UNDERWRITING AGREEMENT
November , 1997
G-V Capital Corp.
000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxx, X.X. 00000
Dear Sirs:
Medical Acquisition Corp., a Florida corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell,
1,166,667 shares of the common stock, $.01 par value (the "Common Stock"), of
the Company (the "Firm Shares"). In addition, solely for the purpose of covering
over-allotments, the Company proposes to grant to you the option to cause the
Company to issue and sell, at the offering price, less commissions and
non-accountable expense allowance, up to an aggregate of 175,000 shares of
Common Stock (the "Additional Shares") exercisable during the 45 day period
after the date of the Prospectus. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares". The Shares are more fully
described in the Registration Statement and Prospectus referred to below.
The Company has been advised by you that it proposes to offer the
shares of Common Stock to the public at the initial offering price set forth on
the cover page of the Prospectus and to certain dealers at that price less a
concession not in excess of $ per share. You may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other dealers.
The Company confirms as follows its agreement with you with respect to the sale
of the Shares by you as exclusive agent for the Company:
1. REGISTRATION STATEMENT AND PROSPECTUS: The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission"), in
accordance with the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder (the "Rules and
Regulations", and together with said Act, the "Act"), a registration statement
on Form SB-2 (File No. ______________) and may have filed one or more amendments
thereto, including in such registration statement and in certain amendments
thereto a related preliminary prospectus for the registration under the Act of
the Shares. In addition, subject to the provisions of Section 4(e) hereof, the
Company has filed or will promptly file a further amendment to such registration
statement prior to the effectiveness of such registration statement, unless an
amendment is not required pursuant to Rule 430A of the Rules and Regulations. As
used in this Agreement, the term "Registration Statement" means such
registration statement, including the prospectus, financial statements and
schedules thereto, exhibits and other documents filed as part thereof, as
amended when, and in the form in which, it is declared effective by the
Commission, and, in the event any post-effective amendment thereto is filed
thereafter and on or before the Closing Date (as hereinafter defined), shall
also mean (from and after the date such post-effective amendment is effective
under the Act) such registration statement as so amended, provided that such
Registration Statement, at the time it becomes effective, may omit such
information as is permitted to be omitted from the Registration Statement when
it becomes effective pursuant to Rule 430A of the Rules and Regulations, which
information ("Rule 430A Information") shall be deemed to be included in such
Registration Statement when a final prospectus is filed with the Commission in
accordance with Rules 430A and 424(b)(1) or (4) of the Rules and Regulations;
the term "Preliminary Prospectus" means each prospectus included in the
Registration Statement, or any amendments thereto, before it becomes effective
under the Act, the form of prospectus omitting Rule 430A Information included in
the Registration Statement when it becomes effective, if applicable (the "Rule
430A Prospectus"), and any prospectus filed by the Company with your consent
pursuant to Rule 424(a) of the Regulations; the term "Prospectus" means the
final prospectus included as part of the Registration Statement, except that (i)
if any
prospectus (including any preliminary prospectus) which differs from such
prospectus included in the Registration Statement is provided to you for use in
connection with the offering of the Shares (whether or not such differing
prospectus is required to be filed by the Company pursuant to Rule 424(b) under
the Act), the term "Prospectus" as used herein shall mean such differing
prospectus from and after the date on which it shall have been first used, and
(ii) in the event any supplement to or amendment of such prospectus is made
after the date on which the Registration Statement is declared effective and on
or prior to the Closing Date, the term "Prospectus" shall also mean (with
respect to any supplement, from and after the date such supplement is first used
or, with respect to any amendment, the date such amendment is effective under
the Act) such prospectus as so supplemented or amended; and the term "Effective
Date" means (i) if the Company and you have determined not to proceed pursuant
to Rule 430A under the Act, the date on which the Registration Statement becomes
effective, or (ii) if the Company and you have determined to proceed pursuant to
Rule 430A under the Act, the date of this Agreement.
2. AGREEMENTS TO SELL AND ISSUE: Subject to the terms and conditions
herein set forth, the Company agrees to appoint you as its exclusive agent to
sell on a "best efforts, all or none" basis at a purchase price of $6.00 per
Firm Share or, as applicable, solely for the purpose of covering over-allotments
made in connection with the offering of the Firm Shares, per Additional Share,
the number of Shares (to be adjusted by you so as to eliminate fractional
shares) determined by multiplying the aggregate number of Firm Shares or
Additional Shares to be sold by a fraction, the numerator of which is the
aggregate number of Firm Shares or Additional Shares to be sold by you and the
denominator of which is the aggregate number of Firm Shares or Additional Shares
to be sold hereunder.
Subject to the terms and conditions herein set forth the Company agrees
to appoint you as its exclusive agent to sell on a "best efforts, all or none"
basis, up to an aggregate of 175,000 Additional Shares at a purchase price of
$6.00 per Additional Share. Additional Shares may be sold solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Shares. Additional Shares may be sold at any time and from time to time on or
before the forty-fifth business day following the date of the Prospectus upon
written notice from you to the Company specifying the number of Additional
Shares to be sold.
You will offer the Shares for sale at the initial public offering price
set forth on the cover of the Prospectus. After the initial public offering, you
may from time to time increase or decrease the public offering price, in your
sole discretion, by reason of changes in general market conditions or otherwise.
The Company acknowledges that you agree to use your best efforts to
find purchasers for the Firm Shares and for the Additional Shares within a
period of 30 days from the date of this Prospectus, subject to the extension for
an additional period of 30 days on mutual consent of the Company (the "Offering
Period") and you and that you have made no commitment to purchase any or all of
the Firm Shares or Additional Shares.
3. DELIVERY AND PAYMENT: Delivery of and payment for the Firm Shares
shall be made at the offices of G-V Capital Corp. ("GV"), 000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx, 00000 (or such other place as shall be
mutually agreed upon) at such time and date, not later than the third full
business day following the end of the Offering Period, as you shall designate by
at least forty-eight hours prior notice to the Company (the "Closing Date").
All proceeds from subscriptions will be deposited promptly into a
non-interest bearing account with [North Fork Bank], as escrow agent pursuant to
an escrow agreement between the Company, the Underwriter and such escrow agent.
Funds will be transmitted to the escrow agent for deposit in the escrow account
no later than noon of the business day following receipt. All checks must be
payable to "North Fork Bank, as escrow agent for Medical Acquisition Corp." In
the event the 1,166,667 shares of Common Stock are not sold within the Offering
Period described above, funds will be refunded promptly to subscribers in full
without
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deduction therefrom or interest thereon. During the Offering Period, no
subscriber will be entitled to a refund of any subscription, and no funds will
be released from escrow until completion or termination of the offering. There
are none nor will there be any arrangements between the Company and the
Underwriter whereby shares of Common Stock will be reserved for sales to persons
associated or affiliated with management of the Company or its affiliated
persons, although such persons may purchase shares of Common Stock in order to
assure the completion of this offering.
Delivery of and payment for Additional Shares shall be made at said
offices of GV, or at such other place, and at such time(s) and date(s) (each an
"Optional Closing Date") as may be agreed upon in writing by you and the
Company; PROVIDED, HOWEVER, that in no event may an Optional Closing Date be (i)
earlier than the Closing Date or (ii) later than three business days after the
date on which the related notice to sell Additional Shares is given.
The Closing Date and the time and place of delivery of and payment for
the Shares may be varied by agreement between you and the Company. The Optional
Closing Date and the time and place of delivery of and payment for the
Additional Shares may be varied by agreement between you and the Company.
Delivery of certificates for the Shares (in definitive form, registered in such
names and in such denominations as you shall request at least two business days
prior to the Closing Date by written notice to the Company) shall be made to
each purchaser against payment of the purchase price therefor by certified or
official bank check or checks payable in New York Clearing House funds to the
order of the Company, as its interest may appear. For the purpose of expediting
the checking and packaging of certificates for the Shares, the Company agrees to
make such certificates available for inspection at the offices of GV at least 24
hours prior to the Closing Date and each Optional Closing Date, as the case may
be.
As its basic compensation, your commission shall be seven percent (7%)
of the aggregate offering price of the Shares sold, payable in cash, at the
Closing. In addition, the Company shall pay you a non-accountable expense
allowance equal to $120,000 and (ii) the Company shall, at the Closing, issue,
sell and deliver to you, for an aggregate of $100 consideration, a warrant
representing the right to purchase up to an aggregate of 75,000 shares of Common
Stock (the "Underwriters' Warrant") in substantially the form filed as an
exhibit to the Registration Statement. The shares of Common Stock issuable upon
exercise of the Underwriters' Warrant are hereinafter referred to collectively
as the "Underwriters' Warrant Shares". The Underwriters' Warrant will be
exercisable initially at $6.00 per share at any time and from time to time, in
whole or in part, during a four-year period commencing one year from the date of
the Prospectus. The Underwriter=s Warrants may not be transferred, sold,
assigned or hypothecated during the one-year period following the date of the
Prospectus, except to you and members of the selected dealers and their officers
and partners.
4. COVENANTS AND AGREEMENTS OF THE COMPANY: (A) The Company covenants
and agrees with you as follows:
(a) The Company will notify you promptly by telephone and (if requested by
you) will confirm such advice in writing, (1) when the Registration
Statement has become effective and when any post-effective amendment
thereto becomes effective, (2) if Rule 430A under the Act is used, or
the Prospectus is otherwise required to be filed with the Commission
pursuant to Rule 424(b) under the Act, when the Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Act, (3) of any
request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information,
(4) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, preventing or suspending
the use of the Preliminary Prospectus, the Prospectus, the Registration
Statement or any amendment or supplement thereto, or refusing to permit
the effectiveness of the Registration Statement ("Stop Order"), or the
initiation of any proceedings for any of those purposes, (5) of the
happening of any event during the period mentioned in paragraph (f)
below which in the reasonable judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue
or which requires the making
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of any changes in the Registration Statement or the Prospectus in order
to make the statements therein not misleading, and (6) of the receipt
of any comments from the Commission [or the Blue Sky] or securities
authorities of any jurisdiction regarding the Registration Statement,
any post-effective amendment thereto, the Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto. The Company will
use its best efforts to prevent the issuance of any Stop Order by the
Commission or any notification from the Blue Sky or securities
authorities of any jurisdiction suspending the qualification or
registration of the Shares for sale in such jurisdictions, and if at
any time the Commission shall issue any Stop Order, or if the Blue Sky
or securities authorities of any jurisdiction shall issue notification
suspending the qualification or registration of the Shares, the Company
will make every reasonable effort to obtain the withdrawal of such Stop
Order or notification at the earliest possible moment. The Company will
promptly advise you of its receipt of any notification with respect to
the suspension of the qualification or registration of the Shares for
offer or sale in any jurisdiction or the initiation or threatening of
any action or proceeding for such purpose.
(b) Prior to any public offering of the Shares, the Company will cooperate
with you and your counsel (or, at your discretion, our counsel) in
registering or qualifying the Shares for offer or sale under the Blue
Sky or securities laws, rules or regulations of such jurisdictions as
you may reasonably request; provided that in no event shall the Company
be obligated to register or qualify to do business as a foreign
corporation in any jurisdiction where it is not now so registered or
qualified or to take any action which would subject it to general
service of process, or to taxation as a foreign corporation doing
business, in any jurisdiction where it is not now so subject. The
Company will pay all fees and expenses relating to the registration or
qualification of the Shares under such Blue Sky or securities laws of
such jurisdictions as you may designate (including the legal fees,
expenses and disbursements of counsel to you, or, in your discretion,
counsel to the Company, for the registration or qualification of the
Shares in such jurisdictions as you shall determine). After
registration, qualification or exemption of the Shares for offer and
sale in such jurisdictions, and for as long as any offering pursuant to
this Agreement continues, the Company, at your reasonable request, will
file and make such statements or reports, and pay the fees applicable
thereto, at such times as are or may be required by the laws, rules or
regulations of such jurisdictions in order to maintain and continue in
full force and effect the registration, qualification or exemption for
offer or sale of the Shares in such jurisdictions. After the
termination of the offering contemplated hereby, and as long as any of
the Shares are outstanding, the Company will file and make, and pay all
fees applicable thereto, such statements and reports and renewals of
registration as are or may be required by the laws, rules or
regulations of such jurisdictions to maintain and continue in full
force and effect the registration, qualification or exemption for
secondary market transactions in the Shares, in the various
jurisdictions in which the Shares were originally registered, qualified
or exempted for offer or sale.
(c) The Company will furnish to you, without charge, four manually-signed
copies, and such reasonable number of conformed copies, of the
Registration Statement as originally filed on Form SB-2 and of any
amendments (including post-effective amendments thereto), including
financial statements and schedules, if any, and all consents,
certificates and exhibits (including those incorporated therein by
reference to the extent not previously furnished to you), heretofore or
hereafter made, signed by or on behalf of its officers whose signatures
are required thereon and a majority of its board of directors.
(d) The Company will use its best efforts to cause the Registration
Statement to become effective under the Act. Upon such effectiveness,
if the Company and you have determined not to proceed pursuant to Rule
430A under the Act, the Company will timely file a Prospectus pursuant
to, and in conformity with, Rule 424(b), if required, and if the
Company and you have determined to proceed pursuant to Rule 430A under
the Act, the Company will timely file a Prospectus pursuant to, and in
conformity with, Rules 424(b) and 430A under the Act.
4
(e) The Company will give you and your counsel advance notice of its
intention to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether before or after the
effective date of the Registration Statement, and will not file any
such amendment or supplement unless the Company shall have first
delivered copies of such amendment or supplement to you and your
counsel and you and your counsel shall have given your consent to the
filing of such amendment or supplement, which consent shall not be
unreasonably withheld. Any such amendment or supplement shall comply
with the Act.
(f) From and after the Effective Date, the Company will deliver to you,
without charge, as many copies of the Prospectus or any amendment or
supplement thereto as you may reasonably request. The Company consents
to the use of the Prospectus or any amendment or supplement thereto by
you and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for such period
of time thereafter as the Prospectus is required by law to be delivered
in connection therewith. If during such period of time any event shall
occur which in the judgment of you or your counsel should be set forth
in the Prospectus in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, or if it
is necessary to supplement or amend the Prospectus to comply with law,
the Company will forthwith prepare and duly file with the Commission an
appropriate supplement or amendment thereto, and will deliver to each
of you, without charge, such number of copies thereof as you may
reasonably request.
(g) The Company will promptly pay all expenses in connection with (1) the
preparation, printing, filing, distribution and mailing (including,
without limitation, express delivery service) of the Registration
Statement, each preliminary prospectus, the Prospectus, and the
preliminary and final forms of Blue Sky memoranda (if any); (2) the
qualification, issuance and delivery of the Shares offered for sale
under the laws of such states as you may reasonably designate; (3) the
fees and expenses of legal counsel and independent accountants for the
Company relating to, among other things, opinions of counsel, audits,
review of unaudited financial statements and cold comfort review; (4)
the fees and expenses of a registrar or transfer agent for the Common
Stock; (5) the printing, filing, distribution and mailing (including,
without limitation, express delivery service) of this Agreement; (6)
furnishing such copies of the Registration Statement, the Prospectus
and any preliminary prospectus, and all amendments and supplements
thereto, as may be reasonably requested for use in connection with the
offering and sale of the Shares by you or by dealers to whom Shares may
be sold; (7) any fees and communication expenses with respect to
filings required to be made by you with the NASD Regulation, Inc. (the
"NASDR"); and (8) the quotation of the Shares on NASDR's Automated
Quotation System ("NASDAQ").
(h) On the Closing Date, the Company shall sell to you the Underwriters'
Warrant to purchase 75,000 Shares for an aggregate purchase price of
$100. The Underwriters Warrant shall be divided between you and your
designees in such manner as you shall direct by written instruction to
the Company at least two business days prior to the Closing Date.
(i) On or prior to the Closing Date, the Company shall obtain from each of
its officers and directors, his or her enforceable written agreement,
in form and substance satisfactory to your counsel, that for a period
of [twenty-four (24)] months after the Effective Date (or any longer
period required by NASDAQ or any jurisdiction in which the offer and
sale of the Shares is to be registered or qualified), he or she will
not offer for sale, sell, contract to sell, assign, pledge, transfer,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any securities of the Company (including without limitation
any shares of Common Stock), owned by him or her as of the Closing
Date, whether upon exercise of warrants, stock options or otherwise,
without GV s prior written consent (the "Lock-up Letter").
5
(j) The Company has reserved and shall continue to reserve and keep
available the maximum number of shares of its authorized but unissued
Common Stock and other securities for issuance upon exercise of the
Underwriters' Warrant.
(k) For a period of five years after the date of this Agreement, the
Company shall:
(1) retain Xxxxxxx X. Xxxxxx & Company, LLP, or a nationally
recognized firm of independent public accountants, as its
auditors, and at its own expense, shall cause such independent
certified public accountants to review the Company's financial
statements for each of the first three fiscal quarters of each
fiscal year prior to the announcement of quarterly financial
information and the filing of the Company's Form 10-QSB
quarterly reports;
(2) cause the Company's Board of Directors to meet not less
frequently than [quarterly], upon proper notice, and cause an
agenda and minutes of the preceding meeting to be distributed
to directors prior to each such meeting;
(3) distribute to its security holders, within 120 days after the
end of each fiscal year, an annual report (containing
certified financial statements of the Company) prepared in
accordance with those required under Rule 14a-3(b) of
Regulation 14A promulgated by the Commission under the
Securities Exchange Act of 1934, as amended; and
(4) appoint a transfer agent for the Common Stock reasonably
acceptable to you.
(l) For a period of five years after the date of this Agreement, the
Company shall furnish you, free of charge, with the following:
(1) within 90 days after the end of each fiscal year, financial
statements for the Company certified by the independent
certified public accountants referred to in Section 4(k)(1)
above, including a balance sheet, statement of operations,
statement of stockholders' equity and statement of cash flows,
for the Company, with supporting schedules, prepared in
accordance with generally accepted accounting principles, as
at the end of such fiscal year and for the twelve months then
ended, accompanied by a copy of the certificate or report
thereon of such independent certified public accountants;
(2) (x) for so long as the Company is a reporting company under
any of Sections 12(b), 12(g) or 15(d) of the Securities
Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder
(collectively, the "Exchange Act"), promptly after filing with
the Commission, copies of all reports and proxy soliciting
material which the Company is required to file under the
Exchange Act, or (y) at such times as the Company is not a
reporting company under the aforesaid provisions of the
Exchange Act, as soon as practicable after the end of each of
the first three fiscal quarters of each fiscal year, financial
statements of the Company, including a balance sheet,
statement of operations, statement of stockholders' equity and
statement of cash flows as at the end of, or for each such
fiscal quarter and the comparable period of the preceding
year, which statements need not be audited;
(3) as soon as practicable after they have first been distributed
to stockholders of the Company, copies of each annual and
interim financial or other report or communication sent by the
Company to its stockholders (except to the extent duplicative
of information furnished pursuant to any other clause of this
Section 4(n));
6
(4) as soon as practicable following release or other
dissemination, copies of every press release and every
material news item and article in respect of the Company or
its affairs released or otherwise disseminated by the Company;
(5) promptly following receipt thereof, copies of the Company's
daily transfer sheets prepared by the Company's transfer agent
and a list of stockholders; and
(6) such additional documents and information with respect to the
Company and its affairs, if any, as you may from time to time
reasonably request.
(m) On or prior to the Effective Date, the Company will have accomplished
the quotation of the Shares on the NASD=s Electronic Bulletin Board,
subject only to notice of issuance and the registration of such
securities under the Exchange Act.
(n) The Company will make generally available to its security holders and
deliver to you as soon as it is practicable to do so (but in no event
later than the 45th day after the end of the twelve-month period
beginning at end of the fiscal quarter of the Company during which the
Registration Statement becomes effective, or, if the Registration
Statement becomes effective during the Company's last fiscal quarter,
the 90th day after the end of such twelve-month period), an earnings
statement of the Company (which need not be audited) covering a period
of at least twelve consecutive months commencing after the effective
date of the Registration Statement, which shall satisfy the
requirements of Section 11(a) of the Act.
(o) The Company will, promptly upon your request, prepare and file with the
Commission any amendments or supplements to the Registration Statement,
any Preliminary Prospectus or the Prospectus and take any other action,
which in the reasonable opinion of Law Offices of Xxxxx X. Xxxxxxx,
counsel to you, may be reasonably necessary or advisable in connection
with the distribution of the Shares, and will cause the same to become
effective as promptly as possible.
(p) The Company will furnish to you as early as practicable prior to the
Closing Date and any Optional Closing Date, as the case may be, but no
less than two full business days prior thereto, a copy of the latest
available unaudited interim financial statements of the Company which
have been reviewed by the Company's independent certified public
accountants, as stated in their letters to be furnished pursuant to
Section 7(e) hereof.
(q) The Company will apply the net proceeds from the issuance and sale of
the Shares for the purposes and in the manner set forth under the
caption "Use of Proceeds" in the Prospectus, and will file on a timely
basis such reports with the Commission with respect to the sale of the
Shares and the application of the proceeds therefrom as may be required
pursuant to Rule 463 under the Act. The Company will operate its
business in such a manner and, pending application of the net proceeds
of the offering for the purposes and in the manner set forth under the
caption "Use of Proceeds" in the Prospectus, will invest such net
proceeds in certain types of securities so as not to become an
"investment company" as such term is defined under the Investment
Company Act of 1940, as amended (the "Investment Company Act"). You
acknowledge that a substantial portion of the proceeds shall be held in
a trust account pending a Business Combination (as defined in the
Prospectus).
(r) The Company has filed a registration statement on Form 8-A covering the
Shares pursuant to Section 12(b) of the Exchange Act and will use its
best efforts to cause said registration statement to become effective
on the Effective Date. The Company will comply with all registration,
filing and reporting requirements of the Exchange Act, which may from
time to time be applicable to the Company. The Company shall comply
with the provisions of all undertakings contained in the Registration
Statement.
7
(s) For a period of ninety (90) days after the date hereof, the Company
will not, directly or indirectly, take any action designed, or which
will constitute or which is intended to cause or result in,
stabilization or manipulation of the market price of the Shares, or the
facilitation of the sale or resale of the Shares.
(t) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to cash and cash equivalents is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for cash and cash equivalents is
compared with the existing cash and cash equivalents at reasonable
intervals and appropriate action is taken with respect to any
differences.
(u) There are no business relationships or related party transactions of
the nature required to be described in the Prospectus by Item 404 of
Regulation S-B of the Rules and Regulations involving the Company and
any person referred to in Items 401 or 404, except as described in the
Prospectus.
(v) The Company will not grant any person or entity registration rights
with respect to any of its securities, except such rights as are
subordinate to or pari passu with the registration rights contained in
the Underwriters' Warrant.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY: (A) The Company
represents and warrants to you that:
(a) When the Registration Statement becomes effective, and at all times
subsequent thereto to and including the Closing Date and each Optional
Closing Date, and during such longer period as the Prospectus may be
required to be delivered in connection with sales by you or any dealer,
and during such longer period until any post-effective amendment
thereto shall become effective, the Registration Statement (and any
post-effective amendment thereto) and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any
amendment or supplement to the Registration Statement or the
Prospectus) will contain all statements which are required to be stated
therein in accordance with the Act, will comply with the Act, and will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, and no event will have occurred
which should have been set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not then been set
forth in such an amendment or supplement; if a Rule 430A Prospectus is
included in the Registration Statement at the time it becomes
effective, the Prospectus filed pursuant to Rules 430A and 424(b) (1)
or (4) will contain all Rule 430A Information and all statements which
are required to be stated therein in accordance with the Act, will
comply with the Act, and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and
each Preliminary Prospectus, as of the date filed with the Commission,
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; except that no representation or
warranty is made in this Section 5(A)(a) with respect to statements or
omissions made in reliance upon and in conformity with written
information furnished to the Company as stated in Section 6(b) with
respect to you expressly for inclusion in any Preliminary Prospectus,
the Registration Statement, or the Prospectus, or any amendment or
supplement thereto.
(b) Neither the Commission nor the Blue Sky or securities authorities of
any jurisdiction has issued an order suspending the effectiveness of
the Registration Statement, preventing or suspending the use of any
Preliminary Prospectus, the Prospectus, the Registration Statement, or
any amendment or
8
supplement thereto, refusing to permit the effectiveness of the
Registration Statement, or suspending the registration or qualification
of the Shares, nor has the Commission or any of such authorities
instituted or threatened to institute any proceedings with respect to
such an order.
(c) The Company is a corporation duly incorporated and validly existing in
good standing under the laws of Florida, its jurisdiction of
incorporation. The Company has full corporate power and authority and
has obtained all necessary consents, authorizations, approvals, orders,
licenses, certificates, declarations and permits of and from, and have
made all required filings with, all federal, state, local and other
governmental authorities and all courts and other tribunals, to own,
lease, license and use its properties and assets and to carry on its
business in the manner described in the Prospectus. All such consents,
authorizations, approvals, orders, licenses, certificates,
declarations, permits and filings are in full force and effect and the
Company is in all material respects complying therewith. The Company is
duly registered or qualified to do business as a foreign corporation
and is in good standing in each other jurisdiction in which their
ownership, leasing, licensing, or use of property and assets or the
conduct of its business requires such registration or qualification.
(d) The Company is authorized to issue 20,000,000 shares of Common Stock,
$.01 par value, and 5,000,000 shares of Preferred Stock. There are
1,000 shares of Common Stock currently outstanding and no shares of
Preferred Stock are currently outstanding. The Company does not have
any subsidiaries or own any capital stock or equity interest in any
other corporation, partnership, limited liability company or other
entity. Each outstanding share of Common Stock, including the
Additional Shares to be sold by the Company to you hereunder, are
validly authorized, and when such shares are issued and paid for as
described in the Prospectus, will be validly issued, fully paid, and
nonassessable, without any personal liability attaching to the
ownership thereof, and such shares have not been issued and is not
owned or held in violation of any preemptive rights of stockholders.
There is no commitment, plan or arrangement to issue, and no
outstanding option, warrant or other right calling for the issuance of,
any share of capital stock of the Company or any security or other
instrument which by its terms is convertible into, exercisable for, or
exchangeable for capital stock of the Company, except as disclosed in
the Prospectus. There is outstanding no security or other instrument
which by its terms is convertible into or exchangeable for capital
stock of the Company.
(e) The financial statements of the Company included in the Registration
Statement and the Prospectus fairly present the financial position, the
results of operations and the other information purported to be shown
therein at the respective dates and for the respective periods to which
they apply. Such financial statements have been prepared in accordance
with generally accepted accounting principles and are prepared in
accordance with the books and records of the Company. The accountants
whose reports on the audited financial statements are filed with the
Commission as a part of the Registration Statement are, and during the
periods covered by their report(s) included in the Registration
Statement and the Prospectus were, independent certified public
accountants with respect to the Company within the meaning of the Act.
No other financial statements are required by Form SB-2 or otherwise to
be included in the Registration Statement or the Prospectus. Except as
disclosed in the Prospectus, there has at no time been a material
adverse change in the condition (financial or otherwise), results of
operations, business, property, assets, liabilities or prospects of the
Company from the latest information set forth in the Registration
Statement or the Prospectus.
(f) There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, or to the
Company=s knowledge, threatened (or any basis therefor known to the
Company), with respect to or affecting the Company, its operations,
business, property or assets, except as disclosed in the Prospectus or
such as individually or in the aggregate do not now have and are not
expected to have a material adverse effect upon the operations,
businesses, property, assets or condition (financial or otherwise) of
the Company (a "Material Adverse Effect"). The Company is
9
not in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree, except as disclosed in the
Prospectus or such as individually or in the aggregate do not now have
and are not expected to have a material adverse effect upon the
operations, businesses, property, assets, condition (financial or
otherwise) or prospects of the Company; nor is the Company required to
take any action in order to avoid any such violation or default.
(g) The Company has good and marketable title to all assets which the
Prospectus indicates are owned by it, free and clear of all liens,
security interests, pledges, charges, mortgages and other encumbrances
(except as may be required to be and are disclosed in the Prospectus).
The Company holds no properties under lease.
(h) Neither the Company nor any other party is now or is expected by the
Company to be in violation or breach of, or in default with respect to
complying with, any material provision of any indenture, mortgage, deed
of trust, debenture, note or other evidence of indebtedness, contract,
agreement, instrument, lease or license, or arrangement or
understanding which is material to the Company, and each such
indenture, mortgage, deed of trust, debenture, note or other evidence
of indebtedness, contract, agreement, instrument, lease or license is
in full force and is the legal, valid and binding obligation of the
Company, and to the knowledge of the Company, of the other contracting
party and is enforceable as to them in accordance with its terms. The
Company is not a party to or bound by any contract, agreement,
instrument, lease, license, arrangement or understanding, or subject to
any charter or other restriction, which has had or is expected in the
future to have a Material Adverse Effect. The Company is not in
violation or breach of, or in default with respect to, any term of its
Articles of Incorporation or By-laws, in each case as amended to the
date hereof.
(i) The Company does not own or have any licensed rights to, in or under
any patents, patent applications, trademarks, service marks, trademark
or service xxxx applications, trade names, service marks, copyrights,
technology, know-how or other intangible properties or assets (all of
the foregoing being herein called "Intangibles") that are material to
the business of the Company, except to the extent disclosed in the
Prospectus. There is no right under any Intangibles of the Company
necessary to the business of the Company as presently conducted or as
proposed to be conducted as indicated in the Prospectus, except as may
be disclosed in the Prospectus. The Company has not received notice of
infringement with respect to asserted Intangibles of others, except as
disclosed in the Prospectus. To the knowledge of the Company, there is
no infringement by others of Intangibles of the Company. To the
knowledge of the Company, there is no Intangible of others which has
had or may in the future have a materially adverse effect on the
condition (financial or otherwise), results of operations, businesses,
property, assets, liabilities or prospects of the Company.
(j) Neither the Company, any director or officer of the Company, or to the
best knowledge of the Company, any agent, employee, or other person
authorized to act on behalf of the Company have, directly or
indirectly: used any corporate funds of the Company for unlawful
contributions, gifts, entertainment or other unlawful expenses relating
to political activity; made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds of the Company; violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended, as
relates to the business of the Company or its predecessor in interest;
or made any bribe, rebate, payoff, influence payment, kickback, or
other unlawful payment in connection with the business of the Company
or its predecessor in interest.
(k) Any contract, agreement, instrument, lease or license required to be
described in the Registration Statement or the Prospectus has been
properly described therein. Any contract, agreement, instrument, lease
or license required to be filed as an exhibit to the Registration
Statement has been filed with the Commission as an exhibit to or has
been incorporated as an exhibit by reference into the Registration
Statement.
10
(l) The Company has all requisite corporate power and authority to execute,
deliver and perform under the terms and conditions of this Agreement
and the Underwriters' Warrant. All necessary corporate proceedings of
the Company have been duly taken to authorize the execution, delivery
and performance by the Company of this Agreement and the Underwriters'
Warrant. This Agreement has been duly authorized, executed and
delivered by the Company, is a legal, valid, and binding agreement of
the Company, and is enforceable as to the Company in accordance with
its terms. The Underwriters' Warrant has been duly authorized by the
Company and, when executed and delivered by the Company, assuming the
due execution and delivery thereof by the other parties thereto, will
be a legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms. No consent,
authorization, approval, order, license, certificate, declaration or
permit of or from, or filing with, any governmental or regulatory
authority, agent, board or other body is required for the issue and
sale of the Shares by the Company and the execution, delivery or
performance by the Company of this Agreement or the Underwriters'
Warrant (except filings with and orders of the Commission pursuant to
the Act which have been or will be made or obtained prior to the
Closing Date, and such filings, consents or permits as are required
under Blue Sky or securities laws in connection with the transactions
contemplated by this Agreement). No consent of any party to any
contract, agreement, instrument, lease, license, arrangement or
understanding to which the Company is a party, or to which any of their
properties or assets are subject, is required for the execution,
delivery or performance of this Agreement or the Underwriters' Warrant;
and the execution, delivery and performance of this Agreement and the
Underwriters' Warrant will not violate, result in a breach of, conflict
with, or (with or without the giving of notice or the passage of time
or both) entitle any party to terminate or call a default under any
such contract, agreement, instrument, lease, license, arrangement or
understanding, result in the creation or imposition of, any lien,
security interest, pledge, charge, or other encumbrance upon any of the
property or assets of the Company pursuant to the terms of any
indenture, mortgage, deed of trust, loan or credit agreement, lease or
other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or assets of
the Company is subject or violate or result in a breach of any term of
the Certificate of Incorporation or By-laws of the Company, or violate,
result in a breach of, or conflict with any law, rule, regulation,
order, judgment or decree binding on the Company or to which its
operations, business, properties or assets are subject.
(m) Each purchaser of Shares will receive good title to the Shares
purchased by it and you will receive good title to the Underwriters'
Warrant purchased by you upon payment of the purchase price therefor in
accordance with the provisions of this Agreement, free and clear of all
liens, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts (collectively,
"Encumbrances").
(n) The Underwriters' Warrant Shares are validly authorized and reserved
for issuance and, when issued, paid for and delivered upon exercise of
the Underwriters' Warrant, in accordance with the provisions of the
Underwriters' Warrant will be validly issued, fully paid and
non-assessable and will not be issued in violation of any preemptive
rights of stockholders; and the holders of the Underwriters' Warrant
Shares will receive good title to them, free and clear of all
Encumbrances.
(o) The Shares and the Underwriters' Warrant conform to all statements
relating thereto contained in the Registration Statement and the
Prospectus.
(p) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as otherwise may
be stated therein, (i) the Company has not entered into any transaction
or incurred any liability or obligation, contingent or otherwise, which
is material to the Company, except in the ordinary course of business,
(ii) there has not been any change in the outstanding capital stock of
the Company, or any issuance of options, warrants or rights to purchase
11
the capital stock of the Company, or any material increase in the
long-term debt of the Company, or any material adverse change in the
business, condition (financial or otherwise) or results of operations
of the Company, (iii) no loss or damage (whether or not insured) to the
properties of the Company has been sustained which is material to the
Company, (iv) the Company has not paid or declared any dividend or
other distribution with respect to its capital stock, and (v) there has
not been any change, contingent or otherwise, in the direct or indirect
control of the Company nor, to the best knowledge of the Company, do
there exist any circumstances which would likely result in such a
change.
(q) The Company has not incurred, directly or indirectly, any liability for
a fee, commission or other compensation on account of the employment of
a broker or finder in connection with the offering of the Shares
contemplated by this Agreement, except as contemplated by this
Agreement or as disclosed in the Registration Statement.
(r) The Company is not, and does not intend to conduct its business in a
manner in which it would become, an "investment company" as defined in
Section 3(a) of the Investment Company Act.
(s) The Company has obtained, or prior to the Closing Date will obtain a
Lock-up Letter, from each of its officers and directors who owns shares
of Common Stock.
(t) No person or entity has the right to require registration of shares of
Common Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statement other than as disclosed
in the Registration Statement.
(u) The Company has and will continue to (i) adequately insure its
properties against loss or damage by fire, (ii) maintain adequate
insurance against liability for negligence and (iii) maintain such
other insurance as is usually maintained by companies engaged in the
same or similar businesses, including without limitation, product
liability insurance.
(v) The Company has filed all federal, state and local tax returns required
to be filed (or have obtained extensions therefor) and have paid all
taxes shown on such returns and all assessments received by it to the
extent that payment has become due. The Company has made adequate
accruals for all taxes which may be owed by it but has not been paid.
6. INDEMNIFICATION AND CONTRIBUTION:
(a) The Company agrees to indemnify and hold harmless you, your
officers, directors, partners, employees, agents and counsel, and each person,
if any, who controls you within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all loss, liability, claim, damage
and expense whatsoever (which shall include, for all purposes of this Section 6,
but not be limited to, attorneys' fees and any and all expense whatsoever
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation) as and when incurred arising out of,
based upon, or in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained in (1) any Preliminary Prospectus, the
Rule 430A Prospectus, the Registration Statement, or the Prospectus (as from
time to time amended and supplemented), or any amendment or supplement thereto,
or (2) any application or other document or communication (in this Section 6
collectively called an "application") executed by or on behalf of the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Shares under the Blue Sky or securities
laws thereof (or the rules and regulations promulgated thereunder) or filed with
the Commission or any securities exchange or automated quotation system; or any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon and in conformity with written
12
information furnished to the Company as stated in Section 6(b) by you for
inclusion in any Preliminary Prospectus, the Rule 430A Prospectus, the
Registration Statement, of the Prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (ii) any breach of any
representation, warranty, covenant or agreement of the Company contained in this
Agreement. The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have, including liabilities arising under
this Agreement.
If any action is brought against you or any of your officers,
directors, partners, employees, agents or counsel, or any of your controlling
persons (each, an "indemnified party") in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such indemnified
party or parties shall promptly notify the Company in writing of the institution
of such action (but the failure so to notify shall not relieve the Company from
any liability it may have pursuant to this Section 6(a)) and the Company shall
promptly assume the defense of such action, including the employment of counsel
(satisfactory to such indemnified party or parties) and payment of expenses.
Such indemnified party or parties shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties, unless the employment of
such counsel shall have been authorized in writing by the Company in connection
with the defense of such action or the Company shall not have promptly employed
counsel satisfactory to such indemnified party or parties to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be one or more legal defenses available to
it or them or to other indemnified parties which are different from or
additional to those available to the Company, in any of which events such fees
and expenses shall be borne by the Company and the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties. Anything in this paragraph to the contrary notwithstanding, the Company
shall not be liable for any settlement of any such claim or action effected
without its written consent. The Company agrees promptly to notify you of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors in connection with the sale of the Shares, any Preliminary
Prospectus, the Rule 430A Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto, or any application.
(b) You agree to indemnify and hold harmless the Company, each director
of the Company, each officer of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, but only with respect to statements or omissions, if any, made in any
Preliminary Prospectus, the Rule 430A Prospectus, the Registration Statement, or
the Prospectus (as from time to time amended and supplemented), or any amendment
or supplement thereto, or in any application, in reliance upon and in conformity
with written information furnished to the Company by you expressly for inclusion
in any Preliminary Prospectus, the Rule 430A Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement thereto, or in any
application, as the case may be. For all purposes of this Agreement, the public
offering price, the amounts of the selling concession and reallowance set forth
in the Prospectus and the information in the [third paragraph] under
"Underwriting" constitute the only information furnished in writing by or on
your behalf expressly for inclusion in any Preliminary Prospectus, the Rule 430A
Prospectus, the Registration Statement or the Prospectus (as from time to time
amended or supplemented), or any amendment or supplement thereto, or in any
application, as the case may be. If any action shall be brought against the
Company or any other person so indemnified based upon any Preliminary
Prospectus, the Rule 430A Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto, or any application, and in
respect of which indemnity may be sought against you pursuant to this Section
6(b), you shall have the rights and duties given to the Company, and the Company
and each other person so indemnified shall have the rights and duties given to
the indemnified parties, by the provisions of Section 6(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 6(a) or
6(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such
13
case, even though this Agreement expressly provides for indemnification in such
case, or (ii) any indemnified or indemnifying party seeks contribution under the
Act, the Exchange Act, or otherwise, then the Company (including for this
purpose any contribution made by or on behalf of any director of the Company,
any officer of the Company who signed the Registration Statement, and any
controlling person of the Company), as one entity, and you, as a second entity,
shall contribute to the losses, liabilities, claims, damages and expenses
whatsoever to which any of them may be subject, so that you are responsible for
the proportion thereof equal to the percentage which the aggregate commission
set forth on the cover page of the Prospectus represents of the initial public
offering price of the Shares set forth on the cover page of the Prospectus and
the Company is responsible for the remaining portion, in proportion to the net
proceeds from the offering received by them; PROVIDED, HOWEVER, that if
applicable law does not permit such allocation, then other relevant equitable
considerations such as the relative fault of the Company and you in connection
with the facts which resulted in such losses, liabilities, claims, damages and
expenses shall also be considered. The relative fault, in the case of an untrue
statement, alleged untrue statement, omission, or alleged omission, shall be
determined by, among other things, whether such statement, alleged statement,
omission, or alleged omission relates to information supplied by the Company, or
you, and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement, alleged statement, omission or
alleged omission. The Company and you agree that it would be unjust and
inequitable if the respective obligations of the Company and you for
contribution were determined by PRO RATA or PER CAPITA allocation of the
aggregate losses, liabilities, claims, damages and expenses or by any other
method of allocation that does not reflect the equitable considerations referred
to in this Section 6(c). No person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 6(c), each person, if any, who
controls you within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company, shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 6(c). Anything in this Section 6(c) to the contrary notwithstanding, no
party shall be liable for contribution with respect to the settlement of any
claim or action effected without its written consent. This Section 6(c) is
intended to supersede any right to contribution under the Act, the Exchange Act,
or otherwise.
7. CONDITIONS OF YOUR OBLIGATIONS: Your obligations hereunder are
subject to the continuing accuracy of the representations and warranties of the
Company contained herein and in each certificate and document contemplated under
this Agreement to be delivered to you, as of the date hereof, as of the Closing
Date, and each Optional Closing Date, as the case may be, to the performance by
the Company of its obligations hereunder, and to the following additional
conditions:
(a) Notification that the Registration Statement has become effective shall
be received by you not later than 6:30 p.m., New York City time, on the
date of this Agreement or at such later date and time as shall be
consented to in writing by you. If the Company has elected to rely upon
Rule 430A of the Rules and Regulations, the price of the Shares and any
price-related information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the
Rules and Regulations within the prescribed time period, and prior to
the Closing Date the Company shall have provided evidence satisfactory
to you of such timely filing, or a post-effective amendment providing
such information shall have been promptly filed and declared effective
in accordance with the requirements of Rule 430A of the Rules and
Regulations.
(b) The Commission shall not have issued a Stop Order and no Blue Sky or
securities authority of any jurisdiction shall have issued an order
suspending the registration or qualification of the Shares, and no
proceedings for such purpose shall have been instituted or shall be
pending, or to the knowledge of the Company, be threatened or
contemplated by the Commission or the Blue Sky or securities
authorities of any such jurisdiction.
14
(c) You shall have received an opinion, dated the Closing Date and
satisfactory in form and substance to your counsel from Xxxxx &
XxXxxxxx, counsel to the Company, to the effect that:
(1) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of Florida, its
jurisdiction of incorporation, with full corporate power and
authority to own its property and conduct its business in the
manner described in the Prospectus. To the knowledge of such
counsel, the Company has obtained all necessary consents,
authorizations, approvals, orders, licenses, certificates,
declarations and permits of and from, and has made all
required filings with, all federal, state, local and other
governmental authorities and all courts and other tribunals,
to own, lease, license and use its properties and assets and
to carry on its business in the manner described in the
Prospectus..
(2) The authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, $.01 par value, and
5,000,000 shares of Preferred Stock. There are 1,000 shares of
Common Stock currently outstanding and no shares of Preferred
Stock currently outstanding. Each outstanding share of Common
Stock and Preferred Stock is validly authorized, validly
issued, fully paid, and nonassessable, with no personal
liability attaching to the ownership thereof, has not been
issued and is not owned or held in violation of any preemptive
right of stockholders. To the knowledge of such counsel, there
is no commitment, plan or arrangement to issue, and no
outstanding option, warrant or other right calling for the
issuance of, any share of capital stock of the Company or any
security or other instrument which by its terms is convertible
into, exercisable for, or exchangeable for capital stock of
the Company, except as disclosed in the Prospectus. There is
outstanding no security or other instrument which by its terms
is convertible into or exchangeable for capital stock of the
Company except for the outstanding shares of Preferred Stock.
(3) To the knowledge of such counsel, there is no litigation,
arbitration, claim, governmental or other proceeding (formal
or informal), or investigation pending or threatened, with
respect to the Company or any of its operations, business,
property or assets, except as disclosed in the Prospectus or
such as individually or in the aggregate do not now have and
are not expected to have a material adverse effect on the
operations, business, property, assets or condition (financial
or otherwise) of the Company. The Company is not in violation
of, or in default with respect to, any law, rule or
regulation, or to the knowledge of such counsel, after
reasonable investigation, any order, judgment or decree,
except as disclosed in the Prospectus or such as individually
or in the aggregate do not now have and are not expected to
have a material adverse effect on the operations, businesses,
property, assets or condition (financial or otherwise) of the
Company; nor is the Company required to take any action in
order to avoid any such violation or default.
(4) Except as disclosed in the Prospectus, the Company is not now
in violation or breach of, or in default with respect to
complying with, any material provision of any indenture,
mortgage, deed of trust, debenture, note or other evidence of
indebtedness, contract, agreement, instrument, lease or
license, or arrangement or understanding which is material to
the Company, and each such indenture, mortgage, deed of trust,
debenture, note or other evidence of indebtedness, contract,
agreement, instrument, lease or license is in full and force
and is the legal, valid and binding obligation of the Company.
(5) The Company has all requisite corporate power and authority to
execute, deliver and perform this Agreement and the
Underwriters' Warrant. All necessary corporate proceedings of
the Company have been taken to authorize the execution,
delivery, and performance by the Company of this Agreement and
the Underwriters' Warrant. This Agreement and the
Underwriters' Warrant have been duly authorized, executed and
delivered by the Company,
15
constitute legal, valid, and binding agreements of the
Company, and (subject to applicable bankruptcy, insolvency,
reorganization and other laws affecting the enforceability of
creditors' rights generally, and the application of equitable
principles affecting the enforceability of remedies in the
nature of specific enforcement, and except as the
enforceability of the indemnification and contribution
provisions of this Agreement and the Underwriters' Warrant may
be limited under applicable securities laws) is enforceable as
to the Company in accordance with its terms. The Underwriters'
Warrant has been duly authorized by the Company and, when
executed, issued and delivered by the Company and paid for by
you in accordance with the provisions of this Agreement, will
be a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with their
respective terms, except as may be limited by applicable
bankruptcy, insolvency, registration and other laws affecting
the enforceability of creditors' rights generally and the
application of equitable principles affecting the availability
of remedies in the nature of specific enforcement.
(6) The Company is not in violation or breach of, or in default
with respect to any term of its Certificate of Incorporation
or By-laws, in each case as amended to date.
(7) All legally required proceedings in connection with the
authorization, issue and sale of the Shares by the Company in
accordance with the provisions of this Agreement have been
taken, and no consent, authorization, approval, order,
license, certificate, declaration or permit of or from, or
filing with, any governmental or regulatory authority, agency,
board, bureau or other body is required for the execution,
delivery or performance by the Company of this Agreement and
the Underwriters' Warrant (except filings with and orders of
the Commission pursuant to the Act which have been made or
received and matters under Blue Sky or state securities laws,
rules or regulations, as to which such counsel need not
express an opinion).
(8) The Shares are validly authorized. Upon payment of the
purchase price thereunder in accordance with the provisions of
this Agreement, the Underwriters' Warrant will be duly
delivered. The Shares, when issued, paid for and delivered in
accordance with the provisions of this Agreement, will be
validly issued, fully paid and nonassessable, without any
personal liability attaching to the ownership thereof, and, to
the knowledge of such counsel, will not be issued in violation
of any preemptive rights of stockholders.
(9) The Underwriters' Warrant Shares are validly authorized and
have been duly and validly reserved for issuance, and when
issued, paid for and delivered upon exercise of the
Underwriters' Warrant in accordance with the provisions of the
Underwriters' Warrant will be validly authorized, validly
issued, fully paid, and nonassessable, with no personal
liability attaching to the ownership thereof, and, to the
knowledge of such counsel, will not have been issued in
violation of any preemptive rights of stockholders, and the
holders of the Underwriters' Warrant Shares will receive good
title to them, free and clear of all Encumbrances.
(10) The Shares and the Underwriters' Warrant Shares conform to all
statements relating thereto contained in the Registration
Statement and the Prospectus.
(11) To the knowledge of such counsel, any contract, agreement,
instrument, lease or license required to be described in the
Registration Statement or the Prospectus has been properly
described therein. To the knowledge of such counsel, any
contract, agreement, instrument, lease, or license required to
be filed as an exhibit to the Registration Statement has been
filed
16
with the Commission as an exhibit to or has been incorporated
as an exhibit by reference into the Registration Statement.
(12) To the knowledge of such counsel, no person or entity has the
right to require registration of shares of Common Stock or
other securities of the Company because of the filing or
effectiveness of the Registration Statement who has not waived
such right.
(13) The Company is not an "investment company" by reason of its
assets and operations as defined in Section 3(a) of the
Investment Company Act.
(14) None of the shares of Common Stock issued by the Company prior
to the date hereof have been offered and sold by the Company
in violation of the Act or applicable Blue Sky or state
securities laws or rules or regulations. All shares of Common
Stock outstanding as of the date hereof have been duly
authorized and validly issued, and are fully paid and
non-assessable, with no personal liability attaching to the
ownership thereof, and, to the knowledge of such counsel, have
not been issued in violation of any preemptive rights of
stockholders.
(15) The statements in the Prospectus under the caption
"Description of Securities" have been reviewed by such counsel
and insofar as such statements refer to descriptions of
agreements, instruments or leases, summarize the status of
litigation or other proceedings, or the provisions of orders,
judgments or decrees, or constitute statements of law,
descriptions of statutes, rules or regulations, or conclusions
of law, such statements fairly present the information called
for and are accurate and complete in all material respects;
[provided that such counsel need not opine as to the
applicability of Rule 419 under the Act.]
(16) Except for liabilities and obligations incurred in the
ordinary course of business, to the knowledge of such counsel,
after due inquiry, there are no claims (absolute, accrued,
contingent or otherwise), except as disclosed in the
Prospectus or such as individually or in the aggregate do not
have and are not expected to have a material adverse effect
upon the operations, businesses, property, assets or condition
(financial or otherwise) of the Company.
(17) The Registration Statement has become effective under the Act,
and to the knowledge of such counsel, no Stop Order has been
issued and no proceedings for that purpose have been
instituted or threatened.
(18) The Registration Statement, any Rule 430A Prospectus, and the
Prospectus, and any amendment or supplement thereto (except
for the financial statements and the notes and schedules
related thereto, and other financial information and
statistical data contained therein or omitted therefrom, as to
which such counsel need express no opinion), comply as to form
in all material respects with the applicable requirements of
the Act.
(19) In addition, such counsel shall state that it has participated
in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto, and in
the course thereof participated in conferences with officers
and other representatives of the Company, representatives of
the independent certified public accountants for the Company
and your representatives at which the contents of the
Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing upon and
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and Prospectus, or any amendment or
supplement thereto, on the basis of the foregoing, no facts
have come to the attention of such counsel which lead them to
believe that either the Registration Statement or any
17
amendment thereto at the time such Registration Statement or
such amendment became effective or the Prospectus as of its
date or any amendment or supplement thereto as of its date
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading (it
being understood that such counsel need express no comment
with respect to the financial statements, and the notes and
schedules related thereto, and other financial information and
statistical data included in the Registration Statement or
Prospectus).
(20) To the knowledge of such counsel, since the effective date of
the Registration Statement, no event has occurred which should
have been set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been
set forth in such an amendment or supplement.
(21) In rendering such opinion, counsel for the Company may rely
(i) as to matters involving the application of laws other than
the laws of the United States, to the extent counsel for the
Company deems proper and to the extent specified in such
opinion, upon an opinion or opinions of local counsel (in form
and substance satisfactory to your counsel) acceptable to your
counsel, familiar with the applicable laws, in which case the
opinion of counsel for the Company shall state that the
opinion or opinions of such other counsel are satisfactory in
scope, form and substance to counsel for the Company and that
reliance thereon by counsel for the Company is reasonable;
(ii) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company; and (iii)
to the extent they deem proper, upon written statements or
certificates of officers of departments of various
jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be
delivered to your counsel.
(d) You shall have received letters addressed to you and dated the date
hereof and the Closing Date from Xxxxxxx X. Xxxxxx & Company, LLP,
independent certified public accountants for the Company, addressed to
you, and in form and substance satisfactory to you, to the effect that:
(1) Such accountants are independent public accountants as
required by the Act and the rules and regulations of the
Commission thereunder and no information need be supplied with
respect to them in answer to Item 13 of Form SB-2.
(2) In their opinion, the financial statements and related notes
of the Company examined by them, at all dates and for all
periods referred to in their report therein, and included in
the Registration Statement and the Prospectus on their
authority as experts comply as to form in all material
respects with the applicable accounting requirements of the
Act and the Rules and Regulations of the Commission
promulgated thereunder.
(3) On the basis of limited procedures not constituting an audit,
including a reading of the latest available unaudited interim
financial statements of the Company and the financial data and
accounting records of the Company, inquiries of officials of
the Company and others responsible for financial and
accounting matters, a reading of the minute books of the
Company, including without limitation the minutes (if any) of
meetings or consents in lieu of meetings of the stockholders
and of the Board of Directors (and any committees thereof) of
the Company, and other specified procedures and inquiries
requested by you, if any, nothing has come to their attention
which causes them to believe that:
(i) except as disclosed in or contemplated by the
Registration Statement and the Prospectus, during the
period from the date of the last audited balance
sheet of the
18
Company included in the Registration Statement and
Prospectus to a specified date not more than five (5)
days prior to the date of such letter, there were any
decreases, as compared with the corresponding period
of the preceding year, in net sales, cost of goods
sold, operating, selling, general and administrative
expenses, earnings from operations, the total or per
share amounts of net earnings, or the weighted
average number of shares outstanding;
(ii) except as disclosed in or contemplated by the
Registration Statement and the Prospectus, during the
period from the date of the last audited balance
sheet of the Company included in the Registration
Statement and Prospectus to a specified date not more
than five (5) days prior to the date of such letter,
there has been any change in the capital stock or
other securities of the Company or any payment or
declaration of any dividend or other distribution in
respect thereof or in exchange therefor, or any
increase in the long-term debt of the Company or any
decrease in the net current assets or net assets of
the Company as compared with the amounts shown on the
last audited balance sheet of the Company, included
in the Registration Statement and the Prospectus
(other than in the ordinary course of business); and
(iii) On the basis of their examinations referred to in
their report and consent included in the Registration
Statement and Prospectus and the indicated procedures
and inquiries referred to above, nothing has come to
their attention which, in their judgment, would cause
them to believe or indicate that the financial
statements and related notes and schedules of the
Company included in the Registration Statement and
Prospectus do not present fairly the financial
position and results of operations of the Company, as
at the dates and for the periods indicated, in
conformity with generally accepted accounting
principles applied on a consistent basis, and are not
in all material respects a fair presentation of the
information purported to be shown.
(4) In addition to their examination referred to in their report
included in the Registration Statement and the Prospectus and
the inquiries and limited procedures referred to in clause
(ii) of this Section 7(e), they have performed other
procedures, not constituting an audit, with respect to certain
numerical data, percentages, dollar amounts and other
financial information appearing in the Registration Statement
and the Prospectus, which are derived from the general
accounting records of the Company, and have compared certain
of such data and information with the accounting records of
the Company and found them to be in agreement.
(5) Such other matters as you may have reasonably requested.
(f) The representations and warranties of the Company in this Agreement
shall be true and correct with the same effect as if made on and as of
the Closing Date and the Company shall have complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date.
(g) The Registration Statement and the Prospectus and any amendments or
supplements thereto shall contain all statements which are required to
be stated therein in accordance with the Act and the Rules and
Regulations, and shall in all material respects conform to the
requirements thereof, and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto shall contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
19
(h) There shall have been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
no material adverse change in the business, property, condition
(financial or otherwise), results of operations, capital stock,
long-term or short-term debt or general affairs of the Company, except
changes which the Registration Statement and the Prospectus indicate
might occur after the effective date of the Registration Statement, and
the Company shall not have incurred any material liabilities or entered
into any agreements not in the ordinary course of business, except as
disclosed in the Registration Statement and the Prospectus.
(i) No action, suit or proceeding, at law or in equity, shall be pending or
threatened against the Company which would be required to be set forth
in the Registration Statement, and no proceedings shall be pending or
threatened against the Company before or by any commission, board or
administrative agency in the United States or elsewhere, wherein an
unfavorable decision, ruling or finding would have a Material Adverse
Effect.
(j) The Company shall have furnished to you or caused to be furnished to
you at the Closing Date, certificates of the President and chief
financial officer of the Company in form and substance satisfactory to
you, as to the accuracy of the representations and warranties of the
Company herein at and as of the Closing Date and as to the performance
by the Company of all its respective obligations hereunder to be
performed at or prior to the Closing Date and the Company shall have
furnished to you a certificate of the President and chief financial
officer of the Company satisfactory to you as to the matters set forth
in Sections 7(a) and (b) above.
(k) The NASD, upon review of the terms of the public offering of the
Shares, shall have indicated that it has no objections to the
compensation arrangements pertaining to the sale of the Shares and the
participation by you in the sale of the Shares.
(l) Prior to or on the Closing Date, the Company shall have executed and
delivered the Underwriters' Warrant to you.
(m) Prior to or on the Closing Date, the Company shall have delivered to
you executed copies of the Lock-up Letters.
(n) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or
affecting particularly the business or financial affairs of the Company
which would materially and adversely affect the market for the Shares.
(o) Subsequent to the date hereof, no executive officer of the Company
listed as such in the Prospectus shall have died, become physically or
mentally disabled, resigned or have been removed or discharged.
(p) Upon the exercise, in whole or in part, by you of the option to sell
the Additional Shares, referred to in Section 2 hereof, your
obligations to sell the Additional Shares will be subject to the
continuing accuracy of the representations and warranties of the
Company contained herein and in each certificate and document
contemplated under this Agreement to be delivered to you, as of the
date hereof and as of each Optional Closing Date, to the performance by
the Company of its obligations hereunder, and the following additional
conditions:
(1) The Registration Statement shall remain effective at the
Optional Closing Date, and no Stop Order shall have been
issued by the Commission 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 reasonable request on
the part
20
of the Commission for additional information shall have been
complied with to the satisfaction of Law Offices of Xxxxx X.
Xxxxxxx, your counsel.
(2) You shall have received an opinion, dated the Optional Closing
Date and satisfactory in form and substance to counsel to you,
from Xxxxx & XxXxxxxx, counsel to the Company, which opinion
shall be substantially the same in scope and substance as the
opinion furnished to you on the Closing Date pursuant to
Section 7(c) hereof, except that such opinion, where
appropriate, shall cover the Additional Shares.
(3) You shall have received a letter in form and substance
satisfactory to you from Xxxxxx Xxxxxxxx LLP, independent
certified public accountants for the Company, dated the
Optional Closing Date and addressed to you confirming the
information in their letter referred to in Section 7(e) hereof
and stating that nothing has come to their attention during
the period from the ending date of their review referred to in
said letter to a date not more than five (5) days prior to the
Optional Closing Date, which would require any change in said
letter if it were required to be dated the Optional Closing
Date.
(4) You shall have received a certificate of the President and
chief financial officer of the Company, dated the Optional
Closing Date, in form and substance satisfactory to you,
substantially the same in scope and substance as the
certificate furnished to you on the Closing Date pursuant to
Section 7(j) hereof.
8. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective at 9:30 A.M., New York City
time, on the first full business day following the day on which the Registration
Statement becomes effective or at the time of the initial public offering by you
of the Shares, whichever is earlier. The time of the initial public offering
shall mean the time, after the Registration Statement becomes effective, of the
release by you for publication of the first newspaper advertisement which is
subsequently published relating to the Shares or the time, after the
Registration Statement becomes effective, when the Shares are first released by
you for offering by you or dealers by letter or telegram, whichever shall first
occur. You or the Company may prevent this Agreement from becoming effective
without liability of any party to any other party, except as noted below in this
Section 8, by giving the notice indicated in Section 8(c) before the time this
Agreement becomes effective.
(b) In addition to the right to terminate this Agreement pursuant to
Section 7 hereof by reason of the Company's failure, refusal or inability to
perform all obligations and satisfy all conditions on their part to be performed
or satisfied hereunder prior to the Closing Date or Optional Closing Date, as
the case may be, you shall have the right to terminate this Agreement at any
time prior to the Closing Date or any Optional Closing Date, as the case may be,
by giving notice to the Company, if the Company shall have sustained a material
loss or material adverse interference with its business or properties from fire,
flood, accident, hurricane, earthquake, theft, sabotage, or other calamity or
malicious act, whether or not covered by insurance, or from any labor dispute or
any court or governmental action, order or decree, of such a character as to
have a material adverse effect with the conduct of the business and operations
of the Company; or if there shall have been a general suspension of, or a
general limitation on prices for, trading in securities on the New York Stock
Exchange, the American Stock Exchange or in the over-the-counter market; or if a
banking moratorium has been declared by a state or federal authority; or if
there shall have been an outbreak of major hostilities between the United States
and any foreign power, or any other insurrection, armed conflict or national
calamity, which in your judgment makes it impracticable or inadvisable to
proceed with the offering, sale or delivery of the Firm Shares or the Additional
Shares, as the case may be.
(c) If you elect to prevent this Agreement from becoming effective as
provided in this Section 8, or to terminate this Agreement pursuant to Section 7
or this Section 8, you shall notify the Company promptly
21
by telephone, telecopier, telex, or telegram, confirmed by letter. If, as so
provided in this Section 8, the Company elects to prevent this Agreement from
becoming effective, the Company shall notify you promptly by telephone,
telecopier, telex, or telegram, confirmed by letter.
(d) Anything in this Agreement to the contrary notwithstanding other
than Section 8(e), if this Agreement shall not become effective by reason of an
election pursuant to this Section 8 or if this Agreement shall terminate or
shall otherwise not be carried out within the time specified herein by reason of
any failure on the part of the Company to perform any covenant or agreement or
satisfy any condition of this Agreement by it to be performed or satisfied, the
sole liability of the Company to you, in addition to the obligations the Company
assumed pursuant to Section 4(g), will be to reimburse you for such
out-of-pocket expenses (including the fees and disbursements of their counsel)
as shall have been incurred by them in connection with this Agreement or the
proposed offer, sale, and delivery of the Shares, and upon demand the Company
agrees to pay promptly the full amount thereof to you.
(e) Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Sections 4(b), 4(g), 6, 10(b) and 10(c) shall not be in any way
affected by such election or termination or failure to carry out the terms of
this Agreement or any part hereof.
9. MISCELLANEOUS: (a) Notices required to be in writing shall be mailed
or delivered (i) to the Company at the Company's office at 000 X. Xxxxxxxx
Xxxx., Xxxxx 000, Xxxxx, Xxxxxxx 00000 with a copy to Xxxxxx Xxxxx, Esq., Xxxxx
& XxXxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000 or (ii) to
you, at the office of G-V Capital Corp., 000 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx Xxxxxx with a copy to Xxxxx X.
Xxxxxxx, Esq., Law Offices of Xxxxx X. Xxxxxxx, 00 Xxxx 00xx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, XX 00000, and shall be deemed given when received. Any notice not
required to be in writing, including but not limited to notices under Section
7(a) or 8 hereof, may be made by telex, telecopier or telephone and shall be
deemed given at the time the telex, or telecopied communication is received or
the telephone call is made, but if so made shall be subsequently confirmed in
writing.
(b) The representations, warranties, covenants and agreements of the
Company and the indemnity and contribution agreements, contained in Sections 4,
5 and 6 of this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of you, the Company or any of its
officers or directors or any controlling persons of you or the Company and will
survive acceptance of and payment for any of the Shares and the termination of
this Agreement.
(c) This Agreement has been and is made solely for the benefit of you
and the Company and the controlling persons, directors and officers referred to
in Section 6 hereof and their respective successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" as used in this Agreement shall not include a
purchaser, as such purchaser, of Shares from you.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, applicable to contracts made and to be
performed entirely with such State, without regard to conflict of laws
provisions thereof.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and you.
Very truly yours,
MEDICAL ACQUISITION CORP.
By:________________________________
Xxx X. Xxxx, Chief Executive Officer
22
Confirmed, as of the date first above mentioned.
G-V CAPITAL CORP.
By:___________________________
Xxxxxxxx Xxxxxx, President
