EXHIBIT 1.1
SUBJECT TO APPROVAL
OF THE UNDERWRITERS
3,250,000 Shares
AASTROM BIOSCIENCES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
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, 1997
XXXXX & COMPANY
X.X. XXXXXX & COMPANY
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Aastrom Biosciences, Inc., a Michigan corporation (the
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"Company"), proposes to issue and sell, pursuant to the terms of this Agreement,
to the several underwriters named in Schedule A hereto (the "Underwriters," or,
each, an "Underwriter"), an aggregate of 3,250,000 shares of Common Stock, no
par value (the "Common Stock") of the Company. The aggregate of 3,250,000
shares so proposed to be sold is hereinafter referred to as the "Firm Stock".
The Company also proposes to sell to the Underwriters, upon the terms and
conditions set forth in Section 3 hereof, up to an additional 487,500 shares of
Common Stock (the "Optional Stock"). The Firm Stock and the Optional Stock are
hereinafter collectively referred to as the "Stock." Xxxxx & Company ("Cowen")
and X.X. Xxxxxx & Company are acting as representatives of the several
Underwriters and in such capacity are hereinafter referred to as the
"Representatives."
2. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-15415) in
the form in which it became or becomes effective and also in such form
as it may be when any post-effective amendment thereto shall become
effective with respect
to the Stock, including any preeffective prospectuses included as part
of the registration statement as originally filed or as part of any
amendment or supplement thereto, or filed pursuant to Rule 424 under
the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, copies of which
have heretofore been delivered to you, has been carefully prepared by
the Company in conformity with the requirements of the Securities Act
and has been filed with the Commission under the Securities Act; one
or more amendments to such registration statement, including in each
case an amended preeffective prospectus, copies of which amendments
have heretofore been delivered to you, have been so prepared and
filed. If it is contemplated, at the time this Agreement is executed,
that a post-effective amendment to the registration statement will be
filed and must be declared effective before the offering of the Stock
may commence, the term "Registration Statement" as used in this
Agreement means the registration statement as amended by said post-
effective amendment. [MATT--your fax was garbled here; what was your
comment?] The term "Registration Statement" as used in this Agreement
shall also include any registration statement relating to the Stock
that is filed and declared effective pursuant to Rule 462(b) under the
Securities Act. The term "Prospectus" as used in this Agreement means
the prospectus in the form included in the Registration Statement, or,
(A) if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act and such
information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act, the term
"Prospectus" as used in this Agreement means the prospectus in the
form included in the Registration Statement as supplemented by the
addition of the Rule 430A information contained in the prospectus
filed with the Commission pursuant to Rule 424 (b) and (B) if
prospectuses that meet the requirements of Section 10(a) of the
Securities Act are delivered pursuant to Rule 434 under the Securities
Act, then (i) the term "Prospectus" as used in this Agreement means
the "prospectus subject to completion" (as such term is defined in
Rule 434(g) under the Securities Act) as supplemented by (a) the
addition of Rule 430A information or other information contained in
the form of prospectus delivered pursuant to Rule 434(b)(2) under the
Securities Act or (b) the information contained in the term sheets
described in Rule 434(b)(3) under the Securities Act, and (ii) the
date of such prospectuses shall be deemed to be the date of the term
sheets. The term "Preeffective Prospectus" as used in this Agreement
means the prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such prospectus
shall have been amended from time to time prior to the date of the
Prospectus.
(b) The Commission has not issued or threatened to issue any
order preventing or suspending the use of any Preeffective Prospectus,
and, at its date of issue, each Preeffective Prospectus conformed in
all material respects with the requirements of the Securities Act and
did not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
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necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and, when
the Registration Statement becomes effective and at all times
subsequent thereto up to and including the Closing Dates, the
Registration Statement and the Prospectus and any amendments or
supplements thereto contained and will contain all material statements
and information required to be included therein by the Securities Act
and conformed and will conform in all material respects to the
requirements of the Securities Act and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto,
included or will include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representations, warranties and agreements
shall not apply to information contained in or omitted from any
Preeffective Prospectus or the Registration Statement or the
Prospectus or any such amendment or supplement thereto in reliance
upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter, directly or through you,
specifically for use in the preparation thereof; there is no
franchise, lease, contract, agreement or document required to be
described in the Registration Statement or Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or
filed therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents contained in
the Registration Statement are accurate and complete descriptions of
such documents in all material respects.
(c) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
set forth or contemplated in the Prospectus, the Company has not
incurred any material liabilities or obligations, direct or
contingent, nor entered into any material transactions (in all cases
other than in the ordinary course of business), and there has not been
any material adverse change in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results of
operations of the Company or any change in the capital stock, short-
term or long-term debt of the Company.
(d) The financial statements, together with the related notes
and schedules, set forth in the Prospectus and elsewhere in the
Registration Statement fairly present, on the basis stated in the
Registration Statement, the financial position and the results of
operations and changes in financial position of the Company at the
respective dates or for the respective periods therein specified.
Such statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis except as may be set forth in the Prospectus.
(e) Coopers & Xxxxxxx L.L.C., who have expressed their opinions
on the audited financial statements and related schedules included in
the Registration
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Statement and the Prospectus are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(f) The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of the state of
Michigan, with power and authority (corporate and other) to own or
lease its properties and to conduct its business as described in the
Prospectus; except as otherwise described in the Prospectus, the
Company is in possession of and operating in compliance with all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders required for the conduct of its
business, all of which are valid and in full force and effect, expect
for such franchises, grants, authorizations, licenses, permits,
easements, consents, certificates or orders the absence of which,
alone or in the aggregate, do not or would not have a material adverse
effect on the Company; and the Company is duly qualified to do
business and in good standing as a foreign corporation in all other
jurisdictions where its ownership or leasing of properties or the
conduct of its business requires such qualification. The Company has
all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications,
licenses and permits of and from all public regulatory or governmental
agencies and bodies to own, lease and operate its properties and
conduct its business as now being conducted and as described in the
Registration Statement and the Prospectus, and no such consent,
approval, authorization, order, registration, qualification, license
or permit contains a materially burdensome restriction not adequately
disclosed in the Registration Statement and the Prospectus. The
Company does not own or control, directly or indirectly, any other
corporations, associations or other entities.
(g) The Company's authorized and outstanding capital stock is on
the date hereof, and will be on the Closing Dates, as set forth under
the caption "Capitalization" in the Prospectus (adjusted, in the case
of the Option Closing Date, as set forth under the heading "Pro Forma
As Adjusted" under such caption); the outstanding shares of common
stock (including the outstanding shares of Stock) of the Company
conform to the description thereof in the Prospectus and have been
duly authorized and validly issued and are fully paid and
nonassessable; and have been issued in compliance with all federal and
state securities laws and were not issued in violation of or subject
to any preemptive rights or similar rights to subscribe for or
purchase securities. Except as disclosed in and or contemplated by
the Prospectus and the financial statements of the Company and related
notes thereto included in the Prospectus, the Company does not have
outstanding any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase any securities
or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations, except for options
granted subsequent to the date of information provided in the
Prospectus pursuant to the Company's employee and stock option plans
as disclosed in the Prospectus. The description of the Company's
stock option and other stock plans or arrangements, and the options or
other rights
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granted or exercised thereunder, as set forth in the Prospectus,
accurately and fairly presents in all material respects the
information required to be shown with respect to such plans,
arrangements, options and rights.
(h) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and nonassessable and free of
any preemptive or similar rights and will conform to the description
thereof in the Prospectus.
(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company is subject, which, if determined
adversely to the Company might individually or in the aggregate (i)
prevent or adversely affect the transactions contemplated by this
Agreement, (ii) suspend the effectiveness of the Registration
Statement, (iii) prevent or suspend the use of the Preeffective
Prospectus in any jurisdiction or (iv) result in a material adverse
change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of
the Company; and to the best of the Company's knowledge no such
proceedings are threatened or contemplated against the Company by
governmental authorities or others. The Company is not a party nor
subject to the provisions of any material injunction, judgment, decree
or order of any court, regulatory body or other governmental agency or
body. The description of the Company's litigation under the heading
"Legal Proceedings" in the Prospectus is true and correct and complies
with the Rules and Regulations.
(j) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms or provisions of
or constitute a default under any indenture, mortgage, deed of trust,
note or other agreement or instrument to which the Company is a party
or by which it or any of its properties is or may be bound other than
any such indenture, mortgage, deed of trust, note or other agreement
or instrument which, alone or in the aggregate, is material to the
Company, the Articles of Incorporation, By-laws or other
organizational documents of the Company, or any law, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties, other than any
such law, order, rule or regulation which, alone or in the aggregate,
is material to the Company, or will result in the creation of a lien.
(k) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except
such as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or under the Securities Act or the
securities or "Blue Sky" laws of any jurisdiction in connection with
the purchase and distribution of the Stock by the Underwriters, all of
which requirements have been satisfied in all material respects.
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(l) The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder
(including to issue, sell and deliver the Stock), and this Agreement
has been duly and validly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
to the extent that rights to indemnity and contribution hereunder may
be limited by federal or state securities laws or the public policy
underlying such laws and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by general
equitable principles;
(m) The Company is in all material respects in compliance with,
and conducts its businesses in conformity with, all applicable
federal, state, local and foreign laws, rules and regulations or any
court or governmental agency or body; to the knowledge of the Company,
otherwise than as set forth in the Registration Statement and the
Prospectus, no prospective change in any of such federal or state
laws, rules or regulations has been adopted which, when made
effective, would have a material adverse effect on the operations of
the Company.
(n) The Company has filed all necessary federal, state, local
and foreign income, payroll, franchise and other tax returns and has
paid all taxes shown as due thereon or with respect to any of its
properties, and there is no tax deficiency that has been, or to the
knowledge of the Company is likely to be, asserted against the Company
or any of its properties or assets that would materially adversely
affect the financial position, business or operations of the Company.
(o) Except as disclosed in the Registration Statement, the
Company is in compliance with all applicable existing federal, state,
local and foreign laws and regulations relating to the protection of
human health or the environment or imposing liability or requiring
standards of conduct concerning any Hazardous Materials
("Environmental Laws"), except for such instances of noncompliance
which, either singly or in the aggregate, would not have a material
adverse effect. The term "Hazardous Material" means (i) any
"hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environment Law.
(p) No person or entity has the right to require registration,
as part of the Registration Statement, of shares of Common Stock or
other securities of the Company because of the filing or effectiveness
of the Registration Statement or otherwise, except for persons and
entities who have expressly waived such right or who have been given
proper notice and have failed to exercise such right within the time
or times required under the terms and conditions of such right.
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(q) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, 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.
(r) The Company has provided you with all financial statements
since June 30, 1992 to the date hereof that are available to the
officers of the Company.
(s) The Company owns or possesses license rights to all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, tradenames, copyrights, licenses, inventions, trade
secrets and rights as described in the Prospectus as being owned or
licensed by it, as being proprietary to the Company or as necessary
for the conduct of its business as presently conducted or contemplated
by the Prospectus, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the
Company with respect to the foregoing. Without limiting the
foregoing, each of the license agreement between the Company and
Xxxxxx X. Xxxxxxxxx dated July [__], 1992 and relating to [Patent nos.
__] and the license agreement between the Company and the University
of Michigan dated March 13, 1992, as amended, and relating to U.S.
Patent No. 4,839,292, is a valid and binding agreement of Xxxxxx X.
Xxxxxxxxx and of the University of Michigan, respectively, enforceable
in accordance with its terms; and the Company is not in material
breach or violation of any of the terms or provisions of either such
agreement, and no default exists under either such agreement. The
Company's business as now conducted and as proposed to be conducted
does not and will not infringe or conflict with in any material
respect patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses or other intellectual property or franchise
right of any person. Except as described in the Prospectus, no claim
has been made against the Company alleging the infringement by the
Company of any patent, trademark, service xxxx, tradename, copyright,
trade secret, license in or other intellectual property right or
franchise right of any person.
(t) The Company has performed all material obligations currently
required to be performed by it under all contracts required by Item
601(b)(10) of Regulation S-K under the Securities Act to be filed as
exhibits to the Registration Statement, and neither the Company nor,
to the Company's knowledge, any other party to such contract is in
default under or in breach of any such obligations. The Company has
not received any notice of such default or breach.
(u) The Company is not involved in any labor dispute nor is any
such dispute threatened. The Company is not aware that (A) any
executive, key employee or significant group of employees of the
Company plans to terminate employment with the Company or (B) any such
executive or key employee is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that
would be violated by the present or proposed business
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activities of the Company. The Company does not have or expect to
have any liability for any prohibited transaction or funding
deficiency or any complete or partial withdrawal liability with
respect to any pension, profit sharing or other plan which is subject
to the "Employee Retirement Income Security Act of 1974, as amended
("ERISA"), to which the Company makes or ever has made a contribution
and in which any employee of the Company is or has ever been a
participant. With respect to such plans, the Company is in compliance
in all material respects with all applicable provisions of ERISA.
(v) The Company has obtained the written agreement described in
Section 8(o) of this Agreement from each of its officers and
directors.
(w) The Company has and the Company as of the Closing Dates will
have, good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned or proposed
to be owned by it which is material to the business of the Company, in
each case free and clear of all liens, encumbrances and defects except
such as are described the Prospectus or such as would not have a
material adverse effect on the Company; and any real property and
buildings held under lease by the Company or proposed to be held after
giving effect to the transactions described in the Prospectus are, or
will be as of the Closing Dates, held by it under valid, subsisting
and enforceable leases with such exceptions as would not have a
material adverse effect on the Company, in each case except as
described in or contemplated by the Prospectus.
(x) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are customary in the businesses in which it is engaged or proposes to
engage after giving effect to the transactions described in the
Prospectus; and the Company does not have any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition, financial or
otherwise, or the earnings, business or operations of the Company
except as described in or contemplated by the Prospectus.
(y) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(z) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida).
(aa) 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
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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.
(ab) To the Company's knowledge, neither the Company nor any
employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of
a character required to be disclosed in the Prospectus.
(ac) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(ad) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the
matters covered thereby.
3. Purchase by, and Sale and Delivery to, Underwriters -- Closing
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Dates. The Company agrees to sell to the Underwriters the Firm Stock, and on the
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basis of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase the Firm Stock from
the Company, the number of shares of Firm Stock to be purchased by each
Underwriter being set opposite its name in Schedule A, subject to adjustment in
accordance with Section 12 hereof.
The purchase price per share to be paid by the Underwriters to the
Company will be $ [_____] per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York Time, on the second full business day preceding the
First Closing Date (as defined below) or, if no such direction is received, in
the names of the respective Underwriters or in such other names as Cowen may
designate (solely for the purpose of administrative convenience) and in such
denominations as Cowen may determine, against payment of the aggregate Purchase
Price therefor by certified or official bank check or checks in Clearing House
funds (next day funds), payable to the order of the Company, all at the offices
of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The time and date of the delivery and closing shall be at 10:00 A.M., New York
Time, on [__________], 1997, in accordance with Rule 15c6-1 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The time and date of
such payment and delivery are herein referred to as the "First Closing Date."
The First Closing Date and the location of delivery of, and the form of payment
for, the Firm Stock may be varied by agreement between the Company and Cowen.
The First Closing Date may be postponed pursuant to the provisions of Section
12.
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The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters not later than
10:00 A.M., New York Time, on the business day preceding the First Closing Date
at the offices of [Xxxxx & Company, Xxxxxxxxx Xxxxxx,] Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen, individually and not as a Representative
of the several Underwriters, may (but shall not be obligated to) make payment to
the Company on behalf of any Underwriter or Underwriters, for the Stock to be
purchased by such Underwriter or Underwriters. Any such payment by Cowen shall
not relieve such Underwriter or Underwriters from any of its or their other
obligations hereunder.
The several Underwriters agree to make an initial public offering of
the Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is advisable.
The Representatives shall promptly advise the Company of the making of the
initial public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase up to 487,500
shares of Optional Stock. The price per share to be paid for the Optional Stock
shall be the Purchase Price. The option granted hereby may be exercised as to
all or any part of the Optional Stock at any time, and from time to time, not
more than thirty (30) days subsequent to the effective date of this Agreement.
No Optional Stock shall be sold and delivered unless the Firm Stock previously
has been, or simultaneously is, sold and delivered. The right to purchase the
Optional Stock or any portion thereof may be surrendered and terminated at any
time upon notice by the Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Cowen to the Company setting forth the number of
shares of the Optional Stock to be purchased by them and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date," and shall in no event
be earlier than two (2) business days nor later than ten (10) business days
after written notice is given. The Option Closing Date and the First Closing
Date are herein called the "Closing Dates." All purchases of Optional Stock from
the Company shall be made on a pro rata basis. Optional Stock shall be purchased
for the account of each Underwriter in the same proportion as the number of
shares of Firm Stock set forth opposite such Underwriter's name in Schedule A
hereto bears to the total number of shares of Firm Stock (subject to adjustment
by the Underwriters to eliminate odd lots). Upon exercise of the option by the
Underwriters, the Company agrees to sell to the Underwriters the number of
shares of Optional Stock set forth in the written notice of exercise and the
Underwriters agree, severally and not jointly and subject to the terms and
conditions herein set forth, to purchase the number of such shares determined as
aforesaid.
The Company will deliver the Optional Stock to the Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives
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may direct by notice in writing to the Company given at or prior to 12:00 Noon,
New York Time, on the second full business day preceding the Option Closing Date
or, if no such direction is received, in the names of the respective
Underwriters or in such other names as Cowen may designate (solely for the
purpose of administrative convenience) and in such denominations as Cowen may
determine, against payment of the aggregate Purchase Price therefor by certified
or official bank check-or checks in Clearing House funds (next day funds),
payable to the order of the Company all at the offices of Xxxxxxx, Xxxxxxx &
Xxxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Company shall make
the certificates for the Optional Stock available to the Underwriters for
examination not later than 10:00 A.M., New York Time, on the business day
preceding the Option Closing Date at the offices of Xxxxx & Company, Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option Closing Date and the location of
delivery of, and the form of payment for, the Option Stock may be varied by
agreement between the Company and Cowen. The Option Closing Date may be
postponed pursuant to the provisions of Section 12.
4. Covenants and Agreements of the Company. The Company covenants
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and agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives
have determined not to proceed pursuant to Rule 430A, use its best
efforts to cause the Registration Statement to become effective, (ii)
if the Company and the Representatives have determined to proceed
pursuant to Rule 430A, use its best efforts to comply with the
provisions of and make all requisite filings with the Commission
pursuant to Rule 430A and Rule 424 of the Rules and Regulations and
(iii) if the Company and the Representatives have determined to
deliver Prospectuses pursuant to Rule 434 of the Rules and
Regulations, to use its best efforts to comply with all the applicable
provisions thereof. The Company will advise the Representatives
promptly as to the time at which the Registration Statement becomes
effective, will advise the Representatives promptly of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for
that purpose, and will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible the lifting
thereof, if issued. The Company will advise the Representatives
promptly of the receipt of any comments of the Commission or any
request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for additional information
and will not at any time file any amendment to the Registration
Statement or supplement to the Prospectus which shall not previously
have been submitted to the Representatives a reasonable time prior to
the proposed filing thereof or to which the Representatives shall
reasonably object in writing or which is not in compliance with the
Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon the request of the Representatives, any amendments or
supplements to the Registration Statement or the Prospectus which in
the reasonable opinion of the Representatives may be necessary to
enable the several Underwriters to continue
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the distribution of the Stock and will use its best efforts to cause
the same to become effective as promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be
delivered under the Securities Act, including under the Rules and
Regulations, any event relating to or affecting the Company occurs as
a result of which the Prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact, or omit
to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Securities Act, the Company will promptly notify
the Representatives thereof and will prepare an amended or
supplemented prospectus which will correct such statement or omission;
and in case any Underwriter is required to deliver a prospectus
relating to the Stock nine (9) months or more after the effective date
of the Registration Statement, the Company upon the request of the
Representatives and at the expense of such Underwriter will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities
Act.
(d) The Company will deliver to the Representatives, at or before
the Closing Dates, signed copies of the Registration Statement, as
originally filed with the Commission, and all amendments thereto
including all financial statements and exhibits thereto and will
deliver to the Representatives such number of copies of the
Registration Statement, including such financial statements but
without exhibits, and all amendments thereto, as the Representatives
may reasonably request. The Company will deliver or mail to or upon
the order of the Representatives, from time to time until the
effective date of the Registration Statement, as many copies of the
Preeffective Prospectus as the Representative(s) may reasonably
request. The Company will deliver or mail to or upon the order of the
Representatives on the date of the initial public offering, and
thereafter from time to time during the period when delivery of a
prospectus relating to the Stock is required under the Securities Act,
including under the Rules and Regulations, as many copies of the
Prospectus, in final form or as thereafter amended or supplemented as
the Representatives may reasonably request; provided, however, that
the expense of the preparation and delivery of any prospectus required
for use nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to
deliver such prospectus.
(e) The Company will make generally available to its shareholders
as soon as practicable, but not later than fifteen (15) months after
the effective date of the Registration Statement, an earnings
statement which will be in reasonable detail (but which need not be
audited) and which will comply with Section 11(a) of the Securities
Act, covering a period of at least twelve (12) months beginning after
the "effective date" (as defined in Rule 158 under the Securities Act)
of the Registration Statement.
12
(f) The Company will cooperate with the Representatives to
enable the Stock to be registered or qualified for offering and sale
by the Underwriters and by dealers under the securities laws of such
jurisdictions as the Representatives may reasonably designate and at
the request of the Representatives will make such applications and
furnish such consents to service of process or other documents as may
be required of it as the issuer of the Stock for that purpose;
provided, however, that the Company shall not be required to qualify
to do business or to file a general consent (other than that arising
out of the offering or sale of the Stock) to service of process in any
such jurisdiction where it is not now so subject. The Company will,
from time to time, prepare and file such statements and reports as are
or may be required of it as the issuer of the Stock to continue such
qualifications in effect for so long a period as the Representative(s)
may reasonably request for the distribution of the Stock. The Company
will advise the Representatives promptly after the Company becomes
aware of the suspension of the qualifications or registration of (or
any such exception relating to) the Common Stock of the Company for
offering, sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the
Representatives use its best efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its shareholders annual reports
containing financial statements certified by independent public
accountants and will make available to its shareholders quarterly
summary financial information in reasonable detail which may be
unaudited. During the period of five (5) years from the date hereof,
the Company will deliver to the Representatives and, upon request, to
each of the other Underwriters, as soon as they are available, copies
of each annual report of the Company and each other report furnished
by the Company to its shareholders and will deliver to the
Representatives, (i) as soon as they are available, copies of any
other reports (financial or other) which the Company shall publish or
otherwise make available to any of its shareholders generally, (ii) as
soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange and (iii) from time to time such other information
concerning the Company as you may reasonably request.
(h) The Company will use its best efforts to list the Stock,
subject to official notice of issuance, on the NASDAQ National Market
System ("NASDAQ").
(i) The Company will maintain a transfer agent and registrar for
its Common Stock.
(j) Prior to filing its quarterly statements on Form 10-Q, the
Company will have its independent auditors perform a limited quarterly
review of its quarterly numbers.
13
(k) Without the prior written consent of Cowen, the Company will
not offer, sell, assign, transfer, encumber, contract to sell, grant
an option to purchase or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock (including, without limitation, Common
Stock of the Company which may be deemed to be beneficially owned by
the undersigned in accordance with the Rules and Regulations) during
the 180 days following the date on which the price of the Common Stock
to be purchased by the Underwriters is set, other than the Company's
sale of Common Stock hereunder and the Company's issuance of Common
Stock upon the exercise of warrants or stock options, or pursuant to
contractual rights, in each case which are presently outstanding and
described in the Prospectus or subsequently granted as contemplated by
the Prospectus.
(l) The Company will apply the net proceeds from the sale of the
Stock as set forth in the description under "Use of Proceeds" in the
Prospectus, which description complies in all respects with the
requirements of Item 504 of Regulation S-K.
(m) The Company will supply you with copies of all correspondence
to and from, and all documents issued to and by, the Commission in
connection with the registration of the Stock under the Securities
Act.
(n) Prior to the Closing Dates the Company will furnish to you,
as soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.
(o) Prior to the Closing Date the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company, the financial condition,
results of operation, business, prospects, assets or liabilities of
the Company, or the offering of the Stock, without your prior written
consent.
5. Payment of Expenses. (a) The Company will pay (directly or by
-------------------
reimbursement) all costs, fees and expenses incurred in connection with expenses
incident to the performance of its obligations under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to (i) all expenses and taxes incident to the issuance and delivery of the Stock
to the Representatives; (ii) all expenses incident to the registration of the
Stock under the Securities Act; (iii) the costs of preparing stock certificates
(including printing and engraving costs); (iv) all fees and expenses of the
registrar and transfer agent of the Stock; (v) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Stock to the
Underwriters; (vi) fees and expenses of the Company's counsel and the Company's
independent accountants; (vii) all costs and expenses incurred in connection
with the preparation, printing, filing, shipping and distribution of the
Registration Statement, each Preeffective Prospectus and the Prospectus
(including all exhibits and financial
14
statements) and all amendments and supplements provided for herein, or in
connection with the printing, filing, shipping and distribution of the
"Agreement Among Underwriters" between the Representatives and the Underwriters,
the Master Selected Dealers, Agreement, the Underwriters Questionnaire and the
Blue Sky memoranda and this Agreement; (viii) all filing fees, attorneys fees,
and expenses incurred by the Company or the Underwriters in connection with
exemptions from the qualifying or registering (or obtaining qualification or
registration of) all or any part of the Stock for offer and sale and
determination of its eligibility for investment under the Blue Sky or other
securities laws of such jurisdictions as the Representatives may reasonably
designate; (ix) all fees and expenses paid or incurred in connection with
filings made with the NASD; and (x) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section.
(b) In addition to its other obligations under Section 6(a)
hereof, the Company agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of, or
based upon, (i) any statement or omission or any alleged statement or omission
or (ii) any breach or inaccuracy in its representations and warranties, it will
reimburse each Underwriter on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's obligation to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter shall
promptly return it to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to timed by The
Chase Manhattan Bank, New York, New York (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Underwriter in a timely manner
as provided below shall bear interest at the Prime Rate from the due date for
such reimbursement. This expense reimbursement agreement will be in addition to
any other liability which the Company may otherwise have. The request for
reimbursement will be sent to the Company.
(c) In addition to its other obligations under Section 6(b)
hereof, each Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in Section 6(b) hereof which relates to information
furnished to the Company pursuant to Section 6(d) hereof, it will reimburse the
Company (and, to the extent applicable, each officer, director or controlling
person) on a quarterly basis for all reasonable legal or other expenses incurred
in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters, obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company (and, to the
extent applicable, each officer, director or controlling person) shall promptly
return it to the Underwriters together with interest, compounded daily,
determined on the basis of the
15
Prime Rate. Any such interim reimbursement payments which are not made to the
Company within thirty (30) days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in paragraph (b)
and/or (c) of this Section 5, including the amounts of any requested
reimbursement payments and the method of determining such amounts, shall be
settled by arbitration conducted under the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc. or pursuant
to the Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the event
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in paragraph (b)
and/or (c) of this Section 5, as the case may be, and would not resolve the
ultimate propriety or enforceability of the obligation to reimburse expenses
which is created by the provisions of Section 6.
6. Indemnification and Contribution. (a) The Company agrees to indemnify
--------------------------------
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of the Securities Act and the respective
officers, directors, partners, employees, representatives and agents of each
such Underwriter (collectively, the "Underwriter Indemnified Parties" and, each,
an "Underwriter Indemnified Party"), against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in connection
therewith), joint or several, which may be based upon the Securities Act, or any
other statute or at common law, on the ground or alleged ground that any
Preeffective Prospectus, the Registration Statement or the Prospectus (or any
Preeffective Prospectus, the Registration Statement or the Prospectus as from
time to time amended or supplemented) includes or allegedly includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter, directly or through the
Representatives, specifically for use in the preparation thereof and, provided,
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that the indemnity agreement provided in this Section 6(a) with respect to any
Preeffective Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any losses, claims, damages, liabilities or expenses
based upon any untrue statement or alleged untrue statement of material fact or
omission or alleged omission to state therein a material fact purchased Common
Stock, if a copy of the Prospectus in which such untrue statement or alleged
untrue statement or omission or alleged omission was corrected had not been sent
or given to such person within the time required by the Securities Act and the
Rules and Regulations, unless such failure is the result of noncompliance by the
Company with Section 4(d) hereof. The Company will be entitled to participate
at its own expense in the defense or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but if the Company elects to
assume the defense, such defense shall be conducted by counsel chosen by it. In
the event the Company elects to assume the defense of any such suit and retain
such counsel, any Underwriter
16
Indemnified Parties, defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) the
Company shall have specifically authorized the retaining of such counsel or (ii)
the parties to such suit include any such Underwriter Indemnified Parties, and
the Company and such Underwriter Indemnified Parties at law or in equity have
been advised by counsel to the Underwriters that one or more legal defenses may
be available to it or them which may not be available to the Company, in which
case the Company shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
This indemnity agreement is not exclusive and will be in addition to any
liability which the Company might otherwise have and shall not limit any rights
or remedies which may otherwise be available at law or in equity to each
Underwriter Indemnified Party.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties"), against any losses, claims, damages, liabilities or
expenses (including, unless the Underwriter or Underwriters elect to assume the
defense, the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or several,
which arise out of or are based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that any
Preeffective Prospectus, the Registration Statement or the Prospectus (or any
Preeffective Prospectus, the Registration Statement or the Prospectus, as from
time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading, but only insofar as any such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by such Underwriter, directly or through
the Representatives, specifically for use in the preparation thereof; provided,
however, that in no case is such Underwriter to be liable with respect to any
claims made against any Company Indemnified Party against whom the action is
brought unless such Company Indemnified Party shall have notified such
Underwriter in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon the Company Indemnified Party, but failure to notify such
Underwriter of such claim shall not relieve it from any liability which it may
have to any Company Indemnified Party otherwise than on account of its indemnity
agreement contained in this paragraph. Such Underwriter shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but, if such
Underwriter elects to assume the defense, such defense shall be conducted by
counsel chosen by it. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company Indemnified
Parties and any other Underwriter or Underwriters or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them, respectively, unless (i) the
Underwriters shall have specifically authorized the retaining of such counsel or
(ii) the parties to such suit include any such Company Indemnified Parties, and
the Underwriters and such Company Indemnified Parties at law or in equity have
been advised by counsel to the Company that one or more legal defenses may be
available to it or them which conflict with the defenses of the Underwriters, in
which case the indemnified party
17
or parties shall have the right to select a single separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action
on behalf of such indemnified party or parties. The Underwriter against whom
indemnity may be sought shall not be liable to indemnify any person for any
settlement of any such claim effected without such Underwriter's consent. This
indemnity agreement is not exclusive and will be in addition to any liability
which such Underwriter might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to any Company
Indemnified Party.
(c) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Stock. If however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The 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 Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, defending, settling or compromising any
such claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Underwriters' obligations to contribute 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
18
(d) The information set forth in the last paragraph on the front
cover page (insofar as such information relates to the Underwriters), on the
inside front cover concerning stabilization and over-allotment by the
Underwriters, and under the third and eighth paragraphs under the caption
"Underwriting" in any Preeffective Prospectus and in the Prospectus constitutes
the only information furnished by the Underwriters to the Company for inclusion
in any Preeffective Prospectus, the Prospectus or the Registration Statement.
(e) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnification could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on all claims that are the subject
matter of such proceeding.
7. Survival of Indemnities, Representations, Warranties, etc. The
----------------------------------------------------------
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any of its officers or directors or
any controlling person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters, Obligations. The respective obligations of
---------------------------------------
the several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated herein) as of the date hereof and at and as of the
Closing Dates, of the representations and warranties made herein by the Company,
to compliance at and as of the Closing Dates by the Company with its covenants
and agreements herein contained and other provisions hereof to be satisfied at
or prior to the Closing Dates, and to the following additional conditions:
(a) The Registration Statement shall have become effective and no
stop order suspending the effectiveness thereof shall have been issued
and no proceedings for that purpose shall have been initiated or, to
the knowledge of the Company or the Representatives, shall be
threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives.
Any filings of the Prospectus, or any supplement thereto, required
pursuant to Rule 424 (b) or Rule 434 of the Rules and Regulations,
shall have been made in the manner and within the time period required
by Rule 424(b) and Rule 434 of the Rules and Regulations, as the case
may be.
(b) The Representatives shall have been satisfied that there
shall not have occurred any change prior to the Closing Dates in the
condition (financial or otherwise) properties, business, management,
prospects, net worth or results of operations of the Company or any
change in the capital stock, short-term or long-term debt of the
Company, such that (i) the Registration Statement or the Prospectus,
or any amendment or supplement thereto, contains an untrue statement
of fact which, in the opinion of the Representatives, is material, or
19
omits to state a fact which, in the opinion of the Representatives is
required to be stated therein or is necessary to make the statements
therein not misleading, or (ii) it is impracticable in the reasonable
judgment of the Representatives to proceed with the public offering or
purchase the Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company which is
material and adverse to the Company or which affects or may affect the
Company's ability to perform its obligations under this Agreement
shall have been instituted or threatened and there shall have occurred
no material adverse development in any existing such action, suit or
proceeding.
(d) At the time of execution of this Agreement, the
Representatives shall have received from Coopers & Xxxxxxx L.L.P.,
independent certified public accountants, a letter, dated the date
hereof, in form and substance satisfactory to the Underwriters.
(e) The Representatives shall have received from Coopers &
Xxxxxxx L.L.P., independent certified public accountants, a letter,
dated the Closing Dates, to the effect that such accountants reaffirm,
as of the Closing Dates, and as though made on the Closing Dates, the
statements made in the letter furnished by such accountants pursuant
to paragraph (d) of this Section 8.
(f) The Representatives shall have received from Xxxx Xxxx Xxxx &
Freidenrich, counsel for the Company, an opinion, dated the Closing
Dates, to the effect set forth in Exhibit I hereto.
(g) The Representatives shall have received from Pepper, Xxxxxxxx
& Xxxxxxx, counsel for the Company, an opinion, dated the Closing
Dates, to the effect set forth in Exhibit II hereto.
(h) The Representatives shall have received from Oblon, Spivak,
McClelland, Xxxxx & Neustadt, P.C., patent counsel for the Company, an
opinion, dated the Closing Dates, to the effect set forth in Exhibit
III hereto.
(i) The Representatives shall have received from Pretty,
Xxxxxxxxx, Xxxxxxxxxxx & Xxxxx, P.C., patent counsel for the Company,
an opinion, dated the Closing Dates, to the effect set forth in
Exhibit IV hereto.
(j) The Representatives shall have received from Xxxxxxxx &
Xxxxxx, patent counsel for the Company, an opinion, dated the Closing
Dates, to the effect set forth in Exhibit V hereto.
(k) The Representatives shall have received from Xxxxx, Xxxxxx &
XxXxxxxx, regulatory counsel for the Company, an opinion, dated the
Closing Dates, to the effect set forth in Exhibit VI hereto.
20
(l) The Representatives shall have received from Xxxxxxx, Xxxxxxx
& Xxxxxxxx LLP, counsel for the Underwriters, their opinion or
opinions dated the Closing Dates with respect to the incorporation of
the Company, the validity of the Stock, the Registration Statement and
the Prospectus and such other related matters as it may reasonably
request, and the Company shall have furnished to such counsel such
documents as they may request for the purpose of enabling them to pass
upon such matters.
(m) The Representatives shall have received a certificate, dated
the Closing Dates, signed on behalf of the Company by its chief
executive officer or the President and the chief financial or
accounting officer of the Company to the effect that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that purpose have
been instituted or are pending or contemplated under the
Securities Act;
(ii) Neither any Preeffective Prospectus, as of its date,
nor the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate,
included any untrue statement of a material fact or omitted to
state 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;
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as set forth or contemplated in the
Prospectus, the Company has not incurred any material liabilities
or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and
there has not been any material adverse change in the condition
(financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company, or
any change in the capital stock (other than through the exercise
of stock options), short-term or long-term debt of the Company;
(iv) The representations and warranties of the Company in
this Agreement are true and correct at and as of the Closing
Dates, and the Company has complied with all the agreements and
performed or satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Dates; and
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, (i)
there has not been any material
21
adverse change or a development involving a material adverse
change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of
operations of the Company; (ii) the business and operations
conducted by the Company have not sustained a loss by strike,
fire, flood, accident or other calamity (whether or not insured)
of such a character as to interfere materially with the conduct
of the business and operations of the Company; (iii) no legal or
governmental action, suit or proceeding is pending or threatened
against the Company which is material to the Company, whether or
not arising from transactions in the ordinary course of business,
or which may materially and adversely affect the transactions
contemplated by this Agreement; (iv) since such dates and except
as so disclosed, the Company has not incurred any material
liability or obligation, direct, contingent or indirect, made any
change in its capital stock (except pursuant to its stock plans),
made any material change in its short-term or funded debt or
repurchased or otherwise acquired any of the Company's capital
stock; and (v) the Company has not declared or paid any dividend,
or made any other distribution, upon its outstanding capital
stock payable to stockholders of record on a date prior to the
Closing Date.
(n) The Company shall have furnished to the Representatives such
additional certificates as the Representatives may have reasonably
requested as to the accuracy, at and as of the Closing Dates, of the
representations and warranties made herein by it and as to compliance
at and as of the Closing Dates by it with its covenants and agreements
herein contained and other provisions hereof to be satisfied at or
prior to the Closing Dates, and as to satisfaction of the other
conditions to the obligations of the Underwriters hereunder.
(o) Cowen shall have received the written agreements of the
officers, directors and holders of Common Stock listed in Schedule B
that each will not offer, sell, assign, transfer, encumber, contract
to sell, grant an option to purchase or otherwise dispose of, directly
or indirectly, any shares of Common Stock or securities convertible
into or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock (including, without limitation, Common Stock of
the Company which may be deemed to be beneficially owned by the
undersigned in accordance with the Rules and Regulations) during the
180 days following the date of the final Prospectus, other than (i) by
operation of law, (ii) as a bona fide gift or gifts, provided the
donee or donees thereof agree in writing to be bound by this
restriction or (iii) as a distribution to partners or stockholders of
such person provided that the distributees thereof agree in writing to
be bound by the terms of this restriction.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
22
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Dates, but Cowen shall be
entitled to waive any of such conditions.
9. Effective Date. This Agreement shall become effective immediately as
--------------
to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. New York City time on the first full business day
following the effectiveness of the Registration Statement or at such earlier
time after the Registration Statement becomes effective as the Representatives
may determine on and by notice to the Company or by release of any of the Stock
for sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by you of
telegrams (i) advising Underwriters that the shares of Stock are released for
public offering or (ii) offering the Stock for sale to securities dealers,
whichever may occur first.
10. Termination. This Agreement (except for the provisions of Section 5)
-----------
may be terminated by the Company at any time before it becomes effective in
accordance with Section 9 by notice to the Representatives and may be terminated
by the Representatives at any time before it becomes effective in accordance
with Section 9 by notice to the Company. In the event of any termination of this
Agreement under this or any other provision of this Agreement, there shall be no
liability of any party to this Agreement to any other party, other than as
provided in Sections 5, 6 and 11 and other than as provided in Section 12 as to
the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company if (i) at or prior to the First Closing
Date (or the Option Closing Date) trading in securities on any of the New York
Stock Exchange, the American Stock Exchange, the NASDAQ, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade
shall have been suspended or minimum or maximum prices shall have been
established on any such exchange or market, or a banking moratorium shall have
been declared by New York or United States authorities; (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) at or prior to the First Closing Date or the
Option Closing Date there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power or of any other
insurrection or armed conflict involving the United States or (B) any change in
financial markets or any calamity or crisis which, in the judgment of the
Representatives, makes it impractical or inadvisable to offer or sell the Firm
Stock or Optional Stock, as applicable, on the terms contemplated by the
Prospectus; (iv) there shall have been any development or prospective
development involving particularly the business or properties or securities of
the Company or the transactions contemplated by this Agreement, which, in the
judgment of the Representatives, makes it impracticable or inadvisable to offer
or deliver the Firm Stock or the Optional Stock, as applicable on the terms
contemplated by the Prospectus; (v) there shall be any litigation or proceeding,
pending or threatened, which, in the judgment of the Representatives, makes it
impracticable or inadvisable to offer or deliver the Firm Stock or Optional
Stock, as applicable, on the terms contemplated by the Prospectus; or (vi) there
shall have occurred any other event that makes it, in the judgment of the
Representatives, impractical
23
or inadvisable to offer or deliver the Firm Stock or Optional Stock, as
applicable on the terms contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other provisions
-----------------------------
hereof, if this Agreement shall not become effective by reason of any election
of the Company pursuant to the first paragraph of Section 10 or shall be
terminated by the Representatives under Section 8 or Section 10, the Company
will bear and pay the expenses specified in Section 5 hereof and, in addition to
its obligations pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the several Underwriters (including
reasonable fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives.
12. Substitution of Underwriters. If any Underwriter or Underwriters shall
----------------------------
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except for expenses to be paid or
reimbursed pursuant to Section 5 and except for the provisions of Section 6.
13. Notices. All communications hereunder shall be in writing and, if sent
-------
to the Underwriters shall be mailed, delivered or telegraphed and confirmed to
you, as their Representatives c/o Cowen & Company at Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 except that notices given to an Underwriter pursuant to Section 6
hereof shall be sent to such Underwriter at the address furnished by the
Representatives or, if sent to the Company, shall be mailed, delivered or
telegraphed and confirmed c/o Xxxxxxx Xxxxxxxxx.
24
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Company and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence 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,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the person or persons, if any, who control any
Underwriter or Underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and the indemnities of the several
Underwriters shall also be for the benefit of each director of the Company, each
of its officers who has signed the Registration Statement and the person or
persons, if any, who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this Agreement,
--------------------------------
you will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by Cowen, as Representative, will be binding on all the
Underwriters.
17. Partial Unenforceability. The invalidity or unenforceability of any
------------------------
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
18. General. This Agreement constitutes the entire agreement of the
-------
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representatives.
19. Counterparts. This Agreement may be signed in two (2) or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
25
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
AASTROM BIOSCIENCES, INC.
By:
----------------------
President
Accepted and delivered in
New York, New York as of
the date first above written.
XXXXX & COMPANY
X.X. XXXXXX & COMPANY
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: Cowen Incorporated,
its general partner
By:
-------------------------------
Title:
26
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- --------- ---------
Xxxxx & Company.....................
X.X. Xxxxxx & Company...............
--------- ---------
Total.......................... 3,250,000 487,500
========= =========
SCHEDULE B
X. Xxxxx X. Xxxxxxx X. Xxxxxxx
X.X. Xxxxxxxxx X. Xxxxxx L. Xxxx
X. Xxxxxx X. Xxxxxxxx X. Xxxxxx
X. Xxxxxx X. Xxxxxx X. Xxxxxxxxxx
Brentwood Associates V, L.P. R. Xxxxxx X. Xxxxxxxxx-Xxxxxxx
X. Xxxxx X. Xxxxxxx X. Xxxxxx
X. Xxxxx X. Xxxxx X. Xxxxx
X. Xxxx X. Xxxxxxx X. Xxxxxx
X. Xxxxxx X. Xxxxxx SBIC Partners, L.P.
J. Xxxxxxxx X. Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxx Family X. Xxxxxx X. Xxxxxxxx
Trust X. Xxxxxxx S. Xxxxx
X. Xxxxxxx X. Xxxxx X. Xxxxxxx
X. Xxxxxx X. Xxxxxx X. Xxxxx
COBE Laboratories X. Xxxxxxxx X. Xxxxx
X. Xxxxxx X. Xxxxxx X. Xxxxxxxx
X. Xxxxxxxxxx X. Xxxxxxxxxx X. Xxxxxxxxxx
X. Xxxxxxxx M.D. Xxxxxxxx Cancer Center X. Xxxxx
X. Xxxxx X. Xxxxxxx X. Xxxxx
X. Xxxxxxx X. Xxxxx X. Xxxxxx
X. Xxxxxxx X. Xxxxxx X. Xxxxxx
Enterprise Development X. Xxxxxxx Treasurer of State of Michigan
Fund II, L.P. R. Mandalam X. Xxxxxx
Enterprise Development X. Xxxxxx University of Michigan
Fund, L.P. E. Mussi X. Xxx Xxxx
X. Xxxx X. Xxxxxxx X. Xxxxx
GC&H Partners X. Xxxxxx X. Xxxxxxx
X. Xxxxxxx Northwest Ohio Venture X. Xxxxx
X. Xxxxxx Fund, X.X. Xxxxx-Xxxxxxx Xxxxx, Inc.
X. Xxxxxxxx X. Xxxxx X. Xxxxxxxx
X. Xxxxxx X. Xxxxxx Wind Point II, L.P.
A. Grims X. Xxxxxxx X. Xxxxxxx
H&Q Life Science Technology X. Xxxxxxx X. Xxxxxx
H&Q London Ventures X. Xxxxxxx X. Xxxxxxx
EXHIBIT I
OPINION OF XXXX XXXX XXXX & FREIDENRICH
(a) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified or
be in good standing would not have a material adverse effect on the
condition (financial or otherwise), earnings, operations or business of the
Company and its subsidiaries considered as one enterprise. To such
counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity;
(b) To such counsel's knowledge, the Firm Stock or the Optional
Stock, as the case may be, to be issued by the Company pursuant to the
terms of this Agreement will not have been issued in violation of or
subject to any co-sale right, registration right, right of first refusal or
other similar right.
(c) The license agreement between the Company and Xxxxxx X.
Xxxxxxxxx dated July [__], 1992 and relating to [Patent nos. __] is a valid
and binding agreement of the Company, enforceable in accordance with its
terms; and to such counsel's knowledge, the Company is not in material
breach or violation of any of the terms or provisions of such agreement,
and no default exists under such agreement;
(d) The license agreement between the Company and the University
of Michigan dated March 13, 1992, as amended, and relating to U.S. Patent
No. 4,839,292 is a valid and binding agreement of the Company, enforceable
in accordance with its terms; and to such counsel's knowledge, the Company
is not in material breach or violation of any of the terms or provisions of
such agreement and no default exists under such agreement;
(e) This Agreement, assuming due authorization, execution and
delivery by the Company and you, is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except insofar as
indemnification and contribution provisions may be limited by applicable
law and except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally or by general equitable principles;
(f) The Registration Statement has become effective under the Act
and, to such counsel's knowledge, 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
threatened under the Act;
(g) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements
(including supporting schedules) and financial data derived therefrom as to
which such counsel need express no
1
opinion), as of the effective date of the Registration Statement, complied
as to form in all material respects with the requirements of the Act and
the applicable Rules and Regulations;
(h) The description in the Registration Statement and the
Prospectus of statutes other than Michigan Law are accurate and fairly
present the information required to be presented by the Act and the
applicable Rules and Regulations;
(i) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of a
character required to be described or referred to in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement which are not described or referred to therein or filed as
required;
(j) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the Company's
indemnification and contribution obligations hereunder, concerning which no
opinion need be expressed) will not, to such counsel's knowledge, result in
a material breach or violation of any of the terms and provisions of, or
constitute a default under, any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of trust,
loan agreement, joint venture or other agreement or instrument known to
such counsel to which the Company is a party or by which its properties are
bound, or any applicable statute, rule or regulation known to such counsel
or, to such counsel's knowledge, any order, writ or decree of any court,
government or governmental agency or body having jurisdiction over the
Company or over any of its properties or operations;
(k) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body
having jurisdiction over the Company, or over any of its properties or
operations is necessary in connection with the consummation by the Company
of the transactions herein contemplated, except such as have been obtained
under the Act or such as may be required under state or other securities or
Blue Sky laws in connection with the purchase and the distribution of the
Stock by the Underwriters;
(l) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company of a
character required to be disclosed in the Registration Statement or the
Prospectus by the Act or the Rules and Regulations, other than those
described therein;
(m) To such counsel's knowledge, the Company is not presently (a)
in material violation of its charter or bylaws, or (b) in material breach
of any applicable statute, rule or regulation known to such counsel or, to
such counsel's knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over the Company or over
any of its properties or operations; and
(n) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders 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 having
rights known to such counsel to registration of such shares of Common Stock
or other securities as part
2
of the offering contemplated by the Registration Statement have, with
respect to the offering contemplated thereby, waived such rights or such
rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed, and although they have not independently checked or verified the
accuracy or completeness of the statements contained in the Registration
Statement or the Prospectus, nothing has come to the attention of such counsel
which leads them to believe that, (i) at the time the Registration Statement
became effective, the Registration Statement and any amendment or supplement
thereto (other than the financial statements including supporting schedules and
other financial and statistical information derived therefrom, as to which such
counsel need express no comment) 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 (ii) at the Closing
Date or any later date on which the Optional Stock are to be purchased, as the
case may be, the Prospectus and any amendment or supplement thereto (except as
aforesaid) contained any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such counsel may
state that they do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
Prospectus.
Counsel rendering the foregoing opinion may rely as to questions of
fact upon representations or certificates of officers of the Company and of
government officials, in which case their opinion is to state that they are so
relying and that they have no knowledge of any material misstatement or
inaccuracy in any such opinion, representation or certificate. Copies of any
opinion, representation or certificate so relied upon shall be delivered to you,
as Representatives of the Underwriters, and to Underwriters' Counsel.
3
EXHIBIT II
OPINION OF PEPPER, XXXXXXXX & XXXXXXX
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state of
Michigan;
(b) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as described
in the Prospectus;
(c) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified or
be in good standing would not have a material adverse effect on the
condition (financial or otherwise), earnings, operations or business of the
Company and its subsidiaries considered as one enterprise. To such
counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity;
(d) The Firm Stock or the Optional Stock, as the case may be, to
be issued by the Company pursuant to the terms of this Agreement have been
duly authorized and, upon issuance and delivery against payment therefor in
accordance with the terms hereof, will be duly and validly issued and fully
paid and nonassessable, and will not have been issued in violation of or
subject to any preemptive right, co-sale right, registration right, right
of first refusal or other similar right.
(e) The Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver to the Underwriters the
Stock to be issued and sold by it hereunder;
(f) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" as of the dates stated therein, the issued and outstanding
shares of capital stock of the Company have been duly and validly issued
and are fully paid and nonassessable, and, to such counsel's knowledge,
will not have been issued in violation of or subject to any preemptive
right, co-sale right, registration right, right of first refusal or other
similar right;
(g) This Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by the Company and, assuming due authorization, execution and
delivery by you, is a valid and binding agreement of the Company,
enforceable in accordance with its terms, except insofar as indemnification
provisions may be limited by applicable law and except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally or by
general equitable principles;
[(h) The license agreement between the Company and Xxxxxx X.
Xxxxxxxxx dated July [__], 1992 and relating to [Patent nos. __] is a valid
and binding agreement of the Company, enforceable in accordance with its
terms; and to such counsel's
1
knowledge, the Company is not in material breach or violation of any of the
terms or provisions of such agreement, and no default exists under such
agreement;]
[(i) The license agreement between the Company and the University
of Michigan dated March 13, 1992, as amended, and relating to U.S. Patent
No. 4,839,292 is a valid and binding agreement of the Company, enforceable
in accordance with its terms; and to such counsel's knowledge, the Company
is not in material breach or violation of any of the terms or provisions of
such agreement and no default exists under such agreement;]
(j) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes matters
of law or legal conclusions, has been reviewed by such counsel and is a
fair summary of such matters and conclusions; and the forms of certificates
evidencing the Common Stock and filed as exhibits to the Registration
Statement comply with Michigan law;
(k) The description in the Registration Statement and the
Prospectus of the charter and bylaws of the Company and of statutes are
accurate and fairly present the information required to be presented by the
Act and the applicable Rules and Regulations;
[(l) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of a
character required to be described or referred to in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement which are not described or referred to therein or filed as
required;]
(m) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the Company's
indemnification obligations hereunder, concerning which no opinion need be
expressed) will not (a) result in any violation of the Company's charter or
bylaws or (b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a default
under, any bond, debenture, note or other evidence of indebtedness, or any
lease, contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument known to such counsel to which the
Company is a party or by which its properties are bound, or any applicable
statute, rule or regulation known to such counsel or, to such counsel's
knowledge, any order, writ or decree of any court, government or
governmental agency or body having jurisdiction over the Company or over
any of its properties or operations;
(n) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body
having jurisdiction over the Company, or over any of its properties or
operations is necessary in connection with the consummation by the Company
of the transactions herein contemplated, except such as have been obtained
under the Act or such as may be required under state or other securities or
Blue Sky laws in connection with the purchase and the distribution of the
Stock by the Underwriters;
(o) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company of a
character required to be disclosed in the Registration Statement or the
Prospectus by the Act or the Rules and Regulations, other than those
described therein;
2
(p) To such counsel's knowledge, the Company is not presently (a)
in material violation of its charter or bylaws, or (b) in material breach
of any applicable statute, rule or regulation known to such counsel or, to
such counsel's knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over the Company or over
any of its properties or operations; and
(q) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders 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 having
rights known to such counsel to registration of such shares of Common Stock
or other securities, because of the filing of the Registration Statement by
the Company have, with respect to the offering contemplated thereby, waived
such rights or such rights have expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement or have included securities in the Registration Statement
pursuant to the exercise of and in full satisfaction of such rights.
In addition, such counsel shall state that although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention of
such counsel which leads them to believe that, at the time the Registration
Statement became effective and at all times subsequent thereto up to and on the
Closing Date and on any later date on which Optional Stock are to be purchased,
the Registration Statement and any amendment or supplement thereto (other than
the financial statements including supporting schedules and other financial and
statistical information derived therefrom, as to which such counsel need express
no comment) 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 at the Closing Date or any later date on
which the Optional Stock are to be purchased, as the case may be, the
Registration Statement, the Prospectus and any amendment or supplement thereto
(except as aforesaid) contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or the State of Michigan upon
opinions of local counsel, and as to questions of fact upon representations or
certificates of officers of the Company and of government officials, in which
case their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of the
Underwriters, and to Underwriters' Counsel.
3
EXHIBIT III
OPINION OF OBLON, SPIVAK, MCCLELLAND, XXXXX & NEUSTADT, P.C.
1
EXHIBIT IV
OPINION OF PRETTY, XXXXXXXXX, XXXXXXXXXXX & XXXXX, P.C.
1
EXHIBIT V
OPINION OF XXXXXXXX & XXXXXX
1
EXHIBIT VI
OPINION OF XXXXX, XXXXXX & XXXXXXXX
a. The statements in the Registration Statement and
Prospectus under the captions "Risk Factors -- Uncertainty of Regulatory
Approval; Extensive Government Regulation" and "Business -- Government
Regulation," insofar as such statements purport to summarize applicable
provisions of the United Stated food and drug laws (the "Food and Drug
Laws"), have been reviewed by such counsel and are accurate as to, and
fairly describe, the regulatory status of the Company under the Food and
Drug Laws; and to such counsel's knowledge, there are no presently existing
Food and Drug Laws applicable to the Company and/or the Company's products
that are required to be described or referred to in the Registration
Statement and Prospectus that are not so described or referred to therein.
b. To such counsel's knowledge, the Company is currently
conducting its business in material compliance with all applicable
provisions of the Food and Drug Laws.
c. There are no judicial or administrative proceedings
pending or, to such counsel's knowledge, threatened against the Company
that may cause any regulatory permit that is material to the business of
the Company, to be revoked, withdrawn, cancelled, suspended or not renewed.
In rendering the foregoing opinions, such counsel may state that they
have not independently verified nor do they take any responsibility for nor are
they addressing in any way any statements of fact or statements of belief
attributable to the Company.
In addition to the foregoing opinions, counsel shall state that:
During the course of preparation of the Registration Statement, such
counsel participated in certain discussions with officers of the Company as to
the regulatory matters dealt with under the captions "Risk Factors --
Uncertainty of Regulatory Approval; Extensive Government Regulation" and
"Business -- Government Regulation" in the Prospectus. While such counsel has
not undertaken to determine independently and such counsel does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
under such captions in the Prospectus, such counsel shall state on the basis of
these discussions that no facts have come to their attention which cause them to
believe that the statements in the Prospectus under the captions "Risk Factors -
- Uncertainty of Regulatory Approval; Extensive Government Regulation" and
"Business -- Government Regulation," insofar as such statements relate to
regulatory matters, at the time the Registration Statement became effective, or
at the Closing Date or at any later date on which Optional Stock are purchased,
as the case may be, the Prospectus 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.
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