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EXHIBIT 10.1
Form of Letter Agreement between the Issuer and each Selling Shareholder
March __, 1997
▇▇▇▇▇ Medical Industries, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned is a "Selling Shareholder" of the Common Stock, $.04 par
value (the "Common Stock") of ▇▇▇▇▇ Medical Industries, Inc. (the "Issuer") as
such term is defined in the Registration Statement on Form S-3 filed with the
Securities and Exchange Commission on March __, 1997 (Registration No.
333-_______) (the "Registration Statement"). The Registration Statement
relates to the offer, sale and distribution by all Selling Shareholders of an
aggregate of 291,250 shares (the "Shares") of the Issuer's Common Stock under
the Securities Act of 1933 (the "Act"). The Shares constitute a portion of the
Issuer's Common Stock issued pursuant to that certain Plan of Reorganization
and Agreement (the "Agreement") dated October 24, 1996, by and among Abana
Pharmaceuticals, Inc., ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇, and the Issuer.
In accordance with the Agreement, as an inducement to the Issuer to agree
to: (i) prepare and file the Registration Statement; (ii) use its best efforts
to keep the registration of the Shares under the Act current and effective
until the earlier of: (A) the date upon which the sale or distribution of the
Shares by all Selling Shareholders has been completed or is terminated at the
request of all Selling Shareholders; or (B) August 30, 1998; and (iii) bear the
costs, expenses and fees in connection with the registration of the Shares
under the Act, which costs, expenses and fees shall include: (A) the filing fee
due the Securities and Exchange Commission; (B) the fees and expenses of the
Issuer's counsel and accountants in connection with the preparation, review and
filing of the Registration Statement; and (C) the costs of electronic filing of
the Registration Statement and printing costs with respect to the prospectus
included in the Registration Statement, the undersigned hereby covenants and
agrees with you that:
1. The undersigned will provide to the Issuer such information as it may
reasonably request or that is required for inclusion in the
Registration Statement;
2. The undersigned will indemnify and hold the Issuer and its directors,
officers, employees and authorized agents harmless from and against
any loss, claim, damage, liability or expense suffered by the Issuer
or its directors, officers, employees and authorized agents in
connection with the offer, sale and distribution of Shares under the
Act as contemplated in the Registration Statement, including
reasonable attorney's fees and expenses incurred by the Issuer in the
defense of such claims, and arising from: (a) the
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undersigned's failure to observe, perform and discharge its covenants
and agreements set forth herein; and (b) any misstatement of fact, or
the failure to state a fact necessary to make the statements of fact
not misleading, relating to his participation and proposed manner of
sale as set forth under the captions "The Selling Shareholders" and
"Plan of Distribution";
3. The undersigned will bear the expense, incurred by or on behalf of the
undersigned, of any counsel fees and brokerage commissions or other
expenses in connection with the sale of the registered Shares,
including, without limitation, the cost of any review of offering or
brokerage arrangements by the National Association of Securities
Dealers, Inc.;
4. The undersigned will be responsible for costs incurred in connection
with any amendment to the Registration Statement arising from any
change in the proposed manner of offering or distribution or any
withdrawal of Shares from registration and will reimburse the Issuer
for its reasonable out of pocket expenses (including fees of counsel
and accountants and printing expenses) in connection with amending the
Registration Statement and prospectus included therein;
5. The undersigned will not engage (or permit any broker-dealer or agent
acting on its behalf to engage) in offers or sales of the Shares
during: (a) the forty-five (45) days following the effective date of
any registration statement filed by the Issuer relating to an offering
or distribution of equity securities for its own account, whether for
cash or in connection with an acquisition, provided that the Issuer
has given notice to the undersigned of such effective date; or (b)
any period in which the information provided by any of the Selling
Shareholders (including, without limitation, the undersigned) to the
Issuer for inclusion in the Registration Statement is inaccurate or
incomplete; and
6. The undersigned will advise the Issuer promptly of any sales of
Shares by or for its account , including so-called "short against the
box" transactions.
The undersigned further acknowledges the foregoing covenants and
agreements are intended to constitute its binding contract and agreement with
you and that you shall be entitled to enforce the provisions hereof and in the
event of any enforcement proceeding arising from the undersigned's failure to
perform in accordance with this contract and agreement you shall be entitled,
in addition to such other remedies as may be available, to recover your costs
and expenses (including without limitation attorney's fees and expenses) in
connection with any proceeding seeking enforcement against the undersigned.
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The undersigned further represents and warrants that the information set
forth in the Registration Statement and prospectus included therein under the
captions "Selling Shareholders" and "Plan of Distribution" is true, correct and
complete and does not include any misstatement of a material fact or omit to
include any statement necessary to make the statements therein not misleading.
Very truly yours,
By: ____________________
Name: ____________________
Title: ____________________
AGREED TO AND ACCEPTED BY
THE ISSUER THIS ___ DAY
OF MARCH, 1997.
By: __________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
