COMMONWEALTH BIOTECHNOLOGIES, INC.
(a Virginia corporation)
834,000 Shares of Common Stock
($6.00 per share)
UNDERWRITING AGREEMENT
July ___, 1997
Xxxxxxxx & Xxxxxxxxx, Incorporated
0000 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, Commonwealth Biotechnologies, Inc., a Virginia
corporation (the "Company"), hereby confirms its agreement with you as follows:
1. Introduction. This Agreement sets forth the understandings and
agreements between the Company and you whereby, subject to the terms and
conditions herein contained, you will offer to sell, on a best efforts
all-or-none basis on behalf of the Company as provided in Section 4.(a) (the
"Offering"), at an offering price of $6.00 per share, 834,000 shares of common
stock (the "Common Stock"), to be issued by the Company (the "Shares").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Prospectus prepared by the Company and dated
July ___, 1997 (the "Prospectus").
2. Representations and Warranties of the Company. The Company makes the
following representations and warranties to you. Certain exceptions to the
representations and warranties are set forth in the disclosure schedule attached
hereto as Exhibit A (the "Disclosure Schedule"), and no matter set forth in the
Disclosure Schedule shall constitute a breach of the representations and
warranties for any purpose of this Agreement.
(a) Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. __________) (as
defined below, the "Registration Statement") conforming to the requirements of
the Securities Act of 1933, as amended (the
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"1933 Act"), and the applicable rules and regulations (the "Rules and
Regulations") of the Commission. Such amendments to such Registration Statement
as may have been required prior to the date hereof have been filed with the
Commission, and such amendments have been similarly prepared. Copies of the
Registration Statement, any and all amendments thereto prepared and filed with
the Commission, and each related Preliminary Prospectus, and the exhibits,
financial statements and schedules, as finally amended and revised, have been
delivered to you for review.
The term "Registration Statement" as used in this
Agreement shall mean the Company's Registration Statement on Form SB-2,
including the Prospectus, any documents incorporated by reference therein, and
all financial schedules and exhibits thereto, as amended on the date that the
Registration Statement becomes effective. The term "Prospectus" as used in this
Agreement shall mean the prospectus relating to the Shares in the form in which
it was filed with the Commission pursuant to Rule 424(b) of the 1933 Act or, if
no filing pursuant to Rule 424(b) of the 1993 Act is required, shall mean the
form of the final prospectus included in the Registration Statement when the
Registration Statement becomes effective. The term "Preliminary Prospectus"
shall mean any prospectus included in the Registration Statement before it
becomes effective. The terms "effective date" and "effective" refer to the date
the Commission declares the Registration Statement effective pursuant to Section
8 of the 1933 Act.
(b) Adequacy of Disclosure. Each Preliminary Prospectus filed
on or after _______________, 1997, at the time of filing thereof, conformed in
all material respects to the requirements of the 1933 Act and the Rules and
Regulations, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by you expressly for use in
the Registration Statement. When the Registration Statement shall become
effective, when the Prospectus is first filed pursuant to Rule 424(b) of the
Rules and Regulations, when any amendment to the Registration Statement becomes
effective, when any supplement to the Prospectus is filed with the Commission
and on the Closing Date (as hereinafter defined), (i) the Registration
Statement, the Prospectus and any amendments thereof and supplements thereto
will conform in all material respects with the applicable requirements of the
1933 Act and the Rules and Regulations, and (ii) neither the Registration
Statement, the Prospectus nor any amendment or supplement thereto will contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by you expressly
for use in the Registration Statement.
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(c) No Stop Order. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus with respect to
the Shares, and no proceedings for that purpose have been instituted or
threatened by the Commission or the state securities or blue sky authority of
any jurisdiction.
(d) Company: Organization and Qualification. The Company has
been duly incorporated and is validly existing in good standing as a corporation
under the laws of the Commonwealth of Virginia with all requisite corporate
power and authority to enter into this Agreement, to conduct its business as now
conducted and as proposed to be conducted, and to own and operate its
properties, investments and assets, as described in the Registration Statement
and Prospectus, and is qualified to do business and in good standing as a
foreign corporation in each other jurisdiction in which the failure so to
qualify could reasonably be expected to have a material adverse effect on the
Company. Except as set forth on the Disclosure Schedule, the Company is not in
violation of any provision of its articles of incorporation, bylaws or other
governing documents and is not in default under or in breach of, and does not
know of the occurrence of any event that with the giving of notice or the lapse
of time or both would constitute a default under or breach of, any term or
condition of any material agreement or instrument to which it is a party or by
which any of its properties, investments or assets is bound, except as disclosed
in the Registration Statement and Prospectus. The Company does not own or
control, directly or indirectly, any other corporation, association, or other
entity. The Company has furnished to you copies of its articles of incorporation
and bylaws, as amended, and all such copies are true, correct and complete and
contain all amendments thereto through the Closing Date.
(e) Validity of Shares. The Shares have been duly and validly
authorized by the Company, and upon issuance, will be validly issued, fully paid
and nonassessable, with no personal liability attaching to the ownership
thereof, and will conform to the description thereof contained in the
Prospectus. The preferences, rights and limitations of the Shares are set forth
in the Prospectus under the caption "Description of Capital Stock". No party has
any preemptive rights with respect to any of the Shares or any right of
participation or first refusal with respect to the sale of the Shares by the
Company. No person or entity holds a right to require or participate in the
registration under the 1933 Act of the Shares pursuant to the Registration
Statement except for those persons and entities whose shares of Common Stock or
other securities are being so registered in the Registration Statement; and,
except as set forth in the Prospectus, no person holds a right to require
registration under the 1933 Act of any Common Stock of the Company at any other
time. The form of certificates evidencing the Shares complies with all
applicable requirements of Virginia law.
(f) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus under the caption
"Description of Capital Stock." All of the issued and outstanding shares of
Common Stock of the Company have been duly authorized, validly issued, fully
paid and are non-assessable. Except as disclosed in the
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Prospectus or as set forth on the Disclosure Schedule, there is no outstanding
option, warrant or other right calling for the issuance of, and no commitment,
plan or arrangement to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock of the Company.
(g) Full Power: Company. The Company has full legal right,
power, and authority to enter into this Agreement and the Escrow Agreement among
the Company, _____________________ (the "Escrow Agent") and you (the "Escrow
Agreement"), to issue and deliver the Shares as provided herein and in the
Prospectus and to consummate the transactions contemplated herein and in the
Prospectus. Each of this Agreement and the Escrow Agreement have been duly
authorized, executed, and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by (i) bankruptcy,
insolvency, moratorium, liquidation, reorganization, or similar laws affecting
creditors' rights generally, regardless of whether such enforceability is
considered in equity or at law, (ii) general equity principles, and (iii)
limitations imposed by federal and state securities laws or the public policy
underlying such laws regarding the enforceability of indemnification or
contribution provisions.
(h) Disclosed Agreements. All agreements between or among the
Company and third parties expressly referenced in the Prospectus are legal,
valid, and binding obligations of the Company, enforceable in accordance with
their respective terms, except to the extent enforceability may be limited by
(i) bankruptcy, insolvency, moratorium, liquidation, reorganization, or similar
laws affecting creditors' rights generally, regardless of whether such
enforceability is considered in equity or at law, (ii) general equity principles
and (iii) limitations imposed by federal or state securities laws or the public
policy underlying such laws regarding the enforceability of indemnification or
contribution provisions.
(i) Consents. Except as disclosed in the Registration
Statement and Prospectus or as set forth on the Disclosure Schedule, each
consent, approval, authorization, order, license, certificate, permit,
registration, designation or filing by or with any governmental agency or body
or any other third party necessary for the valid authorization, issuance, sale
and delivery of the Shares, the execution, delivery and performance of this
Agreement and the consummation by the Company of the transactions contemplated
hereby and by the Registration Statement and Prospectus, except such as may be
required under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or under state securities laws has been made or obtained and
is in full force and effect.
(j) Litigation. There is not pending or, to the knowledge of
the Company, threatened or contemplated, any action, suit, proceeding, inquiry,
or investigation before or by any court or any federal, state, or local
governmental authority or agency to which the Company may be a party, or to
which any of the properties or rights of the Company may be
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subject, that is not described in the Registration Statement and Prospectus and
(i) that may reasonably be expected to result in any material adverse change in
the condition (financial or otherwise) or business of the Company; or (ii) that
may reasonably be expected to materially adversely affect any of the material
properties of the Company; or (iii) that may reasonably be expected to adversely
affect the consummation of the transactions contemplated by this Agreement, nor,
to the knowledge of the Company, is there any meritorious basis therefor.
(k) Financial Statements. The financial statements of the
Company together with related schedules and notes included in the Registration
Statement and Prospectus present fairly the financial position of the Company as
of the dates indicated and the results of operations and cash flows for the
periods specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
during the periods involved. The financial statement schedules included in the
Registration Statement and the amounts in the Prospectus under the captions
"Prospectus Summary-Summary Financial Information" and "Selected Financial Data"
fairly present the information shown therein and have been compiled on a basis
consistent with the financial statements included in the Registration Statement
and the Prospectus. No other financial statements or schedules are required by
Form SB-2 or otherwise to be included in the Registration Statement, the
Prospectus or any Preliminary Prospectus. The unaudited pro forma financial
information (including the related notes) included in the Prospectus or any
Preliminary Prospectus complies as to form in all material respects to the
applicable accounting requirements of the 1933 Act and the Rules and
Regulations, and management of the Company believes that the assumptions
underlying the pro forma adjustments are reasonable. Such pro forma adjustments
have been properly applied to the historical amounts in the compilation of the
information and such information fairly presents with respect to the Company the
financial position, results of operations and other information purported to be
shown therein at the respective dates and for the respective periods specified.
(l) Independent Accountants. Xxxxxxx & Company, L.L.P., the
accountants that have expressed an opinion on the financial statements that are
included in the Registration Statement and Prospectus are, and Xxxxxxx &
Company, L.L.P. was during the periods covered by their Reports included in the
Registration Statement and Prospectus, with respect to the Company, to the
Company's knowledge, independent public accountants as required by the 1933 Act
and the Rules and Regulations.
(m) Disclosed Liabilities. The Company has not sustained,
since December 31, 1996, any material loss or interference with its business
from fire, explosion, flood, hurricane, accident, or other calamity, whether or
not covered by insurance, or from any labor dispute or arbitrators' or court or
governmental action, order, or decree, otherwise than as set forth or
contemplated in the Registration Statement and Prospectus; and, since the
respective dates as of which information is given in the Registration Statement
and Prospectus, and except as otherwise stated in the Registration Statement and
Prospectus or as set forth on the
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Disclosure Schedule, there has not been (i) any material change in the capital
stock, long-term debt, obligations under capital leases, or short-term
borrowings of the Company, (ii) any material adverse change, or any development
that could be reasonably be seen as involving a prospective material adverse
change in or affecting the business, prospects, properties, assets, results of
operations or condition (financial or other) of the Company, (iii) any liability
or obligation, direct or contingent, incurred or undertaken by the Company that
is material to the business or condition (financial or other) of the Company,
except for liabilities or obligations incurred in the ordinary course of
business, (iv) any declaration or payment of any dividend or distribution of any
kind on or with respect to the capital stock of the Company, or (v) any
transaction that is material to the Company, except transactions in the ordinary
course of business or as otherwise disclosed in the Registration Statement and
Prospectus.
(n) Required Licenses and Permits. Except as disclosed in the
Prospectus, the Company owns, possesses, has obtained or in the ordinary course
of business will obtain, and has made available for your review, all material
permits, licenses, franchises, certificates, consents, orders, approvals, and
other authorizations of governmental or regulatory authorities as are necessary
to own or lease, as the case may be, and to operate its properties and to carry
on its business as presently conducted, or as contemplated in the Prospectus to
be conducted (the "Permits"), and the Company has not received any notice of
proceedings relating to revocation or modification of any such Permits.
(o) Internal Accounting Measures. To the knowledge of the
Company, the Company's system of internal accounting controls taken as a whole
is sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the Company's
financial statements; and, to the knowledge of the Company, none of the Company
or any employee or agent thereof, has made any payment of funds of the Company,
or received or retained any funds of the Company, and no funds of the Company
have been set aside to be used for any payment, in each case in violation of any
law, rule, or regulation.
(p) Taxes. The Company has timely filed all required federal
and state tax returns, and has paid all taxes that have become due and have no
tax deficiency asserted against the Company, and the Company does not know of
any tax deficiency that is likely to be asserted against the Company that if
determined adversely to the Company, would, either individually or in the
aggregate, have a material adverse effect on the business, prospects,
properties, assets, results of operations, or condition (financial or otherwise)
of the Company. All tax liabilities are adequately provided for on the books of
the Company.
(q) Compliance with Instruments. Except as set forth on the
Disclosure Schedule, the execution, delivery and performance of this Agreement
and the Escrow Agreement, the compliance with the terms and provisions hereof
and the consummation of the transactions contemplated herein, therein and in the
Registration Statement and Prospectus by
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the Company, do not and will not violate or constitute a breach of, or default
under (i) the articles of incorporation or bylaws of the Company; (ii) any of
the material terms, provisions, or conditions of any material instrument,
agreement, or indenture to which the Company is a party or by which it is bound
or by which its business, assets, investments or properties may be affected; or
(iii) any order, statute, rule, or regulation applicable to the Company, or any
of its business, investments, assets or properties, of any court or any federal,
state or local (to the knowledge of the Company) governmental authority or
agency having jurisdiction over the Company, or any of its business,
investments, properties or assets; and to the knowledge of the Company do not
and will not result in the creation or imposition of any lien, charge, claim, or
encumbrance upon any property or asset of the Company.
(r) Insurance. The Company maintains insurance (issued by
insurers of recognized financial responsibility) of the types and in the amounts
generally deemed adequate for its business and, to the knowledge of the Company,
consistent with insurance coverage maintained by similar companies and similar
businesses, all of which insurance is in full force and effect.
(s) Work Force. To the knowledge of the Company, no
general labor problem exists or is imminent with the employees of the Company.
(t) Securities Matters. The Company and its officers,
directors, or affiliates have not taken and will not take, directly or
indirectly, any action designed to, or that might reasonably be expected to,
cause or result in or constitute the stabilization or manipulation of any
security of the Company or to facilitate the sale or resale of the Shares.
(u) Environment. To the Company's knowledge, after due
inquiry, the Company has duly complied with, and its business, operations,
assets, equipment, property, leaseholds or other facilities are in compliance
with, the provisions of all federal, state and local environmental, health,
nuclear regulatory and safety laws, codes and ordinances, and all rules and
regulations promulgated thereunder. To the Company's knowledge, after due
inquiry, the Company has been issued, or in the ordinary course of business is
in the process of obtaining, and will maintain all required federal, state and
local permits, licenses, certificates and approvals relating to (1) air
emissions, (2) discharges to surface water or groundwater, (3) noise emissions,
(4) solid or liquid waste disposal, (5) the use, generation, storage,
transportation or disposal of radioactive or otherwise toxic or hazardous
substances or wastes (which shall include any and all such materials listed in
any federal, state or local law, code or ordinance and all rules and regulations
promulgated thereunder as hazardous or potentially hazardous), or (6) other
environmental, health, nuclear regulatory or safety matters. The Company has not
received notice of, and does not know of or suspect facts which might constitute
violations of any federal, state or local environmental, health, nuclear
regulatory or safety laws, codes or ordinances, or any rules or regulations
promulgated thereunder with respect to its business, operations, assets,
equipment, property, leaseholds, or
7
other facilities, which could reasonably be expected to have a material adverse
effect on the Company. Except in accordance with a valid governmental permit,
license, certificate or approval, the Company has made no emission, spill,
release or discharge into or upon (1) the air, (2) soils, or any improvements
located thereon, (3) surface water or groundwater, or (4) the sewer, septic
system or waste treatment, storage or disposal system servicing the premises, of
any radioactive or otherwise toxic or hazardous substances or wastes at or from
the premises of the Company. To the knowledge of the Company, there has been no
complaint, order, directive, claim, citation or notice by any governmental
authority or any person or entity with respect to (1) air emissions, (2) spills,
releases or discharges to soils or improvements located thereon, surface water,
groundwater or the sewer, septic system or waste treatment, storage or disposal
systems servicing the premises, (3) noise emissions, (4) solid or liquid waste
disposal, (5) the use, generation, storage, transportation or disposal of
radioactive or otherwise toxic or hazardous substances or waste, or (6) other
environmental, health or safety matters affecting the Company or its business,
operations, assets, equipment, property, leaseholds or other facilities. To the
knowledge of the Company, the Company does not have any indebtedness, obligation
or liability (absolute or contingent, matured or not matured), with respect to
the storage, treatment, cleanup or disposal of any solid wastes, hazardous
wastes or other radioactive or otherwise toxic or hazardous substances
(including without limitation any such indebtedness, obligation, or liability
with respect to any current regulation, law or statute regarding such storage,
treatment, cleanup or disposal).
(v) Investment Company Act. The Company is not, and will not
become as a result of the consummation of the Offering, an "investment company"
or an entity which that "controls" or is "controlled by" an "investment
company," as such terms are defined under the Investment Company Act of 1940, as
amended (the "1940 Act").
(w) Receipt of Commissions and Fees. Except as stated in or
contemplated by the Prospectus, neither the Company nor any affiliate of the
Company has received or is entitled to receive, directly or indirectly, any
compensation or other benefit, including, but not limited to, any finder's fee,
acquisition fee, selection fee, nonrecurring management fee or other fee or
commission, relating to the investments of the Company.
(x) Payment of Commissions and Fees. Except as stated in or
contemplated by the Prospectus, neither the Company nor any affiliate of the
Company has paid or awarded, nor will any such person pay or award, directly or
indirectly, any commission or other compensation to any person engaged to render
investment advice to a potential purchaser of Shares as an inducement to advise
the purchase of Shares.
3. Representations and Warranties of Placement Agent. You
represent and warrant to the Company that:
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(a) You are a member, in good standing, of the National
Association of Securities Dealers, Inc. ("NASD"), and are duly registered as a
broker-dealer under the 1934 Act, and under the laws of each state in which you
propose to offer the Shares, except where such registration would not be
required by law.
(b) This Agreement when accepted and approved will be duly
authorized, executed and delivered by you and is a valid and binding agreement
of you, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
liquidation, reorganization, or similar laws affecting creditors' rights
generally, regardless of whether such enforceability is considered in equity or
at law, (ii) general equity principles, and (iii) limitations imposed by federal
and state securities laws or the public policy underlying such laws regarding
the enforceability of indemnification or contribution provisions.
(c) The consummation of the transactions contemplated by the
Prospectus relating to the Offering will not violate or constitute a breach of,
or default under, your articles of incorporation or bylaws, or any material
instrument, agreement, or indenture to which you are a party, or violate any
order applicable to you of any federal or state regulatory body or
administrative agency having jurisdiction over you or your property.
4. Sale of Shares.
(a) Exclusive Agency. The Company hereby appoints you as its
exclusive agent to offer for sale, and hereby agrees to sell during the Offering
Period (as defined in Section 4.(c)), 834,000 Shares of Common Stock, and on the
basis of the representations and warranties herein contained but subject to the
terms and conditions herein set forth, you accept such appointment and agree to
use your best efforts as agent to offer the Shares for sale for the account of
the Company, on a cash basis only at the offering price of $6.00 per Share.
During the Offering Period, the Company will not sell or agree to sell any debt
or equity securities otherwise than through you. Subject to your commitment to
the sell the Shares on a "best efforts all-or-none basis" as provided herein,
nothing in this Agreement shall prevent you from entering into an agency
agreement, underwriting agreement, or other similar agreement governing the
offer and sale of securities with any other issuer of securities, and nothing
contained herein shall be construed in any way as precluding or restricting your
right to sell or offer for sale securities issued by any other person, including
securities similar to, or competing with, the Shares. It is understood between
the parties that there is no firm commitment by you to purchase any or all of
the Shares.
(b) Obligation to Offer Shares. Your obligation to offer the
Shares is subject to receipt by you of written advice from the Commission that
the Registration Statement is effective, is subject to the Shares being
qualified for offering under applicable laws in the states as may be reasonably
designated by you, is subject to the absence of any
9
prohibitory action by any governmental body, agency, or official, and is subject
to the terms and conditions contained in this Agreement and in the Registration
Statement.
(c) Offering Termination Date. The "Offering Period" shall
commence on the day that the Prospectus is first made available to prospective
investors in connection with the offering for sale of the Shares and shall
continue until the "Offering Termination Date," which shall be the earlier of
(i) the date all of the Shares offered have been sold, (ii) November 21, 1997,
or (iii) an earlier termination date as determined by you as permitted herein.
The Company and you agree that unless all of the 834,000 Shares offered are sold
on or before the Offering Termination Date, the agency between the Company and
you will terminate, and the full proceeds that have been paid for the Shares
will be returned to the purchasers.
(d) Escrow Agent. Prior to the sale of all of the Shares, all
funds received from purchasers of the Shares shall be placed in an escrow
account (the "Escrow Account") with the Escrow Agent pursuant to the Escrow
Agreement, the form of which is attached as Exhibit 1.3 to the Registration
Statement, and all payments of, from or on account of such funds shall be made
pursuant to the Escrow Agreement. In the event that all of the Shares are not
sold on or before the Offering Termination Date, all funds then held in the
Escrow Account shall be returned promptly to the respective purchasers as
provided in the Escrow Agreement.
(e) Closing Date. As and when the closing of the Offering is
effected, which shall be on or before the Offering Termination Date, and
proceeds from the Shares sold are received and accepted, on such date (the
"Closing Date") and at such time and place as determined by you (which
determination shall be subject to the satisfaction on such date of the
conditions contained herein), the funds received from purchasers will be
delivered by the Escrow Agent to the Company, by wire transfer of immediately
available funds, except for the Selling Commissions payable to you and to
selected dealers on your behalf ("Selected Dealers") on the Closing Date
pursuant to the provisions of Section 4.(f) of this Agreement (which Selling
Commissions shall be delivered to you by the Escrow Agent on behalf of the
Company on the Closing Date).
(f) Selling Commissions. In consideration for your execution
of this Agreement and for the performance of your obligations hereunder, the
Company agrees to pay you, as provided in Section 4.(e) of this Agreement, by
wire transfer of immediately available funds on the Closing Date, if any, a
Selling Commission computed at the rate of eight percent (8.0%) of the public
offering price of the Shares sold by you. With respect to Shares sold by
Selected Dealers, the Escrow Agent shall pay the Selected Dealer on your behalf
a Selling Commission computed at the rate of four percent (4%) of the public
offering price per Share and shall pay you a Selling Commission of four percent
(4%) of the public offering price per Share. In addition, on the Closing Date,
we will issue to you a warrant for the purchase of
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83,400 additional shares of Common Stock, substantially in the form of Exhibit B
attached to this Agreement.
(g) Finder's Fees. Except as set forth in the Registration
Statement or Prospectus, neither you nor the Company, directly or indirectly,
shall pay or award any finder's fee, commission, or other compensation to any
person engaged by a potential purchaser for investment advice as an inducement
to such advisor to advise the purchase of the Shares or for any other purpose.
(h) Delivery of Share Certificates. Delivery of certificates
in definitive form representing the Shares shall be made at the offices of
Newbridge Securities, Inc. or at such other place as shall be agreed upon by the
Company and you, on such date as you may request (the "Date of Delivery"). The
certificates representing the Shares shall be in such denominations and
registered in such names as you may request in writing at least three full
business days before the Date of Delivery. The certificates representing the
Shares will be made available for examination and packaging at the offices of
Newbridge Securities, Inc. or at such other place as shall be agreed upon by the
Company and you, not later than at least two (2) full business days prior to
each Date of Delivery.
5. Covenants.
(a) Covenants of the Company. The Company covenants with
you as follows:
(i) Notices. The Company immediately will
notify you, and confirm such notice in writing, (A) of any fact that would make
inaccurate any representation or warranty by the Company, and (B) of any change
in facts on which your obligation to perform under this Agreement is dependent.
(ii) Effectiveness of Registration Statement.
The Company will use its best efforts to cause the Registration Statement to
become effective (if not yet effective at the date and time this Agreement is
executed and delivered by the parties hereto). If the Company elects to rely
upon Rule 430A of the Rules and Regulations or the filing of the Prospectus is
otherwise required under Rule 424(b) of the Rules and Regulations, and subject
to the provisions of Section 5.(a)(iii) of this Agreement, the Company will
comply with the requirements of Rule 430A and will file the Prospectus, properly
completed, pursuant to the applicable provisions of Rule 424(b) within the time
prescribed. The Company will notify you immediately, and confirm the notice in
writing, (i) when the Registration Statement, or any post-effective amendment to
the Registration Statement, shall have become effective, or any supplement to
the Prospectus, or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission to amend the Registration Statement or amend or supplement the
Prospectus or for additional
11
information, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the suspension
of the qualification of the Shares for offering or sale in any jurisdiction, or
of the institution or threatening of any proceeding for any such purposes. The
Company will use all reasonable efforts to prevent the issuance of any such stop
order or of any order preventing or suspending such use and, if any such order
is issued, to obtain the withdrawal thereof at the earliest possible moment.
(iii) Amendments to Registration Statement
and Prospectus. The Company will not at any time file or make any amendment to
the Registration Statement, or any amendment or supplement (i) to the
Prospectus, if the Company has not elected to rely upon Rule 430A, or (ii) if
the Company has elected to rely upon Rule 430A, to either the Prospectus
included in the Registration Statement at the time it becomes effective or to
the Prospectus filed in accordance with Rule 424(b), in either case if you shall
not have previously been advised and furnished a copy thereof a reasonable time
prior to the proposed filing, or if you or your counsel shall reasonably object
to such amendment or supplement; provided, however, that if you shall have
objected to such amendment or supplement, you shall cease your efforts to sell
the Shares until an amendment or supplement is filed.
(iv) Delivery of Registration Statement. The
Company has delivered to you or will deliver to you, without expense to you, at
such locations as you shall request, as soon as the Registration Statement or
any amended Registration Statement is available, such number of signed copies of
the Registration Statement as originally filed and of amended Registration
Statements, if any, copies of all exhibits and documents filed therewith, and
signed copies of all consents and certificates of experts, as you may reasonably
request.
(v) Delivery of Prospectus. The Company will
deliver to you at its expense, from time to time, as many copies of each
Preliminary Prospectus as you may reasonably request, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will deliver to you at its expense, as soon as the Registration
Statement shall have become effective and thereafter from time to time as
requested during the period when the Prospectus is required to be delivered
under the 1933 Act, such number of copies of the Prospectus (as supplemented or
amended) as you may reasonably request. The Company will comply to the best of
its ability with the 1933 Act and the Rules and Regulations so as to permit the
completion of the distribution of the Shares as contemplated in this Agreement
and in the prospectus. If the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Shares and if at such time any
events shall have occurred as result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made when such Prospectus is
delivered not misleading or, if for any reason it shall be
12
necessary during the same period to amend or supplement the Prospectus in order
to comply with the 1933 Act, the Company will notify you and upon your request
prepare and furnish without charge to you and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus that will correct such statement or
omission or effect such compliance, and in case you are required to deliver a
prospectus in connection with sales of any of the Shares at any time after
__________________, upon your request but at your expense, the Company will
prepare and deliver to you as many copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act.
(vi) Blue Sky Qualification. The Company, in
good faith and in cooperation with you, will use its best efforts to qualify the
Shares for offering and sale under the applicable "blue sky" or securities laws
of such jurisdictions as you from time to time may reasonably designate and to
maintain such qualifications in effect until the date on which the Company
ceases to be obligated to maintain the effectiveness of the Registration
Statement, as provided in Section 5.(a)(xvi) below; provided, however, that the
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to make any undertakings in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be required by
the laws of each jurisdiction in which the Shares have been qualified as above
provided.
(vii) Financial and Other Information.
(A) Earnings Statement. The Company
will make generally available to its securityholders, in the manner specified in
Rule 158(b) under the 1933 Act and deliver to you as soon as practicable and in
any event not later than 45 days after the end of its fiscal quarter in which
the first anniversary date of the effective date of the Registration Statement
occurs, an earnings statement meeting the requirements of Rule 158(a) under the
1933 Act covering a period of at least twelve consecutive months beginning after
the effective date of the Registration Statement.
(B) Annual and Quarterly Reports. The
Company will furnish to its securityholders, as soon as practicable after the
end of each respective period, annual reports (including financial statements
audited by independent public accountants) and unaudited quarterly reports of
operations for each of the first three quarters of the fiscal year. For a period
through and including ___________, 2002, the Company will furnish to you: (i)
concurrently with the date on which the same shall be sent to the
securityholders of the Company, if applicable, and in any event not later than
sixty (60) days after the end of each fiscal quarter of the Company, statements
of operations of the Company for each of the first three quarters in the form
furnished to the Company's securityholders; (ii) concurrently with the date on
which the same shall be sent to the securityholders of the Company, if
applicable, and in any event not later than one hundred twenty (120) days after
the end of each fiscal year
13
of the Company, a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations, of cash flows, and of
securityholders' equity of the Company for such fiscal year, accompanied by a
copy of the certificate or report thereon of independent public accountants;
(iii) as soon as they are available, copies of all reports (financial or
otherwise) mailed to securityholders; and (iv) as soon as they are available,
copies of all reports and financial statements furnished to or filed with the
Commission, any securities exchange, or the NASD. During the period through and
including ___________, 2002, the foregoing financial statements shall be made on
a consolidated basis to the extent that the accounts of the Company are
consolidated with any subsidiaries, and shall be accompanied by similar
financial statements for any significant subsidiary that is not so consolidated.
(C) Press Releases. For a period
through and including ______________, 2002, the Company will furnish to you,
concurrently with the release thereof, one copy of every press release to be
issued and every material news item and article in respect of the Company or its
affairs to be released by the Company; and promptly, such additional documents
and information with respect to the Company and its affairs as you from time to
time may reasonably request.
(D) Other Information. For a period
through and including ____________, 2002, the Company will furnish to you any
additional information of a public nature concerning the Company or its business
that you may reasonably request in writing.
(E) Notice of Major Events. Until the
Offering Termination Date, the Company will notify you in writing promptly, but
in any event not later than two (2) business days after any officer of the
Company becomes aware of the occurrence of any of the following events:
(1) Material Litigation. The
Company shall have become a party to one or more suits, actions or proceedings
which, if adversely determined, could have a material adverse effect on the
business, properties, operations or condition, financial or otherwise, of the
Company taken as a whole;
(2) Defaults. The Company has
received notice of any default or failure to perform any covenant or failure to
maintain any representation or warranty by the Company under any agreement
relating to indebtedness for money borrowed to which the Company is a party;
(3) Material Adverse Change.
Any condition shall exist (i) which would cause the representations and
warranties set forth herein to not be true and correct in all material respects
or (ii) which has resulted in or which is likely, in the reasonable judgment of
the Company, to result in a material adverse change in the business, properties,
operations or condition, financial or otherwise, of the Company taken as a
whole.
14
(viii) Application of Net Proceeds. The
Company will apply the net proceeds received from the sale of the Shares in all
material respects as set forth in the Prospectus under the caption "Use of
Proceeds."
(ix) Solicitation of Purchasers; Right of First
Refusal.
(A) Except as hereinafter specified, the
Company will not, and will not permit any of its affiliates or agents to, (1)
engage in any offering or placement of any debt or equity security or long-term
debt other than in a commercial lending transaction, or pursuant to a stock
incentive plan, or in a transaction that would result in a change in control as
defined in the Incentive Plan for a period of three (3) years from the Closing
Date for which you are not acting as the underwriter or sales or placement
agent, unless you shall have failed to exercise a right of first refusal to act
as the underwriter or sales agent for the proposed offering within fifteen (15)
days of a notice from the Company of the proposed terms of the offering, (2)
solicit the purchasers of Shares in connection with any other offering of any
security for a period of three (3) years from the Closing Date, unless you shall
have been given a right of first refusal to conduct such solicitation or you are
notified and compensated therefor in an amount equal to 8.0% of the purchase
price of any securities purchased by any such purchaser, or (3) furnish the
names of such purchasers or of other potential investors obtained through you to
any person other than as may be required in connection with the normal and usual
conduct by the Company of its business or required by court order or law.
(B) The Company agrees and understands
that a violation of the provisions of Section 5.(a)(ix)(A)(2) or (3) of this
Agreement will cause you irreparable harm and injury and that any money damages
you receive will not compensate you for any breach thereof. Accordingly, the
Company agrees that, in addition to monetary damages, you will be entitled to
all such equitable relief including, without limitation, injunctive relief, as a
court of equity or proper jurisdiction shall deem appropriate in the
circumstances. Such relief shall not be exclusive of any rights you may have at
law or in equity. All of the rights and remedies you have hereunder shall be
cumulative and not alternative. The provisions of this Section shall not limit
your remedies upon the breach by the Company of any other section of this
Agreement.
(x) Cooperation with Your Due Diligence. At all
times prior to the Offering Termination Date, the Company will cooperate with
you in such investigation as you may make or cause to be made of all the
business and operations of the Company in connection with the sale of the
Shares, and will make available to you in connection therewith such information
in its possession as you may reasonably request, all of which you agree to
safeguard as the confidential information of the Company and to refrain from
using for any purpose adverse to the interests of the Company.
15
(xi) Transfer Agent. The Company will maintain a
transfer agent and, if necessary under applicable jurisdictions, a registrar
(which may be the same entity as the transfer agent) for its Common Stock.
(xii) Nasdaq. The Company will use its
reasonable best efforts to maintain the quotation of its shares of Common Stock
on The Nasdaq Small Cap Market.
(xiii) Actions of Company, Officers,
Directors, and Affiliates. The Company will not and will use its best efforts
to cause its officers, directors, and affiliates not to (i) take, directly or
indirectly, prior to termination of the offering contemplated by this Agreement,
any action designed to stabilize or manipulate the price of any security of the
Company, or that may cause or result in, or that might in the future reasonably
be expected to cause or result in, the stabilization or manipulation of the
price of any security of the Company, to facilitate the sale or resale of any of
the Shares, (ii) other than under this Agreement, sell, bid for, purchase, or
pay anyone any compensation for soliciting purchases of the Shares or (iii) pay
or agree to pay to any person any compensation for soliciting any order to
purchase any other securities of the Company.
(xiv) Transactions with Affiliates. The
Company will not, and will not permit any wholly-owned subsidiary to, sell or
transfer any assets or services to, or purchase or acquire any assets or
services of, or otherwise engage in any transaction with, any of their
respective affiliates, except in the ordinary course of business and upon fair
and reasonable terms no less favorable than the Company or such wholly-owned
subsidiary could obtain or could become entitled to in an arm's-length
transaction with a person which was not any such affiliate.
(xv) Nasdaq National Market. The Company will
use its reasonable best efforts to obtain the approval of its shares of Common
Stock for quotation on The Nasdaq National Market as soon as practicable, and to
maintain such status thereafter.
(xvi) Maintenance of Registration. The
Company will maintain the effectiveness of the Registration Statement, and file
and use its best efforts to secure and maintain the effectiveness of all
appropriate post-effective amendments to the Registration Statement, until the
earlier to occur of (A) the sale of all shares of Common Stock and warrants to
purchase Common Stock that are included in the Registration Statement, other
than the Shares (collectively, the "Other Securities"), or (B) your written
consent to remove from registration any of the unsold Other Securities.
(b) Your Covenants. You covenant with the Company as
follows:
(i) Information Provided. You have not provided
and will not provide to the purchasers of Shares any written or oral information
regarding the business of
16
the Company, including any representations regarding the Company's financial
condition or financial prospects, other than such information as is contained in
the Prospectus. You further covenant that you will use your best efforts to
comply in the offering of the Shares with such purchaser suitability
requirements as may be imposed by state securities or blue sky requirements.
(ii) Prospectus Supplements. Until the
termination of this Agreement, if any event affecting the Prospectus, the
Company or you shall occur which, in the opinion of counsel to the Company,
should be set forth in a supplement to the Prospectus, you agree to distribute
each supplement of the Prospectus to each person who has previously received a
copy of the Prospectus from you and you further agree to include such supplement
in all future deliveries of the Prospectus. You agree that following notice from
the Company that a supplement to the Prospectus is necessary, you will cease
further efforts to sell the Shares until such a supplement is prepared and
delivered to you.
(iii) Compliance with Laws, Etc. In your
sale of the Shares, you will comply in all material respects with applicable
federal and state laws, rules and regulations and the rules and regulations of
applicable self-regulatory organizations (provided, however, that you shall be
deemed not to have breached this covenant if your failure to so comply is based
on a breach by the Company of any of its representations, warranties or
covenants contained in this Agreement and you shall have complied with Section
5.(b)(ii) above).
6. Payment of Expenses. Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, and subject to
the provisions of Section 10 of this Agreement, the Company hereby agrees that
it will pay all fees and expenses incident to the performance of its obligations
under this Agreement (excluding fees and expenses of counsel for you, except as
specifically set forth below), including (a) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the Preliminary Prospectuses and
the Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to you, (b) the preparation, printing, and
distribution of this Agreement, any Selected Dealer Agreement, the certificates
representing the Shares, the Blue Sky Memoranda, and any instruments relating to
any of the foregoing, (c) the issuance and delivery of the Shares, including any
transfer taxes payable thereon, (d) the fees and disbursements of the Company's
counsel and accountants, (e) the qualification of the Shares under applicable
securities laws in accordance with Section 5.(a) of this Agreement and any
filing fee paid in connection with the review of the offering by the NASD,
including filing fees and fees and disbursements made in connection therewith
and in connection with the Blue Sky Memoranda supplied to you by counsel for the
Company, (f) all costs, fees, and expenses in connection with the application
for qualifying the Shares for quotation on the Nasdaq Small Cap Market, (g) the
transfer agent's and registrar's fees and all miscellaneous expenses referred to
in Item 25 of the Registration Statement, (h) costs related to travel and
lodging incurred by the Company and its
17
representatives relating to meetings with and presentations to prospective
purchasers of the Shares reasonably determined by you to be necessary or
desirable to effect the sale of the Shares to the public, (i) any escrow
arrangements in connection with the transactions described herein, including any
compensation or reimbursement to the Escrow Agent for its services as such, and
(j) all other costs and expenses incident to the performance of the Company's
obligations hereunder that are not otherwise specifically provided for in this
Section.
7. Conditions of Your Obligations. Your obligations hereunder
shall be subject to, in your discretion, the following terms and conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement shall have become effective not later than 5:30 p.m. on the date of
this Agreement or, at such later time or on such later date as you may agree to
in writing; and as of the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act and no proceedings for that purpose shall have been instituted or shall
be pending or, to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the satisfaction of
your counsel.
(b) Closing Date Matters. On the Closing Date, (i) the
Registration Statement and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required to be stated
therein under the 1933 Act and the Rules and Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the Rules and
Regulations; the Company shall have complied in all material respects with Rule
430A (if it shall have elected to rely thereon) and neither the Registration
Statement nor the Prospectus, as they may then be amended or supplemented, shall
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (ii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement, any material adverse
change in the business, prospects, properties, assets, results of operations or
condition (financial or otherwise) of the Company whether or not arising in the
ordinary course of business, (iii) no action, suit or proceeding at law or in
equity shall be pending or, to the Company's knowledge, threatened against the
Company that would be required to be set forth in the Prospectus other than as
set forth therein and no proceedings shall be pending or, to the knowledge of
the Company, threatened against the Company before or by any federal, state or
other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding could materially adversely affect the business,
prospects, assets, results of operations or condition (financial or otherwise)
of the Company other than as set forth in the Prospectus, (iv) the Company shall
have complied with all agreements and satisfied all conditions on their part to
be performed or satisfied on or prior to the Closing Date, and (v) the
representations and warranties of the Company set forth in Section 2 of this
Agreement shall be accurate in all material respects as though expressly made at
and as of the Closing Date. On each Closing
18
Date, you shall have received a certificate executed by the President of the
Company, dated as of the Closing Date, to such effect and with respect to the
following additional matters: (A) the Registration Statement has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement or preventing or suspending the use of the Prospectus
has been issued, and no proceedings for that purpose have been instituted or are
pending or, to his knowledge, threatened under the 1933 Act; and (B) he has
reviewed the Registration Statement and the Prospectus and, when the
Registration Statement became effective and at all times subsequent thereto up
to the delivery of such certificate, the Registration Statement and the
Prospectus and any amendments or supplements thereto contained all statements
and information required to be included therein or necessary to make the
statements therein not misleading and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading,
and, since the effective date of the Registration Statement, there has occurred
no event required to be set forth in an amended or supplemented Prospectus that
has not been so set forth.
(c) Opinions of XxXxxxx Xxxx. At the Closing Date, you shall
receive the opinion of XxXxxxx Xxxx, a Professional Corporation, counsel for the
Company, in form and substance reasonably satisfactory to you, to the effect of
Exhibit C.
(d) Opinion of Your Counsel. At the Closing Date, you shall
receive the favorable opinion of Xxxxxxx & Xxxxxx, P.C., your counsel, with
respect to such matters as you may reasonably require, and the Company shall
have furnished to such counsel such documents as they may reasonably request for
the purpose of enabling them to pass on such matters.
(e) Independent Public Accountants. At the time that this
Agreement is executed by the Company, you shall have received from Xxxxxxx &
Company, L.L.P. a letter, dated the date hereof, in form and substance
satisfactory to you, confirming that they are independent public accountants
with respect to the Company within the meanings of the 1933 Act and the Rules
and Regulations, and stating in effect that:
(i) in their opinion, the financial statements
and any supplementary financial information and schedule included in the
Registration Statement and covered by their opinion therein comply as to form
and in all material respects with the applicable accounting requirements of the
1933 Act and the Rules and Regulations;
(ii) on the basis of limited procedures (set
forth in detail in such letter and made in accordance with such procedures as
may be specified by you) not constituting an audit in accordance with generally
accepted auditing standards, consisting of (but not limited to) a reading of the
latest available internal unaudited financial statements of
19
the Company, a reading of the minute books of the Company, inquiries of
officials of the Company responsible for financial and accounting matters, and
such other inquiries and procedures as may be specified in such letter, nothing
came to their attention to cause them to believe that:
(A) the unaudited financial statements
and supporting schedule and other unaudited financial data of the Company
included in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and the
Rules and Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration Statement;
(B) any other unaudited income statement
data and balance sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited financial statements from which such data
and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited financial statements included in the
Prospectus;
(C) any unaudited pro forma financial
information included in the Prospectus does not comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the Rules and Regulations or the pro forma adjustments have not been
properly applied to historical amounts in the compilation of that information;
(D) at a specified date not more than
five (5) days prior to the date of such letter, there was any change in the
capital stock or long-term debt or obligations of the Company or there were any
decreases in net current assets or net assets, shareholders' equity, or other
items specified by you from that set forth in the Company's balance sheet at
March 31, 1996, except as described in such letter; and
(E) for the period from ____________,
1997 to a specified date not more than five (5) days prior to the date of such
letter, there were any decreases in revenues or operating income before
interest, depreciation and amortization for the Company, in each case as
compared with the corresponding period of the preceding year, except in each
case for decreases that the Prospectus discloses have occurred or may occur or
that are described in such letter; and
(iii) in addition to the procedures
referred to in clause (ii) above and the examination referred to in their
Reports including in the Registration Statement, they have carried out certain
specified procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages, and
financial information specified by you that are derived from the general
accounting records of the
20
Company, that appear in the Registration Statement or the exhibits or schedules
thereto and are specified by you, and have compared such amounts, percentages,
and financial information with the accounting records of the Company and with
material derived from such records and have found them to be in agreement.
(f) Updated Comfort Letter. At each Closing Date, you shall
have received from Xxxxxxx & Company, L.L.P. a letter, in form and substance
satisfactory to you and dated as of the Closing Date, to the effect that they
reaffirm the statements made in the letter furnished pursuant to Section 7.(e)
above, except that the specified date referred to shall be a date not more than
five (5) days prior to the Closing Date.
(g) Post-Financial Developments. In the event that either of
the letters to be delivered pursuant to Sections 7.(e) and 7.(f) above sets
forth any changes, decreases or increases, it shall be a further condition to
your obligations that you shall have reasonably determined, after discussions
with officers of the Company responsible for financial and accounting matters
and with Xxxxxxx & Company, L.L.P., that such changes, decreases or increases as
are set forth in such letter do not reflect a material adverse change in the
capital stock, long-term debt, obligations under capital leases, total assets,
net current assets, or shareholders' equity of the Company as compared with the
amounts shown in the latest consolidated pro forma balance sheet of the Company,
or a material adverse change in the revenues or operating income before
interest, depreciation and amortization for the Company in each case as compared
with the corresponding period of the prior year.
(h) Additional Information. On the Closing Date, you shall
have been furnished with all such documents, certificates and opinions as you
may reasonably request for the purpose of enabling your counsel to pass upon the
issuance and sale of the Shares as contemplated in this Agreement and the
matters referred to in Section 7.(b), and in order to evidence the accuracy and
completeness of, any of the representations, warranties or statements of the
Company, the performance of any of the covenants of the Company, or the
fulfillment of any of the conditions herein contained; and all proceedings taken
by the Company at or prior to the Closing Date in connection with the
authorization, issuance and sale of the Shares as contemplated in this
Agreement, shall be satisfactory in form and substance to you and to your
counsel. The Company will furnish you with such number of conformed copies of
such opinions, certificates, letters and documents as you shall reasonably
request. Any certificate signed by any officer, partner, or other official of
the Company and delivered to you or your counsel shall be deemed a
representation and warranty by the Company to you as to the statements made
therein.
(i) Adverse Events. Subsequent to the date hereof, there
shall not have occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange or
American Stock Exchange or The Nasdaq National Market, (ii) a general moratorium
on commercial banking activities in Virginia or
21
New York declared by either federal or state authorities, as the case may be,
(iii) the outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war if the
effect of any such event specified in this clause (iii) in your reasonable
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus, or (iv) such a material adverse change in
general economic, political, financial or international conditions affecting
financial markets in the United States having a material adverse impact on
trading prices of securities in general, as, in your reasonable judgment, makes
it impracticable or inadvisable to proceed with the public offering of the
Shares or the delivery of the Shares on the terms and in the manner contemplated
in the Prospectus.
(j) NASD Review. The NASD, upon review of the terms of the
public offering of the Shares, shall not have objected to such offering, the
terms of the offering or your participation in the offering.
(k) Nasdaq Quotation. The Shares shall be approved for
quotation on The Nasdaq Small Cap Market.
If any of the conditions specified in this Section 7 shall not
have been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company at any time at or
prior to the Closing Date, and such termination shall be without liability of
any party to any other party, except as provided in Sections 6 and 10.
Notwithstanding any such termination, the provisions of Section 8 shall remain
in effect.
8. Indemnification and Contribution.
(a) Indemnification by the Company. The Company will indemnify
and hold you harmless against any losses, claims, damages, or liabilities, joint
or several, to which you may become subject under the 1933 Act, the 1934 Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any breach of any
representation, warranty or covenant of the Company herein contained or any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse you for any legal or other expenses reasonably incurred by you in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the Company shall 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 any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any such amendment or
22
supplement, in reliance upon and in conformity with written information
furnished to the Company by you expressly for use therein; provided further,
that the indemnity agreement contained in Section 8.(a) with respect to any
Preliminary Prospectus shall not inure to your benefit if you failed to send or
give a copy of the Prospectus to such person at or prior to the written
confirmation of the sale of such Shares to such person in any case where such
delivery is required by the 1933 Act or the Rules and Regulations and if the
Prospectus would have cured any untrue statement or alleged untrue statement or
omission or alleged omission giving rise to such loss, claim, damage, or
liability. In addition to its other obligations under this Section 8.(a), the
Company agrees that, as an interim measure during the pendency of any such
claim, action, investigation, inquiry, or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 8.(a), it will reimburse you on a monthly basis for
all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry, or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse you
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. Any such interim
reimbursement payments that are not made to you within thirty (30) days of a
request for reimbursement shall bear interest at the prime rate (or reference
rate or other commercial lending rate for borrowers of the highest credit
standing) published from time to time by The Wall Street Journal (the "Prime
Rate") from the date of such request. This indemnity agreement shall be in
addition to any liabilities that the Company may otherwise have. For purposes of
this Section 8, the information set forth in the last paragraph on the front
cover page (insofar as such information relates to you) and under "Underwriting"
in any Preliminary Prospectus and in the Prospectus constitutes the only
information furnished by you to the Company for inclusion in any Preliminary
Prospectus, the Prospectus, or the Registration Statement. The Company will not,
without your prior written consent, settle or compromise or consent to the entry
of any judgment in any pending or threatened action or claim or related cause of
action or portion of such cause of action in respect of which indemnification
may be sought hereunder (whether or not you are a party to such action or
claim), unless such settlement, compromise, or consent includes an unconditional
release of you from all liability arising out of such action or claim (or
related cause of action or portion thereof).
The indemnity agreement in this Section 8.(a) shall
extend upon the same terms and conditions to, and shall inure to the benefit of,
each person, if any, who controls you within the meaning of the 1933 Act or the
1934 Act to the same extent as such agreement applies to you.
(b) Indemnification by You. You will indemnify and hold
harmless the Company against any losses, claims, damages, or liabilities to
which the Company may become subject, under the 1933 Act, the 1934 Act, or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any
23
breach of any warranty or covenant by you herein contained or any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that (i) such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, or the Prospectus or any such amendment
or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by you expressly for use therein, or (ii)
you failed to deliver an amendment or supplement to the Prospectus that the
Company made available to you prior to the Closing Date and that corrected any
statement or omission in a Preliminary Prospectus, the Registration Statement or
the Prospectus which forms the basis for a claim against the Company; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability, or action. In addition to its other obligations under this
Section 8.(b), you agree that, as an interim measure during the pendency of any
such claim, action, investigation, inquiry, or other proceeding arising out of
or based upon any statement or omission, or any alleged statement or omission,
described in this Section 8.(b), you will reimburse the Company on a monthly
basis for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry, or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of your obligation to reimburse the Company for
such expenses and the possibility that such payments might later been held to
have been improper by a court of competent jurisdiction. Any such interim
reimbursement payments that are not made to the Company within thirty (30) days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement shall be in addition to any
liabilities that you may otherwise have. You will not, without the Company's
prior written consent, settle or compromise or consent to the entry of any
judgment in any pending or threatened action or claim or related cause of action
or portion of such cause of action in respect of which indemnification may be
sought hereunder (whether or not the Company is a party to such action or
claim), unless such settlement, compromise, or consent includes an unconditional
release of the Company from all liability arising out of such action or claim
(or related cause of action or portion thereof).
The indemnity agreement in this Section 8.(b) shall
extend upon the same terms and conditions to, and shall inure to the benefit of,
each officer and director of the Company and each person, if any, who controls
the Company within the meaning of the 1933 Act or the 1934 Act to the same
extent as such agreement applies to the Company.
(c) Notices of Claims; Employment of Counsel. Any party that
proposes to assert the right to be indemnified under this Section 8 promptly
shall notify in writing each party against which a claim is to be made under
this Section 8 of the institution of such action
24
but the omission so to notify such indemnifying party of any such action shall
not relieve it from any liability it may have to any indemnified party except
(i) to the extent that the omission to notify shall have caused or increased the
indemnifying party's liability, and (ii) that the indemnifying party shall be
relieved of its indemnity obligation for expenses of the indemnified party
incurred before the indemnifying party is notified. Such indemnifying party or
parties shall assume the defense of such action, including the employment of
counsel (satisfactory to the indemnified party) and payment of fees and
expenses. An indemnified party shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless the employment of such counsel shall have been
authorized in writing by the indemnifying party or parties in connection with
the defense of such action or the indemnifying party or parties shall not have
employed counsel to have charge of the defense of such action or such
indemnified party or parties reasonably shall have concluded that there may be
defenses available to it or them that are different from or additional to those
available to such indemnifying party or parties (in which case such indemnifying
party or parties shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such indemnifying party or parties. Anything in
this paragraph to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any such claim or action effected without its
written consent.
(d) Arbitration. It is agreed that any controversy arising out
of the operation of the interim reimbursement arrangements set forth in Sections
8.(a) and 8.(b) hereof, including the amounts of any requested reimbursement
payments, the method of determining such amounts and the basis on which such
amounts shall be apportioned among the indemnifying parties, shall be settled by
arbitration conducted pursuant to the Code of Arbitration Procedure of the NASD.
Any such arbitration must be commenced by service of a written demand for
arbitration or a written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding arbitration does not make
such designation of an arbitration tribunal in such demand or notice, then the
party responding to said demand or notice is authorized to do so. Any such
arbitration will be limited to the operation of the interim reimbursement
provisions contained in Sections 8.(a) and 8.(b) hereof and will not resolve the
ultimate propriety or enforceability of the obligation to indemnify for expenses
that is created by the provisions of Sections 8.(a) and 8.(b).
(e) Contribution. If the indemnification provided for in
Section 8.(a) or 8.(b) is unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, or liabilities (or
actions in respect thereof) referred to therein, then the Company on the one
hand and you on the other shall contribute to the amount paid or payable as a
result of such losses, claims, damages, or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and you on the other from the offering
of the Shares. If, however, the allocation
25
provided by the immediately preceding sentence is not permitted by applicable
law, then the Company and you shall contribute to such amount paid or payable 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 you on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and you on the other shall be deemed to be in the same
proportion as the total net proceeds from the Offering (before deducting
expenses) received by the Company bear to the total selling commissions received
by you 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 allegedly 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 to information with respect to you
and furnished by you respectively, in writing specifically for inclusion in the
Prospectus 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 you agree that it would not be just and equitable if
contribution pursuant to this Section 8.(e) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 8.(e). The amount
paid or payable as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 8.(e) shall be
deemed to include any legal or other expenses reasonably incurred by any such
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) with respect to the transactions giving rise to the
right of contribution provided in this Section 8.(e) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations in this Section 8.(e) for you to contribute
are several in proportion to your respective underwriting obligations and not
joint. For purposes of this Section 8.(e), each person, if any, who controls you
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as you, and each director of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act, shall have the same rights to
contribution as the Company.
9. Representations and Agreements to Survive. Except as the context
otherwise requires, all representations, warranties, covenants and agreements
contained in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by you, or on your behalf, or by any
controlling person, or by or on behalf of the Company, and shall survive until
the fifth anniversary of the Offering Termination Date and the termination of
this Agreement pursuant to Section 10 hereof.
26
10. Termination of Agreement.
(a) Termination of Agreement. You shall have the right to
terminate this Agreement at any time prior to the Closing Date (i) if any
representation or warranty of the Company hereunder shall be found to have been
incorrect or misleading in any material respect when made or the Company shall
fail, refuse, or be unable to perform any of its agreements hereunder or to
fulfill any condition of your obligations hereunder, (ii) if there shall have
been since the respective dates as of which information is given in the
Registration Statement, a material adverse change, or any development which
could reasonably be expected to result in a prospective material adverse change,
in or affecting the business, prospects, management, properties, assets, results
of operations, or condition (financial or otherwise) of the Company, whether or
not arising in the ordinary course of business, (iii) if trading on any national
securities exchange shall have been suspended (other than for reasons unrelated
to the securities markets), or minimum or maximum prices for trading generally
shall have been fixed or maximum ranges for prices for all securities shall have
been required on any such exchange by such exchange or by order of the
Commission or any other governmental authority having jurisdiction, (iv) if
there has occurred or accelerated any outbreak of hostilities or other national
or international calamity or crisis or change in economic or political
conditions the effect of which on the financial markets of the United States is
such as to make it, in your reasonable judgment, impracticable to market the
Shares or enforce contracts for the sale of the Shares, (v) if a banking
moratorium has been declared by Virginia, New York or federal authorities, (vi)
any federal or state statute, regulation, rule, or order of any court or other
governmental authority has been enacted, published, decreed, or otherwise
promulgated that in your sole judgment materially adversely affects or will
materially adversely affect the business or operations of the Company, or (vii)
any action has been taken by any federal, state, or local government or agency
in respect of its monetary or fiscal affairs that in your reasonable opinion has
a material adverse effect on the securities markets in the United States. You
shall have no liability to the Company pursuant to this Agreement or otherwise
as a result of any such termination.
(b) Result of Termination.
(i) If the sale of the Shares provided for
herein is not consummated (A) because of any termination of this Agreement
pursuant to Section 10.(a), (B) because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or comply with any
provision hereof other than by reason of your default, (C) by ____________, 1997
due to reasons within the control of the Company or any of its affiliates, or
(D) the Company abandons this Offering and obtains financing from other sources
and you are not retained as a senior investment banker in connection with such
financing, then in addition to its obligations with respect to expenses as set
forth in Section 6, the Company will reimburse you on demand for all your
reasonable out-of-pocket expenses (including the fees and expenses of your
counsel), including disbursements reasonably incurred by you in reviewing the
27
Registration Statement and the Prospectus, and in investigating and making
preparations for the marketing of the Shares.
(ii) If the sale of all of the Shares is not
consummated by reason of your inability or failure to sell the Shares within
sixty (60) days of the effective date of the Registration Statement, and if the
inability or failure to sell the Shares is unrelated (A) to any matter giving
rise to a right of termination pursuant to Section 10.(a)(i), (B) to any matter
described in subsections (B) through (D) of Section 10.(b)(i), or (C) to any
significant unforeseen matter concerning the Company detected by you in the
course of your due diligence and other investigations, then you will reimburse
the Company on demand for all of the Company's reasonable out-of-pocket expenses
(including the fees and expenses of its counsel, accountants and the Escrow
Agent), including disbursements reasonably incurred by the Company, incurred in
connection with the Offering.
(iii) If the sale of the Shares provided
for herein is not consummated for any other reason, the Company shall pay
expenses as required by Section 6, and the neither party shall have any
additional liability to the other except for such liabilities, if any, as may
exist or thereafter arise under Section 8.
11. Notices.
(a) Method and Location of Notices. All communications
hereunder, except as herein otherwise specifically provided, shall be in writing
and shall be sent by overnight courier, hand-delivered or telecopied and
confirmed as follows:
To the Company:
Commonwealth Biotechnologies, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Ph.D.
Telecopier No.: (000) 000-0000
with a copy to:
XxXxxxx Xxxx
000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: X. Xxxxxxxx English, Esquire
Telecopier No.: (000) 000-0000
28
To You:
Xxxxxxxx & Strudwick, Incorporated
0000 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. X. XxXxxxxx Xxxxx, III
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx & Savage, P.C.
0000 XxxxxxxXxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Telecopier No.: (000) 000-0000
(b) Time of Notices. Notice shall be deemed to be given
by you to the Company or by the Company to you when it is sent by overnight
courier, hand-delivered or telecopied as provided in Section 11.(a).
12. Parties. This Agreement shall inure solely to the benefit of and
shall be binding upon you, the Company and the controlling persons referred to
in Section 8, and their respective successors, legal representatives and
assigns, and no other person shall have or be construed to have a legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provision herein contained.
13. Governing Law, Construction, and Time. This Agreement shall
be governed by and construed in accordance with the laws of the Commonwealth of
Virginia. Specified time of day refers to United States Eastern Time. Time
shall be of the essence of this Agreement.
14. Description Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
15. Counterparts. This Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart, the executed
counterparts shall together constitute a single instrument.
29
If the foregoing correctly sets forth the understanding between you and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
COMMONWEALTH BIOTECHNOLOGIES, INC.
By:
Name:
Title:
Confirmed and accepted as of the date first above written:
XXXXXXXX & XXXXXXXXX, INCORPORATED
By:
X. XxXxxxxx Downs, III
Senior Vice President
30
EXHIBIT A
Disclosure Schedule
None.
EXHIBIT B
Form of Warrant
See attached.
EXHIBIT C
Company's Legal Opinion
(i) The Company has been duly incorporated and
is validly existing in good standing as a corporation under the laws of the
Commonwealth of Virginia with all requisite corporate power and authority to
enter into this Agreement, to conduct its business and to own and operate its
properties, investments and assets as described in the Prospectus. To the actual
knowledge of such counsel, the Company is not in violation of any provision of
its articles of incorporation or bylaws, and is not in material default under or
in breach of any term or condition of any material agreement or instrument of
which such counsel has actual knowledge to which the Company is a party or by
which any of its properties, investments or assets is bound, except as disclosed
in the Prospectus.
(ii) To their actual knowledge, there is not
pending or threatened, any action, suit or proceeding before or by any federal,
state or local court or government authority or agency to which the Company is
or may be a party, or to which any of the investments, properties or assets of
the Company is or may be subject which is not disclosed in the Prospectus that,
if adversely determined, would materially affect the ability of the Company to
carry out and implement the business of the Company as described in the
Prospectus.
(iii) The Shares conform in all material
respects to the descriptions thereof contained in the Prospectus.
(iv) The information in the Prospectus under the
captions "Risk Factors" and "Description of Capital Stock," has been reviewed by
such counsel and, insofar as they contain statements of law or describe legal
documents, such statements are correct in all material respects.
(v) This Agreement has been duly and validly
authorized, executed and delivered by or on behalf of the Company and assuming
due execution and delivery by the other parties thereto constitutes a valid and
binding agreement of the Company enforceable in accordance with its terms,
except to the extent enforceability may be limited by (A) bankruptcy,
insolvency, moratorium, liquidation, reorganization, or similar laws affecting
creditors' rights generally, regardless of whether such enforceability is
considered in equity or at law, (B) general equity principles and (C)
limitations imposed by federal or state securities laws or the public policy
underlying such laws regarding the enforceability of indemnification or
contribution provisions.
(vi) The Shares have been duly and validly
authorized by the Company, and upon issuance, will be validly issued, fully paid
and non-assessable, with no personal liability attaching to the ownership
thereof, and conform to the description thereof contained in the Prospectus. The
form of certificates evidencing the Shares complies with all applicable
requirements of Virginia law.
(vii) The execution and delivery of this
Agreement, the incurrence of the obligations herein set forth, the compliance
with the terms and provisions hereof and the consummation of the transactions
contemplated herein and in the Prospectus do not and will not conflict with or
constitute a breach of, or default under, the articles of incorporation or
bylaws of the Company, or a material breach of or material default under the
terms, provisions or conditions of any other material instrument, agreement or
indenture of which such counsel has actual knowledge to which the Company is a
party or by which it is bound or by which its properties, assets, business or
investments are affected or any statute, order, rule or regulation applicable to
the Company or any of the investments, properties or assets of the Company of
any court or any federal, state or local governmental authority or agency having
jurisdiction over the Company or any of the investments, properties, assets or
business of the Company.
(viii) To their actual knowledge, other
than with respect to the securities or blue sky laws of any jurisdiction, no
authorization, approval or consent of any federal, state or local court or
governmental authority or agency is necessary in connection with the execution
and delivery by the Company of this Agreement, the consummation of the
transactions contemplated herein and in the Prospectus or the issuance and sale
of the Shares.
(ix) All corporate action required to be taken by
the Company as a condition to the sale of the Shares to the purchasers thereof
has been taken. To the knowledge of such counsel, there are no preemptive or
other rights to subscribe for the Shares except such as have been waived.
(x) The Common Stock, including the Shares, has
been approved for quotation on The Nasdaq Small Cap Market.
(xi) The Registration Statement has become
effective under the 1933 Act and, to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or is pending or
contemplated under the 1933 Act. Other than financial statements and other
financial and operating data and schedules contained therein, as to which
counsel need express no opinion, the Registration Statement, when it became
effective, the Prospectus, as of its date and as of the date hereof, comply as
to form in all material respects with the requirements of the 1933 Act and the
Rules and Regulations.
(xii) Nothing has come to such counsel's
attention that leads it to believe that the Registration Statement, or any
further amendment thereto made prior to the Closing Date, on its effective date,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus or any
amendment or supplement thereto made prior to the Closing Date, as of its date
and as of the Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading (provided that such counsel need express no belief
regarding the financial statements and related schedules and other financial
data contained in the Registration Statement, any amendment thereto, or the
Prospectus, or any amendment or supplement thereto).
(xiii) The Company is not, and will not
become solely as a result of the consummation of the Transactions, an
"investment company," or an entity that controls or is "controlled by" an
"investment company," as such terms are defined under the 1940 Act.
In rendering the opinions set forth above, XxXxxxx Xxxx xxx rely as to
matters of fact upon certificates furnished to them by the Company and its
officers. Copies of all certificates so relied upon shall be delivered to you
and your counsel.
