EXHIBIT 1.1
[2,000,000] UNITS
CARESIDE, INC.
FORM OF
UNDERWRITING AGREEMENT
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June ___ , 1999
Xxxxxxx Investment Company, Inc.
Millennium Financial Group, Inc.
xxxxxx xxxx securities corporation
As Representatives of the Several
Underwriters
c/x Xxxxxxx Investment Company, Inc.
000 X.X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Ladies and Gentlemen:
Careside, Inc., a Delaware corporation (the "Company"), proposes to sell to
the several underwriters (the "Underwriters") named in Schedule I hereto, for
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whom Xxxxxxx Investment Company, Inc. ("Xxxxxxx"), Millennium Financial Group,
Inc. ("Millennium") and xxxxxx xxxx securities corporation are acting as
representatives (collectively, the "Representatives"), an aggregate of
[2,000,000] units (the "Firm Units"). Each Unit (hereinafter defined) will
consist of one share of the Company's Common Stock, $.01 par value per share
("Common Stock"), and a warrant to purchase one additional share of Common Stock
("Warrant"). The terms and conditions governing the Warrants are set forth in
the Warrant Agreement between the Company and American Stock Transfer & Trust
Company, dated as of the date hereof (the "Warrant Agreement"). The respective
amounts of the Firm Units to be so purchased by the Underwriters are set forth
opposite their names in Schedule I hereto. The Company also proposes to grant
to the Underwriters an option to purchase an aggregate of up to [300,000]
additional Units, identical to the Firm Units (the "Option Units"), as set forth
below. The offer and sale of the Firm Units and the Option Units pursuant to
this Agreement is referred to as the "Offering."
In addition, the Company proposes to issue to the Representatives and/or
their designees, warrants (the "Representatives' Warrants") pursuant to a
certain Purchase Warrant Agreement, dated as of the date hereof, between the
Company and Xxxxxxx (the "Representatives' Warrant Agreement"), for the purchase
of an additional [200,000] Units in the aggregate (the "Representatives'
Units"). The Firm Units; the Common Stock and Warrants included in the Firm
Units; the Option Units; the Common Stock and Warrants included in the Option
Units; the Representatives' Warrants; and the Common Stock and Warrants included
in the
Representatives' Warrants (collectively, hereinafter referred to as the
"Securities"), are more fully described in the Registration Statement and the
Prospectus referred to below.
SmithKline Xxxxxxx Clinical Laboratories, Inc. ("SBCL"), a Delaware
corporation and subsidiary of SmithKline Xxxxxxx Corporation, a Pennsylvania
corporation, started the Company's predecessor business (the "Predecessor
Business"), to develop the technology that the Company currently uses. The
Company acquired the Predecessor Business in November 1996. The Company was
incorporated in the State of Delaware on July 10, 1996 under the name Exigent
Diagnostics, Inc. On May 21, 1998, the Company changed its name to Careside,
Inc.
As the Representatives, you have advised the Company that (a) you are
authorized to enter into this Agreement for yourself as Representatives and on
behalf of the several Underwriters, and (b) the several Underwriters are
willing, acting severally and not jointly, to purchase the numbers of Firm Units
set forth opposite their respective names in Schedule I. The Firm Units and the
Option Units (to the extent the aforementioned option is exercised) are herein
collectively called the "Units."
In consideration of the mutual agreements contained herein and the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, each of the Underwriters, as of the date
hereof, as of the Closing Date (hereinafter defined) and as of the Option
Closing Date (hereinafter defined), if any, as follows:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and an
amendment or amendments thereto, on Form S-1 (File No. 333-69207), including any
related preliminary prospectus ("Preliminary Prospectus"), for the registration
of the Securities under the Securities Act of 1933, as amended (the "Act"),
which registration statement and amendment or amendments have been prepared by
the Company in conformity, in all material respects, with the requirements of
the Act, and the rules and regulations of the Commission under the Act (the
"Regulations"). The Company will promptly file a further amendment to said
registration statement in the form heretofore delivered to the Underwriters, and
will not file any other amendment thereto to which the Underwriters shall have
reasonably objected in writing after having been furnished with a copy thereof.
Except as the context may otherwise require, such registration statement, as
amended, on file with the Commission at the time the registration statement
becomes effective (including the prospectus, financial statements, schedules,
exhibits and all other documents filed as a part thereof or incorporated therein
(including, but not limited to those documents or information incorporated by
reference therein) and all information deemed to be a part thereof as of such
time pursuant to paragraph (b) of Rule 430(A) of the Regulations), is
hereinafter called the "Registration Statement," and the form of prospectus in
the form first filed with the Commission pursuant to Rule 424(b) of the
Regulations, is hereinafter called the "Prospectus." For purposes hereof,
"Rules and Regulations" mean the rules and regulations adopted by the
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Commission under either the Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as applicable.
(b) Neither the Commission nor any state regulatory authority has
issued any order preventing or suspending the use of any Preliminary Prospectus,
the Registration Statement or the Prospectus or any part of any of the foregoing
and no proceedings for a stop order suspending the effectiveness of the
Registration Statement or trading in any of the Company's securities have been
instituted, are pending or, to the Company's knowledge, are threatened. Each of
the Preliminary Prospectus, Registration Statement and Prospectus, at the time
of filing thereof, conformed, in all material respects, with the requirements of
the Act and the Rules and Regulations, and none of the Preliminary Prospectus,
Registration Statement or Prospectus, at the time of filing thereof, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein and necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
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however, that this representation and warranty does not apply to statements made
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or statements omitted in reliance upon and in conformity with written
information furnished to the Company with respect to the Underwriters by or on
behalf of the Underwriters, expressly for use in such Preliminary Prospectus,
Registration Statement or Prospectus, or any amendment thereof or supplement
thereto.
(c) When the Registration Statement becomes effective and at all times
subsequent thereto up to the Closing Date and each Option Closing Date, if any,
and during such longer period as the Prospectus is required under the Act or the
Regulations to be delivered in connection with sales by the Underwriters or a
dealer, the Registration Statement and the Prospectus will contain all
statements which are required to be stated therein in accordance with the Act
and the Rules and Regulations, and will conform, in all material respects, to
the requirements of the Act and the Rules and Regulations. Neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, at the time of the effectiveness of the Registration Statement or any
amendment thereto and at the time of delivery of the Prospectus or any amendment
or supplement thereto, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading. Notwithstanding the
above, the representation and warranty contained in this subsection (c) of
Section 1 does not apply to statements made or statements omitted in reliance
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upon and in conformity with information furnished to the Company in writing by
or on behalf of any Underwriter expressly for use in the Preliminary Prospectus,
Registration Statement or Prospectus, or any amendment thereof or supplement
thereto.
(d) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation. The Company does not own an interest in any corporation,
partnership, trust, joint venture or other business entity. The Company is duly
qualified and licensed, and is in good standing as a foreign corporation, in
each jurisdiction in which its ownership or leasing of any properties or the
character of its operations requires such qualification or licensing, except
where the failure to be so qualified or licensed would not have a material
adverse effect upon the business, results of
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operations, financial condition or, insofar as can reasonably be foreseen,
prospects of the Company (a "Company Material Adverse Effect"). The Company has
all requisite corporate power and authority, and has obtained any and all
necessary authorizations, approvals, orders, licenses, certificates, franchises
and permits ("Governmental Authorizations") of and from all governmental or
regulatory officials and bodies (including, without limitation, those having
jurisdiction over environmental or similar matters), to own or lease its
properties and conduct its business as described in the Prospectus, except where
the failure to obtain or maintain a Governmental Authorization would not have a
Company Material Adverse Effect. The Company is and has been doing business in
compliance with all such Governmental Authorizations and all federal, state and
local laws, rules and regulations, and has not received any notice of
proceedings relating to the revocation or modification of any such Governmental
Authorization which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Company Material Adverse
Effect. The disclosures in the Registration Statement concerning the effects of
federal, state and local laws, rules and regulations on the Company's business
as currently conducted and as contemplated to be conducted as set forth in the
Registration Statement are correct in all material respects and do not omit to
state a material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which they were made.
(e) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus, under "Capitalization" and
"Description of Capital Stock" and will, upon the closing of the purchase of the
Firm Units in accordance with the terms of this Agreement, have the adjusted
capitalization set forth therein on the Closing Date based upon the assumptions
set forth therein. The Company is not a party to or bound by any instrument,
agreement or other arrangement providing for it to issue any capital stock,
rights, warrants, options or other securities, except for this Agreement, the
Representatives' Warrant Agreement and as otherwise described in the Prospectus.
The Securities and all other securities issued or issuable by the Company as
described in the Prospectus conform or, when issued and paid for in accordance
with the terms of this Agreement, the Warrant Agreement or the Representatives'
Warrant Agreement, or as described in the Prospectus, as applicable, will
conform, in all material respects, to all statements with respect thereto
contained in the Registration Statement and the Prospectus. All issued and
outstanding securities of the Company have been duly authorized and validly
issued and are fully paid and non-assessable, and the holders thereof have no
rights of rescission with respect thereto, and, subject to the requirements of
applicable law, are not subject to personal liability by reason of being such
holders; and none of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company. The Securities (i) are not and will not be
subject to any preemptive or other similar rights of any stockholder, (ii) have
been duly authorized and (iii) when issued, paid for and delivered in accordance
with the terms of this Agreement, the Warrant Agreement and the Representatives'
Warrant Agreement, respectively, will be validly issued, fully paid and non-
assessable and will conform to the description thereof contained in the
Prospectus. The holders of the Securities will not be subject to any personal
liability solely by reason of being such holders, subject to the requirements of
applicable law. All corporate action required to be taken for the
authorization, issue and sale of the Securities has been duly and validly taken;
and the certificates representing the Securities will be in due and proper form
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according to the corporate law of the jurisdiction of the Company's
incorporation. Upon the issuance and delivery, pursuant to the terms hereof, of
the Firm Units and Option Units to be sold by the Company hereunder, the
Underwriters or the Representatives, as the case may be, will acquire good and
marketable title to such Securities, free and clear of any lien, charge, claim,
encumbrance, pledge, security interest, defect or other restriction or equity of
any kind whatsoever (a "Lien"), other than Liens imposed as a result of actions
or omissions by the Underwriters, the Representatives or those persons or
entities purchasing any such Securities from the Underwriters or the
Representatives.
(f) The consolidated financial statements, including the related notes
and schedules thereto, included in the Registration Statement, each Preliminary
Prospectus and the Prospectus, fairly present, in all material respects, the
financial position, income, changes in cash flow, changes in stockholders'
equity, and results of operations of the Company at the respective dates and for
the respective periods to which they apply. Such financial statements have been
prepared in conformity with generally accepted accounting principles and the
Rules and Regulations, consistently applied throughout the periods involved.
There has been no Company Material Adverse Effect or development involving a
prospective Company Material Adverse Effect, whether or not arising in the
ordinary course of business, since the date of the financial statements included
in the Registration Statement and the Prospectus. The outstanding debt, the
property, both tangible and intangible, and the business of the Company conform,
in all material respects, to the descriptions thereof contained in the
Registration Statement and the Prospectus. Financial information set forth in
the Prospectus under the headings "Summary Financial Data," "Selected Financial
Data," "Capitalization" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," fairly present, in all material respects,
on the basis stated in the Prospectus, the information set forth therein, and
have been derived from, or compiled on, a basis consistent with that of the
audited financial statements included in the Prospectus.
(g) The Company (i) has paid all federal, state, local, and foreign
taxes for which it is liable and for which payment is due, including, but not
limited to, withholding taxes and amounts payable under Chapters 21 through 24
of the Internal Revenue Code of 1986, as amended (the "Code"), and, to its
knowledge, based on consultation with its tax advisors, has furnished all
information and returns it is required to furnish pursuant to the Code and
applicable state, local and foreign tax laws, (ii) has established adequate
reserves for such taxes which are not due and payable, and (iii) does not have
any tax deficiency or claims outstanding, proposed or assessed against it. All
tax liabilities have been adequately provided for in the financial statements of
the Company.
(h) No transfer tax, stamp duty or other similar tax is payable by or
on behalf of the Underwriters in connection with (i) the issuance by the Company
of the Securities, (ii) the purchase by the Underwriters of the Securities to be
sold by the Company hereunder and under the Warrant Agreement and the
Representatives' Warrant Agreement, (iii) the issuance to the Representatives of
the Representatives' Warrants by the Company, or (iv) resales of the Securities
in connection with the distribution by the Underwriters contemplated hereby.
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(i) The Company maintains insurance policies, including, but not
limited to, general liability, product liability and property insurance, and
surety bonds which insure the Company and its employees against such losses and
risks generally insured against by comparable businesses. The Company (i) has
given notice or presented insurance claims with respect to all matters covered
by such insurance policies or surety bonds, including, but not limited to,
claims involving the Company's business, property or employees, in a due and
timely manner, (ii) has no disputes or claims against any underwriter of such
insurance policies or surety bonds, (iii) has paid all premiums due and payable
with respect to such insurance policies and surety bonds and (iv) has complied,
in all material respects, with all conditions contained in such insurance
policies and surety bonds so as to avail itself of coverage in the event of any
claim.
(j) There is no action, suit, proceeding, inquiry, arbitration,
litigation, governmental proceeding (including, without limitation, those having
jurisdiction over environmental or similar matters) or, to the knowledge of the
Company, investigation, domestic or foreign, pending or, to the knowledge of the
Company, threatened against the Company or expressly involving the properties or
business of the Company which (i) questions the validity of the capital stock of
the Company, this Agreement, the Warrant Agreement, the Representatives' Warrant
Agreement or any action taken or to be taken by the Company pursuant to or in
connection with this Agreement, the Warrant Agreement or the Representatives'
Warrant Agreement, (ii) is required to be disclosed in the Registration
Statement which is not so disclosed or (iii) except for matters disclosed in the
Prospectus, could reasonably be expected to have a Company Material Adverse
Effect.
(k) The Company has full legal right, corporate power and authority to
authorize, issue, deliver and sell the Securities, enter into this Agreement,
the Warrant Agreement and the Representatives' Warrant Agreement and to
consummate the transactions provided for in such agreements; and this Agreement,
the Warrant Agreement and the Representatives' Warrant Agreement have each been
duly and properly authorized, executed and delivered by the Company. Each of
this Agreement, the Warrant Agreement and the Representatives' Warrant Agreement
constitutes a legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting
creditors' rights generally, (ii) as enforceability of any indemnification or
contribution provisions may be limited under applicable laws or the public
policies underlying such laws and (iii) that the remedies of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings may be brought. None of the Company's issuance and sale of the
Securities, execution or delivery of this Agreement, the Warrant Agreement or
the Representatives' Warrant Agreement, performance hereunder and thereunder, or
consummation of the transactions contemplated herein and therein, (A) conflicts
with or will conflict with, (B) results in or will result in any breach or
violation of any of the terms or provisions of, (C) constitutes or will
constitute a default under, or (D) result in the creation or imposition of any
Lien upon any property or assets (tangible or intangible) of the Company
pursuant to the terms of, any of the following: (i) the Certificate of
Incorporation or By-laws of
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the Company, (ii) any material license, contract, indenture, mortgage, deed of
trust, voting trust agreement, stockholders agreement, note, indebtedness, loan,
credit agreement or any other agreement or instrument to which the Company is a
party or by which it is bound or to which any of its properties or assets
(tangible or intangible) is expressly subject, or (iii) any statute, rule or
regulation, applicable to the Company, or any judgment, decree or order which by
its terms is expressly applicable to the Company, of any arbitrator, court,
regulatory body or administrative agency or other governmental agency or body
(including, without limitation, those having jurisdiction over environmental or
similar matters), domestic or foreign, having jurisdiction over the Company or
any of its activities or properties.
(l) Except as described in the Prospectus, no consent, approval,
authorization or order of, and no filing with, any court, regulatory body,
government agency or other body, domestic or foreign, is required for the
issuance of the Units pursuant to the Prospectus and the Registration Statement,
the issuance of the Representatives' Warrants, the performance of this
Agreement, the Warrant Agreement and the Representatives' Warrant Agreement and
the transactions contemplated hereby and thereby, including without limitation,
any waiver of any preemptive, first refusal or other rights that any entity or
person may have with respect to the issuance and/or sale of any of the
Securities, except such as have been or may be obtained under the Act or may be
required under state securities or Blue Sky laws in connection with the
Underwriters' purchase and distribution of the Units, and the Representatives'
Warrants to be sold by the Company hereunder and under the Representatives'
Warrant Agreement.
(m) All executed agreements, contracts or other documents or copies of
executed agreements, contracts or other documents filed as exhibits to the
Registration Statement to which the Company is a party or by which it may be
bound or to which any of its assets, properties or business may be subject have
been duly and validly authorized, executed and delivered by the Company, and
constitute the legal, valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors' rights and the application of equitable
principles in any action, legal or equitable, and except as rights to indemnity
or contribution may be limited by applicable law). The descriptions in the
Registration Statement of agreements, contracts and other documents are accurate
in all material respects and fairly present, in all material respects, the
information required to be shown with respect thereto on Form S-1. There are no
contracts or other documents which are required by the Act to be described in
the Registration Statement or filed as exhibits to the Registration Statement
which are not described or filed as required, and the exhibits which have been
filed are, in all material respects, complete and correct copies of the
documents of which they purport to be copies.
(n) Subsequent to the respective dates as of which information is set
forth in the Registration Statement and Prospectus, and except as may otherwise
be indicated or contemplated herein or therein, the Company has not (i) issued
any securities or incurred any liability or obligation, direct or contingent,
for borrowed money, (ii) entered into any transaction other than in the ordinary
course of business, (iii) considered entering into a material transaction
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that is probable of occurring, or (iv) declared or paid any dividend or made any
other distribution on or in respect of its capital stock of any class; and there
has not been any change in the Company's capital stock, material increase in its
debt (long or short term) or liabilities or material adverse change in or
affecting its general affairs, management, financial operations, stockholders'
equity or results of operations. The Company has no material contingent
obligations that are not disclosed in the Company's financial statements
included in the Registration Statement.
(o) No default by the Company exists in the due performance and
observance of any term, covenant or condition of any license, contract,
indenture, mortgage, installment sale agreement, lease, deed of trust, voting
trust agreement, stockholders' agreement, partnership agreement, note, loan,
credit agreement, purchase order, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other agreement or
instrument to which the Company is a party or by which the Company may be bound
or to which the property or assets (tangible or intangible) of the Company are
subject or affected, except where such default would not have a Company Material
Adverse Effect.
(p) The Company is in compliance, in all material respects, with all
federal, state, local, and foreign laws and regulations respecting employment
and employment practices, terms and conditions of employment, and wages and
hours. To the knowledge of the Company, there are no pending investigations
involving the Company by the United States Department of Labor, or any other
governmental agency responsible for the enforcement of any of such federal,
state, local, or foreign laws and regulations. There is no unfair labor
practice charge or complaint against the Company pending before the National
Labor Relations Board or any strike, picketing, boycott, dispute, organized
slowdown or stoppage pending or, to the knowledge of the Company, threatened
against or involving the Company. No question exists with respect to the
employees of the Company being represented by a labor union, and no collective
bargaining agreement or modification thereof is currently being negotiated by
the Company. No grievance or arbitration proceeding is pending under any
expired or existing collective bargaining agreements of the Company. No labor
dispute with the employees of the Company exists or, to the knowledge of the
Company, is imminent.
(q) Except as described in the Prospectus, the Company does not
maintain, sponsor or contribute to any program or arrangement that is an
"employee pension benefit plan," an "employee welfare benefit plan" or a
"multiemployer plan" (collectively, "ERISA Plan") as such terms are defined in
Sections 3(2), 3(1) and 3(37), respectively, of the Employee Retirement Income
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Security Act of 1974, as amended ("ERISA"). To the Company's knowledge, the
Company does not maintain or contribute, now or at any time previously, to a
defined benefit plan, as defined in Section 3(35) of ERISA. To the Company's
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knowledge, no ERISA Plan (or any trust created thereunder), has engaged in a
"prohibited transaction" within the meaning of Section 406 of ERISA or Section
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4975 of the Code, which could subject the Company to any tax penalty on
prohibited transactions and which has not adequately been corrected. To the
Company's knowledge, each ERISA Plan is in compliance, in all material respects,
with all reporting, disclosure and other requirements of the Code and ERISA as
they relate to any such
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ERISA Plan. The Company has never completely or partially withdrawn from a
"multiemployer plan."
(r) Neither the Company nor any of its employees, directors,
stockholders, partners, or affiliates (within the meaning of the Regulations) of
any of the foregoing has taken or will take, directly or indirectly, any action
designed to or which has constituted or which might be expected to cause or
result in, under the Exchange Act, or otherwise, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities or otherwise. The Company acknowledges that the Underwriters may
engage in passive market making transactions in the Units, Common Stock and/or
Warrants on the American Stock Exchange in accordance with the Rules and
Regulations.
(s) Except as otherwise disclosed in the Prospectus, none of the
patents, patent applications, trademarks, service marks, service names, trade
names and copyrights, and none of the licenses and rights to the foregoing
presently owned or held by the Company is in dispute or is in any conflict with
the right of any other person or entity. Except as set forth in the Prospectus,
the Company (i) owns or has the right to use, free and clear of all Liens, all
patents, patent applications, trademarks, service marks, service names, trade
names, copyrights, technology, licenses and rights with respect to the
foregoing, used in the conduct of its business as now conducted or proposed to
be conducted without infringing upon or otherwise acting adversely to the right
or claimed right of any person, corporation or other entity under or with
respect to any of the foregoing and (ii) is not obligated or under any liability
whatsoever to make any payment by way of royalties, fees or otherwise to any
owner or licensee of, or other claimant to, any patent, patent application,
trademark, service xxxx, service name, trade name, copyright, know-how,
technology or other intangible asset, with respect to the use thereof or in
connection with the conduct of its business or otherwise.
(t) There is no action, suit, proceeding, inquiry, arbitration,
litigation, governmental or other proceeding or, to the knowledge of the
Company, investigation, domestic or foreign, pending or, to the knowledge of the
Company, threatened (or circumstances that may give rise to the same) against
the Company which challenges the exclusive rights of the Company with respect to
any trademarks, trade names, service marks, service names, copyrights, patents,
patent applications, licenses or rights to the foregoing used in the conduct of
its business, or which challenge the right of the Company to use any technology
presently used or contemplated to be used in the conduct of its business.
(u) Subject to the various license and other agreements described in
the Prospectus, the Company owns and has the right to use all material trade
secrets, know-how (including all other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), inventions,
technology, designs, processes, works of authorship, computer programs and
technical data and information (collectively herein, "intellectual property")
that are material to the development, manufacture, operation and sale of all
products and services sold or proposed to be sold by the Company, free and clear
of, and without violating, any right, Lien, or claim of others, including,
without limitation, former employers of its employees; provided, however, that
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the possibility exists that other persons or entities,
9
completely independently of the Company, or their employees or agents, could
have developed trade secrets or items of technical information similar or
identical to those of the Company. The Company is not aware of any such
development of similar or identical trade secrets or technical information by
others.
(v) The Company has good and marketable title to, or valid and
enforceable leasehold estates in, all material items of real and personal
property stated in the Prospectus to be owned or leased by it, free and clear of
all Liens, other than those referred to in the Prospectus, lessor's interests,
Liens for taxes not yet due and payable, and other Liens which would not have a
Company Material Adverse Effect.
(w) Xxxxxx Xxxxxxxx LLP ("Xxxxxxxx"), whose report is filed with the
Commission as a part of the Registration Statement, is an independent public
accountant as required by the Act and the Rules and Regulations.
(x) The Company has caused each officer and director of the Company,
and each other person listed in Schedule II hereto who individually owns,
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beneficially or of record, five percent (5%) or more of the aggregate shares of
Common Stock issued and outstanding (or issuable upon exercise of outstanding
options or warrants), to execute and deliver to Xxxxxxx, on or prior to the date
of this Agreement, a letter or letters, in substantially the form of Exhibit A
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attached hereto ("Lock-up Agreements"). The Company is not aware of any facts
which would give the Company reason to believe that any Lock-up Agreement has
not been duly executed and is not a legally binding and enforceable agreement
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable). Based upon the Lock-up
Agreements, the various registration rights agreements described in the
Prospectus, executed Consent Agreements and Waivers by the holders of such
registration rights and an executed Majority Written Consent of Stockholders,
holders of an aggregate of at least ninety-five percent (95%) of the outstanding
shares of Common Stock immediately prior to the Offering (treating all
outstanding options and warrants to purchase shares of Common Stock issuable
thereunder as outstanding for purposes of such calculation) agreed not to (A)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
Units, Common Stock or Warrants, or any other securities convertible into or
exercisable or exchangeable for Units, Common Stock or Warrants owned by such
person, or (B) request the registration for the offer or sale of any of the
foregoing, for a period of one year after the date of the Prospectus, except
with the prior written consent of Xxxxxxx and Millennium, which consent shall
not be unreasonably withheld.
(y) Except as described in the Prospectus under "Underwriting," there
are no claims, payments, issuances, arrangements or understandings, whether oral
or written, to which the Company is a party, for services in the nature of a
finder's or origination fee with respect to the sale of the Securities hereunder
or any other arrangements, agreements, understandings, payments or issuances
with respect to the Company or, to the knowledge of the Company, any of
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its officers, directors, stockholders, partners, employees or affiliates that
may affect the Underwriters' compensation, as determined by the National
Association of Securities Dealers, Inc. ("NASD").
(z) The Units, Common Stock and Warrants, including the Common Stock
and Warrants included in the Representatives' Warrants, have been approved for
quotation on the American Stock Exchange.
(aa) Neither the Company nor any of its officers, employees, agents,
or any other person acting on behalf of the Company, has, directly or
indirectly, given or agreed to give any money, gift or similar benefit (other
than legal price concessions to customers in the ordinary course of business) to
any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency (domestic or foreign) or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who was, is or may be in a position
to help or hinder the business of the Company (or assist the Company in
connection with any actual or proposed transaction) which (i) would subject the
Company, or any other such person, to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or foreign), (ii) if
not given in the past, might have had a materially adverse effect on the assets,
business or operations of the Company, or (iii) if not continued in the future,
could reasonably be expected to result in a Company Material Adverse Effect.
The Company's internal accounting controls are sufficient to cause the Company
to comply with the Foreign Corrupt Practices Act of 1977, as amended.
(bb) Except as set forth in the Prospectus, to the best of the
Company's knowledge, no officer, director or stockholder of the Company, or any
"affiliate" or "associate" (as these terms are defined in Rule 405 promulgated
under the Regulations) of any of the foregoing persons or entities has or has
had, either directly or indirectly, (i) an interest in any person or entity
which (A) furnishes or sells services or products which are furnished or sold or
are proposed to be furnished or sold by the Company, or (B) purchases from or
sells or furnishes to the Company any goods or services, or (ii) a beneficial
interest in any contract or agreement to which the Company is a party or by
which it may be bound or affected which is material to the Company or is
otherwise required by the Regulations to be disclosed in the Prospectus. Except
as set forth in the Prospectus, there have been, and are, no existing
agreements, arrangements, understandings or transactions, or proposed
agreements, arrangements, understandings or transactions, between or among the
Company, on the one hand, and any officer, director, or Principal Stockholder
(as such term is defined in the Prospectus) of the Company, or any partner,
affiliate or associate of any of the foregoing persons or entities, on the other
hand, to which the Company is a party or by which it may be bound or affected
which are material to the Company or are otherwise required by the Regulations
to be disclosed in the Prospectus.
(cc) Any certificate signed by any officer of the Company, and
delivered to the Underwriters or to Underwriters' counsel, shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
11
(dd) The minute book of the Company has been made available to the
Underwriters and, in all material respects, (i) contains a complete summary of
all meetings and actions of the directors, stockholders, audit committee,
compensation committee and any other committee of the Board of Directors of the
Company, since the time of its incorporation, and (ii) reflects all transactions
referred to in such minutes accurately.
(ee) No holders of any securities of the Company or of any options,
warrants or other convertible or exchangeable securities of the Company have the
right to include any securities issued by the Company in the Registration
Statement or any registration statement to be filed by the Company or to require
the Company to file a registration statement under the Act, other than those
holders who have effectively waived such rights. Except as described in the
Prospectus, no holder of any securities of the Company or any other person has
the right, contractual or otherwise, which has not been satisfied or effectively
waived, to cause the Company to sell or otherwise issue to them, or permit them
to underwrite the sale of, any of the Securities.
(ff) The Company has, as of the date that the Commission has entered
an order declaring the Registration Statement effective under the Act (the
"Effective Date"), (i) entered into an employment agreement with each of X.
Xxxxxxx Stoughton, Xxxxxx X. Xxxxx and Xxxxx X. Xxxx, substantially in the forms
filed as Exhibit 10.8, 10.9 and 10.10, respectively, to the Registration
Statement and (ii) purchased individual term key-man life insurance policies on
the lives of Xx. Xxxxxxxxx and Xx. Xxxxx in the amounts of $3,000,000 and
$2,000,000 respectively, which policies name the Company as the sole
beneficiary.
(gg) On or before the Effective Date, the Company amended its
Certificate of Incorporation to effect a plan of recapitalization by
consummating a 1-for-5.2 reverse stock split with respect to the Common Stock
(the "Recapitalization"), without any change in the powers, preferences, rights,
qualifications, limitations or restrictions thereof, such that every 5.2 shares
of Common Stock outstanding or held by the Company in its treasury on the date
of the filing of the Certificate of Amendment to the Company's Certificate of
Incorporation was changed and reclassified into one (1) share of Common Stock,
which share was fully paid and nonassessable. The Recapitalization has been
duly and validly authorized by the Company and its respective shareholders and
all certificates, agreements, contracts, minutes or other documents necessary to
effect the Recapitalization (collectively, the "Recapitalization Documents"),
have been duly and validly authorized, executed and delivered and, if necessary,
filed with the appropriate regulatory body, government agency or other body,
domestic or foreign, by the appropriate parties, and constitute the legal, valid
and binding agreements of such parties, enforceable against each of them in
accordance with their respective terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting enforcement of
creditors' rights and the application of equitable principles in any action,
legal or equitable, and except as rights to indemnity or contribution may be
limited by applicable law), and none of the execution or delivery of any of the
Recapitalization Documents by the parties thereto, the performance by the
Company hereunder or thereunder, or the consummation of the transactions
contemplated herein or therein, (i) conflicts with or will conflict with, (ii)
results in or will result in any breach or violation of
12
any of the terms or provisions of, (iii) constitutes or will constitute a
default under, (iv) or result in the creation or imposition of any Lien upon any
property or assets (tangible or intangible) of the Company pursuant to the terms
of, (A) the Certificate of Incorporation or By-laws of the Company, (B) any
material license, contract, collective bargaining agreement, indenture,
mortgage, deed of trust, lease, voting trust agreement, stockholders' agreement,
note, indebtedness, loan, credit agreement or any other agreement or instrument
to which the Company is a party or by which it is or may be bound or to which
any of its properties or assets (tangible or intangible) is or may be subject or
(C) any statute, judgment, decree, order, rule or regulation, applicable to the
Company, of any arbitrator, court, regulatory body, administrative agency or
other governmental agency or body (including, without limitation, those having
jurisdiction over environmental or similar matters), domestic or foreign, having
jurisdiction over the Company or any of its activities or properties. The
Recapitalization Documents properly effect the Recapitalization as described in
the Prospectus; and the descriptions in the Registration Statement of the
Recapitalization are accurate and fairly present, in each case in all material
respects, the information required to be shown with respect thereto by Form S-1.
(hh) The Company is not an "investment company" within the meaning of
such term under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and the rules and regulations of the Commission thereunder.
(ii) At least five (5) days prior to the Effective Date, the Company
filed a Form 8-A with the Commission providing for the registration of the Units
and the Common Stock and Warrants included in the Units under the Exchange Act.
(jj) The Company owns all of the assets (the "Purchased Assets"),
related to the Predecessor Business which it acquired from SmithKline Xxxxxxx
Corporation and its affiliates (within the meaning of the Regulations;
collectively, "SmithKline") free and clear of all Liens, other than Liens
disclosed in the Prospectus. For purposes of the preceding sentence, Purchased
Assets shall not mean assets that have been disposed of or used in the ordinary
course of the Company's business, or assets that are obsolete or otherwise not
used in the ordinary course of the Company's business.
(kk) The only liabilities acquired (i.e., assumed) from SmithKline
related to the Predecessor Business, other than those stated on the Company's
balance sheets for the years ended December 31, 1997 and 1998, are set forth in
that certain Asset Purchase Agreement, dated as of November 7, 1996, between the
Company and SmithKline.
(ll) To the best of its knowledge, the Company is in all material
respects in compliance with all applicable Environmental Laws. The Company does
not have any knowledge of any past or present events, conditions, activities,
investigations, studies, plans or proposals that (i) would interfere with, or
prevent compliance with, any Environmental Law by the Company and (ii) could
reasonably be expected to give rise to any liability on the part of, or
otherwise form the basis of a claim, action, suit, proceeding, hearing or
investigation involving, the Company for a violation of Environmental Laws.
Except for the use and management of Hazardous Substances in the ordinary course
of the Company's business consistently in all
13
material respects with applicable Environmental Laws, (A) no Hazardous Substance
is or has been used, treated, stored, generated, manufactured or otherwise
handled on or at any Facility and (B) to the Company's best knowledge, no
Hazardous Substance has otherwise come to be located in, on or under any
Facility. No litigation, claim, proceeding or governmental investigation is
pending regarding any environmental matter for which the Company has been served
or otherwise notified or, to the knowledge of the Company, threatened or
asserted against the Company, or the officers or directors of the Company, in
their capacities as such, any Facility or the Company's business. To the
knowledge of the Company, there are no orders, judgments or decrees of any court
or any governmental agency or instrumentality under any Environmental Law which
specifically apply to the Company, any Facility or any of the Company's
operations. The Company has not received from a governmental authority or other
person (1) any notice that it is a potentially responsible person for any
Contaminated site or (2) any request for information about a site alleged to be
Contaminated or regarding the disposal of Hazardous Substances. There is no
litigation or proceeding initiated by the Company against any other person
regarding any environmental matter. The Company has disclosed in the Prospectus
or made available to the Underwriters and their counsel true, complete and
correct copies of any reports, studies, investigations, audits, analysis, tests
and monitoring results in the possession of or initiated by the Company
pertaining to any environmental matter relating to the Company, its past or
present operations or any Facility.
For the purposes of the foregoing paragraph, "Environmental Laws"
means any applicable federal, state or local statute, regulation, code, rule,
ordinance, order, judgment, decree, injunction or common law pertaining in any
way to the protection of human health (excluding, for this purpose, federal and
state statutes, regulations and other statements of law regulating drug
discovery, development, delivery and related matters) and the environment,
including, without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Toxic
Substances Control Act, the Clean Air Act, the Federal Water Pollution Control
Act and any similar or comparable state or local law; "Hazardous Substance"
means any hazardous, toxic, radioactive or infectious substance, material or
waste as defined, listed or regulated under any Environmental Law;
"Contaminated" means the actual existence of Hazardous Substances on or under
any real property if the existence of such Hazardous Substances triggers a
requirement to perform any investigatory, remedial, removal or other response
action under any Environmental Laws or if such response action legally could be
required by any governmental authority; and "Facility" means any property
currently owned, leased or occupied by the Company.
(mm) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
14
2. Purchase, Sale and Delivery of the Units.
----------------------------------------
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters and each Underwriter agrees, severally and
not jointly, to purchase, at a price of $[________] per Unit, the number of Firm
Units set forth opposite the name of each Underwriter in Schedule I hereof,
subject to adjustments in accordance with Section 9 hereof.
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(b) Payment for the Firm Units to be sold hereunder is to be made in
New York Clearing House (next day) funds or, at the option of the
Representatives, by certified or bank cashier's checks drawn to the order of the
Company or bank wire to an account specified by the Company against either
uncertificated delivery of the securities comprising the Firm Units or
certificates therefor (which delivery, if certificated, shall take place in such
location in New York, New York as may be specified by the Representatives) to
the Representatives for the accounts of the several Underwriters. Such payment
is to be made at the offices of the Company, at the address set forth on the
first page of the Registration Statement, at 7:00 a.m., Pacific time, on the
third business day after the date of this Agreement or at such other time and
date not later than five business days thereafter as the Representatives and the
Company shall agree, such time and date being herein referred to as the "Closing
Date." (As used herein, "business day" means a day on which the New York Stock
Exchange is open for trading and on which banks in New York are open for
business and not permitted by law or executive order to be closed.) Except to
the extent uncertificated securities comprising the Firm Units are delivered on
the Closing Date, the certificates for the securities comprising the Firm Units
will be delivered in such denominations and in such registrations as the
Representatives request in writing not later than the second full business day
prior to the Closing Date, and will be made available for inspection by the
Representatives at least one business day prior to the Closing Date.
(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Representatives to purchase the Option
Units at the price per Unit set forth in paragraph (a) of this Section 2. The
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option granted hereby may be exercised in whole or in part by giving written
notice (i) at any time before the Closing Date and (ii) only once thereafter
within 45 days after the date of this Agreement, by the Representatives to the
Company setting forth the number of Option Units as to which the Representatives
are exercising the option, the names and denominations in which the securities
comprising the Option Units are to be registered and the time and date at which
certificates representing securities comprising such Option Units are to be
delivered. The time and date at which certificates for securities comprising
the Option Units are to be delivered shall be determined by the Representatives
but shall not be earlier than three nor later than 10 full business days after
the exercise of such option, nor in any event prior to the Closing Date (such
time and date being herein referred to as the "Option Closing Date"). If the
date of exercise of the option is three or more days before the Closing Date,
the notice of exercise shall set the Closing Date as the Option Closing Date.
The option with respect to the Option Units granted hereunder may be exercised
only to cover over-allotments in the sale of the Firm Units by the Underwriters.
The Representatives may cancel such option at any time prior to exercise and
prior to its expiration by giving written notice of
15
such cancellation to the Company. To the extent, if any, that the option is
exercised, payment for the Option Units shall be made on the Option Closing Date
in New York Clearing House (next day) funds or, at the option of the
Representatives, by certified or bank cashier's check drawn to the order of the
Company for the Option Units to be sold by the Company or bank wire to an
account specified by the Company against delivery of certificates therefor at
the offices of the Company set forth on the first page of the Registration
Statement.
(d) In addition to the sums payable to the Representatives as provided
elsewhere herein, the Representatives shall be entitled to receive the
Representatives' Warrants on the Closing Date, for themselves alone and not as
representatives of the Underwriters, as additional compensation for their
services.
3. Offering by the Underwriters.
----------------------------
It is understood that the several Underwriters are to make a public
offering of the Firm Units as soon as the Representatives deem it advisable to
do so. The Firm Units are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Units are purchased pursuant
to Section 2 hereof, the Representatives will offer them to the public on the
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foregoing terms.
It is further understood that the Representatives will act as the
representatives for the Underwriters in the offering and sale of the Units in
accordance with an Agreement Among Underwriters entered into by the
Representatives and the other several Underwriters.
4. Covenants of the Company.
------------------------
The Company covenants and agrees with the several Underwriters that:
(a) The Company will (i) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule 430A of
the Regulations is followed, to prepare and timely file with the Commission
under Rule 424(b) of the Regulations a Prospectus in a form approved by the
Representatives containing information previously omitted on the Effective Date
in reliance on Rule 430A of the Regulations, and (ii) not file any amendment to
the Registration Statement or supplement to the Prospectus of which the
Representatives shall not previously have been advised and furnished with a
copy, or to which the Representatives shall have reasonably objected in writing
or which is not in compliance with the Rules and Regulations.
(b) The Company will advise the Representatives promptly after
obtaining knowledge (i) when the Registration Statement or any post-effective
amendment thereto shall have become effective, (ii) of receipt of any comments
from the Commission, (iii) of any request of the Commission for an amendment of
the Registration Statement or for a supplement to the Prospectus or for any
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the use of
the Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to
16
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(c) The Company will cooperate with the Representatives in endeavoring
to qualify the Units for sale under the securities laws of such jurisdictions as
the Representatives may reasonably have designated in writing and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Representatives may
reasonably request for distribution of the Units.
(d) The Company will deliver to the Representatives, from time to
time, as many copies of any Preliminary Prospectus as the Representatives may
reasonably request. The Company will deliver to the Representatives during the
period when delivery of a Prospectus is required under the Act, as many copies
of the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, four signed copies of the
Registration Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representatives such number of copies of the
Registration Statement (including such number of copies of the exhibits filed
therewith that may reasonably be requested), and all amendments thereto, as the
Representatives may reasonably request.
(e) The Company will comply with the Act, the Exchange Act and the
Rules and Regulations, so as to permit the completion of the distribution of the
Units as contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company will promptly prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the law.
(f) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the Effective Date, an earnings statement (which need not be audited),
covering a period of at least 12 consecutive months beginning after the
Effective Date, which earnings statement shall satisfy the requirements of
Section 11(a) of the Act and Rule 158 of the Rules and Regulations.
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(g) During the period ending on the earlier of (i) five years from the
Closing Date and (ii) the date when the Company no longer has a class of equity
securities registered
17
under the Exchange Act, the Company will deliver to the Representatives copies
of annual reports and copies of all other documents, reports and information
furnished by the Company to its shareholders or filed with any securities
exchange pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the Exchange Act. The Company will deliver to the
Representatives similar reports with respect to significant subsidiaries, as
that term is defined in the Rules and Regulations, which are not consolidated in
the Company's financial statements.
(h) Except as set forth in the Prospectus, no offering, sale, short
sale, issuance, transfer, assignment, pledge, hypothecation, distribution or
other disposition of any shares of Common Stock or other securities convertible
into or exchangeable or exercisable for shares of Common Stock or derivative of
Common Stock (or agreement for such) will be made by the Company for a period of
one year after the date of this Agreement, directly or indirectly, by the
Company otherwise than hereunder or with the prior written consent of the
Representatives, which consent will not be unreasonably withheld, other than
pursuant to outstanding convertible securities, stock options and warrants or
pursuant to employee benefit plans in effect as of the date hereof, in each case
as disclosed in the Prospectus.
(i) The Company shall apply the net proceeds of its sale of the Units
as set forth in the Prospectus and shall file such reports with the Commission
with respect to the sale of the Units and the application of the proceeds
therefrom as may be required in accordance with Rule 463 of the Regulations.
(j) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Units in such a manner as would
require the Company to register as an investment company under the Investment
Company Act.
(k) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar for the Common
Stock and a warrant agent for the Warrants.
(l) The Company shall use its best efforts to keep the Registration
Statement current at all times for so long as any Warrant or Representatives'
Warrant shall remain outstanding and exercisable.
5. Costs and Expenses.
------------------
(a) Xxxxxxx shall be entitled to receive from the Company, for itself
alone and not as a representative of the Underwriters, a nonaccountable expense
allowance equal to 1.5% of the aggregate public offering price of Units sold to
the Underwriters in connection with the Offering, including Option Units.
Xxxxxxx shall be entitled to withhold this allowance on the Closing Date and on
the Option Closing Date, if any, from the Underwriters' payment for Units
delivered on such dates.
(b) In addition to the payment described in paragraph (a) of this
Section 5, the Company will pay all costs, expenses and fees incident to the
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performance of the obligations of
18
the Company under this Agreement, including, without limiting the generality of
the foregoing, the following: accounting fees of the Company; the fees and
disbursements of counsel for the Company; the cost of printing and delivering to
the Underwriters copies of the Registration Statement, Preliminary Prospectuses,
the Prospectus, this Agreement, the Underwriters' Selling Memorandum, the
Underwriters' Invitation Letter, the American Stock Exchange Listing
Application, the Blue Sky Survey and any supplements or amendments thereto; the
filing fees of the Commission; the filing fees incident to securing any required
review by the NASD of the terms of the sale of the Units, and the fees and
disbursements of counsel for the Underwriters with respect to such NASD review;
the listing fee of the American Stock Exchange; the expenses, including the fees
and disbursements of counsel for the Underwriters, incurred in connection with
the qualification of the Units under state securities or Blue Sky laws; and an
additional $99,350 of the fees and disbursements of counsel to the Underwriters
related to the earlier initial public offering effort of the Company. Any
transfer taxes imposed on the sale of the Units to the several Underwriters will
be paid by the Company. The Company shall not, however, be required to pay for
any of the Underwriters' expenses (other than those described above) except
that, if this Agreement shall not be consummated by reason of an election of the
Company or if this Agreement shall not be carried out within the time specified
herein by reason of any failure on the part of the Company to perform any
undertaking or satisfy any condition of this Agreement by it to be performed or
satisfied, then the Company shall reimburse the several Underwriters for their
reasonable accountable out-of-pocket expenses, including fees and disbursements
of counsel, reasonably incurred in connection with investigating, marketing and
proposing to market the Units or in contemplation of performing their
obligations hereunder; however, the Company shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Units. Notwithstanding the immediately
preceding sentence, if this Agreement shall not be consummated by reason of an
election of the Representatives pursuant to Section 11, then the Company shall
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reimburse the Representatives for their reasonable accountable out-of-
pocket expenses up to an aggregate of $50,000.
6. Conditions of Obligations of the Underwriters.
---------------------------------------------
The obligations of the several Underwriters to purchase the Firm Units
on the Closing Date and the Option Units, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Company contained
herein, and to the performance by the Company of its covenants and obligations
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to the Representatives' reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as amended from time
to time, shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission and no injunction,
19
restraining order, or order of any nature by a federal or state court of
competent jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance of the Units.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxxxx Xxxxxxxx LLP,
outside counsel for the Company, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters (and stating that the
opinions given therein may be relied upon by counsel to the Underwriters),
substantially in the form attached hereto as Exhibit B and incorporated herein
---------
by this reference.
(c) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the favorable opinion of Xxxxxxxxx &
Xxxxxxx, special regulatory counsel to the Company, with respect to certain
regulatory matters, dated the Closing Date or the Option Closing Date, as the
case may be, addressed to the Underwriters, substantially in the form attached
hereto as Exhibit C and incorporated herein by this reference.
---------
(d) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the favorable opinion of Xxxxxxxxxxx
Xxxxx & Xxxxxxxx LLP, special patent counsel to the Company, with respect to
certain patent matters, dated the Closing Date or the Option Closing Date, as
the case may be, addressed to the Underwriters, substantially in the form
attached hereto as Exhibit D and incorporated herein by this reference.
---------
(e) The Representatives shall have received from Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo P.C. ("Mintz Xxxxx"), counsel for the Underwriters, an
opinion dated the Closing Date or the Option Closing Date, as the case may be,
with respect to the organization of the Company; the validity of the Units, the
Common Stock and the Warrants underlying the Units, the Representatives'
Warrants, and the Common Stock and the Warrants underlying the Representatives
Warrants; and the fact that this Agreement, the Representatives' Warrant
Agreement and the Representatives' Warrants have been duly authorized. In
rendering such opinion, Xxxxx Xxxxx may rely as to matters involving the
application of laws other than the laws of the United States and the
Commonwealth of Massachusetts, to the extent Xxxxx Xxxxx deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions of
other counsel, including Xxxxxx Xxxxxxxx LLP, familiar with applicable laws. In
addition to the matters set forth above, such letter shall also include a
statement to the effect that nothing has come to the attention of such counsel
that has caused it to believe that (i) the Registration Statement, or any
amendment thereto, as of the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) as of the Closing Date or the Option Closing Date, as the case
may be, 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, and (ii) the Prospectus, or any supplement thereto, on
the date it was filed pursuant to the Rules and Regulations and as of the
Closing Date or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact, necessary in
order to make the statements, in light of the circumstances under which they are
made, not misleading (except that such counsel need express no view as to
financial statements, schedules and statistical information therein). With
20
respect to such statement, Xxxxx Xxxxx may state that its belief is based upon
the procedures' set forth therein, but is without independent verification.
(f) The Representatives shall have received at or prior to the Closing
Date from Xxxxx Xxxxx a memorandum or summary, in form and substance
satisfactory to the Representatives, with respect to the qualification for
offering and sale by the Underwriters of the Units under the state securities or
Blue Sky laws of such jurisdictions as the Representatives may reasonably have
designated to the Company.
(g) The Representatives, on behalf of the several Underwriters, shall
have received, on each of the date hereof, the Closing Date and the Option
Closing Date, as the case may be, a letter dated the date hereof, the Closing
Date or the Option Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, from Xxxxxxxx confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations and stating that in its opinion the financial
statements examined by them and included in the Registration Statement comply in
form in all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations and containing such other
statements and information as are ordinarily included in accountants' "comfort
letters" to Underwriters with respect to the financial statements and certain
financial and statistical information contained in the Registration Statement
and Prospectus.
(h) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) the Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been
taken or are, to their knowledge, contemplated by the Commission;
(ii) the representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing Date
-------
or the Option Closing Date, as the case may be;
(iii) all filings required to have been made pursuant to Rule
424 or 430A of the Regulations have been made;
(iv) they have carefully examined the Registration Statement
and the Prospectus and, in their opinion, as of the Effective Date, the
statements contained in the Registration Statement were true and correct,
and such Registration Statement and Prospectus did not omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading, and since the Effective Date, no
event has occurred which should have been set forth in a supplement to or
an amendment of the Prospectus which has not been so set forth in such
supplement or amendment; and
21
(v) since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been any
Company Material Adverse Effect or any development involving a prospective
Company Material Adverse Effect, whether or not arising in the ordinary
course of business.
(i) The Company shall have furnished to the Representatives such
further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as the
Representatives may reasonably have requested.
(j) The Units, Common Stock and Warrants, including the Common Stock
and Warrants included in the Representatives' Warrants, shall have been approved
for designation upon notice of issuance on the American Stock Exchange.
(k) The Lock-up Agreements described in Section 1(x) shall be in full
-------
force and effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Xxxxx Xxxxx, counsel for the
Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
-------
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be. In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 8
--------
hereof).
7. Conditions of the Obligations of the Company.
--------------------------------------------
The obligations of the Company to sell and deliver the portion of the
Units required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of the
Act, against any losses, claims, damages or liabilities to which such
Underwriter or any such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated
22
therein or necessary to make the statements therein not misleading (in the case
of the Prospectus, in light of the circumstances under which they were made);
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage or liability, action or proceeding or in responding to a subpoena
or governmental inquiry, related to the offering of the Securities, whether or
not such Underwriter or controlling person is a party to any action or
proceeding; provided, however, that the Company will not be liable in any such
-----------------
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement, or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which the Company may otherwise have; provided, however, that the
-----------------
indemnification contained in this paragraph with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any related person thereof) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Units by such Underwriter to
any person if a copy of the Prospectus, as amended or supplemented, shall not
have been delivered or sent to such person within the time required by the Act,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, as amended or supplemented, provided that the
Company has delivered sufficient quantities of the Prospectus, as amended or
supplemented, to the several Underwriters on a timely basis to permit such
delivery or sending.
(b) Each Underwriter will severally and not jointly 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 Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made; and will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding or in
responding to a subpoena or governmental inquiry, related to the offering of the
Securities, whether or not such Underwriter or controlling person is a party to
any action or proceeding; provided, however, that each Underwriter will be
-----------------
liable in each case to the extent, and only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the
23
Representatives specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
-------
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
-------
8(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 8(c) if the party to whom notice was not given was
-------
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a) or (b). In case any
-------
such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, assume the
defense thereof, with counsel satisfactory to such indemnified party and shall
pay, as incurred, the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing,
the indemnifying party shall pay as incurred (or within 30 days of presentation)
the fees and expenses of the counsel retained by the indemnified party in the
event (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them or (iii) the indemnifying party shall have failed to assume the defense and
employ counsel acceptable to the indemnified party within a reasonable period of
time after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by the Representatives in the case of
parties indemnified pursuant to Section 8(a) and by the Company in the case of
-------
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
-------
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment
to the extent set forth in this Section 8. In addition, the indemnifying party
-------
will not, without the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding of which indemnification may be sought hereunder
(whether or not any indemnified party is an actual or potential party to such
claim, action or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action or proceeding.
24
(d) If the indemnification provided for in this Section 8 is
-------
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
-------
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings 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. 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 or
liabilities, (or actions or proceedings 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 bears to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. 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 on the
one hand or the Underwriters on the other 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 contributions pursuant to this Section 8(d) 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 in this Section 8(d). The amount
-------
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above in this Section 8(d) shall be deemed to include any legal or other
-------
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), (i) no Underwriter shall be required to
-------
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Units purchased by such Underwriter, and (ii) no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
-------
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Section
-------
8(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
-------
(i) consents to the jurisdiction of any court having jurisdiction over any other
contributing party, (ii) agrees that process issuing from such court may be
served upon him or it by any other contributing party, (iii) consents to the
25
service of such process, and (iv) agrees that any other contributing party may
join him or it as an additional defendant in any such proceeding in which such
other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
-------
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
-------
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Units and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
-------
9. Default by Underwriters.
-----------------------
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the Units
which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company), the
Representatives, as representatives of the Underwriters, shall use reasonable
efforts to procure within 36 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company the Firm Units or
Option Units, as the case may be, which the defaulting Underwriter or
Underwriters failed to purchase, in such amounts as may be agreed upon and upon
the terms set forth herein. If during such 36 hours the Representatives shall
not have procured such other Underwriters, or any others, to purchase the Firm
Units or Option Units, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate number of
Units with respect to which such default shall occur does not exceed 10% of the
Firm Units or Option Units, as the case may be, covered hereby, the other
Underwriters shall be obligated, severally, in proportion to the respective
numbers of Firm Units or Option Units, as the case may be, which they are
obligated to purchase hereunder, to purchase the Firm Units or Option Units, as
the case may be, which such defaulting Underwriter or Underwriters failed to
purchase or (b) if the aggregate number of Firm Units or Option Units, as the
case may be, with respect to which such default shall occur equals or exceeds
10% of the Firm Units or Option Units, as the case may be, covered hereby, the
Company or the Representatives will have the right, by written notice given
within the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting Underwriters
or the Company, except to the extent provided in Section 8 hereof. In the event
-------
of a default by any Underwriter or Underwriters, as set forth in this Section 9,
-------
the Closing Date or Option Closing Date, as the case may be, may be postponed
for such period, not exceeding seven days, as the Representatives may determine
in order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a
26
defaulting Underwriter. Any action taken under this Section 9 shall not relieve
-------
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Notices.
-------
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to Xxxxxxx Investment
Company, Inc., 000 X.X. Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000,
Attention: Xxxxxxx X.X. Xxxxxxx; with a copy to Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxxxxx X. Xxxxxxx, Esquire; if to the Company, to Careside, Inc.,
0000 Xxxxxxx Xxxxxxx, Xxxxxx Xxxx, Xxxxxxxxxx 00000, Attention: X. Xxxxxxx
Stoughton; with a copy to Xxxxxx Xxxxxxxx LLP, 0000 Xxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000, Attention: Xxxxx X. Xxxxxxx, Esquire.
11. Termination.
-----------
This Agreement may be terminated by the Representatives upon notice to
the Company as follows:
(a) at any time prior to the earlier of (i) the time the Units are
released by the Representatives for sale by notice to the Underwriters, or (ii)
11:30 a.m., Pacific time, on the first business day following the date of this
Agreement;
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any Company Material Adverse
Effect or any development involving a prospective Company Material Adverse
Effect, whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change in the financial markets of
the United States would, in the Representatives' reasonable judgment, make it
impracticable to market the Units or to enforce contracts for the sale of the
Units, (iii) the Dow Xxxxx Industrial Average shall have fallen by 15 percent or
more from its closing price on the day immediately preceding the Effective Date,
(iv) suspension of trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or limitation on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such exchange, (v) the enactment, publication, decree or other promulgation of
any statute, regulation, rule or order of any court or other governmental
authority which in the Representatives' opinion materially and adversely affects
or may materially and adversely affect the business or operations of the
Company, (vi) declaration of a banking moratorium by United States or New York
State authorities, (vii) the suspension of trading of the Units, Common Stock or
Warrants by the American Stock Exchange or (viii) the taking of any action by
any governmental body or agency in respect of its monetary or fiscal affairs
which in the Representatives' reasonable opinion has a material adverse effect
on the securities markets in the United States; or
27
(c) as provided in Sections 6 and 9 of this Agreement.
--------
12. Successors.
----------
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and their respective successors and assigns, and the
officers, directors and controlling persons referred to herein and their
respective executors, administrators, heirs and assigns, and no other person
will have any right or obligation hereunder. No purchaser of any of the Units
from any Underwriter shall be deemed a successor or assign merely because of
such purchase.
13. Information Provided by Underwriters.
------------------------------------
The Company and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of legends
required by Item 502 of Regulation S-K of the Regulations and the information
under the caption "Underwriting" in the Prospectus.
14. Miscellaneous.
-------------
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Units under
this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York. All disputes relating to this Agreement
shall be adjudicated before a court located in Multnomah County, Oregon to the
exclusion of all other courts that might have jurisdiction.
[THE BALANCE OF THIS PAGE LEFT BLANK INTENTIONALLY]
28
If the foregoing Agreement is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
CARESIDE, INC.
By:______________________________
X. Xxxxxxx Stoughton
Chairman of the Board of Directors
and Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
XXXXXXX INVESTMENT COMPANY, INC.
MILLENNIUM FINANCIAL GROUP, INC.
XXXXXX XXXX SECURITIES CORPORATION
As Representatives of the several
Underwriters listed on Schedule I
By:______________________________
Xxxxxxx X.X. Xxxxxxx
Chairman of the Board of Directors,
Xxxxxxx Investment Company, Inc.
29
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Units
Underwriter to be Purchased
----------- -------------------------
Xxxxxxx Investment Company, Inc.
Millennium Financial Group, Inc.
xxxxxx xxxx securities corporation
American Fronteer Financial Corporation
Capital West Securities, Inc.
Xxxxx, Xxxxx & Co.
Xxxxxxx Xxxxxxxx Securities Corp.
Xxxxxxx & Company, Inc.
First Colonial Securities Group, Inc.
Total [2,000,000]
==============================
30
SCHEDULE II
Schedule of Persons, Other than Officers and Directors,
Who Have Signed Lock-up Agreements
1. Xxxxx Xxxxxxxxx
2. SmithKline Xxxxxxx Corporation
3. Xxxxx Xxxxxxx
31
