Exhibit 1.1
2,000,000 SHARES
COMMON STOCK
ORTHOVITA, INC.
UNDERWRITING AGREEMENT
DATED JUNE __, 1998
TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY2
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY2
(a) Compliance with Registration Requirements2
(b) Offering Materials Furnished to Underwriters3
(c) Distribution of Offering Material By the Company3
(d) The Underwriting Agreement3
(e) Authorization of the Common Shares3
(f) No Applicable Registration or Other Similar Rights3
(g) No Material Adverse Change3
(h) Independent Accountants4
(i) Preparation of the Financial Statements4
(j) Incorporation and Good Standing of the Company and its Subsidiaries4
(k) Capitalization and Other Capital Stock Matters4
(l) Stock Listing5
(m) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required5
(n) No Material Actions or Proceedings5
(o) Intellectual Property Rights6
(p) All Necessary Permits, etc6
(q) Title to Properties6
(r) Tax Law Compliance6
(t) Insurance6
(u) No Price Stabilization or Manipulation7
(v) Related Party Transactions7
(w) No Unlawful Contributions or Other Payments7
(x) Company's Accounting System7
(y) Compliance with Environmental Laws7
(z) ERISA Compliance8
(aa) EASD/NASD Associations8
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS8
(a) The Underwriting Agreement8
(b) The Custody Agreement and Power of Attorney9
(c) Title to Common Shares to be Sold; All Authorizations Obtained9
(d) Delivery of the Common Shares to be Sold9
(e) Non-Contravention; No Further Authorizations or Approvals Required9
(f) No Registration or Other Similar Rights9
(g) No Further Consents, etc10
(h) Disclosure Made by Such Selling Shareholder in the Prospectus10
(i) No Price Stabilization or Manipulation10
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES10
(a) The Firm Common Shares10
(b) The First Closing Date10
(c) The Optional Common Shares; the Second Closing Date11
(d) Payment for the Common Shares11
(e) Delivery of the Common Shares12
(f) Delivery of Prospectus to the Underwriters12
SECTION 3. COVENANTS12
A. COVENANTS OF THE COMPANY.12
(a) Approval by Regulators12
(b) Representative Review of Proposed Amendments and Supplements12
(c) Regulatory Compliance13
(d) Amendments and Supplements to the Prospectus and Other Matters13
(e) Copies of any Amendments and Supplements to the Prospectus13
(f) Use of Proceeds13
(g) Transfer Agent13
(h) Earnings Statement13
(j) Periodic Reporting Obligations14
(k) Agreement Not To Offer or Sell Additional Securities14
(l) Future Reports to the Representative14
(m) EASDAQ14
B. COVENANTS OF THE SELLING SHAREHOLDERS14
(a) Agreement Not to Offer or Sell Additional Securities15
(b) Delivery of Forms W-8 and W-915
SECTION 4. PAYMENT OF EXPENSES15
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS16
(a) Accountants' Comfort Letter16
(b) Compliance with Registration Requirements; No Stop Order; Approval of
Prospectus16
(c) No Material Adverse Change or Ratings Agency Change17
(d) Opinion of Counsel for the Company17
(e) Opinion of Counsel for the Underwriters17
(f) Officers' Certificate17
(g) Bring-down Comfort Letter17
(h) Selling Shareholders' Certificate18
(i) Selling Shareholders' Documents18
(j) Lock-Up Agreement from Certain Shareholders of the Company Other Than
Selling Shareholders18
(k) Additional Documents18
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES18
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT19
SECTION 8. INDEMNIFICATION19
(a) Indemnification of the Underwriters19
(b) Indemnification of the Company, its Directors and Officers20
(c) Notifications and Other Indemnification Procedures21
(d) Settlements21
SECTION 9. CONTRIBUTION.22
SECTION 11. TERMINATION OF THIS AGREEMENT23
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY23
SECTION 13 NOTICES23
SECTION 14. SUCCESSORS24
SECTION 15. PARTIAL UNENFORCEABILITY24
SECTION 16. GOVERNING LAW PROVISIONS25
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING SHAREHOLDERS TO SELL AND
DELIVER COMMON SHARES25
SECTION 18. GENERAL PROVISIONS25
SCHEDULE A - UNDERWRITERS27
SCHEDULE B-SELLING SHAREHOLDERS28
EXHIBIT A-LEGAL OPINION OF ISSUER'S COUNSELA-1
EXHIBIT B-FORM OF LOCK-UP LETTERB-1
UNDERWRITING AGREEMENT
June __, 1998
QUARTZ CAPITAL PARTNERS LIMITED
As Representative of the several Underwriters
00 Xxxxx Xxxxxx
Xxxxxx X0X 0XX
Ladies and Gentlemen:
INTRODUCTORY. Orthovita, Inc., a Pennsylvania corporation (the "Company),
proposes to issue and sell to the several underwriters named in Schedule A (the
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"Underwriters") an aggregate of 1,500,000 shares of its Common Stock, par value
$.01 per share (the "Common Stock"); and the shareholders of the Company named
in Schedule B (collectively, the "Selling Shareholders") severally propose to
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sell to the Underwriters an aggregate of 500,000 shares of Common Stock. The
1,500,000 shares of Common Stock to be sold by the Company and the 500,000
shares of Common Stock to be sold by the Selling Shareholders are collectively
called the "Firm Common Shares". In addition, the Company has granted to the
Underwriters an option to purchase up to an additional 300,000 shares (the
"Optional Common Shares") of Common Stock, as provided in Section 2. The Firm
Common Shares and, if and to the extent such option is exercised, the Optional
Common Shares are collectively called the "Common Shares". Quartz Capital
Partners Limited has agreed to act as representative of the several Underwriters
(in such capacity, the "Representative") in connection with the offering and
sale of the Common Shares.
The Company has prepared and filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (File No. 333-51689),
which contains a form of prospectus to be used in connection with the public
offering and sale of the Common Shares. Such registration statement, as
amended, including the exhibits and schedules thereto, in the form in which it
was declared effective by the Commission under the Securities Act of 1933 and
the rules and regulations promulgated thereunder (collectively, the "Securities
Act"), including any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is called the
"Registration Statement". Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "Rule 462(b)
Registration Statement", and from and after the date and time of filing of the
Rule 462(b) Registration Statement the term "Registration Statement" shall
include the Rule 462(b)
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Registration Statement. Such prospectus, in the form first used by the
Underwriters to confirm sales of the Common Shares, is called the "Prospectus".
All references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a preliminary prospectus, or the Prospectus or the Term
Sheet, or any amendments or supplements to any of the foregoing, shall include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("XXXXX").
In addition, the Company has caused copies of the registration statement and
each amendment thereto and each prospectus included in such registration
statement or amendment to be filed with the Market Authority of the European
Association of Securities Dealers Automated Quotation market for financial
instruments ("EASDAQ") and the Banking and Finance Commission of the Kingdom of
Belgium ("CBF").
The Company and each of the Selling Shareholders hereby confirms their
respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Regulatory Requirements. The Registration Statement and
any Rule 462(b) Registration Statement have been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission's satisfaction with all requests of the Commission for additional or
supplemental information. The Company's EASDAQ Admission Application has been
approved by the EASDAQ Market Authority. The Prospectus has been approved by
the EASDAQ Market Authority and the CBF. The Company has received no notice of
any stop order by the Commission suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement which is in
effect, or any equivalent action or trading halt by the EASDAQ Market Authority
or CBF, and no proceedings for such purpose have been instituted or are pending
or, to the best knowledge of the Company, are contemplated or threatened by the
Commission, EASDAQ Market Authority, or CBF.
The preliminary prospectus filed with Amendment No. 1 to the Registration
Statement on May 28, 1998 (the "Preliminary Prospectus") and the Preliminary
Prospectus as supplemented by the Supplement to the Prospectus dated June 12,
1998 (the "Prospectus Supplement") and the Prospectus, when filed, complied in
all material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Common Shares.
Each of the Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not
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misleading. The Prospectus, as amended or supplemented, as of its date and at
all subsequent times, did not and will not contain any untrue statement of a
material fact or omit 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. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any post-
effective amendment thereto, or the Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by the Representative,
expressly for use therein. There are no contracts or other documents required
under the Securities Act to be described in the Prospectus or to be filed as
exhibits to the Registration Statement which have not been described or filed as
required. The Prospectus, on the date hereof, complies in all material respects
with the provisions of Belgian law and the rules and regulations of the CBF and
EASDAQ.
(b) Offering Materials Furnished to Underwriters. The Company has delivered
to the Representative one complete manually signed copy of the Registration
Statement and of each consent and certificate of experts filed as a part
thereof, and conformed copies of the Registration Statement (without exhibits)
and preliminary prospectuses and the Prospectus, as amended or supplemented, in
such quantities and at such places as the Representative has reasonably
requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of the Underwriters' distribution of
the Common Shares, any offering material in connection with the offering and
sale of the Common Shares other than the Preliminary Prospectus, the Prospectus
Supplement, the Prospectus or the Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(e) Authorization of the Common Shares. The Common Shares to be purchased by
the Underwriters from the Company have been duly authorized for issuance and
sale pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(f) No Applicable Registration or Other Similar Rights. There are no persons
with registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering
contemplated by this Agreement, other than the Selling Shareholders with respect
to the Common Shares included in the Registration Statement, except for such
rights as have been duly waived.
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(g) No Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(h) Independent Accountants. Xxxxxx Xxxxxxxx LLP who have expressed their
opinion with respect to the financial statements (which term as used in this
Agreement includes the related notes thereto) filed with the Commission as a
part of the Registration Statement and included in the Prospectus, are
independent public or certified public accountants as required by the Securities
Act.
(i) Preparation of the Financial Statements. The financial statements filed
with the Commission as a part of the Registration Statement and included in the
Prospectus present fairly, on the basis stated in the Registration Statement,
the financial position of the Company as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles as applied in the United States applied on a consistent
basis throughout the periods involved, except as may be expressly stated in the
related notes thereto. No other financial statements or supporting schedules
are required under GAAP or the Securities Act to be included in the Registration
Statement. The financial data set forth in the Prospectus under the captions
"Prospectus Summary--Summary Financial Information", "Selected Financial Data"
and "Capitalization" fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained in the
Registration Statement.
(j) Incorporation and Good Standing of the Company and its Subsidiaries. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, in the case of the
Company, to enter into and perform its obligations under this Agreement. The
Company has no facilities, employees or inventories in any other state which
would require it to qualify to do business in that state. The Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except for
such jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the
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aggregate, result in a Material Adverse Change. The Company does not own or
control, directly or indirectly, any corporation, association or other entity.
(k) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in the Prospectus
under the caption "Description of Capital Stock" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options or warrants described in the
Prospectus). The Common Stock (including the Common Shares) conforms in all
material respects to the description thereof contained in the Prospectus. All
of the issued and outstanding shares of Common Stock (including the shares of
Common Stock owned by Selling Shareholders) have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company or any of its subsidiaries other than those
listed in the Prospectus. The stock ledger of the Company delivered to the
Representative accurately lists the record owners of the capital stock, and the
Company has received no notice of any transfer of stock or lien or encumbrance
on any such stock owned by a Selling Stockholder not reflected thereon. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth in
the Prospectus accurately and fairly presents in all material respects the
information required to be shown with respect to such plans, arrangements,
options and rights.
(l) Stock Listing. The Common Shares have been admitted to trading on
EASDAQ.
(m) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or is in default (or, with the giving of
notice or lapse of time, would be in default) ("Default") under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound (including, without limitation, the
Company's Credit Facility with Progress Bank, as lender), or to which any of the
property or assets of the Company or any of its subsidiaries is subject (each,
an "Existing Instrument"), except for such Defaults that have not been waived by
such bank or as would not, individually or in the aggregate, result in a
Material Adverse Change The Company's execution, delivery and performance of
this Agreement and consummation of the transactions contemplated hereby and by
the Prospectus (i) have been duly authorized by all necessary corporate action
and will not result in any violation of the provisions of the charter or by-laws
of the Company or any subsidiary, (ii) will not conflict with or constitute a
breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, or require the consent of any other part to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate,
5
result in a Material Adverse Change and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any subsidiary. No consent, approval,
authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency, is required for the
Company's execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the Prospectus, except such as
have been obtained or made by the Company and are in full force and effect under
the Securities Act, applicable state securities or blue sky laws and the
applicable rules and regulations of EASDAQ and the CBF.
(n) No Material Actions or Proceedings. Except as otherwise disclosed in the
Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened (i) against or
affecting the Company or any of its subsidiaries, (ii) which has as the subject
thereof any officer or director of, or property owned or leased by, the Company
or any of its subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility that such
action, suit or proceeding might be determined adversely to the Company or such
subsidiary and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions contemplated by this
Agreement. No material labor dispute with the employees of the Company or any
of its subsidiaries, or with the employees of any principal supplier of the
Company, exists or, to the best of the Company's knowledge, is threatened or
imminent.
(o) Intellectual Property Rights. The Company and its subsidiaries own or
possess sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals, trade secrets and other similar rights (collectively, "Intellectual
Property Rights") reasonably necessary to conduct their businesses as now
conducted; and the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Change. Except as otherwise
disclosed in the Prospectus, neither the Company nor any of its subsidiaries has
received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.
(p) All Necessary Permits, etc. Except as otherwise disclosed in the
Prospectus, the Company and each subsidiary possess such valid and current
certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct their respective
businesses as presently conducted, and neither the Company nor any subsidiary
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Change.
(q) Title to Properties. The Company and each of its subsidiaries has good and
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1 (A) (i) above (or elsewhere in the
Prospectus), in each case free and clear of any security interests, mortgages,
liens,
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encumbrances, equities, claims and other defects, except for the Progress
Bank security interest in substantially all of its assets and the Finova
interest as lessor in certain leased properties, and such other matters as do
not materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such property
by the Company or such subsidiary. The real property, improvements, equipment
and personal property held under lease by the Company or any subsidiary are held
under valid and enforceable leases, with such exceptions as are not material and
do not materially interfere with the use made or proposed to be made of such
real property, improvements, equipment or personal property by the Company or
such subsidiary.
(r) Tax Law Compliance. The Company and its consolidated subsidiaries have
filed all necessary federal, state and foreign income and franchise tax returns
or have properly requested extensions thereof and have paid all taxes required
to be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them. The Company has made
adequate charges, accruals and reserves in the applicable financial statements
referred to in Section 1 (A) (i) above in respect of all federal, state and
foreign income and franchise taxes for all periods as to which the tax liability
of the Company or any of its consolidated subsidiaries has not been finally
determined.
(s) Company Not an "Investment Company". The Company has been advised of the
rules and requirements under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Company is not, and after receipt of payment for
the Common Shares will not be, an "investment company" within the meaning of
Investment Company Act and will conduct its business in a manner so that it will
not become subject to the Investment Company Act.
(t) Insurance. Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes, and policies for employee and product liability insurance. The
Company has no reason to believe that it or any subsidiary will not be able (i)
to renew its existing insurance coverage as and when such policies expire or
(ii) to obtain comparable coverage from similar institutions as may be necessary
or appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change. Neither of the Company nor any
subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
(u) No Price Stabilization or Manipulation. Other than the grant of the
option to purchase the Optional Common Shares pursuant to Section 2(c) hereof,
the Company has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Common Shares.
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(v) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the Prospectus which have not been described
as required.
(w) No Unlawful Contributions or Other Payments. Neither the Company nor any
of its subsidiaries nor, to the best of the Company's knowledge, any employee or
agent of the Company or any subsidiary, has made any contribution or other
payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law or of the character required to be disclosed in
the Prospectus.
(x) Company's Accounting System. The Company maintains a system of 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 as
applied in the United States 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.
(y) Compliance with Environmental Laws. Except as would not, individually or
in the aggregate, result in a Material Adverse Change (i) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local or
foreign law or regulation relating to pollution or protection of human health or
the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, "Materials of Environmental Concern"), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
"Environmental Laws"); and (ii) there is no claim, action or cause of action
filed with a court or governmental authority, no investigation with respect to
which the Company has received written notice, and no written notice by any
person or entity alleging potential liability for investigatory costs, cleanup
costs, governmental responses costs, natural resources damages, property
damages, personal injuries, attorneys' fees or penalties arising out of, based
on or resulting from the presence, or release into the environment, of any
Material of Environmental Concern at any location owned, leased or operated by
the Company or any of its subsidiaries, now or in the past (collectively,
"Environmental Claims"), pending or, to the best of the Company's knowledge,
threatened against the Company or any of its subsidiaries or any person or
entity whose liability for any Environmental Claim the Company or any of its
subsidiaries has retained or assumed either contractually or by operation of
law.
(z) ERISA Compliance. The Company and its subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
8
subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of organizations described in
Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the "Code") of
which the Company or such subsidiary is a member. No "reportable event" (as
defined under ERISA) has occurred or is reasonably expected to occur with
respect to any "employee benefit plan" established or maintained by the Company,
its subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfunded benefit liabilities" (as defined under ERISA). Neither the
Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit plan" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit
plan" established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates that is intended to be qualified under Section 401(a) of the
Code is so qualified and nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification.
(aa) EASD/NASD Associations. To the Company's knowledge, except as set forth
in Prospectus there are no affiliations or associations between any member of
either the European Association of Securities Dealers (the "EASD") or the
National Association of Securities Dealers, Inc., (the "NASD") and any of the
Company's officers, directors or 5% or greater securityholders.
Any certificate signed by an officer of the Company and delivered to the
Representative or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company (but not of such officer in his
individual capacity) to each Underwriter as to the matters set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each Selling
Shareholder represents, warrants and covenants to each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling Shareholder and is a
valid and binding agreement of such Selling Shareholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of the (i) Custody
Agreement signed by such Selling Shareholder and the Company, as custodian (the
"Custodian"), relating to the deposit of the Common Shares to be sold by such
Selling Shareholder (the "Custody Agreement") and (ii) Power of Attorney
appointing certain individuals named therein as such Selling Shareholder's
attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set forth therein
relating to the transactions contemplated hereby and by
9
the Prospectus (the "Power of Attorney"), of such Selling Shareholder has been
duly authorized, executed and delivered by such Selling Shareholder and is a
valid and binding agreement of such Selling Shareholder, enforceable in
accordance with its terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(c) Title to Common Shares to be Sold; All Authorizations Obtained. Such
Selling Shareholder has, and on the First Closing Date and the Second Closing
Date (as defined below) will have, good and valid title to all of the Common
Shares which may be sold by such Selling Shareholder pursuant to this Agreement
on such date and the legal right and power, and all authorizations and approvals
required by law and under its charter or by-laws, partnership agreement, trust
agreement or other organizational documents (collectively "Organizational
Documents") to the extent that such selling Shareholder's other than an
individual to enter into this Agreement and its Custody Agreement and Power of
Attorney, to sell, transfer and deliver all of the Common Shares which may be
sold by such Selling Shareholder pursuant to this Agreement and to comply with
its other obligations hereunder and thereunder.
(d) Delivery of the Common Shares to be Sold. Delivery of the Common Shares
which are sold by such Selling Shareholder pursuant to this Agreement will pass
good and valid title to such Common Shares, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or other claim.
(e) Non-Contravention; No Further Authorizations or Approvals Required. The
execution and delivery by such Selling Shareholder of, and the performance by
such Selling Shareholder of its obligations under, this Agreement, the Custody
Agreement and the Power of Attorney will not contravene or conflict with, result
in a breach of, or constitute a Default under, or require the consent of any
other party to, the Organizational Documents of such Selling Shareholder if
applicable, or any other agreement or instrument to which such Selling
Shareholder is a party or by which it is bound or under which it is entitled to
any right or benefit, any provision of applicable law or any judgment, order,
decree or regulation applicable to such Selling Shareholder of any court,
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Shareholder. No consent, approval, authorization
or other order of, or registration or filing with, any court or other
governmental authority or agency, is required for the consummation by such
Selling Shareholder of the transactions contemplated in this Agreement, except
such as have been obtained or made and are in full force and effect under the
Securities Act the rules and regulation of the Belgium Banking and Finance
Commission and the rules of the EASD.
(f) No Registration or Other Similar Rights. Such Selling Shareholder does
not have any registration or other similar rights to have any equity or debt
securities registered for sale by the Company under the Registration Statement
or included in the offering contemplated by this Agreement, except for such
rights as are described in the Prospectus under "Shares Eligible for Future
Sale".
10
(g) No Further Consents, etc. Except for the (i) consent of such Selling
Shareholder to the respective number of Common Shares to be sold by all of the
Selling Shareholders pursuant to this Agreement and (ii) waiver by certain other
holders of the Company's securities of certain registration rights no consent,
approval or waiver is required under any instrument or agreement to which such
Selling Shareholder is a party or by which it is bound or under which it is
entitled to any right or benefit, in connection with the offering, sale or
purchase by the Underwriters of any of the Common Shares which may be sold by
such Selling Shareholder under this Agreement or the consummation by such
Selling Shareholder of any of the other transactions contemplated hereby.
(h) Disclosure Made by Such Selling Shareholder in the Prospectus. All
information, if any, furnished by or on behalf of such Selling Shareholder in
writing expressly for use in the Registration Statement and Prospectus is, and
on the First Closing Date and the Second Closing Date will be, true, correct,
and complete in all material respects, and does not, and on the First Closing
Date and the Second Closing Date will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make such
information not misleading. Such Selling Shareholder confirms as accurate the
number of shares of Common Stock set forth opposite such Selling Shareholder's
name in the Custody Agreement (both prior to and after giving effect to the sale
of the Common Shares).
(i) No Price Stabilization or Manipulation. Such Selling Shareholder has not
taken and will not take, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or manipulation
of the price of the Common Stock to facilitate the sale or resale of the Common
Shares.
Any certificate signed by or on behalf of any Selling Shareholder and
delivered to the Representative or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Shareholder to each
Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
(a) The Firm Common Shares. Upon the terms herein set forth, (i) the Company
agrees to issue and sell to the several Underwriters an aggregate of 1,500,000
Firm Common Shares and (ii) the Selling Shareholders agree to sell to the
several Underwriters an aggregate of 500,000 Firm Common Shares, each Selling
Shareholder selling the number of Firm Common Shares set forth opposite such
Selling Shareholder's name on Schedule B. On the basis of the representations,
----------
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Underwriters agree, severally and not
jointly, to purchase from the Company and the Selling Shareholders the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
----------
Underwriters to the Company and the Selling Shareholders shall be $[___] per
share.
11
(b) The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of Xxxxx Brothers Xxxxxxxx & Co., New York (or such other place as
may be agreed to by the Company and the Representative) at [ ] Eastern Daylight
Time, on June ___, 1998, or such other time and date not later than ten calendar
days thereafter as the Representative shall designate by notice to the Company
(the time and date of such closing are called the "First Closing Date"). The
Company and the Selling Shareholders hereby acknowledge that circumstances under
which the Representative may provide notice to postpone the First Closing Date
as originally scheduled include, but are in no way limited to, any determination
by the Company, the Selling Shareholders or the Representative to recirculate to
the public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 10.
(c) The Optional Common Shares; the Second Closing Date. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of 300,000 Optional Common Shares from the
Company at the purchase price per share to be paid by the Underwriters for the
Firm Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the Representative
to the Company, which notice may be given at any time within 30 days from the
date of this Agreement. Such notice shall set forth (i) the aggregate number of
Optional Common Shares as to which the Underwriters are exercising the option,
(ii) the names and denominations in which the certificates for the Optional
Common Shares are to be registered and (iii) the time, date and place at which
such certificates will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in such case the term
"First Closing Date" shall refer to the time and date of delivery of
certificates for the Firm Common Shares and the Optional Common Shares). Such
time and date of delivery, if subsequent to the First Closing Date, is called
the "Second Closing Date" and shall be determined by the Representative and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Optional Common Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representative may determine) that bears the same
proportion to the total number of Optional Common Shares to be purchased as the
number of Firm Common Shares set forth on Schedule A opposite the name of such
----------
Underwriter bears to the total number of Firm Common Shares. The Representative
may cancel the option at any time prior to its expiration by giving written
notice of such cancellation to the Company.
(d) Payment for the Common Shares. Payment for the Common Shares to be sold
by the Company shall be made at the First Closing Date (and, if applicable, at
the Second Closing Date) by wire transfer of immediately available funds to the
order of the Company. Payment for the Common Shares to be sold by the
12
Selling Shareholders shall be made at the First Closing by wire transfer of
immediately available funds to the order of the Custodian.
It is understood that the Representative has been authorized, for its own
account and the accounts of the several Underwriters, to accept delivery of and
receipt for, and make payment of the purchase price for, the Firm Common Shares
and any Optional Common Shares the Underwriters have agreed to purchase. Each
of Quartz Capital Partners Limited, Artesia Bank, N.V. and Bank Brussels Xxxxxxx
may (but shall not be obligated to) make payment for any Common Shares to be
purchased by any Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
Each Selling Shareholder hereby agrees that (i) it will pay all stock transfer
taxes, stamp duties and other similar taxes, if any, payable upon the sale or
delivery of the Common Shares to be sold by such Selling Shareholder to the
several Underwriters, or otherwise in connection with the performance of such
Selling Shareholder's obligations hereunder and (ii) the Custodian is authorized
to deduct for such payment any such amounts from the proceeds to such Selling
Shareholder hereunder and to hold such amounts for the account of such Selling
Shareholder with the Custodian under the Custody Agreement.
(e) Delivery of the Common Shares. The Company and the Selling Shareholders
shall deliver, or cause to be delivered, to the Representative for the accounts
of the several Underwriters certificates for the Firm Common Shares to be sold
by them at the First Closing Date, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The Company shall also deliver, or cause to be delivered, to the
Representative for the accounts of the several Underwriters, certificates for
the Optional Common Shares the Underwriters have agreed to purchase at the
First Closing Date or the Second Closing Date, as the case may be, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The certificates for the Common Shares
shall be in definitive form and registered in such names and denominations as
the Representative shall have requested at least two full business days prior to
the First Closing Date (or the Second Closing Date, as the case may be) and
shall be made available for inspection on the business day preceding the First
Closing Date (or the Second Closing Date, as the case may be) at a location in
New York City as the Representative may designate. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
(f) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m. New
York time on the second business day following the date the Common Shares are
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered copies of the Prospectus in such quantities and at such
places as the Representative shall request.
SECTION 3. COVENANTS.
13
A. COVENANTS OF THE COMPANY. The Company further covenants and agrees with
each Underwriter as follows:
(a) Approval by Regulators. The Company shall cooperate with the
Representative and counsel for the Underwriters to obtain any further approval
of the Prospectus from the CBF and the EASDAQ Market Authority. The Company
will prepare and file with the Commission, the CBF and EASDAQ, promptly upon the
request of the Representative, any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the Representative may be
necessary to enable the several Underwriters to continue the distribution of the
Common Shares and will use its best efforts to cause the same to become
effective or be approved, as the case may be, as promptly as possible.
(b) Representative Review of Proposed Amendments and Supplements. During such
period beginning on the date hereof and ending on the later of the First Closing
Date or such date, as in the opinion of counsel for the Underwriters, the
Prospectus is no longer required by law to be delivered in connection with sales
by an Underwriter or dealer (the "Prospectus Delivery Period"), prior to
amending or supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the Prospectus,
the Company shall furnish to the Representative for review a copy of each such
proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Representative shall reasonably
object.
(c) Regulatory Compliance. After the date of this Agreement, the Company
shall promptly advise the Representative in writing (i) of the receipt of any
comments of, or requests for additional or supplemental information from, the
Commission, EASDAQ Market Authority or CBF, (ii) of the time and date of any
filing of any post-effective amendment to the Registration Statement with the
Commission or any amendment or supplement to any preliminary prospectus or the
Prospectus with the Commission, EASDAQ Market Authority or CBF, (iii) of the
time and date that any post-effective amendment to the Registration Statement
becomes effective under the Securities Act or is approved by the EASDAQ Market
Authority or the CBF, (iv) of the issuance by the Commission, EASDAQ Market
Authority or CBF of any stop order or equivalent suspending the effectiveness of
the Registration Statement or any post-effective amendment thereto or of any
order preventing or suspending the use of any preliminary prospectus or the
Prospectus, and (v) of the commencement of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission, EASDAQ Market Authority or CBF shall enter
any such stop order or equivalent at any time, the Company will use its best
efforts to obtain the lifting of such order as promptly as practical.
Additionally, the Company agrees that it shall comply with the provisions of
Rules 424(b) and 430A, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company under such
Rule 424(b) were received in a timely manner by the Commission.
14
(d) Amendments and Supplements to the Prospectus and Other Matters. If,
during the Prospectus Delivery Period, any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the opinion of
the Representative or counsel for the Underwriters it is otherwise necessary to
amend or supplement the Prospectus to comply with law, the Company agrees to
promptly prepare (subject to Section 3(A)(a) hereof), file with the Commission,
EASDAQ Market Authority and/or CBF and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not, in
light of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply
with law.
(e) Copies of any Amendments and Supplements to the Prospectus. The Company
agrees to furnish the Representative, without charge, during the Prospectus
Delivery Period, as many copies of the Prospectus and any amendments and
supplements thereto as the Representative may reasonably request.
(f) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Common Shares sold by it in the manner described under the caption "Use
of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at its expense, a
registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representative an
earnings statement (which need not be audited) covering the twelve-month period
ending June 30, 1999 that satisfies the provisions of Section 11(a) of the
Securities Act.
(j) Periodic Reporting Obligations. During the Prospectus Delivery Period the
Company shall file, on a timely basis, with the Commission, EASDAQ and the CBF
all reports and documents required to be filed under the Exchange Act, EASDAQ
rules or the laws and regulations of Belgium.
(k) Agreement Not To Offer or Sell Additional Securities. During the period
of 180 days following the date of the Prospectus, the Company will not, without
the prior written consent of Quartz Capital Partners Limited (which consent may
be withheld at the sole discretion of Quartz Capital Partners Limited), directly
or indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the meaning of
Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock, options or warrants to
acquire shares of the Common Stock or securities exchangeable or exercisable for
or convertible into shares of Common Stock (other than as contemplated by this
Agreement with respect to the Common Shares); provided, however, that the
Company may issue (i) Common Stock issuable upon the exercise of warrants and
options which are outstanding as of the date of this Agreement, or (ii) options
to purchase its Common Stock granted pursuant to any stock option, stock bonus
or other stock
15
plan or arrangement described in the Prospectus, or (iii) Common Stock issuable
pursuant to exercise of options under such plans or arrangements, but in each
case only if the holders of such shares, options, or warrants, or shares issued
upon exercise of such options or warrants, agree in writing not to sell, offer,
dispose of or otherwise transfer any such shares or options during such 180 day
period without the prior written consent of Quartz Capital Partners Limited
(which consent may be withheld at the sole discretion of the Quartz Capital
Partners Limited).
(l) Future Reports to the Representative. During the period of five years
hereafter the Company will furnish to the Representative at 00 Xxxxx Xxxxxx,
Xxxxxx X0X 0XX, (x) as soon as practicable after the end of each fiscal year,
copies of the Annual Report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income,
shareholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other report filed by the Company with the Commission,
EASDAQ, the CBF or any securities exchange or designated offshore securities
market as defined in Regulation S under the Securities Act; and (iii) as soon as
available, copies of any report or communication of the Company mailed generally
to holders of its capital stock.
(m) EASDAQ. The Company will comply with all applicable rules and regulations
with respect to admission to trading of securities on EASDAQ and with all EASDAQ
rules and regulations. The Company will use its reasonable efforts to maintain
the admission to trading of the Common Shares on EASDAQ.
B. COVENANTS OF THE SELLING SHAREHOLDERS. Each Selling Shareholder further
covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such Selling
Shareholder will not, without the prior written consent of Quartz Capital
Partners Limited (which consent may be withheld in its sole discretion),
directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of any shares of Common Stock, options or
warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3 under
Securities Exchange Act of 1934, as amended) by the undersigned, or publicly
announce the undersigned's intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of trading on the
date 180 days after the date of the Prospectus.
(b) Delivery of Forms W-8 and W-9. Such Selling Shareholder will deliver to
the Representative prior to the First Closing Date a properly completed and
executed United States Treasury Department Form
16
W-8 (if the Selling Shareholder is a non-United States person) or Form W-9 (if
the Selling Shareholder is a United States Person).
Quartz Capital Partners Limited, on behalf of the several Underwriters, may,
in its sole discretion, waive in writing the performance by the Company or any
Selling Shareholder of any one or more of the foregoing covenants or extend the
time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company shall pay all costs, fees and
expenses incurred in connection with the performance of the obligations
hereunder and in connection with the transactions contemplated hereby (other
than underwriting discounts and commissions), including without limitation (i)
all expenses incident to the issuance and delivery of the Common Shares
(including all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Common Stock, (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Common Shares to the Underwriters or by the Underwriters to their customers,
(iv) all fees and expenses of the Company's counsel, independent public or
certified public accountants and other advisors, (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each preliminary
prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys' fees and expenses incurred by
the Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Common Shares for offer and sale under the state securities or blue sky
laws of the United States, or the provincial securities laws of Canada, and, if
requested by the Representative, preparing and printing a "Blue Sky Survey" or
memorandum, and any supplements thereto, advising the Underwriters of such
qualifications, registrations and exemptions, (vii) the filing fees incident to,
and the reasonable fees and expenses of counsel for the Underwriters in
connection with, any NASD review and approval of the Underwriters' participation
in the offering and distribution of the Common Shares, (viii) the fees and
expenses associated with admission to trading of Common Shares on EASDAQ or the
filing with the Belgium Banking and Finance Commission, (ix) the fees, up to a
limit of US$20,000, of Xx Xxxxx, Xxx Xxxxx & Lagae in respect of their work
relating to the offering of the Common Shares, and (x) all other fees, costs and
expenses referred to in Item 13 of Part II of the Registration Statement.
Except as provided in this Section 4, Section 6, Section 8 and Section 9 hereof,
the Underwriters shall pay their own expenses, including the fees and
disbursements of their counsel.
The Selling Shareholders further agree with each Underwriter to pay (directly
or by reimbursement) all fees and expenses incident to the performance of their
obligations under this Agreement which are not otherwise specifically provided
for herein, including but not limited to (i) fees and expenses of counsel and
other advisors for such Selling Shareholders, (ii) fees and expenses of the
Custodian and (iii) expenses and taxes incident to the sale and delivery of the
Common Shares to be sold by such Selling Shareholders to the Underwriters
hereunder (which taxes, if any, may be deducted by the Custodian under the
provisions of Section 2 of this Agreement).
17
This Section 4 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Shareholders, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy in all materials respects of the representations and warranties on the
part of the Company and the Selling Shareholders set forth in Sections 1(A) and
1(B) hereof as of the date hereof and as of the First Closing Date as though
then made and, with respect to the Optional Common Shares, as of the Second
Closing Date as though then made, to the timely performance by the Company and
the Selling Shareholders of their respective covenants and other obligations
hereunder, and to each of the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the Representatives shall
have received from Xxxxxx Xxxxxxxx LLP, independent public or certified public
accountants for the Company, a letter dated the date hereof addressed to the
Underwriters, in form and substance satisfactory to the Representative,
containing statements and information of the type ordinarily included in
accountant's "comfort letters" to underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration Statement and the Prospectus (and the
Representative shall have received an additional three conformed copies of such
accountants' letter for each of the several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order; Approval of
Prospectus. For the period from and after effectiveness of this Agreement and
prior to the First Closing Date and, with respect to the Optional Common Shares,
the Second Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act) in
the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required by such Rule
430A, and such post-effective amendment shall have become effective; or,
(ii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment to the Registration Statement, shall be in effect and no proceedings
for such purpose shall have been instituted or threatened by the Commission; and
(iii) The Prospectus shall have been approved by each of the EASDAQ
Market Authority and CBF and shall comply in all material respects with all
applicable legal requirements for use in a public offering in Belgium, and no
proceeding shall have been initiated by the CBF or EASDAQ for the purpose of
rescinding such approval.
18
(c) No Material Adverse Change or Ratings Agency Change. For the
period from and after the date of this Agreement and prior to the First Closing
Date and, with respect to the Optional Common Shares, the Second Closing Date in
the reasonable judgment of the Representative there shall not have occurred any
Material Adverse Change.
(d) Opinion of Counsel for the Company. On each of the First Closing Date and
the Second Closing Date the Representative shall have received the favorable
opinion of Xxxxxx, Xxxxx & Bockius LLP, counsel for the Company, dated as of
such Closing Date, the form of which is attached as Exhibit A and the opinion of
---------
Xxxxxxxx, Washburn, Kurtz, Xxxxxxxxxx and Xxxxxx as to certain patent matters
(and the Representative shall have received an additional three conformed copies
of each such counsel's legal opinion for each of the several Underwriters).
(e) Opinion of Counsel for the Underwriters. On each of the First Closing
Date and the Second Closing Date the Representative shall have received the
favorable opinion of Brown, Rudnick, Freed & Gesmer, counsel for the
Underwriters, dated as of such Closing Date, with respect to such matters as it
may reasonably request, and the Company and the Selling Shareholders shall have
furnished to such counsel such documents as they may request for the purpose of
enabling them to pass upon such matters (and the Representative shall have
received an additional three conformed copies of such counsel's legal opinion
for each of the several Underwriters).
(f) Officers' Certificate. On each of the First Closing Date and the Second
Closing Date the Representative shall have received a written certificate
executed by the Chief Executive Officer of the Company and the Chief Financial
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsections (b)(ii) and (c)(ii) of this Section 5, and further to the effect
that:
(i) for the period from and after the date of this Agreement and prior
to such Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set
forth in Section 1 (A) of this Agreement are true and correct in all material
respects with the same force and effect as though expressly made on and as of
such Closing Date; and
(iii) the Company has complied in all material respects with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date.
(g) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date the Representative shall have received from Xxxxxx Xxxxxxxx
LLP, independent public or certified public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the
Representative, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of
19
procedures shall be no more than three business days prior to the First Closing
Date or Second Closing Date, as the case may be (and the Representative shall
have received an additional three conformed copies of such accountants' letter
for each of the several Underwriters).
(h) Selling Shareholders' Certificate. On the First Closing Date the
Representative shall received a written certificate executed by the Attorney-in-
Fact of each Selling Shareholder, dated as of such Closing Date, to the effect
that:
(i) the representations, warranties and covenants of such Selling
Shareholder set forth in Section 1(B) of this Agreement are true and correct
with the same force and effect as though expressly made by such Selling
Shareholder on and as of such Closing Date; and
(ii) such Selling Shareholder has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(i) Selling Shareholders' Documents. On the date hereof, the Company and the
Selling Shareholders shall have furnished for review by the Representative
copies of the Powers of Attorney and Custody Agreements executed by each of the
Selling Shareholders and such further information, certificates and documents as
the Representative may reasonably request.
(j) Lock-Up Agreement from Certain Shareholders of the Company Other Than
Selling Shareholders. On the date hereof, the Company shall have furnished to
the Representative an agreement in the form of Exhibit B hereto from the
---------
officers, directors and certain holders of Common Stock listed in Schedule C,
and such agreement shall be in full force and effect on each of the First
Closing Date and the Second Closing Date.
(k) Additional Documents. On or before each of the First Closing Date and the
Second Closing Date, the Representative and counsel for the Underwriters shall
have received such information, documents and opinions as they may reasonably
require in order to evidence the accuracy of any of the representations and
warranties, or the satisfaction of any of the conditions or agreements, herein
contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Representative
by notice to the Company and the Selling Shareholders at any time on or prior to
the First Closing Date and, with respect to the Optional Common Shares, at any
time prior to the Second Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 4,
Section 6, Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
20
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated by the Representative pursuant to Section 5, Section 7, Section 10,
Section 11 or Section 17, or if the sale to the Underwriters of the Common
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or the Selling Shareholders to
perform any agreement herein or to comply with any provision hereof, the Company
agrees to reimburse the Representatives and the other Underwriters severally,
upon demand for all out-of-pocket expenses that shall have been reasonably
incurred by the Representative and the Underwriters in connection with the
proposed purchase and the offering and sale of the Common Shares, including but
not limited to the reasonable fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not become
effective until the later of (i) the execution of this Agreement by the parties
hereto and (ii) notification by the Commission to the Company and the
Representative of the effectiveness of the Registration Statement under the
Securities Act. Prior to such effectiveness, this Agreement may be terminated by
any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the
Selling Shareholders to any Underwriter, except that the Company and the Selling
Shareholders shall be obligated to reimburse the expenses of the Representative
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of any Underwriter
to the Company or the Selling Shareholders, or (c) of any party hereto to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter, its officers and employees, and each person, if
any, who controls any Underwriter within the meaning of the Securities Act and
the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A
under the Securities Act, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Prospectus, Prospectus
Supplement or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; or (iii) in whole or in part upon any material
inaccuracy in the representations and warranties of the Company contained
herein; or (iv) in whole or in part upon any failure of the Company to perform
its obligations hereunder or
21
under law; or (v) any act or failure to act or any alleged act or failure to act
by any Underwriter in connection with, or relating in any manner to, the Common
Stock or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith or willful misconduct; and to reimburse each Underwriter and each
such controlling person for any and all expenses (including the reasonable fees
and disbursements of counsel chosen by Quartz Capital Partners Limited) as such
expenses are reasonably incurred by such Underwriter or such controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however,
that the foregoing indemnity agreement shall not apply to any loss, claim,
damage, liability or expense to the extent, but only to the extent, arising out
of or based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Representative expressly for use in
the Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and provided, further, that with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not inure to
the benefit of any Underwriter from whom the person asserting any loss, claim,
damage, liability or expense purchased Common Shares, or any person controlling
such Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that the
Company and the Selling Shareholders may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement, the Selling Shareholders and each person, if any, who
controls the Company or any Selling Shareholder within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which the Company, or any such director, officer,
Selling Shareholder or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that
22
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any preliminary prospectus, the
Prospectus (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company and the Selling
Shareholders by the Representative expressly for use therein; and to reimburse
the Company, or any such director, officer, Selling Shareholder or controlling
person for any legal and other expense reasonably incurred by the Company, or
any such director, officer, Selling Shareholder or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action. Each of the Company and
each of the Selling Shareholders, hereby acknowledges that the only information
that the Underwriters have furnished to the Company and the Selling Shareholders
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) are the statements set
forth (A) in the paragraph on the inside first page of the Prospectus concerning
stabilization by the Underwriters and (B) in the Sections entitled "Offering and
Subscription" and "Underwriting" in the Prospectus; and the Underwriters confirm
that such statements are correct. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that each Underwriter may
otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding
23
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (together with any
reasonable required local counsel), approved by the indemnifying party (Quartz
Capital Partners Limited in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand, and the Underwriters, on the other hand, from the
offering of the Common Shares pursuant to this Agreement 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 the Company and
the Selling Shareholders, on the one hand, and the Underwriters, on the other
hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, 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 hand, in connection with the offering of the
Common Shares pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Common
Shares pursuant to this Agreement (before deducting expenses) received by the
Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the front cover page of the Prospectus bear to the
aggregate initial public offering price of the Common Shares as set forth on
such cover. The relative fault of the Company on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact or
24
any such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company on the one hand, or the Underwriters, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The Company, the Selling Shareholders and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
----------
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
SECTION 10. [Reserved]
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing Date
this Agreement maybe terminated by the Representative by notice given to the
Company and the Selling Shareholders if at any time (i) trading or quotation in
any of the Company's securities shall have been suspended or limited by the
Commission, by EASDAQ or the CBF, or trading in securities generally on EASDAQ,
shall have been suspended or limited, or minimum or maximum prices shall have
been generally established on EASDAQ; (ii) a general banking moratorium shall
have been declared by any United States or State of New York authorities or the
Bank of England; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial
25
markets, or any substantial change or development involving a prospective
substantial change in United States' or international political, financial or
economic conditions, as in the reasonable judgment of the Representative is
material and adverse and makes it impracticable to market the Common Shares in
the manner and on the terms described in the Prospectus or to enforce contracts
for the sale of securities; (iv) in the reasonable judgment of the
Representative there shall have occurred any Material Adverse Change; or (v) the
Company shall have sustained a loss by strike, fire, flood, earthquake, accident
or other calamity of such character as in the judgment of the Representative may
interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured. Any
termination pursuant to this Section 11 shall be without liability on the part
of (a) the Company or the Selling Shareholders to any Underwriter, except that
the Company shall be obligated to reimburse the expenses of the Representative
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to
the Company or the Selling Shareholders, or (c) of any party hereto to any other
party except that the provisions of Section 8 and Section 9 shall at all times
be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers , of the Selling Shareholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Shareholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 13 NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representative:
Quartz Capital Partners Limited
00 Xxxxx Xxxxxx
Xxxxxx X0X 0XX
Facsimile: x00-000-000-0000
Attention: Xx. Xxx Xxxxx
with a copy to:
Brown, Rudnick, Freed & Gesmer
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
26
If to the Company or the Selling Shareholders:
Orthovita, Inc.
00 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xx. Xxxxx Xxxxxx, CEO
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and personal representative, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH JURISDICTION.
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING SHAREHOLDERS TO SELL AND
DELIVER COMMON SHARES. If one or more of the Selling Shareholders shall fail to
sell and deliver to the Underwriters the Common Shares to be sold and delivered
by such Selling Shareholders at the First Closing Date pursuant to this
Agreement, then the Underwriters may at their option, by written notice from the
Representative to the Company and the Selling Shareholders, either (i) purchase
a number of additional shares from other Selling
27
Shareholders equal to the number of shares failed to deliver, or (ii) purchase
the shares which the Company and other Selling Shareholders have agreed to sell
and deliver in accordance with the terms hereof. If one or more of the Selling
Shareholders shall fail to sell and deliver to the Underwriters the Common
Shares to be sold and delivered by such Selling Shareholders pursuant to this
Agreement at the First Closing Date or the Second Closing Date, then the
Underwriters shall have the right, by written notice from the Representative to
the Company and the Selling Shareholders, to postpone the First Closing Date or
the Second Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof, except that the provisions of Section
2 of the letter agreement between Quartz Capital Partners Limited and the
Company dated 30 April 1998 shall continue in effect until completion of the
Second Closing and Sections 1 and 4 through 7 thereof shall continue in
accordance with the terms thereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. The Table of
Contents and the Section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, any preliminary prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company and the Custodian the enclosed copies
hereof, whereupon this instrument, along with all counterparts hereof, shall
become a binding agreement in accordance with its terms.
Very truly yours,
ORTHOVITA, INC.
28
By:
Xxxxx Xxxxxx
SELLING STOCKHOLDERS
By:
Xxxxx Xxxxxx, as Attorney-in-Fact
The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representative in London, England as of the date first above written.
QUARTZ CAPITAL PARTNERS LIMITED
Acting as Representative of the
several Underwriters named in
the attached Schedule A.
By: ___________
29
SCHEDULE A
NUMBER OF
FIRM COMMON
UNDERWRITERS SHARES
TO BE PURCHASED
Quartz Capital Partners Limited ....... 1,400,000
Artesia Bank N.V. ..................... 300,000
Bank Brussels Xxxxxxx ................. 300,000
Total ................................. 2,000,000
30
SCHEDULE B
NUMBER OF
SELLING SHAREHOLDER FIRM
COMMON
SHARES
TO BE SOLD
[To be provided by the Company]
31