EXHIBIT 1.1
2,000,000 Shares
BIONX IMPLANTS, INC.
Common Stock
FORM OF UNDERWRITING AGREEMENT
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_________ __, 1997
UBS Securities LLC
Xxxxxxxxx & Xxxxx LLC
Xxxxx Xxxxx Xxxxxx & Company, LLC
As Representatives of the Several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Bionx Implants, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell 2,000,000 shares (the "Firm Shares") of its authorized but
unissued Common Stock, $.0019 par value per share (the "Common Stock"), to the
several underwriters listed on Schedule A to this Agreement (collectively, the
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"Underwriters"). The Company also proposes to grant to the Underwriters an
option to purchase up to 300,000 additional shares (the "Option Shares") of
Common Stock on the terms and for the purposes set forth in Section 2(c). The
Firm Shares and the Option Shares are hereinafter collectively referred to as
the "Shares."
The Company wishes to confirm as follows its agreements with you (the
"Representatives") and the other Underwriters on whose behalf you are acting in
connection with the several purchases by the Underwriters of the Shares.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants as follows:
(a) A registration statement on Form S-1 (File No. 333-22359)
including a prospectus relating to the Shares and each amendment thereto has
been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. There have been delivered to you three signed copies of such
registration statement and amendments, together with three copies of each
exhibit filed therewith. Copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested for each of
the Underwriters. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective
will be filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus containing all Rule 430A
Information (as hereinafter defined) will be filed by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations on or
before the second business day after the date hereof (or such earlier time as
may be required by the Rules and Regulations).
The term "Registration Statement" as used in this Agreement shall mean
such registration statement (including all exhibits and financial statements at
the time such registration statement becomes or became effective) and, in the
event any post-effective amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term shall include all
Rule 430A Information deemed to be included in such registration statement at
the time such registration statement becomes effective as provided by Rule 430A
of the Rules and Regulations and shall also mean any registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations with respect to the
Shares. The term "Preliminary Prospectus" shall mean any preliminary prospectus
referred to in the preceding paragraph and any preliminary prospectus included
in the Registration Statement at the time it becomes effective that omits Rule
430A Information. The term "Prospectus" as used in this Agreement shall mean
the prospectus relating to the Shares in the form in which it is first filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if
no filing pursuant to Rule 424(b) of the Rules and Regulations is required,
shall mean the form of final prospectus included in the Registration Statement
at the time such registration statement becomes effective. The term "Rule 430A
Information" means information with respect to the Shares and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules and Regulations. The term
"Offering Memorandum" as used in this Agreement shall mean the Offering
Memorandum consisting of the Prospectus and a Canadian wrap-around used in
connection with the offering of the Shares in Canada.
(b) The Company has not received, and has no notice of, any order of
the Commission preventing or suspending the use of any Preliminary Prospectus,
or instituted proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act and the Rules and Regulations. When the Registration
Statement became or becomes, as the case may be, effective (the "Effective
Date") and at all times subsequent thereto up to and at the Closing Date (as
hereinafter defined), any later date on which Option Shares are to be purchased
(the "Option Closing Date") and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, (i) the Registration Statement and
Prospectus, and any amendments or
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supplements thereto, will contain all statements which are required to be stated
therein by, and will comply with the requirements of, the Act and the Rules and
Regulations, and (ii) neither the Registration Statement nor the Prospectus, nor
any amendment or supplement thereto, will 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 not misleading. The foregoing
representations and warranties in this section 1(b) do not apply to any
statements or omissions made in reliance on and in conformity with the
information contained in the section of the Prospectus entitled "Underwriting"
(except for the sixth paragraph thereof) and the information in the last
paragraph on the front cover page of the Prospectus. The Company has not
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the Preliminary Prospectus, the
Prospectus, the Offering Memorandum or any other materials, if any, permitted by
the Act.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement. The Company is
duly qualified to do business as a foreign corporation in good standing in each
jurisdiction where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to so qualify
would not have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse Effect"). Except for
its interest in Bioabsorbable Concepts, Inc. ("Newco"), which will be
distributed to the stockholders in the manner described in the Prospectus, the
Company has no subsidiaries (as defined in the Rules and Regulations) other than
BioScience, OY, a company formed under Finnish law ("Bioscience"), Biocon, OY, a
company formed under Finnish law ("Biocon"), Orthosorb Inc., a New Jersey
corporation ("Orthosorb"), and Biostent, Inc., a New Jersey corporation
("Biostent") (collectively, the "Subsidiaries"). The Company owns 100% of the
outstanding capital stock of each of the Subsidiaries. Other than the
Subsidiaries and Newco, the Company does not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity. Complete and correct copies of the certificates of
incorporation and of the bylaws, or other corporate organizational documents, of
the Company and the Subsidiaries and all amendments thereto have been delivered
to the Representatives, and except as set forth in the exhibits to the
Registration Statement no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
Each Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement. Each Subsidiary is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of the properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a Material Adverse Effect.
All of the outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and non-assessable and
are owned by the Company or another of the Subsidiaries subject to no security
interest, other encumbrance or adverse claims. Except as otherwise set forth in
the Reorganization
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Agreement set forth as an exhibit to the Registration Statement pursuant to
which Biocon shall merge into BioScience, and Orthosorb and Biostent shall merge
into the Company, no options, warrants or other rights to purchase, agreements
or other obligation to issue or other rights to convert any obligation into
shares of capital stock or ownership interests in the Subsidiaries are
outstanding.
(d) The Company has full power and authority (corporate and otherwise)
to enter into this Agreement and to perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement on the part of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by applicable laws or
equitable principles and except as enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or affecting creditors' rights generally or by general equitable principles.
The performance of this Agreement by the Company and the consummation by the
Company of the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
(i) any indenture, mortgage, deed of trust, loan agreement, bond, debenture,
note agreement or other evidence of indebtedness, or any lease, contract or
other agreement or instrument to which the Company or any Subsidiary is a party
or by which its properties are bound, or (ii) the certificate of incorporation
or bylaws of the Company or any Subsidiary or (iii) any law, order, rule,
regulation, writ, injunction or decree of any court or governmental agency or
body to which the Company or any Subsidiary is subject. The Company is not
required to obtain or make (as the case may be) any consent, approval,
authorization, order, designation or filing by or with any court or regulatory,
administrative or other governmental agency or body as a requirement for the
consummation by the Company of the transactions herein contemplated, except such
as may be required under the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or under state securities or blue sky ("Blue Sky")
laws or under the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD") or under applicable Canadian securities law.
(e) The Company and the Subsidiaries are not (i) in violation of their
certificate of incorporation or bylaws, or (ii) in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
bond, debenture, note or other evidence of indebtedness, which default would
have a Material Adverse Effect, or (iii) in default in the performance or
observance of any contract, indenture, mortgage, loan agreement, joint venture
or other agreement or instrument to which they are a party or by which their or
any of their properties are bound, which default would have a Material Adverse
Effect, or (iv) in violation of any law, order, rule, regulation, writ,
injunction, judgment or decree of any court or governmental agency or body to
which the Company or the Subsidiaries are subject, including, but not limited
to, the United States Food and Drug Administration (the "FDA").
(f) Except as disclosed in the Prospectus, there is not pending or, to
the Company's knowledge, threatened, any action, suit, claim, proceeding or
investigation against the Company or its Subsidiaries or any of their respective
officers or any of their respective properties, assets or rights before any
court or governmental agency or body or
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otherwise which might reasonably be expected to result in a Material Adverse
Effect or prevent consummation of the transactions contemplated hereby. There
are no statutes, rules, regulations, agreements, contracts, leases or documents
that are required to be described in the Prospectus, or to be filed as exhibits
to the Registration Statement by the Act or by the Rules and Regulations that
have not been accurately described in all material respects in the Prospectus or
filed as exhibits to the Registration Statement.
(g) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and were
not issued in violation of any preemptive right, resale right, right of first
refusal or similar right. The authorized and outstanding capital stock of the
Company conforms in all material respects to the description thereof contained
in the Registration Statement, the Offering Memorandum and the Prospectus (and
such description correctly states the substance of the provisions of the
instruments defining the capital stock of the Company). The Shares have been
duly authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company against payment therefor
in accordance with the terms of this Agreement, will be duly and validly issued
and fully paid and nonassessable. Except as set forth in the Prospectus, no
preemptive right, co-sale right, registration right, right of first refusal or
other similar rights of securityholders exists with respect to any of the Shares
or the issue and sale thereof other than those that have been expressly waived
prior to the date hereof. No holder of securities of the Company has the right
to cause the Company to include such holder's securities in the Registration
Statement. No further approval or authorization of any security holder, the
Board of Directors or any duly appointed committee thereof or others is required
for the issuance and sale or transfer of the Shares, except as may be required
under the Act, the Exchange Act, under state securities or Blue Sky laws, or
under Canadian securities laws. Except as disclosed in or contemplated by the
Prospectus, the Offering Memorandum and the financial statements of the Company,
and the related notes thereto, included in the Prospectus and the Offering
Memorandum, the Company does not have outstanding any options or warrants to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. The description of the Company's
stock option plan and the options or other rights granted and exercised
thereunder, set forth in the Prospectus and the Offering Memorandum accurately
and fairly presents, in all material respects, the information required to be
shown with respect to such plan, options and rights.
(h) KPMG Peat Marwick LLP, independent accountants (the
"Accountants"), who have examined the financial statements, together with the
related schedule and notes, of the Company filed with the Commission as a part
of the Registration Statement, which are included in the Prospectus, are
independent public accountants within the meaning of the Act and the Rules and
Regulations. The financial statements of the Company, together with the related
schedule and notes, forming part of the Registration Statement, the Offering
Memorandum and the Prospectus, fairly present the financial position and the
results of operations of the Company at the respective dates and for the
respective periods to which they apply. All financial statements, together with
the related schedules and notes, filed with the Commission as part of the
Registration Statement have been prepared in
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accordance with generally accepted accounting principles as in effect in the
United States consistently applied throughout the periods involved except as may
be otherwise stated in the Registration Statement. The selected and summary
financial data included in the Registration Statement, the Offering Memorandum
and the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with the financial statements presented therein.
No other financial statements or schedules are required by the Act or the Rules
and Regulations to be included in the Registration Statement. The statistical
data included in the Registration Statement and the Offering Memorandum is
accurate in all material respects and presents fairly the information shown
therein.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement, the Offering Memorandum and the Prospectus,
there has not been (i) any material adverse change, or any development which, in
the Company's reasonable judgment, is likely to cause a material adverse change,
in the business, properties or assets described or referred to in the
Registration Statement, or the results of operations, condition (financial or
otherwise), business or operations of the Company and its Subsidiaries taken as
a whole, (ii) any transaction which is material to the Company and its
Subsidiaries taken as a whole, except transactions in the ordinary course of
business, (iii) any obligation, direct or contingent, which is material to the
Company and its Subsidiaries taken as a whole, incurred by the Company or its
Subsidiaries, except obligations incurred in the ordinary course of business,
(iv) except as described in the Prospectus, any change in the capital stock or
material change in the outstanding indebtedness of the Company or its
Subsidiaries or (v) except as described in the Prospectus, any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company. Neither the Company nor its Subsidiaries has any material contingent
obligation which is not disclosed in the Registration Statement. Except as set
forth in the Registration Statement, the Offering Memorandum and Prospectus, the
Company and the Subsidiaries own or lease all such properties as are necessary
to their operations as now conducted or as proposed to be conducted in the
foreseeable future.
(j) Except as set forth in the Prospectus and the Offering Memorandum,
(i) the Company and each Subsidiary have good and marketable title to all
material properties and assets described in the Prospectus and the Offering
Memorandum as owned by them, free and clear of any pledge, lien, security
interest, charge, encumbrance, claim, equitable interest, or restriction, (ii)
the agreements to which the Company or any Subsidiary is a party described in
the Prospectus and the Offering Memorandum are valid agreements, enforceable
against the Company or such Subsidiary in accordance with their terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles, and, to the Company's knowledge,
the other contracting party or parties thereto are not in material breach or
default under any of such agreements and (iii) The Company and the Subsidiaries
have valid and enforceable leases for the properties described in the Prospectus
and the Offering Memorandum as leased by it, and such leases conform in all
material respects to the description thereof, if any, set forth in the
Registration Statement.
(k) The Company and each Subsidiary now hold and at the Closing Date
and any later Option Closing Date, as the case may be, will hold, all licenses,
certificates,
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approvals and permits from all state, United States, foreign and other
regulatory authorities, including, but not limited to, the FDA and any foreign
regulatory authorities performing functions similar to those performed by the
FDA, that are material to the conduct of the business of the Company (as such
business is currently conducted), all of which are valid and in full force and
effect (and there is no proceeding pending or, to the knowledge of the Company,
threatened which may cause any such license, certificate, approval or permit to
be withdrawn, cancelled, suspended or not renewed). All of the descriptions in
the Registration Statement and Prospectus of the legal and governmental
proceedings by or before the FDA or any foreign, state or local government body
exercising comparable authority are true, complete and accurate in all material
respects.
(l) Since 1990, the Company and each Subsidiary have filed on a timely
basis all necessary federal, state and foreign income, franchise and other tax
returns and have paid all taxes shown thereon as due, and the Company has no
knowledge of any tax deficiency which has been or might be asserted against the
Company or any Subsidiary which might have a Material Adverse Effect. All
material tax liabilities are adequately provided for within the financial
statements of the Company.
(m) The Company and its Subsidiaries maintain insurance of the types
and in the amounts adequate for their business and consistent with insurance
coverage maintained by similar companies in similar businesses, including, but
not limited to, insurance covering clinical trial liability, product liability
and real and personal property owned or leased against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(n) Neither the Company nor its Subsidiaries are involved in any
material labor dispute or disturbance nor, to the knowledge of the Company, is
any such dispute or disturbance threatened.
(o) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(p) Except as set forth in the Prospectus and the Offering Memorandum
under the captions "Risk Factors -- Uncertainties Relating to Licenses, Trade
Secrets, Patents and Proprietary Rights" and "Business -- Licenses, Trade
Secrets, Patents and Proprietary Rights," (i) the Company or its Subsidiaries
own or possess valid and enforceable licenses for all inventions, patents,
patent applications, trademarks (registered or unregistered), trademark
applications, tradenames, copyrights, manufacturing processes, formulae, trade
secrets, know-how, and other intangible property and assets (collectively,
"Intellectual Property") necessary to the conduct of their businesses now
conducted as described in the Prospectus and the Offering Memorandum and the
Company is not aware of
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any facts which would form a reasonable basis for a claim that the Company does
not own or possess valid and enforceable licenses of all Intellectual Property
necessary to the conduct of the Company's and its Subsidiaries' businesses
proposed to be conducted as described in the Prospectus and the Offering
Memorandum; (ii) the Company has no knowledge that it or any Subsidiary lacks or
will be unable to obtain any rights or licenses to use any of the Intellectual
Property necessary to conduct the businesses now conducted or proposed to be
conducted by it as described in the Prospectus and the Offering Memorandum;
(iii) the Company believes that there are no third parties who have or will be
able to establish rights to any of the Intellectual Property, except for the
ownership rights of the owners of the Intellectual Property which is licensed to
the Company or its Subsidiaries and except for the rights of secured parties
under security interests disclosed in the Prospectus; (iv) to the Company's
knowledge, except as referenced in the opinions referenced in Sections 2 and 3
of Appendix A annexed hereto, there is no infringement by third parties of any
of the Intellectual Property; (v) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the Company's rights of title or other interest in or to any Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (vi) except as referenced in the opinion referenced in
Section 3 of Appendix A annexed hereto there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any Intellectual Property, and the Company is unaware
of any facts which would form a reasonable basis for any such claim; (vii) there
is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company or its Subsidiaries or their
products or processes infringe or otherwise violate any patent, trademark,
copyright, trade secret or other proprietary right of others, and the Company is
unaware of any facts which would form a reasonable basis for any such claim;
(viii) to the Company's knowledge, there are no grounds for an interference
proceeding before the USPTO in relation to any of the patents or patent
applications currently owned by the Company or its Subsidiaries; (ix) to the
Company's knowledge, there are no facts which would bar the grant of a patent
from each of the patent applications within the Intellectual Property; (x) other
than the patents and patent applications identified on Schedule C attached
hereto, there are no other patents or patent applications owned or licensed by
the Company or its Subsidiaries which are material to their businesses as now
conducted, or to its knowledge as proposed to be conducted, as described in the
Prospectus and the Offering Memorandum; (xi) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by any current
or former employee, consultant or agent of the Company seeking either ownership
rights to any invention or compensation from the Company for any invention made
by such employee, consultant or agent in the course of his/her employment with
the Company, nor, to the Company's knowledge, can any such action, suit,
proceeding or claim, if instituted, be sustained; and (xii) there is no act or
omission of which the Company is aware that may render any patent or patent
application within the Intellectual Property unpatentable, unenforceable or
invalid. The Prospectus and the Offering Memorandum fairly and accurately
describe the Company's rights with respect to the Intellectual Property.
(q) The Company and each Subsidiary are conducting their businesses in
compliance in all material respects with all of the laws, rules and regulations
of the jurisdictions in which it is conducting business, including, but not
limited to, (i) the laws,
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rules and regulations administered or promulgated by the FDA or any foreign,
state or local government body exercising comparable authority and (ii) any
laws, rules and regulations applicable to the import and export of the Company's
and Subsidiaries' products.
(r) The Company is not, and, upon the sale of the shares to be issued
and sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds" will not be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(s) Neither the Company nor any of its Subsidiaries has incurred any
liability for a fee, commission, or other compensation on account of the
employment of a broker or finder in connection with the transactions
contemplated by this Agreement other than the underwriting discounts and
commissions contemplated hereby.
(t) The Company and each of its Subsidiaries is (i) in material
compliance with any and all applicable United States, foreign, state and local
environmental laws, rules, regulations, treaties, statutes and codes promulgated
by any and all governmental authorities relating to the protection of human
health and safety, the environment or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received all material permits,
licenses or other approvals required of it under applicable Environmental Laws
to conduct its business as currently conducted, and (iii) is in compliance with
all terms and conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive required permit
licenses or other approvals would not, individually or in the aggregate, have a
Material Adverse Effect. No action, proceeding, revocation proceeding, writ,
injunction or claim is pending or threatened relating to the Environmental Laws
or to the Company's or its Subsidiaries' activities involving Hazardous
Materials. "Hazardous Materials" means any material or substance (i) that is
prohibited or regulated by any environmental law, rule, regulation, order,
treaty, statute or code promulgated by any governmental authority, or any
amendment or modification thereto, or (ii) that has been designated or regulated
by any governmental authority as radioactive, toxic, hazardous or otherwise a
danger to health, reproduction or the environment. The Company and the
Subsidiaries have not engaged in the generation, use, manufacture,
transportation or storage of any Hazardous Materials on any of the Company's or
Subsidiaries' properties or former properties, except where such use,
manufacture, transportation or storage is in compliance in all material respects
with Environmental Laws. No Hazardous Materials have been treated or disposed
of on any of the Company's or Subsidiaries' properties or on properties formerly
owned or leased by the Company or Subsidiaries during the time of such ownership
or lease, except in compliance in all material respects with Environmental Laws.
No spills, discharges, releases, deposits, emplacements, leaks or disposal of
any Hazardous Materials have occurred on or under or have emanated from any of
the Company's or Subsidiaries' properties or former properties during the time
of the Company's or Subsidiaries' ownership or lease thereof and the Company is
not aware of any spills, discharges, releases, deposits, emplacements, leaks or
disposal of any Hazardous Materials that have occurred on or under or have
emanated from any of the Company's or Subsidiaries' properties or former
properties prior to the Company's or Subsidiaries' ownership or lease thereof.
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(u) Neither the Company nor any of its Subsidiaries has engaged in the
generation, use, manufacture, transportation or storage of any Hazardous
Materials on any of the Company's or its Subsidiaries' properties or former
properties, except where such use, manufacture, transportation or storage is in
compliance in all material respects with Environmental Laws. No Hazardous
Materials have been treated or disposed of on any of the Company's or its
Subsidiaries' properties or on properties formerly owned or leased by the
Company or any Subsidiary during the time of such ownership or lease, except in
compliance in all material respects with Environmental Laws. No spills,
discharges, releases, deposits, emplacements, leaks or disposal of any Hazardous
Materials have occurred on or under or have emanated from any of the Company's
or its Subsidiaries' properties or former properties.
(v) Neither the Company nor any of its Subsidiaries has at any time
during the last five years (i) made any unlawful contribution to any candidate
for foreign office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any foreign, United States or state
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States.
(w) The Company has obtained agreements from each beneficial owner of
the Company's Common Stock listed on Schedule B to this in form and substance
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identical to the Agreement attached hereto as Appendix B. The Company has
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provided to counsel for the Underwriters a complete and accurate list of all
securityholders of the Company and the number and type of securities held by
each securityholder. The Company has provided to counsel for the Underwriters
true, accurate and complete copies of all of the agreements pursuant to which
its officers, directors and stockholders have agreed to such or similar
restrictions (the "Lock-up Agreements") presently in effect or effected hereby.
The Company hereby represents and warrants that it will not release any of its
officers, directors or other stockholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of UBS
Securities LLC.
(x) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act. The Shares have been duly authorized for quotation on The Nasdaq
Stock Market, Inc. Automated Quotation National Market System ("Nasdaq National
Market"). The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq National Market, nor has the
Company received any notification that the Commission or the Nasdaq National
Market is contemplating terminating such registration or listing.
(y) Excluding any actions taken by a certain managing director of UBS
Securities LLC who is also a director of the Company, neither the Company nor,
to its knowledge, any of its officers, directors or affiliates has taken, and at
the Closing Date and at any later Option Closing Date, neither the Company nor,
to its knowledge, any of its officers, directors or affiliates will have taken,
directly or indirectly, any action which has constituted, or might reasonably be
expected to constitute, the stabilization or manipulation of the price of sale
or resale of the Shares.
10
(z) The Company has timely and properly filed with the Commission all
reports and other documents required to have been filed by it with the
Commission pursuant to the Act and the Rules and Regulations. True and complete
copies of all such reports and other documents have been delivered to you.
(aa) The Company is in compliance with all provisions of Florida
Statutes (S)517.075 and the regulations thereunder, relating to issuers doing
business with Cuba.
(ab) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company or the Subsidiaries to or for the benefit of any of
the officers or directors of the Company or any of the members of the families
of any of them that are required to be disclosed in the Registration Statement,
the Offering Memorandum and the Prospectus that are not so disclosed. Except as
disclosed in Prospectus, there are no business relationships or related party
transactions required to be disclosed therein by Item 404 of Regulation S-K of
the Commission.
2. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
the Firm Shares to the several Underwriters, and each of the Underwriters agrees
to purchase from the Company the respective aggregate number of Firm Shares set
forth opposite its name on Schedule A, plus such additional number of Firm
----------
Shares which such Underwriter may become obligated to purchase pursuant to
Section 2(b) hereof. The price at which such Firm Shares shall be sold by the
Company and purchased by the several Underwriters shall be $_____ per share. In
making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraphs (b) and (c) of this Section 2, the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares specified on Schedule A.
----------
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 9 hereof) to purchase and pay for
the number of Shares agreed to be purchased by such Underwriter or Underwriters,
the non-defaulting Underwriters shall have the right within twenty-four (24)
hours after such default to purchase, or procure one or more other Underwriters
to purchase, in such proportions as may be agreed upon between you and such
purchasing Underwriter or Underwriters and upon the terms herein set forth, all
or any part of the Shares which such defaulting Underwriter or Underwriters
agreed to purchase. If the non-defaulting Underwriters fail so to make such
arrangements with respect to all such Shares and portion, the number of Shares
which each non-defaulting Underwriter is otherwise obligated to purchase under
this Agreement shall be automatically increased on a pro rata basis (as adjusted
by you in such manner as you deem advisable to avoid fractional shares) to
absorb the remaining shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase; provided, however, that the non-defaulting
Underwriters shall not be obligated to purchase the Shares and portion which the
defaulting Underwriter or Underwriters agreed to purchase if the aggregate
number of such Shares exceeds 10% of the
11
total number of Shares which all Underwriters agreed to purchase hereunder. If
the total number of Shares which the defaulting Underwriter or Underwriters
agreed to purchase shall not be purchased or absorbed in accordance with the two
preceding sentences, the Company shall have the right, within twenty-four (24)
hours next succeeding the 24-hour period referred to above, to make arrangements
with other underwriters or purchasers reasonably satisfactory to you for
purchase of such Shares and portion on the terms herein set forth. In any such
case, either you or the Company shall have the right to postpone the Closing
Date determined as provided in Section 4 hereof for not more than seven business
days after the date originally fixed as the Closing Date pursuant to said
Section 4 in order that any necessary changes in the Registration Statement, the
Offering Memorandum, the Prospectus or any other documents or arrangements may
be made. If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the 24-hour periods
stated above for the purchase of all the Shares which the defaulting Underwriter
or Underwriters agreed to purchase hereunder, this Agreement shall be terminated
without further act or deed and without any liability on the part of the Company
to any non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph (b), and
no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase all or any
portion of the Option Shares from the Company at the same price per share as the
Underwriters shall pay for the Firm Shares. Said option may be exercised only
to cover over-allotments in the sale of the Firm Shares by the Underwriters and
may be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement upon written or telecopied
notice by you to the Company setting forth the aggregate number of shares of the
Option Shares as to which the several Underwriters are exercising the option.
Delivery of certificates for the shares of Option Shares, and payment therefor,
shall be made as provided in Section 4 hereof. Each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, the exact number of shares to be
adjusted by you in such manner as you deem advisable to avoid fractional shares.
3. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering of the Shares in the
United States by the Underwriters shall be as set forth in the Prospectus. The
terms of the private placement of the Shares in Canada by the Underwriters shall
be as set forth in the Offering Memorandum. The Underwriters may from time to
time change the public offering and private placement prices after the closing
of the initial public offering and the private placement in Canada,
respectively, and increase or decrease the concessions and discounts to dealers
as they may determine.
12
(b) You, on behalf of the Underwriters, represent and warrant that (i)
the information set forth in the last paragraph on the front cover page, and the
table under paragraph 1 and paragraph 6 under the caption "Underwriting" in the
Registration Statement, the Offering Memorandum, any Preliminary Prospectus and
the Prospectus relating to the Shares (insofar as such information relates to
the Underwriters) constitutes the only information furnished by the Underwriters
to the Company for inclusion in the Registration Statement, the Offering
Memorandum, any Preliminary Prospectus, and the Prospectus, and that the
statements made therein are correct and do not omit to state any material fact
required to be stated therein or necessary to make the statements made therein
in light of the circumstances under which they were made not misleading, and
(ii) the Underwriters have not distributed and will not distribute prior to the
Closing Date or on any Option Closing Date, as the case may be, any offering
material in connection with the offering and sale of the shares other than the
Preliminary Prospectus, the Prospectus, the Registration Statement, the Offering
Memorandum and other materials permitted by the Act and applicable Canadian
securities law.
4. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) Delivery of certificates for the Firm Shares and the Option Shares
(if the option granted pursuant to Section 2(c) hereof shall have been exercised
not later than 1:00 p.m., New York time, on the date at least two business days
preceding the Closing Date), and payment therefor, shall be made at the office
of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at
10:00 a.m., New York City time, on the fourth business day after the date of
this Agreement, or at such time on such other day, not later than seven full
business days after such fourth business day, as shall be agreed upon in writing
by the Company and you (the "Closing Date").
(b) If the option granted pursuant to Section 2(c) hereof shall be
exercised after 1:00 p.m., New York City time, on the date two business days
preceding the Closing Date, and on or before the 30th day after the date of this
Agreement, delivery of certificates for the Option Shares, and payment therefor,
shall be made at the office of Xxxxxxx, Phleger & Xxxxxxxx LLP, 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., New York City time, on the third
business day after the exercise of such option.
(c) Payment for the Shares purchased from the Company shall be made to
the Company or its order, by wire transfer in same day funds. Such payment
shall be made upon delivery of certificates for the Shares to you for the
respective accounts of the several Underwriters against receipt therefor signed
by you. Certificates for the Shares to be delivered to you shall be registered
in such name or names and shall be in such denominations as you may request at
least three business days before the Closing Date, in the case of Firm Shares,
and at least two business days prior to the Option Closing Date, in the case of
the Option Shares. Such certificates will be made available to the Underwriters
for inspection, checking and packaging at a location in New York, New York,
designated by the Underwriters not less than one full business day prior to the
Closing Date or, in the case of the Option Shares, by 3:00 p.m., New York time,
on the business day preceding the Option Closing Date.
13
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later Option Closing Date. Any such
payment by you shall not relieve such Underwriter from any of its obligations
hereunder.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees
as follows:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective as promptly as possible; it will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement or any
subsequent amendment to the Registration Statement has become effective or any
supplement to the Prospectus has been filed. If the Company omitted information
from the Registration Statement at the time it was originally declared effective
in reliance upon Rule 430A(a), the Company will provide evidence satisfactory to
you that the Prospectus contains such information and has been filed, within the
time period prescribed, with the Commission pursuant to subparagraph (1) or (4)
of Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to such Registration Statement as originally declared effective which
is declared effective by the Commission. If for any reason the filing of the
final form of Prospectus is required under Rule 424(b)(3) of the Rules and
Regulations, it will provide evidence satisfactory to you that the Prospectus
contains such information and has been filed with the Commission within the time
period prescribed. The Company will notify you promptly of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information. Promptly upon your request, it
will prepare and file with the Commission any amendments or supplements to the
Registration Statement or Prospectus which, in the reasonable opinion of counsel
to the several Underwriters ("Underwriters' Counsel"), may be necessary or
advisable in connection with the distribution of the Shares by the Underwriters.
The Company will promptly prepare and file with the Commission, and promptly
notify you of the filing of, any amendments or supplements to the Registration
Statement or Prospectus which may be necessary to correct any statements or
omissions, if, at any time when a prospectus relating to the Shares is required
to be delivered under the Act, any event shall have occurred as a result of
which the Prospectus or any other prospectus relating to the Shares as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In case any
Underwriter is required to deliver a prospectus within the nine-month period
referred to in Section 10(a)(3) of the Act in connection with the sale of the
Shares, the Company will prepare promptly upon request, but at the expense of
such Underwriter, such amendment or amendments to the Registration Statement and
such prospectus or prospectuses as may be necessary to permit compliance with
the requirements of Section 10(a)(3) of the Act. The Company will file no
amendment or supplement to the Registration Statement or Prospectus that shall
not previously have been submitted to you a reasonable time prior to the
proposed filing thereof or to which you shall reasonably object in writing or
which is not in compliance with the Act and Rules and Regulations or the
provisions of this Agreement.
14
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or the use
of the Prospectus or of the initiation or threat of any proceeding for that
purpose; and it will promptly use its best efforts to prevent the issuance of
any such stop order or to obtain its withdrawal at the earliest possible moment
if such stop order should be issued.
(c) The Company will cooperate with you in endeavoring to qualify the
Shares for offering and sale under the securities laws of such jurisdictions as
you may designate and to continue such qualifications in effect for so long as
may be required for purposes of the distribution of the Shares, except that the
Company shall not be required in connection therewith or as a condition thereof
to qualify as a foreign corporation, or to execute a general consent to service
of process in any jurisdiction, or to make any undertaking with respect to the
conduct of its business. In each jurisdiction in which the Shares shall have
been qualified, the Company will make and file such statements, reports and
other documents in each year as are or may be reasonably required by the laws of
such jurisdictions so as to continue such qualifications in effect for so long a
period as you may reasonably request for distribution of the Shares, or as
otherwise may be required by law.
(d) The Company will furnish to you, as soon as available, copies of
the Registration Statement (three of which will be signed and which will include
all exhibits), each Preliminary Prospectus, the Prospectus, the Offering
Memorandum and any amendments or supplements to such documents, including any
prospectus prepared to permit compliance with Section 10(a)(3) of the Act, all
in such quantities as you may from time to time reasonably request.
(e) The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than the 45th day following the
end of the fiscal quarter first occurring after the first anniversary of the
effective date of the Registration Statement, an earnings statement (which will
be in reasonable detail but need not be audited) complying with the provisions
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and
covering a twelve-month period beginning after the effective date of the
Registration Statement, and will advise you in writing when such statement has
been made available.
(f) During a period of five years after the date hereof, the Company,
as soon as practicable after the end of each respective period, will furnish to
its stockholders annual reports (including financial statements audited by
independent certified public accountants) and will furnish to its stockholders
unaudited quarterly reports of operations for each of the first three quarters
of the fiscal year, and will, upon request, furnish to you and the other several
Underwriters hereunder (i) concurrently with making such reports available to
its stockholders, statements of operations of the Company for each of the first
three quarters in the form made available to the Company's stockholders; (ii)
concurrently with the furnishing thereof to its stockholders, a balance sheet of
the Company as of the end of such fiscal year, together with statements of
operations, of stockholders' equity and of cash flow of the Company for such
fiscal year, accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants; (iii)
concurrently
15
with the furnishing of such reports to its stockholders, copies of all reports
(financial or other) mailed to stockholders; (iv) as soon as they are available,
copies of all reports and financial statements furnished to or filed with the
Commission, any securities exchange or the Nasdaq National Market by the Company
(except for documents for which confidential treatment is requested); and (v)
every material press release and every material news item or article in respect
of the Company or its affairs which was generally released to stockholders or
prepared for general release by the Company. During such five-year period, if
the Company shall have any active subsidiaries, the foregoing financial
statements shall be on a consolidated basis to the extent that the accounts of
the Company are consolidated with any subsidiaries, and shall be accompanied by
similar financial statements for any significant subsidiary that is not so
consolidated.
(g) The Company shall not, during the 180 days following the effective
date of the Registration Statement, except with your prior written consent as
Representatives, file a registration statement covering any of its shares of
capital stock, except that one or more registration statements on Form S-8 may
be filed at any time following the effective date of the Registration Statement.
(h) The Company shall not, during the 180 days following the effective
date of the Registration Statement, except with your prior written consent as
Representatives, issue, sell, offer or agree to sell, grant, distribute or
otherwise dispose of, directly or indirectly, any shares of Common Stock, or any
options, rights or warrants with respect to shares of Common Stock, or any
securities convertible into or exchangeable for Common Stock, other than (i) the
sale of Shares hereunder, (ii) the grant of options or the issuance of shares of
Common Stock under the Company's stock option plans or stock purchase plan, as
the case may be, existing on the date hereof, (iii) the issuance of shares of
Common Stock upon exercise of the currently outstanding options or warrants
described in the Registration Statement or upon conversion of the Company's
outstanding Series A Preferred Stock described in the Registration Statement and
Prospectus.
(i) The Company will apply the net proceeds from the sale of the
Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(j) The Company will maintain a Transfer Agent and, if necessary under
the jurisdiction of incorporation of the Company, a Registrar (which may be the
same entity as the Transfer Agent) for its Common Stock.
(k) The Company will use its best efforts to maintain listing of its
shares of Common Stock on the Nasdaq National Market.
(l) The Company will file Form SR in conformity with the requirements
of the Act and the Rules and Regulations.
(m) The Company is familiar with the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder, and has in the past
conducted its affairs, and will in the future conduct its affairs, in such a
manner so as to ensure that the Company
16
was not and will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.
(n) If at any time during the 180-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your reasonable
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the Company will,
after written notice from you advising the Company to the effect set forth above
consult with you in good faith regarding the necessity of disseminating a press
release or other public statement responding to or commenting on such rumor,
publication or event and, if the Company in its reasonable judgment determines
that such a press release or other public statement is appropriate, the
substance of any press release or other public statement.
6. EXPENSES.
The Company agrees with each Underwriter that:
(a) The Company will pay and bear all costs, fees and expenses in
connection with the preparation, printing and filing of the Registration
Statement (including financial statements, schedules and exhibits), the Offering
Memorandum (including fees relating to the filing of reports in Canada),
Preliminary Prospectuses and the Prospectus and any amendments or supplements
thereto; the reproduction of this Agreement, the Agreement Among Underwriters,
the Selected Dealer Agreement, the Preliminary Blue Sky Memoranda and any
Supplemental Blue Sky Memoranda and any instruments related to any of the
foregoing; the issuance and delivery of the Shares hereunder to the several
Underwriters, including transfer taxes, if any; the cost of all stock
certificates representing the Shares and Transfer Agents' and Registrars' fees;
the fees and disbursements of corporate, patent and regulatory counsel for the
Company; all fees and other charges of the Company's independent public
accountants; the cost of furnishing to the several Underwriters copies of the
Registration Statement (including appropriate exhibits), the Offering
Memorandum, Preliminary Prospectuses and the Prospectus, and any amendments or
supplements to any of the foregoing; NASD filing fees and expenses incident to
securing any required review and the cost of qualifying the Shares under the
laws of such jurisdictions within the United States as you may designate
(including filing fees and fees and disbursements of Underwriters' Counsel in
connection with such NASD filings and Blue Sky qualifications); listing
application fees of the Nasdaq National Market; and all other expenses directly
incurred by the Company in connection with the performance of its obligations
hereunder.
(b) If the transactions contemplated hereby are not consummated by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed hereunder or to fulfill any
condition of the Underwriters' obligations hereunder, the Company will, in
addition to paying the expenses described in clause (a) above, reimburse the
several Underwriters for all out-of-pocket expenses (including reasonable fees
and disbursements of Underwriters' Counsel) incurred by the Underwriters in
reviewing the Registration Statement and the Prospectus and in preparing the
Offering Memorandum and in otherwise investigating, preparing to market or
marketing the Shares.
17
The Company will in no event be liable to any of the several Underwriters for
any loss of anticipated profits from the sale by them of the Shares.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the several Underwriters to purchase and pay for the
Shares, as provided herein, shall be subject to the accuracy, as of the date
hereof and the Closing Date and any later Option Closing Date, as the case may
be, of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective not later
than 9:00 a.m., New York City time, on the date following the date of this
Agreement, or such later time or date as shall be consented to in writing by
you. If the filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b) and Rule 430A of the Rules and Regulations, the
Prospectus shall have been filed in the manner and within the time period
required by Rule 424(b) and Rule 430A of the Rules and Regulations. No stop
order suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Company or any Underwriter, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the reasonable satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in connection
with this Agreement, the form of Registration Statement, the Offering Memorandum
and the Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares shall have been reasonably satisfactory to Underwriters'
Counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this subsection.
(c) You shall have received, at no cost to you, on the Closing Date
and on any later Option Closing Date, as the case may be, the opinions of (i)
Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx, P.A., U.S. corporate counsel to the
Company, (ii) Xxxxxx & Xxxxxx, special U.S. patent counsel to the Company, (iii)
Tampereen Patenttitoimisto, special foreign patent counsel to the Company, (iv)
Xxxxx & Xxxxxxx, special FDA counsel to the Company, (v) Medical Technology
Consultants - BRI International, special European regulatory counsel to the
Company, and (vi) Merilampi, Martilla & Laitasalo, Finnish counsel to the
Company, dated the Closing Date or such later Option Closing Date, in the forms
attached hereto on Appendix A, addressed to the Underwriters and with reproduced
----------
copies of signed counterparts thereof for each of the Representatives.
(d) You shall have received from Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP,
Underwriters' Counsel, an opinion or opinions, dated the Closing Date or on any
later Option Closing Date, as the case may be, in form and substance reasonably
satisfactory to you, with respect to the sufficiency of all corporate
proceedings undertaken by the Company and other legal matters relating to this
Agreement and the transactions contemplated hereby
18
as you may reasonably require, and the Company shall have furnished to such
counsel such documents as it may have reasonably requested for the purpose of
enabling it to pass upon such matters.
(e) You shall have received on the Closing Date and on any later
Option Closing Date, as the case may be, a letter from the Accountants addressed
to the Company and the Underwriters, dated the Closing Date or such later Option
Closing Date, as the case may be, confirming that it is an independent certified
public accountant with respect to the Company within the meaning of the Act and
the Rules and Regulations thereunder and based upon the procedures described in
its letter delivered to you concurrently with the execution of this Agreement
(herein called the "Original Letter"), but carried out to a date not more than
three days prior to the Closing Date or any such later Option Closing Date, as
the case may be, (i) confirming that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later Option
Closing Date, as the case may be; and (ii) setting forth any revisions and
additions to the statements and conclusions set forth in the Original Letter
that are necessary to reflect any changes in the facts described in the Original
Letter since the date of such letter, or to reflect the availability of more
recent financial statements, data or information. The letter shall not disclose
any change, or any development involving a prospective change, in or affecting
the business or properties of the Company which, in your reasonable judgment,
makes it impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Prospectus. In addition, you shall have received
from the Accountants a letter addressed to the Company and made available to you
for the use of the Underwriters stating that its review of the Company's system
of internal accounting controls, to the extent it deemed necessary in
establishing the scope of its latest examination of the Company's financial
statements, did not disclose any weaknesses in internal controls that it
considered to be material weaknesses. All such letters shall be in a form
reasonably satisfactory to the Representatives and their counsel.
(f) You shall have received on the Closing Date and on any later
Option Closing Date, as the case may be, a certificate of the President and the
Chief Financial Officer of the Company, dated the Closing Date or such later
date, to the effect that as of such date (and you shall be satisfied that as of
such date):
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the Closing
Date or any later Option Closing Date, as the case may be; and the
Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied at or prior to
the Closing Date or any later Option Closing Date, as the case may be;
(ii) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Prospectus has
been issued, and no proceedings for that purpose have been instituted
or are pending or, to the best of their knowledge, threatened under
the Act;
19
(iii) They have carefully reviewed the Registration Statement,
the Offering Memorandum and the Prospectus; and, when the Registration
Statement became effective and at all times subsequent thereto up to
the delivery of such certificate, the Registration Statement, Offering
Memorandum, the Prospectus and any amendments or supplements thereto
contained all statements and information required to be included
therein or necessary to make the statements therein not misleading;
and when the Registration Statement became effective, and at all times
subsequent thereto up to the delivery of such certificate, none of the
Registration Statement, the Prospectus or the Offering Memorandum or
any amendment or supplement thereto included any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented Registration Statement, Prospectus or Offering
Memorandum that has not been so set forth; and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement, the Offering Memorandum and
the Prospectus, except as disclosed therein, there has not been (A)
any material adverse change in the properties or assets described or
referred to in the Registration Statement, the Offering Memorandum and
the Prospectus or in the condition (financial or otherwise),
operations, business or prospects of the Company and its Subsidiaries
taken as a whole, (B) any transaction which is material to the Company
and its Subsidiaries taken as a whole, except transactions entered
into in the ordinary course of business, (C) any obligation, direct or
contingent, incurred by the Company or its Subsidiaries, which is
material to the Company and its Subsidiaries taken as a whole, (D) any
change in the capital stock or outstanding indebtedness of the Company
or its Subsidiaries which is material to the Company and its
Subsidiaries taken as a whole or (E) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company.
(g) The Company shall have furnished to you such further certificates
and documents as you shall reasonably request as to the accuracy of the
representations and warranties of the Company herein, as to the performance by
the Company of its obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Underwriters hereunder,
including, but not limited to, a certificate setting forth the material U.S. or
foreign patents and patent applications owned by, or licensed to, the Company
and/or its Subsidiaries.
(h) The Firm Shares and the Option Shares, if any, shall have been
approved for designation upon notice of issuance on the Nasdaq National Market.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The
20
Company will furnish you with such number of conformed copies of such opinions,
certificates, letters and documents as you shall reasonably request.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) below, the Company
agrees to indemnify and hold harmless each Underwriter and each person
(including each partner or officer thereof) who controls any Underwriter within
the meaning of Section 15 of the Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which such indemnified
parties or any of them may become subject under the Act, the Exchange Act, or
the common law or otherwise, and the Company agrees to reimburse each such
Underwriter and controlling person for any legal or other out-of-pocket expenses
(including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any 462(b) registration statement)
or in the Offering Memorandum or any post-effective amendment thereto (including
any 462(b) registration statement), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus or
the Prospectus (as amended or as supplemented if the Company shall have filed
with the Commission any amendment thereof or supplement thereto) or in the
Offering Memorandum or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that (1) the indemnity agreements of the Company contained in this paragraph (a)
shall not apply to any such losses, claims, damages, liabilities or expenses if
such statement or omission is contained in the section of the Prospectus
entitled "Underwriting" (except for the sixth paragraph thereof) or the last
paragraph of text on the cover page of the Prospectus or in the section of the
Offering Memorandum entitled "Representation by Purchasers," and (2) the
indemnity agreements of the Company contained in this paragraph (a) with respect
to any Preliminary Prospectus or Offering Memorandum shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages, liabilities or expenses purchased the Shares which is the
subject thereof (or to the benefit of any person controlling such Underwriter)
if at or prior to the written confirmation of the sale of such Shares a copy of
the Prospectus (or the Prospectus as amended or supplemented or, in the case of
purchasers resident in Ontario, Canada, the revised Offering Memorandum) was not
sent or delivered to such person (excluding any documents incorporated therein
by reference) and the untrue statement or omission of a material fact contained
in such Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented or, in the case of purchasers resident in
Ontario, Canada, the revised Offering Memorandum) unless the failure is the
result of noncompliance by the Company with paragraph (a) of Section 5 hereof.
The indemnity agreements of the Company contained in this paragraph (a) and the
representations and warranties of the Company contained in Section 1 hereof
shall
21
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its executive officers, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Act, from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Act, the Exchange Act, or the common law or
otherwise and to reimburse each of them for any legal or other expenses
including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or in the Offering Memorandum or any post-effective amendment thereto
(including any 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or in the Offering Memorandum or the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that in the cases of clauses (i) and (ii) above, such
statement or omission is contained in the Section of the Prospectus entitled
"Underwriting" (except for the sixth paragraph thereof) or the last paragraph on
the cover page of the Prospectus or in the section of the Offering Memorandum
entitled "Representations by Purchasers." The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Shares.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 8 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against it, in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (a "Notice") of such service or
notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be
available to any party who shall fail so to give the Notice if the party to whom
such Notice was not given was unaware of the action, suit, investigation,
inquiry or proceeding to which the Notice would have related and was prejudiced
by the failure to give the Notice, but the omission so to notify such
indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified
22
party for contribution or otherwise than on account of such indemnity agreement.
Any indemnifying party shall be entitled at its own expense to participate in
the defense of any action, suit or proceeding against, or investigation or
inquiry of, an indemnified party. Any indemnifying party shall be entitled, if
it so elects within a reasonable time after receipt of the Notice by giving
written notice (the "Notice of Defense") to the indemnified party, to assume
(alone or in conjunction with any other indemnifying party or parties) the
entire defense of such action, suit, investigation, inquiry or proceeding, in
which event such defense shall be conducted, at the expense of the indemnifying
party or parties, by counsel chosen by such indemnifying party or parties and
reasonably satisfactory to the indemnified party or parties; provided, however,
that (i) if the indemnified party or parties reasonably determine that there may
be a conflict between the positions of the indemnifying party or parties and of
the indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled, at its or their own expense to
have counsel chosen by such indemnified party or parties participate in, but not
conduct, the defense. It is understood that the indemnifying parties shall not,
in respect of the legal defenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all of the Underwriters and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, and (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Act. If, within a reasonable time after receipt of the Notice, an
indemnifying party gives a Notice of Defense and the counsel chosen by the
indemnifying party or parties is reasonably satisfactory to the indemnified
party or parties, the indemnifying party or parties will not be liable under
paragraphs (a) through (c) of this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding, except that
(A) the indemnifying party or parties shall bear the legal and other expenses
incurred in connection with the conduct of the defense as referred to in clause
(i) of the proviso to the preceding sentence and (B) the indemnifying party or
parties shall bear such other expenses as it or they have authorized to be
incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding. The
indemnifying party or parties shall not be liable for any settlement of any
proceeding effected without its or their written consent, provided such consent
has not been unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 8, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of the losses,
23
claims, damages or liabilities referred to in paragraph (a) or (b) of this
Section 8 (i) in such proportion as is appropriate to reflect the relative
benefits received by each indemnifying party from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
each indemnifying party in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, or actions in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Underwriters, on the
other, shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Shares received by the Company and the total
underwriting discount received by the Underwriters, as set forth in the table on
the cover page of the Prospectus, bear to the aggregate public offering price of
the Shares. Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by each indemnifying party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparation to defend or defense against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this paragraph (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 8).
(e) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such
24
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including without limitation the
provisions of this Section 8 and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act or in the Offering Memorandum as required by Canadian securities law.
9. TERMINATION. This Agreement may be terminated by you at any time on
or prior to the Closing Date or on or prior to any later Option Closing Date, as
the case may be, (i) if the Company shall have failed, refused or been unable,
at or prior to the Closing Date, or on or prior to any later Option Closing
Date, as the case may be, to perform any agreement on its part to be performed,
or because any other condition of the Underwriters' obligations hereunder
required to be fulfilled by the Company is not fulfilled, or (ii) if trading on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been
required on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market, by such trading exchanges or by order of the Commission
or any other governmental authority having jurisdiction, or if a banking
moratorium shall have been declared by federal or New York authorities, or (iii)
if the Company shall have sustained a loss by strike, fire, flood, accident or
other calamity of such character as to have a Material Adverse Effect regardless
of whether or not such loss shall have been insured, or (iv) if there shall have
been a material adverse change in the general political or economic conditions
or financial markets in the United States as in the judgment of the
Representatives makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have occurred
an outbreak or escalation of hostilities between the United States and any
foreign power or of any other insurrection or armed conflict involving the
United States or other national or international calamity, hostilities or crisis
or the declaration by the United States of a national emergency which, in the
judgment of the Representatives, adversely affects the marketability of the
Shares, or (vi) if since the respective dates as of which information is given
in the Registration Statement, the Offering Memorandum and the Prospectus, there
shall have occurred any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company or the business affairs, management, or business
prospects of the Company, whether or not arising in the ordinary course of
business, or (vii) if any foreign, federal or state statute, regulation, rule or
order of any court or other governmental authority shall have been enacted,
published, decreed or otherwise promulgated which in the judgment of the
Representatives materially and adversely affects or will materially and
adversely affect the business or operations of the Company, or trading in the
Common Stock shall have been suspended, or (viii) there shall have occurred a
material adverse decline in the value of
25
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market or (ix) action shall be taken by any foreign,
federal, state or local government or agency in respect of its monetary or
fiscal affairs which, in the judgment of the Representatives, has a material
adverse effect on the securities markets in the United States. If this
Agreement shall be terminated in accordance with this Section 9, there shall be
no liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; provided, however, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to in
Section 6.
If you elect to terminate this Agreement as provided in this Section 9, the
Company shall be notified promptly by you by telephone, telecopy or telegram,
confirmed by letter.
10. REIMBURSEMENT OF CERTAIN EXPENSES.
(a) In addition to their other obligations under Section 8 of this
Agreement, the Company hereby agrees to reimburse on a quarterly basis the
Underwriters for all reasonable legal and other expenses incurred in connection
with investigating or defending any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (a) of Section 8 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 10 and the
possibility that such payments might later be held to be improper; provided,
however, that (i) to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them and
(ii) such persons shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
(b) In addition to their other obligations under Section 8 of this
Agreement, the Underwriters hereby agree to reimburse on a quarterly basis the
Company for all reasonable legal and other expenses incurred in connection with
investigating or defending any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (b) of Section 8 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 10 and the
possibility that such payments might later be held to be improper; provided,
however, that (i) to the extent any such payment is ultimately held to be
improper, the Company shall promptly refund it and (ii) the Company shall
provide to the Underwriter, upon request, reasonable assurances of its ability
to effect any refund, when and if due.
11. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company and the several Underwriters and, with respect to
the provisions of Section 8 hereof, the several parties (in addition to the
Company and the several Underwriters) indemnified under the provisions of said
Section 8, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained.
26
The term "successors and assigns" as herein used shall not include any
purchaser, as such purchaser, of any of the Shares from any of the several
Underwriters.
12. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telecopy and, if to the Underwriters, shall
be mailed, telecopied or delivered to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Xx. Xxxxxxx Xxxxxxx, with a copy to Xxxxxxx, Phleger
& Xxxxxxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, 00000, Xxxxxxxxx: Xxxxxxxxx X. Xxxxx;
and if to the Company, shall be mailed, telecopied or delivered to it at its
office, Bionx Implants, Inc., 000X Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, XX 00000,
Attention: Xxxxx X. Xxxxxxxx, with a copy to Xxxxxxxxxx, Sandler, Kohl, Xxxxxx &
Xxxxxx P.A., 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxx
X. Xxxxxxxxx. All notices given by telecopy shall be promptly confirmed by
letter.
13. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(i) any investigation made by or on behalf of any Underwriter or controlling
person thereof, or by or on behalf of the Company or its respective directors of
officers, and (ii) delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
You will act as Representatives of the several Underwriters in all dealings
with the Company under this Agreement, and any action under or in respect of
this Agreement taken by you jointly or by UBS Securities LLC, as
Representatives, will be binding upon all of the Underwriters.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
[INTENTIONALLY LEFT BLANK]
27
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement among the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
BIONX IMPLANTS, INC.
By:______________________________
Xxxxx X. Xxxxxxxx
President
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
UBS SECURITIES LLC
XXXXXXXXX & XXXXX LLC
XXXXX XXXXX XXXXXX & COMPANY LLC
By: UBS SECURITIES LLC
By: ______________________________
Title:
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
----------
28
SCHEDULE A
UNDERWRITERS
Number of
Shares
to be
Underwriters Purchased
------------ ---------
UBS Securities LLC ..................................
Xxxxxxxxx & Xxxxx LLC ...............................
Xxxxx Xxxxx Xxxxxx & Company LLC ....................
Total ..... [ ]
==========
SCHEDULE B
Lock-Up Agreements
------------------
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. XxxXxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. X'Xxxxx
Xxxxxx Xxxxxxxx
Bershad Investment Group, L.P.
Bionix, B.V.
BTAR Associates, L.P.
Delaware Charter Guarantee & Trust
Company/Custodian FBO
Xxxxx X. XxxXxxxxx
Desert Orthopedics and Rehabilitation Ltd.
Profit Sharing Plan
Xxxx Xxxxx
H&Q Bionix Investors, X.X.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Custodian FBO Xxxxxxx Xxxxxx
Profit Sharing Plan
Xxxxx Xxxxxx
Landmark Financial Associates II, L.P.
Xxxxxx X. Xxxxxxx
Xxxxxxx X'Xxxxxxx
Xxxxxx X. and Xxxxxx X. Xxxxxxxxx
Family Trust
Stage Right Ltd. Defined Benefits
Pension Plan
Strategic Concepts Inc. Profit
Sharing Plan
X. Xxxx Price Threshold Fund III
TDW Associates, L.P.
Xxxxxxx Xxxxxxxx
SCHEDULE C
MATERIAL PATENTS AND PATENT APPLICATIONS
APPENDIX A
----------
1. OPINION OF COUNSEL TO THE COMPANY
---------------------------------
Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx, P.A. shall opine to the
effect that:
(A) The Company has been duly organized and is validly existing as a
corporation, and is in good standing under, the laws of the State of Delaware;
(B) The Company has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement and Prospectus, and has all licenses, permits, consents,
orders, approvals and authorizations of any federal or state government
authority that are necessary to conduct its business as described in the
Registration Statement and the Prospectus, except where failure to have such
licenses, permits, consents, orders, approvals and authorizations would not have
a Material Adverse Effect; the Company is duly qualified to do business as a
foreign corporation and is in good standing in all jurisdictions in the United
States where to such firm's knowledge, the Company owns or leases properties and
where the failure to so qualify would have a Material Adverse Effect;
(C) To our knowledge, other than the Subsidiaries and NEWCO, the
Company does not own any equity, trust or other ownership interests, directly or
indirectly, any corporation, association or other entity. Each Subsidiary has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and Prospectus, and has all
licenses, permits, consents, orders, approvals and authorizations of any federal
or state government authority that are necessary to conduct their business as
described in the Registration Statement and the Prospectus, except where failure
to have such licenses, permits, consents, orders, approvals and authorizations
would not have a Material Adverse Effect. Each Subsidiary is duly qualified to
do business as a foreign corporation in good standing in each jurisdiction where
the ownership or leasing of the properties or the conduct of its business
requires such qualification, except where the failure to so qualify would not
have a Material Adverse Effect. All of the outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and are owned by the Company, in each case subject
to no security interest, other encumbrance or adverse claim; to the best of such
counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding;
(D) The authorized capital stock of the Company consists of 8,000,000
shares of Preferred Stock, $.001 par value, of which there are no outstanding
shares, and 31,600,000 shares of Common Stock, $.0019 par value, of which there
are outstanding __ shares (including the Firm Shares plus the number of Option
Shares issued on the date
A-1
hereof) [and such additional number of shares, if any, as may have been issued
after the date of the Prospectus and prior to the Closing Date, pursuant to the
Company's option plan]; the authorized shares of the Company's Common Stock have
been duly authorized; the issued and outstanding shares of the Company's capital
stock have been duly authorized and validly issued and are fully paid and
nonassessable, and have been issued in compliance with all federal and state
securities laws and have not been issued in violation of any preemptive right,
co-sale right, registration right, right of first refusal or other similar right
known to such counsel;
(E) The Shares to be issued by the Company pursuant to this Agreement
have been duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and by all requisite corporate action will be, upon issuance and
delivery against payment therefor in accordance with the terms hereof, validly
issued, fully paid and nonassessable, and, to the knowledge of such counsel, not
in violation of any preemptive right, co-sale right, registration right, right
of first refusal or other similar right, which rights have not previously been
waived, in connection with the purchase or sale of any of the Shares;
(F) The Company has full corporate power and authority to enter into
this Agreement and to issue, sell and deliver to the Underwriters the Firm
Shares or the Option Shares, as the case may be, to be issued and sold by it
hereunder;
(G) The Registration Statement has become effective under the Act and,
to such counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the Prospectus has
been issued under the Act and no proceedings for that purpose have been
instituted or are pending or threatened under the Act; any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424(b) of the Rules
and Regulations has been made in the manner and within the time period required
by such Rule 424(b) and any required filing of an abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations has been made in
the manner and within the time period required by such Rule 462(b);
(H) The Registration Statement, the Prospectus, and each amendment or
supplement thereto on and after the effective date (other than the financial
statements, financial and statistical data and supporting schedules included
therein, as to which such counsel need express no opinion), comply as to form in
all material respects with the requirements of the Act and the applicable Rules
and Regulations and to such counsel's knowledge, there are no agreements,
contracts, leases or documents of a character required to be described in, or
filed as an exhibit to, the Registration Statement which are not described or
filed as required by the Act and the applicable Rules and Regulations;
(I) The terms and provisions of the capital stock of the Company
conform to the description thereof contained in the Registration Statement and
the Prospectus, and the information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes matters of law
or legal conclusions, has been reviewed by such counsel and is correct, and the
form of certificate evidencing the Common Stock complies with the applicable
provisions of Delaware law;
A-2
(J) The statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations, including the Delaware general
corporation law, and the description of the certificate of incorporation and
bylaws are accurate and fairly and correctly present the information required to
be presented by the Act or the Rules and Regulations in all material respects;
and such counsel does not know of any statutes, rules or regulations required to
be described in the Registration Statement or the Prospectus that are not
described or referred to therein as required;
(K) The statements under the captions "Risk Factors -- Shares Eligible
for Future Sale," " -- Potential Anti-Takeover Effects of Delaware Law and the
Company's Certificate of Incorporation and Bylaws," "Management - Employment
Agreements," " -- Stock Option/Stock Issuance Plan" and " -- Compensation
Committee Interlocks and Insider Participation," "Certain Transactions,"
"Description of Capital Stock" and "Shares Eligible for Future Sale" in the
Prospectus, and in Items 14 or 15 of the Registration Statement, insofar as such
statements constitute a summary of documents referred to therein or matters of
law, are accurate summaries and fairly and correctly present, in all material
respects, the information called for with respect to such documents and matters;
provided that such counsel shall be entitled to rely on representations of the
Company with respect to certain factual matters contained in such statements,
and provided further that such counsel shall state that nothing has come to the
attention of such counsel which leads them to believe that such representations
are not true and correct in all material respects;
(L) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions herein contemplated do not and
will not (a) conflict with or result in a breach of any of the terms or
provisions of or, constitute a default under, the certificate of incorporation
or bylaws of the Company, or any statute, rule or regulation applicable to the
Company (except that no opinion need to be expressed with respect to compliance
with federal, state or Canadian securities laws) or (b) to the knowledge of such
counsel, result in the creation or imposition of any lien or encumbrance upon
any of the assets of the Company pursuant to the terms or provisions of, or
result in a material breach or violation of any of the terms or provisions of,
or constitute a default or result in the acceleration of any obligation under,
any indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement, other evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company is a party or by which its property is bound or
(c) to the knowledge of such counsel, conflict with or result in a violation or
breach of, or constitute a default under, any applicable license, authorization,
approval, permit, judgment, franchise, order, writ or decree of any court or
governmental agency or body;
(M) No authorization, approval, consent, order, designation or
declaration of or filing by or with any governmental authority or agency is
necessary in connection with the execution and delivery of this Agreement by the
Company and the consummation of the transactions therein contemplated except
such as may have been obtained under the Act and the Rules and Regulations or
such as may be required under foreign or state securities or Blue Sky laws or by
the bylaws and rules of the NASD in connection with the purchase and
distribution of the Shares by the Underwriters.
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(N) The Company, Orthosorb and Biostent are not in violation of their
certificates of incorporation or bylaws. To the best of such counsel's
knowledge, the Company, Orthosorb and Biostent are not in breach of or default
with respect to any provision of any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument by which they or any
of their properties may be bound or affected, except where such breach or
default would not have a Material Adverse Effect, and nothing has come to the
attention of such counsel to give it reason to believe that the Company is in
compliance with all laws, rules, regulations, judgments, decrees, orders and
statutes of any court or jurisdiction to which it is subject, except where
noncompliance would not have a Material Adverse Effect;
(O) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, there are no pending or threatened
actions, suits, claims, proceedings or investigations that, if successful, would
have a Material Adverse Effect or would limit, revoke, cancel, suspend, or cause
not to be renewed any existing license, certificate, registration, approval or
permit, known to such counsel, from any state, federal, or regulatory authority
that is material to the conduct of the business of the Company or the
Subsidiaries, taken as a whole, as presently conducted, or that is of a
character otherwise required to be disclosed in the Registration Statement or
the Prospectus under the Act or the applicable Rules and Regulations;
(P) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of shares of Common Stock or
other securities of the Company have registration rights with respect to
securities of the Company and, except as set forth in the Registration Statement
and Prospectus, all holders of securities of the Company having registration
rights with respect to shares of Common Stock or other securities of the Company
have, with respect to the offering contemplated hereby, waived such rights or
such rights have otherwise been waived or such rights have expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement.
(Q) No transfer taxes are required to be paid in connection with the
sale or delivery to the Underwriters of the Firm Shares or the Option Shares;
(R) The Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended;
In addition, such counsel shall include a statement to the effect that
such counsel has participated in conferences with officers, directors and other
representatives of the Company, the Representatives, Underwriters' Counsel and
the independent public accountants of the Company, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed, and although they have not verified the accuracy or completeness
of the statements contained in the Registration Statement and the Prospectus,
nothing has come to the attention of such counsel which caused them to believe
that, at the time the Registration Statement became effective the Registration
Statement (except as to financial statements, financial and statistical data and
supporting
A-4
schedules contained therein, as to which such counsel need express no opinion)
contained any 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, or at the Closing Date or any later Option Closing Date, as the
case may be, the Registration Statement or the Prospectus (except as aforesaid)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under,which they were made, not misleading.
Counsel rendering the foregoing may rely (i) as to questions of law
not involving the laws of the State of New Jersey, the United States or the
General Corporation Law of the State of Delaware, upon opinions of local
counsel, and (ii) as to questions of fact upon representations or certificates
of officers of the Company and of governmental officials, as the case may be, in
which case its opinion shall state that it is so doing and that it has no actual
knowledge of any material misstatement or inaccuracy in such opinions,
representations or certificates, and that they believe that they and the
Underwriters are justified in relying on such opinions or certificates. Copies
of any opinion, representation or certificate so relied upon shall be delivered
to you, as Representatives of the Underwriters, and to Underwriters' Counsel.
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2. OPINION OF U.S. PATENT COUNSEL.
------------------------------
Xxxxxx & Xxxxxx shall indicate that they served as special counsel to
the Company with respect to patents and proprietary rights, and shall deliver an
opinion in form and substance agreeable to the Representatives and to
Underwriters' Counsel.
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3. OPINION OF FOREIGN PATENT COUNSEL.
---------------------------------
Tampereen Patenttitoimisto, shall indicate that they served as special
counsel to the Company with respect to patents and proprietary rights, and shall
deliver an opinion in form and substance agreeable to the Representatives and to
Underwriters' Counsel.
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4. OPINION OF FDA COUNSEL.
----------------------
Xxxxx & Xxxxxxx shall indicate that they served as special counsel to
the Company with respect to FDA matters and shall opine that:
I. The statements in the Prospectus under the captions "Risk Factors
-- Government Regulation," and "Business -- Government Regulation," insofar as
such statements purport to summarize applicable provisions of the Food, Drugs
and Cosmetics Act and the regulations promulgated thereunder, are accurate
summaries in all material respects of the provisions purported to be summarized
under such captions in the Prospectus; and
II. No facts have come to such counsel's attention which causes such
counsel to believe that the statements in the Prospectus under the captions
"Risk Factors -- Government Regulation," and "Business -- Government
Regulation," insofar as such statements relate to FDA regulatory matters, at the
time the Registration Statement became effective, 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, or as of the
date hereof contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
Such counsel may advise you that, in rendering their opinion, they
have relied on certain factual representations of the Company and that they have
not independently verified the accuracy and completeness of such
representations.
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5. OPINION OF EUROPEAN REGULATORY COUNSEL.
--------------------------------------
Medical Technology Consultants - BRI International Ltd. shall indicate
that they served as special counsel to the Company with respect to foreign
regulatory matters and shall opine that:
I. The statements in the Prospectus under the captions "Risk Factors
-- Government Regulation" and "Business -- Government Regulation --
International" insofar as such statements summarize provisions of applicable
European statutes and regulations, are accurate summaries in all material
respects of the provisions purported to be summarized under such captions in the
Prospectus;
II. No facts have come to the attention of such counsel that causes
such counsel to believe that the statements in the Prospectus under the caption
"Risk Factors -- Government Regulation" and "Business -- Government Regulation -
- International," insofar as such sections relate to European regulatory
matters, at the time the Registration Statement became effective, or at the
Closing Date or any later Option Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Such counsel may advise you that, in rendering their opinion, they
have relied on certain factual representations of the Company and that they have
not independently verified the accuracy and completeness of such
representations.
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6. OPINION OF FINNISH COUNSEL
--------------------------
Merilampi, Martilla & Laitasalo, shall indicate that they served as
Finnish counsel to the Company, and shall deliver an opinion in form and
substance agreeable to the Representatives and to Underwriters' Counsel.
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