys-in-Fact shall have received notice of such
death, incapacity or other event.
15
Delivery of certificates, and payment of the purchase price, for the
Firm Shares shall be made at the offices of Xxxxxx Xxxx LLC at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or such other location as shall be agreed upon by the
Company and the Representatives. Such delivery and payment shall be made at
10:00 a.m., New York City time, on __________, 1997 or at such other time and
date not more than ten business days thereafter as shall be agreed upon by the
Representatives and the Company. The time and date of such delivery and payment
are herein called the "Closing Date."
Delivery of the certificates for the Firm Shares shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price for the Firm Shares by certified or official bank checks in New York
Clearing House (next day) funds drawn to the order of the Company in the case of
Firm Shares sold by it and the Custodian in the case of Firm Shares sold by the
Selling Stockholders. The certificates for the Firm Shares to be so delivered
will be in definitive, fully registered form, will bear no restrictive legends
and will be in denominations and registered in such names as the Representatives
shall request, not less than two full business days prior to the Closing Date.
The certificates for the Firm Shares will be made available to the
Representatives at such office or such other place as the Representatives may
designate for inspection, checking and packaging not later than 9:30 a.m., New
York time on the business day prior to the Closing Date.
4. Public Offering of the Shares. It is understood that the
Underwriters propose to make a public offering of the Shares at the price and
upon the other terms set forth in the Prospectus.
5. Covenants of the Company and the Selling Stockholders.
The Company and the Selling Stockholders covenant and agree with
each of the Underwriters that:
(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 (A) 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 Prospectus, as then amended or
supplemented, and (B) will not file with the Commission the prospectus or
the amendment referred to in the third sentence of Section 2(a)(i) hereof,
any amendment or supplement to such prospectus or any amendment to the
Registration Statement of which the Representatives 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 Representatives
shall not have given their consent.
16
(b) As soon as the Company is advised or obtains knowledge
thereof, the Company will advise the Representatives (A) 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;
(B) 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 (C) 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 (A) 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 Representatives may
designate, (B) continue such qualifications in effect for as long as may be
necessary to complete the distribution of the Shares, and (C) make such
applications, file such documents and furnish such information as may be
required for the purposes set forth in clauses (A) and (B); 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 Underwriters and all dealers to
whom the Shares may be sold, 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 Representatives and, subject to Section
5(a)(i) hereof, will prepare and file with the Commission an amendment to
the 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 Underwriters.
(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
17
specified in Rule 158(b) of the Rules and Regulations, and to the
Representatives, 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 Representatives:
(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
(vi) any additional information of a public nature
concerning the Company or its business which the Representatives 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.
18
(h) The Company will furnish, without charge, to the
Representatives or on the Representatives' order, at such place as the
Representatives may designate, copies of the each Preliminary Prospectus,
the Registration Statement and any pre-effective or post-effective
amendments thereto (three of which copies 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 Representatives may reasonably request.
(i) The Company shall not, during the 180 days following the
effective date of the Registration Statement, except with your prior
written consent as Representatives, file a registration statement covering
any of its shares of capital stock.
(j) The Company shall not, during the Lock-up Period, except with
your prior written consent as Representatives, issue, sell, offer or agree
to sell, grant, distribute or otherwise dispose of, directly or indirectly,
any shares of Common Stock, or any options, rights or warrants with respect
to shares of Common Stock, or any securities convertible into or
exchangeable for Common Stock, other than (i) the sale of Shares hereunder,
(ii) the grant of options or the issuance of shares of Common Stock under
the Company's stock option plans or stock purchase plan, as the case may
be, existing on the date hereof, and (iii) the issuance of shares of Common
Stock upon exercise of the currently outstanding options or warrants
described in the Registration Statement.
(k) The Company will use its best efforts to maintain listing of
its shares of Common Stock on the Nasdaq National Market.
(l) 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.
(m) 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.
(n) 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 Regulations, 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.
6. Expenses.
(a) Regardless of whether the transactions contemplated in this
Agreement are consummated, and regardless of whether for any reason this
Agreement is terminated, the
19
Company and the Selling Stockholders will pay, and hereby agree to indemnify
each Underwriter against, all fees and expenses incident to the performance of
the obligations of the Company and the Selling Stockholders under this
Agreement, including, but not limited to, (i) fees and expenses of accountants
and counsels for the Company and the Selling Stockholders, (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 Underwriters of any Preliminary Prospectus
or Prospectus, or any amendment or supplement thereto), this Agreement, the
Agreement Among Underwriters, any Selected Dealer Agreement, Underwriters'
Questionnaire, Underwriters' Power of Attorney, Custody Agreement and Selling
Stockholders' Power of Attorney 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, (v) any
fees and expenses in connection with the quotation of the Shares on the National
Association of Securities Dealers Automated Quotations National Market System,
(vi) costs and expenses incident to the preparation, issuance and delivery to
the Underwriters 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 Underwriters of the Shares to be sold by the
Company and the Selling Stockholders pursuant to this Agreement and (vii) costs
and expenses incident to any meetings with prospective investors in the Shares
(other than as shall have been specifically approved by the Representatives to
be paid for by the Underwriters).
(b) If the purchase of the Shares as herein contemplated is not
consummated for any reason other than the Underwriters' default under this
Agreement or other than by reason of Section 11(a), the Company and the Selling
Stockholders shall reimburse the several Underwriters for their out-of-pocket
expenses (including reasonable counsel fees and disbursements) in connection
with any investigation made by them, and any preparation made by them in respect
of marketing of the Shares or in contemplation of the performance by them of
their obligations hereunder.
7. Conditions of the Underwriters' Obligations. The obligation of
each Underwriter to purchase and pay for the Shares set forth opposite the name
of such Underwriter in Schedule I is subject to the continuing accuracy of the
----------
representations and warranties of the Company and the Selling Stockholders
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 and the Selling Stockholders made pursuant
to the provisions hereof; the performance by the Company and the Selling
Stockholders on and as of the Closing Date of their respective covenants and
agreements hereunder; and the following additional conditions:
(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
20
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
Representatives 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 Representatives 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 Representatives, 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 Representatives shall not have advised the Company that the
Registration Statement, or any amendment thereto, contains an untrue statement
of fact which, in the Representatives' opinion, is material, or omits to state a
fact which, in the Representatives' 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 Representatives' opinion, is material, or omits to state a
fact which, in the Representatives' 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 Representatives shall have
received from counsel to the Underwriters, such opinion or opinions with respect
to the issuance and sale of the Firm Shares, the Registration Statement and the
Prospectus and such other related matters as the Representatives 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 Underwriters shall have received at no
cost to them the opinions, dated the Closing Date, of (i) Xxxxxxx, Procter &
Xxxx LLP, counsel to the Company ("Company Counsel"), (ii) King & Spalding,
special FDA counsel to the Company, (iii) Xxxxxxxx, Xxxxx, Xxxxx & Xxxxxxxx,
P.C., special patent counsel to the Company and (iv) _________, counsel to the
Selling Stockholders, in the forms attached hereto at Appendix A, addressed to
the Underwriters and with reproduced copies of signed counterparts thereof for
each of the Underwriters:
(e) On or prior to the Closing Date, counsel to the Underwriters 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 the
Selling Stockholders, or conditions herein contained.
21
(f) On the Closing Date, the Underwriters shall have received, a
letter from the Accountants addressed to the Company and the Underwriters, dated
the Closing Date, confirming that it is an independent certified public
accountant with respect to the Company within the meaning of the Act and the
Rules and Regulations thereunder and based upon the procedures described in its
letter delivered to you concurrently with the execution of this Agreement
(herein called the "Original Letter"), but carried out to a date not more than
three days prior to the Closing Date, (i) confirming that the statements and
conclusions set forth in the Original Letter are accurate as of the Closing
Date; and (ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter that are necessary to reflect any
changes in the facts described in the Original Letter since the date of such
letter, or to reflect the availability of more recent financial statements, data
or information. 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 your reasonable judgment, makes it impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectus. In addition, you shall have received from the Accountants a
letter addressed to the Company and made available to you for the use of the
Underwriters stating that its review of the Company's system of internal
accounting controls, to the extent it deemed necessary in establishing the scope
of its latest examination of the Company's financial statements, did not
disclose any weaknesses in internal controls that it considered to be material
weaknesses. All such letters shall be in a form reasonably satisfactory to the
Representatives and their counsel.
(g) On the Closing Date, the Underwriters 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
22
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, the Company has not incurred, other than in the
ordinary course of its business, any material liabilities or obligations,
direct or contingent; the Company has not purchased any of its outstanding
capital stock or paid or declared any dividends or other distributions on
its capital stock; the Company has not entered into any transactions not in
the ordinary course of business; and there has not been any change in the
capital stock or long-term debt or any increase in the 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; the Company has
not 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 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.
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 7 or (ii) any
change, or any development involving a prospective change, in the business or
properties of the Company 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 Representatives' 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 5(a)(iii)(A) 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) On the Closing Date, the Underwriters shall have received a
certificate, dated the Closing Date, from each Selling Stockholder (which may be
signed by the Attorney-in-Fact) to the effect that each of such Selling
Stockholders has carefully examined the Registration Statement and the
Prospectus and this Agreement, and that:
(A) The representations and warranties of such Selling
Stockholder in this Agreement are true and correct, as if made at and as of the
Closing Date,
23
and such Selling Stockholder has complied with all the agreements and satisfied
all the conditions to be performed or satisfied by such Selling Stockholder at
or prior to the Closing Date; and
(B) The Registration Statement and Prospectus and, if any, each
amendment and each supplement thereto, contain all statements required to be
included therein regarding such Selling Stockholder, and none of the
Registration Statement nor any amendment thereto includes any untrue statement
of a material fact regarding such Selling Stockholder or omits to state any
material fact regarding such Selling Stockholder required to be stated therein
or necessary to make the statements therein regarding such Selling Stockholder
not misleading, and neither the Prospectus (and any supplements thereto) or any
Preliminary Prospectus includes or included any untrue statement of a material
fact regarding such Selling Stockholder or omits or omitted to state a material
fact regarding such Selling Stockholder required to be stated therein or
necessary in order to make the statements therein regarding such Selling
Stockholder, in light of the circumstances under which they were made, not
misleading.
(k) The Representatives shall have received a Lock-up Agreement from
each person who is a director or officer of the Company or who owns more than 5%
of the outstanding shares of Common Stock and each Selling Stockholder.
(l) The Company and the Selling Stockholders shall have furnished the
Underwriters with such further opinions, letters, certificates or documents as
you or counsel for the Underwriters may reasonably request. All opinions,
certificates, letters and documents to be furnished by the Company and the
Selling Stockholders will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Underwriters and to
counsel for the Underwriters. The Company and the Selling Stockholders shall
furnish the Underwriters with conformed copies of such opinions, certificates,
letters and documents in such quantities as you reasonably request. The
certificates delivered under this Section 7 shall constitute representations,
warranties and agreements of the Company and the Selling Stockholders, as the
case may be, 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.
(m) The Shares have been duly authorized for quotation on the National
Association of Securities Dealers Automated Quotation National Market System.
8. Indemnification.
(a) Subject to the provisions of Section 8(e), the Company and the
Selling Stockholders, jointly and severally, agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls such Underwriter
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 Underwriter 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 any blue sky application or other document
executed by
24
the Company specifically for the purpose of qualifying, or based upon written
information furnished by the Company or the Selling Stockholders filed in any
state or other jurisdiction in order to qualify, any or all of the Shares under
the securities or blue sky laws thereof (any such application, document or
information being hereinafter called a "Blue Sky Application"), 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 not
misleading and will reimburse, as incurred, such Underwriter or such controlling
persons for any legal or other expenses incurred by such Underwriter 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 and such Selling Stockholder 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 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 on behalf of such Underwriter through the Representatives
expressly for use therein, and provided, further, that such indemnity with
-------- -------
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) 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
Underwriter 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 5(a)(viii) hereof. The Company and the
Selling Stockholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective amounts of
such liability for which they each shall be responsible, and the provisions of
this Section 8(a) shall not affect any such agreement.
The indemnity agreement in this paragraph (a) shall be in addition to
any liability which the Company and the Selling Stockholders may otherwise have.
(b) Each of the Underwriters agrees severally, but not jointly, 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 and each Selling Stockholder against any and all losses,
claims, damages or liabilities (and actions in respect thereof) to which the
Company or any such Selling Stockholder, 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 in any Blue Sky Application, 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
25
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 that Underwriter through the Representatives 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 Selling
Stockholder, director, officer, controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
The Company and the Selling Stockholders acknowledge that the statements with
respect to the public offering of the Shares set forth under the heading
"Underwriting," except for the ____ paragraph thereof, in the Prospectus have
been furnished by the Underwriters to the Company expressly for use therein and
constitute the only information furnished in writing by or on behalf of the
Underwriters for inclusion in the Prospectus. The indemnity agreement contained
in this subsection (b) shall be in addition to any liability which the
Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against one or more indemnifying parties
under this Section 8, 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 8 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 8 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 8 is
unavailable or insufficient 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
26
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 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 and/or
any Selling Stockholder are contributing parties and the Underwriters are the
indemnified party, the relative benefits received by the Company and/or the
Selling Stockholders on the one hand, and the Underwriters, 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
underwriting discounts received by the Underwriters 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 the
Selling Stockholders or by the Underwriters, 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), the Underwriters shall not
be required to contribute any amount in excess of the underwriting discount
applicable to the Shares purchased by the Underwriters hereunder. The
Underwriters' obligations to contribute pursuant to this paragraph (d) are
several in proportion to their respective underwriting obligations, and not
joint. 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 an Underwriter 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 Underwriter 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 and each of the
Selling Stockholders 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 in addition to any liabilities
which any indemnifying party may otherwise have.
27
(e) Notwithstanding any other provision of this Agreement, the
liability of each Selling Stockholder under this Section 8, solely in its
capacity as a Selling Stockholder herein and not with respect to any other
relationships any of the Selling Stockholders or any of its affiliates may have
with the Company, shall not exceed the lesser of (i) the amount equal to the
public offering price of the Shares sold by the Selling Securityholder to the
Underwriters minus the amount of the underwriting discount paid thereon to the
Underwriters by the Selling Stockholder, and (ii) such Selling Stockholder's
proportionate share of such liability, determined by dividing the number of
shares sold by such Selling Stockholder under this Agreement by the total number
of shares of Common Stock sold under this Agreement by the Company and the
Selling Stockholders.
9. Right to Increase Offering. At anytime during a period of 30 days
from the date of the Prospectus, the Underwriters, by no less than two business
days' prior notice to the Company and the Selling Stockholders may designate a
closing (which may be concurrent with, and part of, the closing on the Closing
Date with respect to the Firm Shares or may be a second closing held on a date
subsequent to the Closing Date, in either case such date shall be referred to
herein as the "Option Closing Date") at which the Underwriters may purchase all
or less than all of the Additional Shares in accordance with the provisions of
this Section 9 at the purchase price per share to be paid for the Firm Shares.
In no event shall the Option Closing Date be later than 10 business days after
written notice of election to purchase Additional Shares is given.
The Company and the Selling Stockholders agree, severally and not
jointly, to sell to the several Underwriters the respective numbers of
Additional Shares obtained by multiplying the number of Shares specified in such
notice by a fraction, of which the numerator is in the case of the Company, the
maximum number of Additional Shares offered by it, and, in the case of each of
the Selling Stockholders, the number of shares set forth opposite the name of
each Selling Stockholder set forth in Column (2) of Schedule II hereto, and the
-----------
denominator is the total number of Additional Shares (subject to adjustment by
you to eliminate fractions). Such Additional Shares shall be purchased from the
Company and each Selling Stockholder for the account of each Underwriter in the
same proportion as the number of Firm Shares set forth opposite the name of such
Underwriter in Column (3) of Schedule I bears to the total number of Firm Shares
----------
(subject to adjustment by you to eliminate fractions) and may be purchased by
the Underwriters only for the purpose of covering over-allotments made in
connection with the sale of the Firm Shares.
No Additional Shares shall be sold or delivered unless the Firm Shares
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Additional Shares or any portion thereof may be surrendered and
terminated at any time upon notice by you to the Company.
Except to the extent modified by this Section 9, all provisions of
this Agreement relating to the transactions contemplated to occur on the Closing
Date for the sale of the Firm Shares shall apply, mutatis mutandis, to the
Option Closing Date for the sale of the Additional Shares.
28
10. Representations, etc. to Survive Delivery. The respective
representations, warranties, agreements, covenants, indemnities and statements
of, and on behalf of, the Company and its officers, the Selling Stockholders and
the Underwriters, 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 Underwriters, and will survive delivery of and payment for the
Shares. Any successors to the Underwriters shall be entitled to the indemnity,
contribution and reimbursement agreements contained in this Agreement.
11. Effective Date and Termination.
(a) This Agreement shall become effective at 11:00 A.M., New York time
on the first business day following the date hereof, or at such earlier time
after the Registration Statement becomes effective as the Representatives, in
their sole discretion, shall release the Shares for the sale to the public
unless prior to such time the Representatives shall have received written notice
from the Company that it elects that this Agreement shall not become effective,
or the Representatives shall have given written notice to the Company that the
Representatives on behalf of the Underwriters elect that this Agreement shall
not become effective; provided, however, that the provisions of this Section and
-------- -------
of Section 6 and Section 8 hereof shall at all times be effective. For purposes
of this Section 11(a), the Shares to be purchased hereunder shall be deemed to
have been so released upon the earlier of notification by the Representatives to
securities dealers releasing such Shares for offering or the release by the
Representatives for publication of the first newspaper advertisement which is
subsequently published relating to the Shares.
(b) This Agreement (except for the provisions of Sections 6 and 8
hereof) may be terminated by the Representatives by notice to the Company and
the Attorney-in-Fact in the event that the Company or any of the Selling
Stockholders have failed to comply in any respect with any of the provisions of
this Agreement required on their respective parts to be performed at or prior to
the Closing Date or the Option Closing Date, or if any of the representations or
warranties of the Company or the Selling Stockholders are not accurate in any
respect or if the covenants, agreements or conditions of, or applicable to the
Company or the Selling Stockholders herein contained have not been complied with
in any respect or satisfied within the time specified on the Closing Date or the
Option Closing Date, respectively, or if prior to the Closing Date or the Option
Closing Date:
(i) the Company 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 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 National Association of Securities Dealers Automated
Quotations National Market System or trading in securities generally on the New
York Stock Exchange or the National Association of Securities Dealers Automated
Quotations National Market System 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;
29
(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 that, in each case, in
the Representatives' judgment makes it impracticable or inadvisable to make or
consummate the public offering, sale or delivery of the Company's Shares on the
terms and in the manner contemplated in the Prospectus and the Registration
Statement.
(c) Termination of this Agreement under this Section 11 or Section 12
after the Firm Shares have been purchased by the Underwriters hereunder shall be
applicable only to the Additional Shares. Termination of this Agreement shall
be without liability of any party to any other party other than as provided in
Sections 6 and 8 hereof.
12. Substitution of Underwriters. If one or more of the Underwriters
shall fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 7 or 11 hereof) to
purchase and pay for (a) in the case of the Closing Date, the number of Firm
Shares agreed to be purchased by such Underwriter or Underwriters upon tender to
you of such Firm Shares in accordance with the terms hereof or (b) in the case
of the Option Closing Date, the number of Additional Shares agreed to be
purchased by such Underwriter or Underwriters upon tender to you of such
Additional Shares in accordance with the terms hereof, and the number of such
Shares shall not exceed 10% of the Firm Shares or Additional Shares required to
be purchased on the Closing Date or the Option Closing Date, as the case may be,
then, each of the non-defaulting Underwriters shall purchase and pay for (in
addition to the number of such Shares which it has severally agreed to purchase
hereunder) that proportion of the number of Shares which the defaulting
Underwriter or Underwriters shall have so failed or refused to purchase on such
Closing Date or Option Closing Date, as the case may be, which the number of
Shares agreed to be purchased by such non-defaulting Underwriter bears to the
aggregate number of Shares so agreed to be purchased by all such non-defaulting
Underwriters on such Closing Date or Option Closing Date, as the case may be.
In such case, you shall have the right to postpone the Closing Date or the
Option Closing Date, as the case may be, to a date not exceeding seven full
business days after the date originally fixed as such Closing Date or the Option
Closing Date, as the case may be, pursuant to the terms hereof in order that any
necessary changes in the Registration Statement, the Prospectus or any other
documents or arrangements may be made.
If one or more of the Underwriters shall fail or refuse (otherwise than for
a reason sufficient to justify the termination of this Agreement under the
provisions of Section 7 or 11 hereof) to purchase and pay for (a) in the case of
the Closing Date, the number of Firm Shares agreed to be purchased by such
Underwriter or Underwriters upon tender to you of such Firm Shares in accordance
with the terms hereof or (b) in the case of the Option Closing Date, the
30
number of Additional Shares agreed to be purchased by such Underwriter or
Underwriters upon tender to you of such Additional Shares in accordance with the
terms hereof, and the number of such Shares shall exceed 10% of the Firm Shares
or Additional Shares required to be purchased by all the Underwriters on the
Closing Date or the Option Closing Date, as the case may be, then (unless within
48 hours after such default arrangements to your satisfaction shall have been
made for the purchase of the defaulted Shares by an Underwriter or Underwriters)
and subject to the provisions of Section 11(b) hereof, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or on
the part of the Company or the Selling Stockholders except as otherwise provided
in Sections 6 and 8 hereof. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this paragraph.
Nothing in this Section 12, and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
13. Notices. All communications hereunder shall be in writing and if sent
to the Representatives shall be mailed or delivered or telegraphed and confirmed
by letter or telecopied and confirmed by letter to x/x Xxxxxx Xxxx LLC at 000
Xxxx Xxxxxx, 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 000 Xxxx Xxxxxxxx Xxxx, Xxxxxx, XX 00000, or if sent to the
Selling Stockholders, shall be mailed or delivered or telegraphed and confirmed
by letter or telecopied and confirmed by letter to [name[s] of Attorney[s]-in-
Fact and address].
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Company, the Selling Stockholders, and each Underwriter and the
Company's, the Selling Stockholders' and each Underwriter'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 and the Selling Stockholders contained in this Agreement shall also be
for the benefit of any person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and except that the Underwriters' 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, any 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 and the Selling Stockholders. No purchaser of
Shares from the Underwriters will be deemed a successor because of such
purchase.
15. 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 8 above and
agrees to accept, either directly or through an agent, service of process of
each such court.
31
16. 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.
32
If the foregoing correctly sets forth our understanding, please indicate
the Underwriters' acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
ANIKA THERAPEUTICS, INC.
By:
-----------------------------------------
Name:
Title:
SELLING STOCKHOLDERS
By:
-----------------------------------------
As Attorney-in-Fact for
the Selling Stockholders named in
Schedule II hereto
-----------
33
Accepted as of the date first
above written:
XXXXXX XXXX LLC
By: Xxxxxx Xxxx LLC
Acting on its own behalf and as one of
the Representatives of the
several Underwriters referred to
in the foregoing Agreement
By:
------------------------------------
Title:
---------------------------------
VOLPE, BROWN, XXXXXX & COMPANY LLC
By: Volpe, Brown, Xxxxxx & Company LLC
Acting on its own behalf and as one of the
Representatives of the several Underwriters
referred to in the foregoing Agreement
By:
------------------------------------
Title:
---------------------------------
LEERINK, SWANN, GARRITY, SALLAMI, XXXXXX & XXXX, INC.
By: Leerink Xxxxx & Company
Acting on its own behalf and as one of the
Representatives of the several Underwriters
referred to in the foregoing Agreement
By:
------------------------------------
Title:
---------------------------------
34
SCHEDULE I
----------
UNDERWRITERS
Underwriting Agreement dated ______________, 1997
(2) (3)
(1) Number of Firm Aggregate
Number of Firm Shares to be Number of
Shares to be Purchased from Firm Shares
Purchased from the Selling to be
the Company Stockholders Purchased
-------------- -------------- -----------
Name and Address
----------------
Xxxxxx Xxxx LLC................
-------------- -------------- -----------
Volpe, Brown, Xxxxxx & Company
LLC...........................
-------------- -------------- -----------
Leerink, Swann, Garrity,
Sallami, Xxxxxx & Xxxx, Inc...
-------------- -------------- -----------
-------------- -------------- -----------
Total..........................
============== ==============
35
SCHEDULE II
-----------
SELLING STOCKHOLDERS
(1) (2)
Maximum Number
of
Name and Address of Firm Shares Additional Shares
Selling Stockholder to be Sold to be Sold
------------------- ----------- -----------------
Axiom Venture Partners Limited Partnership 500,000
c/o Axiom Venture Partners
City Place II, 17th Floor
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
------- -----------------
Total....................................... 500,000
======= =================
36
APPENDIX A
1. Opinion of Counsel to the Company
---------------------------------
(i) The Company (A) 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
Prospectus, and (B) is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction (x) in which the
conduct of its business requires such qualification (except for those
jurisdictions in which the failure so to qualify can be cured without
having a Material Adverse Effect) and (y) in which it owns or leases
property;
(ii) The authorized capital stock of the Company consists of ______
shares of Preferred Stock, of which there are no outstanding shares, and
______ shares of Common Stock, $.1 par value, of which there are
outstanding ___ shares (including the Shares plus the number of Option
Shares issued on the date hereof) [and such additional number of shares, if
any, as may have been issued after ___ and prior to the Closing Date,
pursuant to ________]; The Company does not own or control, directly or
indirectly, any corporation, association or other entity; the securities of
the Company conform in all material respects to the description thereof
contained in the Prospectus; the issued and outstanding shares of Common
Stock have been duly authorized and validly issued by the Company, are
fully paid and nonassessable and have been issued in compliance with all
federal and state securities laws and have not been issued in violation of
any preemptive right, co-sale right, registration right, right of first
refusal or other similar right known to such counsel, and are free of any
such rights;
(iii) The Company has duly authorized the issuance and sale of the Shares
to be sold by it hereunder; such Shares, when issued by the Company and
paid for in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus and will be sold free and
clear of any pledge, lien, security interests, encumbrance, claim, or
equitable interest, and, to the best knowledge of such counsel, not in
violation of or subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar right, which
rights have not previously been waived, in connection with the purchase or
sale of any of the Shares and the Shares have been duly authorized for
quotation on the National Association of Securities Dealers Automated
Quotation National Market System;
(iv) The Registration Statement is effective under the Act; any required
filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b) and any required
filing of an abbreviated registration statement pursuant to Rule 462(b) of
the Rules and Regulations has been made in the manner and within the time
period required by such rule 462(b); and no stop order
37
suspending the effectiveness of the Registration Statement or any amendment
thereto has been issued, and no proceedings for that purpose have been
instituted or are pending or, to the best knowledge of such counsel, are
threatened or contemplated under the Act;
(v) The Registration Statement originally filed with respect to the
Shares and each amendment thereto and the Prospectus and, if any, each
amendment and supplement thereto (except for the financial statements,
schedules and other financial data included therein, as to which such
counsel need not express any opinion), complied as to form in all material
respects with the requirements of the Act and the Rules and Regulations;
the descriptions contained and summarized in the Registration Statement and
the Prospectus of contracts and other documents, are accurate and fairly
represent in all material respects the information required to be shown by
the Act and the Rules and Regulations;
(vi) To the best knowledge of such counsel, there are no contracts or
documents which are required by the Act to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required by the Act and the
Rules and Regulations; to the best knowledge of such counsel, there is not
pending or threatened against the Company any action, suit, proceeding or
investigation before or by any court, regulatory body, or administrative
agency or any other governmental agency or body, domestic or foreign, of a
character required to be disclosed in the Registration Statement or the
Prospectus which is not so disclosed therein; and the statements set forth
under the headings "Risk Factors -Dependence on Marketing Partners," "Risk
Factors - Possible Adverse Effect of Certain Anti-Takeover Provisions,"
"Business - Environmental Laws," ["Business - [Partner Agreements],"] the
third paragraph of "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Management - Employment Agreements,"
"Management - 1993 Stock Option Plan" and "Description of Capital Stock,"
"Shares Eligible for Future Sale" and "Certain Transactions" and Items 14
and 15 of the Registration Statement in the Prospectus, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, provide an accurate summary of such legal
matters, documents and proceedings;
(vii) The Company has full legal right, power, and authority to enter
into this Agreement and to consummate the transactions provided for herein;
this Agreement has been duly authorized, executed and delivered by the
Company; and this Agreement, assuming due authorization, execution and
delivery by each other party hereto, is a valid and binding agreement of
the Company, enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
now or hereafter in effect relating to or affecting creditors' rights
generally or by general principles of equity relating to the availability
of remedies and except as rights to indemnity and contribution may be
limited by federal or state securities laws or the public policy underlying
such laws.
(viii) None of the Company's execution or delivery of this Agreement, its
performance hereof, its consummation of the transactions contemplated
herein or its application of the net proceeds of the offering in the manner
set forth under the caption "Use of Proceeds",
38
conflicts or will conflict with or results or will result in any breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon, any property or assets of the Company pursuant to the
terms of the certificate of incorporation or by-laws of the Company; the
terms of any indenture, mortgage, deed of trust, voting trust agreement,
stockholder's agreement, note agreement or other agreement or instrument
known to such counsel after reasonable investigation to which the Company
is a party or by which it is or may be bound or to which any of its
properties may be subject; any statute, rule or regulation of any
regulatory body or administrative agency or other governmental agency or
body, domestic or foreign, having jurisdiction over the Company or any of
its activities or properties; or any judgment, decree or order, known to
such counsel after reasonable investigation, of any government, arbitrator,
court, regulatory body or administrative agency or other governmental
agency or body, domestic or foreign, having such jurisdiction; and no
consent, approval, authorization or order of any court, regulatory body or
administrative agency or other governmental agency or body, domestic or
foreign, has been or is required for the Company's performance of this
Agreement or the consummation of the transactions contemplated hereby,
except such as have been obtained under the Act or may be required under
state securities or blue sky laws in connection with the purchase and
distribution by the Underwriters of the Shares;
(ix) To the best of such counsel's knowledge, the conduct of the
businesses of the Company is not in violation of any federal, state or
local statute, administrative regulation or other law, which violation is
likely to have a Material Adverse Effect; and the Company has obtained all
franchises, licenses, permits, approvals, certificates and other
authorizations from federal, state and foreign 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, as are necessary or required for the ownership,
leasing and operation of its properties and the conduct of its business as
presently conducted and as contemplated in the Prospectus;
(x) The statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations, including the Massachusetts
general corporation law, and the description of the certificate of
incorporation and bylaws are accurate and fairly and correctly present the
information required to be presented by the Act or the Rules and
Regulations in all material respects; and such counsel does not know of any
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;
(xi) The Company is not in violation of its certificate of incorporation
or bylaws, and to the best of such counsel's knowledge, the Company is not
in breach of or default with respect to any provision of any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument by which it or any of its properties may be bound or
affected, except where such default would not materially adversely affect
the Company and, to the best of such counsel's knowledge, the Company is in
compliance with all laws, rules, regulations, judgments, decrees, orders
and statutes of any court or
39
jurisdiction to which it is subject, except where noncompliance would not
materially adversely affect the Company;
(xii) To the best of such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of shares of Common Stock
or other securities of the Company have registration rights with respect to
securities of the Company and, except as set forth in the Registration
Statement and Prospectus, all holders of securities of the Company have
registration rights with respect to shares of Common Stock or other
securities have, with respect to the offering contemplated hereby, waived
such rights or such rights have otherwise been waived or such rights have
expired by reason of lapse of time following notification of the Company's
intent to file the Registration Statement.
(xiii) No transfer taxes are required to be paid in connection with the
sale or delivery to the Underwriters of the Firm Shares or the Option
Shares;
(xiv) The Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," or a "promotor"
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 state that in the course of the preparation
of the Registration Statement and the Prospectus, such counsel has participated
in conferences with officers and representatives of the Company and with the
Company's independent public accountants, at which conferences such counsel made
inquiries of such officers, representatives and accountants and discussed the
contents of the Registration Statement and the Prospectus and (without taking
any further action to verify independently the statements made in the
Registration Statement and the Prospectus and, except as stated in the foregoing
opinion, without assuming responsibility for the accuracy, completeness or
fairness of such statements) nothing has come to such counsel's attention that
causes such counsel to believe that either the Registration Statement as of the
date it is declared effective and as of the Closing Date or the Prospectus as of
the date thereof and as of 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 not
misleading (it being understood that such counsel need not express any opinion
with respect to the financial statements, schedules and other financial data
included in the Registration Statement or the Prospectus).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the Commonwealth of
Massachusetts, State of Delaware or the United States.
References to the Registration Statement and the Prospectus in this
paragraph (d) shall include any amendment or supplement thereto at the date of
such opinion.
40
2. Opinion of FDA Counsel
----------------------
King & Spalding shall indicate that they served as special counsel to the
Company with respect to FDA matters and shall opine that:
I. The statements in the Prospectus under the captions "Risk Factors
-- Comprehensive Government Regulation; No Assurance of FDA Approval" and
"Business -- Government Regulation," insofar as such statements purport to
summarize applicable provisions of the Food, Drugs and Cosmetics Act and the
regulations promulgated thereunder, are accurate summaries in all material
respects of the provisions purported to be summarized under such captions in the
Prospectus; and
II. No facts have come to such counsel's attention which causes such
counsel to believe that the statements in the Prospectus under the captions
"Risk Factors -- Comprehensive Government Regulation; No Assurance of FDA
Approval" and "Business -- Government Regulation," insofar as such statements
relate to FDA regulatory matters, at the time the Registration Statement became
effective, contained an untrue statement of 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 as of the date hereof contains an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
Such counsel may advise you 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.
References to the Registration Statement and the Prospectus in this
paragraph (d) shall include any amendment or supplement thereto at the date of
such opinion.
41
3. Opinion of Patent Counsel
-------------------------
For the purposes of rendering the opinions set forth below, such
counsel shall have reviewed the following (collectively the "Documents"):
1. the Underwriting Agreement;
2. that certain Form SB-2 as filed by the Company with the
Securities and Exchange Commission on [insert date], together
with any and all exhibits;
3. the Company's Prospectus dated [insert date];
4. the patents and patent applications listed on Schedule 1 attached
hereto, which include all of the patents and patent applications
held by the Company (the "Patents and Patent Applications") and
which are divided into category A, which are the patents and
patent applications owned by the Company (collectively, the
"Owned Patent Rights") collectively, and category B, which are
the patents and patent applications licensed by the Company
(collectively, the "Licensed Patent Rights");
5. copies of the license agreements listed on Schedule 2 attached
hereto (collectively, the "License Agreements");
6. copies of assignments relevant to ownership of the Patents and
Patent Applications;
7. the results of searches in the United States Patent and Trademark
Office ("USPTO"), completed on ____________ [date must be just
prior to the date of the opinion] in relation to the USPTO's
record of title to the United States patents and patent
applications within the Patents and Patent Applications;
8. the results of a search of the Uniform Commercial Code ("UCC")
records of the following jurisdictions [insert details of the
state(s) and county/counties] completed on ________ [date must be
just prior to the date of the opinion] against the current and
former names of the Company and the licensors specified in the
License Agreements (collectively, the "Licensors") [other
potential UCC searches to be discussed];
9. a litigation search of the ________ database completed on
___________ [date must be just prior to the date of the opinion];
42
10. any and all references cited to, or by, the USPTO during the
prosecution of the United States patents and patent applications
included within the Patents and Patent Applications;
11. the documents referred to in those certain opinions of this firm
copies of which are attached as Exhibits hereto;
12. the internal files of this firm pertaining to the Company.
[insert details of other documents upon which counsel has relied in
preparing this opinion]
Whenever such counsel's opinions are qualified by the phrase "to our
best knowledge," except as may be further qualified below, such language means
that based upon the Documents, the actual knowledge of attorneys within such
firm (i.e., not including matters as to which such attorneys could be deemed to
have constructive knowledge) and inquiries of officers, directors and employees
of the Company, such counsel believes that such opinions are factually correct.
(a) To such counsel's best knowledge, the Company is the sole
owner of the Owned Patent Rights and has obtained valid, currently
effective licenses to the Licensed Patent Rights pursuant to the License
Agreements.
(b) The Company is listed in the records of the USPTO as the sole
owner of the United States patents and patent applications within the Owned
Patent Rights.
(c) The Licensors are listed in the records of the USPTO as the
sole owners of the United States patents and patent applications within the
Licensed Patent Rights.
(d) To such counsel's best knowledge, the Company has good and
marketable title to the Owned Patent Rights, free of any liens, pledges,
claims, security interests or other encumbrances.
(e) To such counsel's best knowledge, the Licensors have good and
marketable title to the Licensed Patent Rights, free of any liens, pledges,
claims, security interests or other encumbrances, except for the licenses
granted to the Company and the Subsidiaries pursuant to the License
Agreements.
(f) To such counsel's best knowledge, there are no facts which
would preclude the grant of a patent from each of the patent applications
within the Patents and Patent Applications.
43
(g) To such counsel's best knowledge, the Company has complied
with USPTO's duty of candor and disclosure for each of the United States
patents and patent applications included in the Patents and Patent
Applications.
(h) To such counsel's best knowledge, except as disclosed in the
Prospectus, there are no facts which form a basis for a finding of
unenforceability or invalidity of any of the claims of the Patents and
Patent Applications. Specifically, in relation to U.S. patent no.
4,937,270 entitled "Water Insoluble Derivatives of Hyaluronic Acid" issued
on June 26, 1990 (the "Xxxxxxxx Patent"), based on the analysis set forth
in this firm's letter to the Company dated January 18, 1994, a copy of
which is attached hereto as Exhibit A, except as disclosed in the
---------
Prospectus, the Xxxxxxxx Patent and the disclosures made therein do not
invalidate any of the Patents and Patent Applications. Additionally, in
relation to U.S. patent no. 5,017,229 entitled "Water Insoluble Derivatives
of Hyaluronic Acid" issued on May 21, 1991 (the "Xxxxx Patent"), based on
the analysis set forth in this firm's letter to the Company dated January
18, 1994, a copy of which is attached hereto as Exhibit B, except as
---------
disclosed in the Prospectus, the Xxxxx patent and the disclosures made
therein do not invalidate any of the Patents and Patent Applications.
(i) To our best knowledge, at all times prior to the effective
date of the Registration Statement, the Company has qualified as a "small
entity" as defined in 37 CFR (S) 1.9. To our best knowledge, there were no
or omissions made in statements to or filings with the USPTO as to the
Company's status as a "small entity" or as to any change of status or
transfer of any of the United States patents and patent applications
included within the Patents and Patent Applications.
(j) To such counsel's best knowledge, no one other than the
Company and the Licensors have or will be able to establish any rights of
title or other interest to any of the Patents and Patent Applications,
trademarks (either registered and unregistered), trade names, copyrights or
trade secrets described in the Prospectus as being owned or licensed by the
Company or its Sublicensees (collectively, the "Intellectual Property").
(k) To such counsel's best knowledge, there are no facts known to
us that indicate that the Company lacks or will be unable to obtain any
rights or licenses which are necessary for its business as described in the
Prospectus.
(l) There is no pending or, to such counsel's best knowledge,
threatened action, suit, proceeding or claim by others challenging the
Company's or its Subsidiaries' ownership or license rights in or to any of
the Intellectual Property.
(m) Except as disclosed in the Prospectus, there is no pending
or, to our best knowledge, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any of the Intellectual
Property.
44
(n) There is no pending or, to such counsel's best knowledge,
threatened action, suit, proceeding or claim by the Company that a third
party has or will infringe or otherwise violate any of the Intellectual
Property.
(o) There is no pending or, to such counsel's best knowledge,
threatened action, suit, proceeding or claim by any third party that the
Company or its products and processes infringe or otherwise violate any
patent, trademark, copyright, trade secret, or other right of such third
party. Specifically:
(i) Based on the analysis set forth in this firm's letter
to the Company dated January 14, 1994, a copy of which is attached
hereto as Exhibit A, the Company and its products and processes do not
---------
infringe the Xxxxxxxx Patent. Based on the analysis set forth in this
firm's letter to the Company dated January 18, 1994, a copy of which
is attached hereto as Exhibit A, the Company and its products and
---------
processes do not infringe the Xxxxx Patent.
(ii) Based on the analysis set forth in this firm's letter
to the Company dated January 18, 1994, a copy of which is attached
hereto as Exhibit B, the Company and its products and processes do not
---------
infringe the Xxxxx Patent.
(p) The statements in the Registration Statement and Prospectus
under the captions "Risk Factors - Uncertainty Relating to Dependence on
Licenses, Patents and Proprietary Rights" and "Business - Patents, and
Proprietary Rights" and other references in the Prospectus to the
Intellectual Property and other patent, trade secret, trademark and
licensing matters (collectively the "Intellectual Property References"),
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, are accurate in all material
respects and fairly present the information purported to be disclosed
therein.
(q) To such counsel's best knowledge, there are no contracts or
other documents relating to the Intellectual Property that are of a
character required to be filed as an exhibit to the Registration Statement
or required to be described in the Registration Statement or Prospectus
that are not filed or described as required.
Such counsel has participated in conferences with officials and other
representatives of the Company, Company's counsel and others, at which
conferences the contents of the Intellectual Property References and related
matters were discussed, and although such counsel has not verified the accuracy
or completeness of the statements contained in the Registration Statement or the
Prospectus, nothing has come to such counsel's attention which leads them to
believe that, at the time the Registration Statement became effective and at all
times subsequent thereto up to and including the date hereof, the Intellectual
Property References in the Registration Statement and any amendment or
supplement thereto contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Intellectual Property References
in the Prospectus, as of the date of the Prospectus and all times subsequent
thereto up to and including the date hereof, contained any untrue statement of a
material fact or omitted
45
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
46
Schedule 1
----------
A. Patents and Patent Applications owned by the Company
----------------------------------------------------
[list all U.S. and foreign patents and patent applications within
this category, with the following details:
. patent number for patents and serial number for patent
applications
. date of issuance for patents and filing date for patent
applications
B. Patents and Patent Applications licensed by the Company
-------------------------------------------------------
[list all U.S. and foreign patents and patent applications within this
category, with the following details:
. patent number for patents and serial number for patent
applications
. date of issuance for patents and filing date for patent
applications
. name and address of licensor
47
Schedule 2
----------
The License Agreements
----------------------
Exhibit A
---------
Copy of opinion to Company
regarding Xxxxxxxx Patent
48
4. Opinion of Selling Securityholders
----------------------------------
(a) Each Selling Stockholder has full legal right, power and
authority to enter into this Agreement and to sell, assign, transfer and deliver
in the manner provided herein the Shares sold by such Selling Stockholder; this
Agreement has been duly executed and delivered by such Selling Stockholder; and
this Agreement, assuming due authorization, execution and delivery by each other
party hereto and further assuming it is a valid and binding agreement of each of
the Underwriters, is a valid and binding agreement of such Selling Stockholder,
enforceable against such Selling Stockholder in accordance with their respective
terms (except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect relating to
or affecting creditors' rights generally and by general principles of equity
relating to the availability of remedies and except as rights to indemnity and
contribution may be limited by federal or state securities laws and the public
policy underlying such laws);
(b) None of the execution, delivery or performance of this Agreement,
the Power of Attorney and the Custody Agreement by such Selling Stockholder and
the consummation by such Selling Stockholder of the transactions herein and
therein contemplated, conflict with or result in a breach of, or default under,
any indenture, mortgage, deed of trust, voting trust agreement, stockholders
agreement, note agreement or other agreement or other instrument known to such
counsel to which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property of any of the Selling
Stockholders is subject, or the charter or by-laws of any of the Selling
Stockholders that are corporations, and nothing has come to such counsel's
attention which causes such counsel to believe that such actions will result in
any violation of any law, rule, administrative regulation or court decree
applicable to such Selling Stockholder (other than state securities or blue sky
laws or regulations, as to which such counsel need not express any opinion);
(c) Each Selling Stockholder has full legal right, power and
authority to enter into a Power of Attorney and the Custody Agreement, and the
Power of Attorney and Custody Agreement have been duly executed and delivered by
each Selling Stockholder and, assuming the due authorization, execution and
delivery of the Custody Agreement by the other parties thereto, each constitutes
the valid and binding agreement of each Selling Stockholder enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by general principles of
equity 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
(d) Upon the delivery of the Shares to be sold hereunder by the
Selling Stockholders and payment therefor in accordance with the terms of this
Agreement and assuming that each of the Underwriters which has severally
purchased such Shares acquires such Shares without notice of any adverse claim
(within the meaning of the Uniform Commercial Code), such Underwriter will have
acquired all of the rights of such Selling Stockholder to the Shares
49
sold by such Selling Stockholder hereunder, and in addition will have acquired
title to such Shares free and clear of any adverse claim.
References to the Registration Statement and the Prospectus shall include
any amendment or supplement thereto at the date of such opinion.
In addition, such counsel shall state that in the course of the preparation
of the Registration Statement and the Prospectus, such counsel has participated
in conferences with officers and representatives of the Company and with the
Company's independent public accountants, at which conferences such counsel made
inquiries of such officers, representatives and accountants and discussed the
contents of the Registration Statement and the Prospectus and (without taking
any further action to verify independently the statements made in the
Registration Statement and the Prospectus and, except as stated in the foregoing
opinion, without assuming responsibility for the accuracy, completeness or
fairness of such statements) nothing has come to such counsel's attention that
causes such counsel to believe that either the Registration Statement as of the
date it is declared effective and as of the Closing Date or the Prospectus as of
the date thereof and as of 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 not
misleading (it being understood that such counsel need not express any opinion
with respect to the financial statements, schedules and other financial data
included in the Registration Statement or the Prospectus).
50
