Draft of 1/7/98
400,000 UNITS
IXION BIOTECHNOLOGY, INC.
AGREEMENT
January , 1998
Xx. Xxxx X. Xxxx
President
Unified Management Corporation
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Dear Xx. Xxxx:
Ixion Biotechnology, Inc., a Delaware corporation (the "Company"),
proposes to sell directly an aggregate of up to 400,000 Units (the
"Units") in a registered public offering. Each Unit will consist of one
share of the Company's Common Stock, $.01 par value ("Common Stock"), and
.25 Charitable Benefit Warrant, substantially in the form filed as
exhibits to the Registration Statement (hereinafter defined) (the
"Charitable Benefit Warrants"). There is no required minimum number of
Units to be sold, and all funds received will go immediately to the
Company. The Company will effect offers and sales of Units through
printed copies of the Prospectus (defined below) delivered by mail and
electronically, by contacting prospective investors by publication
through a posting on the Company's web site, through newspaper
advertisements, direct email, and direct mail. The offer and sale of the
Units are referred to as the "Offering."
The Company proposes to offer the Units directly to investors
through certain executive officers of the Company in various states where
it is qualified to do so, except in Florida, where sales must be made
through a registered broker/dealer under Florida's securities statutes.
In consideration of the mutual agreements contained herein and of
the interests of the parties in the transactions contemplated hereby, the
parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to Unified Management
Corporation ("you" or "Unified Management") as follows:
(a) A registration statement on Form SB-2 (File No.
333-34765) with respect to the Units has been carefully prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the Rules and Regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission. Copies
of such registration statement, including any amendments thereto
(including one post-effective amendment relating to this Agreement), the
preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein, and the exhibits, financial statements
and schedules, as finally amended and revised, have heretofore been
delivered or made available by the Company to you. Such registration
statement, together with any registration statement filed by the Company
pursuant to Rule 462(b) of the Act, herein referred to as the
"Registration Statement," which shall be deemed to include all
information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has become effective under the Act and
no additional post-effective amendment to the Registration Statement has
been filed as of the date of this Agreement. "Prospectus" means (a) the
form of prospectus filed with the Commission pursuant to Rule 424(b) or
(b) the form of prospectus included in Post-Effective Amendment no. 1 to
the Registration Statement filed prior to the time it becomes effective
or filed pursuant to Rule 424(a) under the Act that is delivered by the
Company to Unified Management for delivery to Florida purchasers of the
Units. Each preliminary prospectus included in the Registration
Statement prior to the time it becomes effective is herein referred to as
a "Preliminary Prospectus."
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the state of
Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. The Company does not own and never has owned a controlling
interest in any corporation or other business entity. The Company is
duly qualified to transact business in all jurisdictions in which the
conduct of its business requires such qualification.
(c) The outstanding shares of Common Stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable and have been issued and sold by the Company in compliance
in all material respects with applicable securities laws; the Common
Stock and Charitable Benefit Warrants to be included in the Units have
been duly authorized and when issued and paid for as contemplated herein
will be validly issued, fully paid and non-assessable; and no preemptive
rights of stockholders exist with respect to any security of the Company
or the issue and sale thereof. Neither the filing of the Registration
Statement nor the offering or sale of the Units as contemplated by this
Agreement gives rise to any rights, other than those which have been
waived or satisfied, for or relating to the registration of any shares of
Common Stock or other securities of the Company.
(d) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. The Common Stock
and the Charitable Benefit Warrants conform to the description thereof
contained in the Registration Statement. The forms of certificates for
the Common Stock and Charitable Benefit Warrants conform to the corporate
law of Delaware, the jurisdiction of the Company's incorporation.
(e) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering of
the Units and has not instituted proceedings for that purpose. The
Registration Statement contains, and the Prospectus and any amendments or
supplements thereto will contain, all statements which are required to be
stated therein by, and will conform, to the requirements of the Act and
the Rules and Regulations. The Registration Statement and any amendment
thereto do not contain, and will not contain, any untrue statement of a
material fact and do not omit, and will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any untrue
statement of material fact; and do not omit, and will not omit, to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment
or supplement, in reliance upon, and in conformity with, written
information furnished to the Company by Unified Management specifically
for use in the preparation thereof.
(f) The financial statements of the Company, together with
related notes and schedules as set forth in the Registration Statement,
present fairly the financial position and the results of operations and
cash flows of the Company at the indicated dates and for the indicated
periods. Such financial statements and related schedules have been
prepared in accordance with generally accepted principles of accounting,
consistently applied throughout the periods involved, except as disclosed
therein, and all adjustments necessary for a fair presentation of results
for such periods have been made. The summary financial and statistical
data of the Company included in the Registration Statement present fairly
the information shown therein and such data have been compiled on a basis
consistent with the financial statements presented therein and the books
and records of the Company.
(g) Coopers & Xxxxxxx LLP, who have audited certain of the
financial statements filed with the Commission as part of the
Registration Statement, are independent public accountants as required by
the Act and the Rules and Regulations.
(h) There is no action, suit, claim, or proceeding
pending or, to the knowledge of the Company, threatened against the
Company before any court or administrative agency or otherwise which if
determined adversely to the Company might result in any material adverse
change in the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise), or prospects of the
Company or might prevent the consummation of the transactions
contemplated hereby, except as set forth in the Registration Statement.
(i) The Company has good and marketable title to all of the
properties and assets reflected in the financial statements (or as
described in the Registration Statement), subject to no lien, mortgage,
pledge, charge, or encumbrance of any kind except those reflected in such
financial statements (or as described in the Registration Statement) or
which are not material in amount. The Company occupies its leased
properties under valid and binding leases conforming in all material
respects to the description thereof set forth in the Registration
Statement.
(j) The Company has filed all federal, state, local and
foreign income tax returns which have been required to be filed and has
paid all taxes indicated by said returns and all assessments received by
it to the extent that such taxes have become due and are not being
contested in good faith. All tax liabilities have been adequately
provided for in the financial statements of the Company.
(k) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or any
development involving a prospective material adverse change in or
affecting the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise), or prospects of the
Company, whether or not occurring in the ordinary course of business, and
there has not been any material transaction entered into or any material
transaction that is probable of being entered into by the Company, other
than transactions in the ordinary course of business and changes and
transactions described in the Registration Statement, as it may be
amended or supplemented. The Company has no material contingent
obligations which are not disclosed in the Company's financial statements
included in the Registration Statement or elsewhere in the Prospectus.
(l) The Company is not, nor, with the giving of notice or
lapse of time or both, will it be, in violation of or in default under
its articles of incorporation or bylaws or under any agreement, lease,
contract, indenture, or other instrument or obligation to which it is a
party or by which it, or any of its properties, is bound and which
default is of material significance in respect of the condition,
financial or otherwise of the Company or the business, management,
properties, assets, rights, operations, condition (financial or
otherwise), or prospects of the Company. The execution and delivery of
this Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, or
other agreement or instrument to which the Company is a party, or of the
articles of incorporation or bylaws of the Company or any order, rule, or
regulation applicable to the Company of any court or of any regulatory
body or administrative agency or other governmental body having
jurisdiction.
(m) Each approval, consent, order, authorization,
designation, declaration, or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such
additional steps as may be required by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD") or such additional
steps as may be necessary to qualify the Units for public offering under
state securities or Blue Sky laws) has been obtained or made and is in
full force and effect.
(n) The Company holds all material patents, patent
rights trademarks, trade names, copyrights, trade secrets, and licenses
of any of the foregoing (collectively, "Intellectual Property Rights")
that are necessary to the conduct of its business; there is no claim
pending or, to the best knowledge of the Company, threatened against the
Company alleging any infringement of Intellectual Property Rights, or any
violation of the terms of any license relating to Intellectual Property
Rights, nor does the Company know of any basis for any such claim other
than as described in the Prospectus. The Company knows of no material
infringement by others of Intellectual Property Rights owned by or
licensed to the Company. The Company has obtained, is in compliance in
all material respects with, and maintains in full force and effect all
material licenses, certificates, permits, orders, or other, similar
authorizations granted or issued by any governmental agency
(collectively, "Government Permits") required to conduct its business as
it is presently conducted. All applications for additional Government
Permits described in the Prospectus as having been made by the Company
have been properly and effectively made in accordance with the applicable
laws and regulations with respect thereto and such applications
constitute, in the best judgment of the Company's management, those
reasonably required to have been made in order to carry out the Company's
business plan as described in the Prospectus. No proceeding to revoke,
limit or otherwise materially change any Government Permit has been
commenced or, to the Company's best knowledge, is threatened against the
Company or any supplier to the Company with respect to materials supplied
to the Company, and the Company has no reason to anticipate that any such
proceeding will be commenced against the Company or any such supplier.
Except as disclosed or contemplated in the Prospectus, the Company has no
reason to believe that any pending application for a Government Permit
will be denied or limited in a manner inconsistent with the Company's
business plan as described in the Prospectus.
(o) The Company is in all material respects in compliance
with all applicable Environmental Laws. The Company has no knowledge of
any past, present or, as anticipated by the Company, future events,
conditions, activities, investigation, studies, plans or proposals that
(i) would interfere with or prevent compliance with any Environmental Law
by the Company or (ii) could reasonably be expected to give rise to any
common law or other liability, or otherwise form the basis of a claim,
action, suit, proceeding, hearing, or investigation, involving the
Company and related in any way to Hazardous Substances or Environmental
Laws. Except for the prudent and safe use and management of Hazardous
Substances in the ordinary course of the Company's business, (i) no
Hazardous Substance is or has been used, treated, stored, generated,
manufactured, or otherwise handled on or at any Facility and (ii) to the
Company's best knowledge, no Hazardous Substance has otherwise come to be
located in, on, or under any Facility. No Hazardous Substances are
stored at any Facility except in quantities necessary to satisfy the
reasonably anticipated use or consumption by the Company. No litigation,
claim, proceeding, or governmental investigation is pending regarding any
environmental matter for which the Company has been served or otherwise
notified or, to the knowledge of the Company threatened or asserted
against the Company, or the officers or directors of the Company in
their capacities as such, or any Facility or the Company's business.
There are no orders, judgments or decrees of any court or of any
governmental agency or instrumentality under any Environmental Law which
specifically apply to the Company, any Facility or any of the Company's
operations. The Company has not received from a governmental authority
or other person (i) any notice that it is a potentially responsible
person for any Contaminated site or (ii) any request for information
about a site alleged to be Contaminated or regarding the disposal of
Hazardous Substances. There is no litigation or proceeding against any
other person by the Company regarding any environmental matter. The
Company has disclosed in the Prospectus or made available to Unified
Management and its counsel true, complete, and correct copies of any
reports, studies, investigations, audits, analysis, tests, or monitoring
in the possession of or initiated by the Company pertaining to any
environmental matter relating to the Company, its past or present
operations, or any Facility.
For the purposes of the foregoing paragraph, "Environmental Laws"
means any applicable federal, state or local statute, regulation, code,
rule, ordinance, order, judgment, decree, injunction, or common law
pertaining in any way to the protection of human health or the
environment, including without limitation, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act, the Toxic Substances Control Act, the Clean Air Act, the
Federal Water Pollution Control Act, and any similar or comparable state
or local law; "Hazardous Substance" means any hazardous, toxic,
radioactive, or infectious substance, material, or waste as defined,
listed, or regulated under any Environmental Law; "Contaminated" means
the actual existence on or under any real property of Hazardous
Substances, if the existence of such Hazardous Substances triggers a
requirement to perform any investigatory, remedial, removal, or other
response action under any Environmental Laws or if such response action
legally could be required by any governmental authority; "Facility" means
any property currently owned, leased or occupied by the Company.
(p) The Company has not taken nor intends to take, directly
or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock
to facilitate the sale or resale of the Common Stock.
(q) The Company is not an "investment company" within
the meaning of such term under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the Commission
thereunder.
(r) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(s) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for
companies engaged in similar industries.
(t) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any liability; the
Company has not incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Section 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(u) The Company is in material compliance with all laws,
rules, regulations, orders of any court or administrative agency,
operating licenses, or other requirements imposed by any governmental
body applicable to it, including, without limitation, all applicable
laws, rules, regulations, licenses, or other governmental standards
applicable to the industry in which the Company operates; and the conduct
of the business of the Company, as described in the Prospectus, will not
cause the Company to be in violation of any such requirements.
(v) The Charitable Benefit Warrants have been authorized for
issuance to the various purchasers of the Units and will, when issued,
possess rights, privileges, and characteristics as represented in the
most recent form of Charitable Benefit Warrants filed as an exhibit to
the Registration Statement; the securities to be issued upon exercise of
the Charitable Benefit Warrants, when issued and delivered against
payment therefor in accordance with the terms of the Charitable Benefit
Warrants, will be duly and validly issued, fully paid, nonassessable,
and free of preemptive rights, and all corporate action required to be
taken for the authorization and issuance of the Charitable Benefit
Warrants, and the securities to be issued upon their exercise, has
validly and sufficiently been taken.
(w) Except as disclosed in the Prospectus, neither the
Company nor any of its officers, directors or affiliates have caused any
person, other than Unified Management, to be entitled to reimbursement of
any kind, including, without limitation, any compensation that would be
includable as underwriter compensation under the NASD's Corporate
Financing Rule with respect to the offering of the Units, as a result of
the consummation of such offering based on any activity of such person as
a finder, agent, broker, investment adviser, or other financial service
provider.
2. PURCHASE, SALE AND DELIVERY OF THE UNITS.
(a) On the basis of the representations, warranties, and
covenants herein contained, and subject to the conditions herein set
forth, Unified Management agrees to act on behalf of the Company in
connection with sales to Florida purchasers, and the Company agrees to
sell Units to Florida purchasers who subscribe for Units by properly
completing Unit Purchase Agreements and who are approved for purchase.
Unified Management will have no obligation to purchase Units on a firm
commitment basis, a best efforts basis, or any other basis.
(b) Payment for the Units to be sold hereunder will be
made directly by the purchasers in checks drawn to the order of the
Company or bank wire to an account specified by the Company against
certificates for the Common Stock and the Charitable Benefit Warrants
(which delivery shall take place in such location as may be specified by
purchasers in the Unit Purchase Agreement).
3. OFFERING.
The Units are to be initially offered to the public at the public
offering price (determined solely by the Company) set forth in the
Prospectus.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with Unified Management that:
(a) The Company will (i) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule
430A of the Rules and Regulations is followed, to prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations a
Prospectus containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of
the Rules and Regulations, and (ii) not file any amendment to the
Registration Statement or supplement to the Prospectus of which Unified
Management shall not previously have been advised and furnished with a
copy or to which Unified Management shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations.
(b) The Company will advise Unified Management promptly (i)
when the Registration Statement or any post-effective amendment thereto
shall have become effective, (ii) of receipt of any comments from the
Commission, (iii) of any request of the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the use of the Prospectus or of the institution of any proceedings for
that purpose. The Company will use its best efforts to prevent the
issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if
issued.
(c) The Company will cooperate with Unified Management in
endeavoring to qualify the Units for sale under the securities laws of
Florida and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose. The
Company will, from time to time, prepare and file such statements,
reports, and other documents, as are or may be required to continue such
qualification in effect for so long a period as Unified Management may
reasonably request.
(d) The Company will deliver to Unified Management during the
period when delivery of a Prospectus is required under the Act, as many
paper copies of the Prospectus in final form, or as thereafter amended or
supplemented, as Unified Management may reasonably request. Until the
Offering is terminated, the Company will maintain the Prospectus on its
website in several electronic formats, including HTML and MS Word, so as
to permit prospective investors to download such Prospectus in compliance
with the Act and the Rules and Regulations relating to the use of
electronic media for delivery purposes.
(e) The Company will comply with the Act and the Rules and
Regulations, and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder, so as to permit the sale of the Units as contemplated in this
Agreement and the Prospectus. If during the period in which a prospectus
is required by law to be delivered by Unified Management, any event shall
occur as a result of which, in the judgment of the Company or in the
reasonable opinion of Unified Management, it becomes necessary to amend
or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or, if it is necessary at any
time to amend or supplement the Prospectus to comply with any law, the
Company promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus
so that the Prospectus as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with the law.
(f) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any event
not later than 16 months after the effective date of the Registration
Statement, an earnings statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement, which
earnings statement shall satisfy the requirements of Section 11(a) of the
Act and Rule 158 of the Rules and Regulations.
(g) The Company will, for a period of two years from the date
of the Prospectus, deliver to Unified Management, either electronically
or printed on paper, copies of annual reports and copies of all other
documents, reports and information furnished by the Company to its
stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act
or the Exchange Act.
(h) There is no public market for the Common Stock and it is
unlikely that any such market will develop after the Offering. The
Company does not currently meet the requirements for listing on an
organized stock exchange or quotation of over-the counter market maker
trades on the Nasdaq market. The Company will use reasonable efforts to
list the Common Stock on a regulated securities exchange following the
termination of the Offering.
(i) The Company shall apply the net proceeds of its sale of
the Units as set forth in the Prospectus and shall file such reports with
the Commission with respect to the sale of the Units and the application
of the proceeds here from as may be required in accordance with Rule 463
under the Act.
(j) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Units in such a
manner as would require the Company or any of the subsidiaries to
register as an investment company under the 1940 Act.
(k) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(l) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.
5. FEES, COSTS, AND EXPENSES.
(a) The Company will pay Unified Management a commission of
2.0% of the gross proceeds of sales of Units to purchasers resident in
Florida, arising as a result of access to the Company's website,
newspaper advertisements, direct email, or direct mail and not arising
out of any solicitation of potential customers by Unified Management;
provided, however, that such sales must be made pursuant to completed
Florida Unit Purchase Agreements and must be approved by the Company.
The Company may reject any Unit Purchase Agreement in its absolute
discretion.
(b) The Company will pay all costs, expenses and fees incident
to the performance of the obligations of the Company under this
Agreement, including, without limiting the generality of the foregoing,
the following: accounting fees of the Company; the fees and
disbursements of counsel for the Company; the cost of printing and
delivering to, or as requested by, Unified Management copies of the
Registration Statement, Preliminary Prospectuses, the Prospectus, and
this Agreement; the filing fees of the Commission; the filing fees
incident to securing any required review by the NASD of the terms of the
sale of the Units; and the expenses, including the fees and
disbursements of counsel, incurred in connection with the qualification
of the Units under state securities or Blue Sky laws. Any transfer taxes
imposed on the sale of the Units will be paid by the Company. The
Company shall not, however, be required to pay for any of Unified
Management' expenses (other than those related to qualification under
NASD regulation and state securities or Blue Sky laws).
6. CONDITIONS OF OBLIGATIONS OF UNIFIED MANAGEMENT.
The obligations of Unified Management hereunder are subject
to the accuracy of the representations and warranties of the Company
contained herein, and to the performance by the Company of their
covenants and obligations hereunder and to the following additional
conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made, and any request of the Commission for additional
information (to be included in the Registration Statement or otherwise)
shall have been disclosed to Unified Management and complied with to its
reasonable satisfaction. No stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been taken or, to
the knowledge of the Company, shall be contemplated by the Commission and
no injunction, restraining order, or order of any nature by a federal or
state court of competent jurisdiction shall have been issued as of the
date hereof which would prevent the issuance of the Units.
(b) Unified Management shall have received the opinion of
Xxxxx Xxxxxxxx, Esq., counsel for the Company, dated the date of this
Agreement, addressed to Unified Management to the effect that:
(i) The Units have been duly and validly authorized.
(ii) The Common Shares have been duly and valid
authorized and, when certificates therefor have been duly
authenticated, delivered and paid for in accordance with all
applicable laws and agreements, will be duly and validly
issued, fully-paid, and nonassessable.
(iii) The shares issuable upon exercise of the
Charitable Benefit Warrants (the "Underlying Shares") have
been duly and validly authorized and, (a) assuming the
Underlying Shares will be duly and validly authorized as of
the date of issuance and (b) when certificates therefor have
been duly authenticated, delivered, and the Underlying Shares
have been paid for in accordance with all applicable laws and
the Warrant Agreement, the Underlying Shares will be duly and
validly issued, fully-paid, and nonassessable.
(iv) The Charitable Benefit Warrants have been duly and
valid authorized and, when (a) the Warrant Agreement has been
duly executed and delivered (assuming due authorization,
execution and delivery thereof by the Warrant Agent) and (b)
the Charitable Benefit Warrants have been duly authenticated,
delivered and paid for in accordance with all applicable laws
and the Warrant Agreement, the Charitable Benefit Warrants
will be valid and binding obligations of the Company
enforceable against the Company, except that such enforcement
may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or
creditors' rights generally and general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity).
(v) This Agreement has been duly authorized, executed,
and delivered by the Company.
In addition to the matters set forth above, the opinion of Xxxxx
Xxxxxxxx, Esq., shall also include a statement to the effect that nothing
has come to the attention of such counsel that has caused him to believe
that (i) the Registration Statement, at the time it became effective
under the Act (but after giving effect to any modifications incorporated
therein pursuant to Rule 430A under the Act) and as of the date of this
Agreement, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant
to the Rules and Regulations and as of the date of this Agreement, as the
case may be, contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements, in
the light of the circumstances under which they are made, not misleading
(except that such counsel need express no view as to financial
statements, schedules and statistical information therein).
(c) Unified Management shall have received on the date of this
Agreement a certificate or certificates of the Chairman and Chief
Executive Officer and the Controller of the Company to the effect that,
as of the date of this Agreement each of them severally represents as
follows:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for such purpose have been taken or are, to his
or her knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the
Date of this Agreement;
(iii) All filings required to have been made pursuant to
Rule 424 or Rule 430A under the Act have been made;
(iv) He or she has carefully examined the Registration
Statement and the Prospectus and, in his or her opinion, as
of the effective date of the Registration Statement, the
statements contained in the Registration Statement were true
and correct, and such Registration Statement and Prospectus
did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading, and since the effective date of the Registration
Statement, no event has occurred which should have been set
forth in a supplement to or an amendment of the Prospectus
which has not been so set forth in such supplement or
amendment; and
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has
not been any material adverse change or any development
involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the
Company or the earnings, business, management, properties,
assets, rights, operations, condition (financial or
otherwise) or prospects of the Company, whether or not
arising in the ordinary course of business.
(h) The Company shall have furnished to Unified Management
such further certificates and documents confirming the
representations and warranties, covenants and conditions
contained herein and related matters as Unified Management
may reasonably have requested.
If any of the conditions herein above provided for in this Section
6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of Unified Management hereunder may be
terminated by Unified Management by promptly notifying the Company of
such termination in writing.
In such event, the Company and Unified Management shall not be
under any obligation to each other (except to the extent provided in
Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the Units
required to be delivered as and when specified in this Agreement are
subject to the conditions that at the date of this Agreement, no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and in effect or proceedings therefor initiated or
threatened.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless
Unified Management and each person, if any, who controls Unified
Management within the meaning of the Act, against any losses, claims,
damages, or liabilities to which Unified Management or any such
controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and will reimburse Unified Management and each such
controlling person upon demand for any legal or other expenses reasonably
incurred by Unified Management or such controlling person in connection
with investigating or defending any such loss, claim, damage or
liability, action or proceeding or in responding to a subpoena or
governmental inquiry related to the offering of the Units, whether or not
Unified Management or controlling person is a party to any action or
proceeding; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or such amendment
or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through Unified Management
specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(b) Unified Management will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer or
controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made; and will
reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability,
action or proceeding; provided, however, that Unified Management will be
liable in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company
by or through Unified Management specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability
which Unified Management may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to
any party who shall fail to give notice as provided in this Section 8(c)
if the party to whom notice was not given was unaware of the proceeding
to which such notice would have related and was materially prejudiced by
the failure to give such notice, but the failure to give such notice
shall not relieve the indemnifying party or parties from any liability
which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a) or (b). In
case any such proceeding shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party and shall pay as incurred the fees
and disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of
presentation) the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them, or (iii) the indemnifying party shall have failed to assume
the defense and employ counsel acceptable to the indemnified party within
a reasonable period of time after notice of commencement of the action.
It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees and expenses of more than one separate
firm for all such indemnified parties. Such firm shall be designated in
writing by you in the case of parties indemnified pursuant to Section
8(a) and by the Company in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding of which indemnification may be
sought hereunder (whether or not any indemnified party is an actual or
potential party to such claim, action or proceeding) unless such
settlement, compromise, or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless n indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages, or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and Unified Management on the
other from the offering of the Units. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and Unified Management on
the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and Unified Management on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears to the total
commissions received by Unified Management. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or Unified Management 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 Unified Management agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this Section 8(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, or liabilities (or
actions or proceedings in respect thereof) referred to above in this
Section 8(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) Unified Management shall not be
required to contribute any amount in excess of the commissions
applicable to the Units sold through Unified Management to Florida
purchasers, and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having
jurisdiction over any other contributing party, agrees that process
issuing from such court may be served upon him or it by any other
contributing party and consents to the service of such process and agrees
that any other contributing party may join him or it as an additional
defendant in any such proceeding in which such other contributing party
is a party.
(f) Any losses, claims, damages, liabilities, or expenses for
which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the
indemnified party as such losses, claims, damages, liabilities or
expenses are incurred. The indemnity and contribution agreements
contained in this Section 8 and the representations and warranties of the
Company set forth in this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation made by or on
behalf of Unified Management or any person controlling Unified
Management, the Company, its directors or officers, or any persons
controlling the Company, (ii) acceptance of any Units and payment
therefor hereunder, and (iii) any termination of this Agreement. A
successor to Unified Management, or to the Company, its directors or
officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution, and reimbursement agreements
contained in this Section 8.
9. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, emailed (with
confirmation of delivery) or telecopied as follows: if to Unified
Management, to Unified Management Corporation, 000 Xxxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000-0000, Attention, President, Fax: 000-000-0000,
email: xxxxx@xxxxx.xxx; if to the Company, to Ixion Biotechnology, Inc.,
00000 Xxxxxxxx Xxxxx, Xxxxxxx, XX 00000, Attention: Chairman of the
Board, Fax: 000-000-0000; email: Xxxx@xxxxx-xxxxxxx.xxx; with a copy to
Xxxxx Xxxxxxxx, Esq., 000 XX 0xx Xxx., Xxx. X, Xxxxxxxxxxx, XX 00000,
Fax: 000-000-0000, email: xxxxx@xxx.xxx.
11. TERMINATION.
This Agreement may be terminated by you by notice to the Company as
follows:
(a) at any time prior to the the termination of the Offering
if any of the following has occurred: (i) since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, any material adverse change or any development involving a
prospective material adverse change in or affecting the condition,
financial or otherwise, of the Company and its subsidiaries taken as a
whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise), or prospects of the
Company and its subsidiaries taken as a whole, whether or not arising in
the ordinary course of business or (ii) the enactment, publication,
decree, or other promulgation of any statute, regulation, rule, or order
of any court or other governmental authority which, in your opinion,
materially and adversely affects or may materially and adversely affect
the business or operations of the Company; or
(b) as provided in Sections 6 and 9 of this Agreement.
11. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
Unified Management, the Company, and their respective successors,
executors, administrators, heirs and assigns, and the officers,
directors, and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. No purchaser of any
of the Units through Unified Management shall be deemed a successor or
assign merely because of such purchase.
12. INFORMATION PROVIDED BY UNIFIED MANAGEMENT.
The Company and Unified Management acknowledge and agree that the
only information furnished or to be furnished by Unified Management to
the Company for inclusion in any Prospectus or the Registration Statement
consists of the information set forth on the front cover page (insofar as
such information relates to Unified Management) and the information under
the caption "Plan of Distribution" in the Prospectus.
13. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties, and
covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement and (b) any
investigation made by or on behalf of Unified Management or controlling
person thereof, or by or on behalf of the Company or its directors or
officers.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in accordance
with, the laws of the state of Florida. All disputes relating to this
Agreement shall be adjudicated before a court located in Alachua County,
Florida to the exclusion of all other courts that might have
jurisdiction.
If the foregoing letter is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicates hereof, whereupon it will become a binding agreement between
the Company and Unified Management in accordance with its terms.
Very truly yours,
Ixion Biotechnology, Inc.
By: ---------------------------
Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date
first above written.
Unified Management Corporation
By ---------------------------
Authorized Officer
