_______________Shares
NORTH AMERICAN SCIENTIFIC, INC.
Common Stock
UNDERWRITING AGREEMENT
October __, 2000
CIBC WORLD MARKETS CORP.
PAINEWEBBER INCORPORATED
LEERINK XXXXX & COMPANY
on behalf of the Several
Underwriters named on
Schedule I attached hereto
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
North American Scientific, Inc., a Delaware corporation (the
"Company") and the Selling Stockholders listed on Schedule II attached hereto
(the "Selling Stockholders"), propose, subject to the terms and conditions
contained herein, to sell to you and the other underwriters named on Schedule
I attached hereto (the "Underwriters"), for whom you are acting as
Representatives (the "Representatives"), an aggregate of ________________
shares (the "Firm Shares") of the Company's Common Stock, $0.01 par value
(the "Common Stock"). Of the Firm Shares, ______________ are to be issued and
sold by the Company and ______________ are to be sold by the Selling
Stockholders. The respective amounts of the Firm Shares to be purchased by
each of the several Underwriters are set forth opposite their names on
Schedule I attached hereto. In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional shares
________________ (the "Option Shares") of Common Stock from the Company for
the purpose of covering over-allotments in connection with the sale of the
Firm Shares. The Firm Shares and the Option Shares are together called the
"Shares."
1. SALE AND PURCHASE OF THE SHARES.
On the basis of the representations, warranties and agreements contained
in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase
from the Company, at a price of $_____ per share (the "Initial Price"),
the number of Firm Shares set forth opposite the name of such
Underwriter under the column "Number of Firm Shares to be Purchased from
the Company" on Schedule I to this Agreement, subject to adjustment in
accordance with Section 11 hereof. The Selling Stockholders agree to
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from such Selling Stockholders,
at the Initial Price, the number of Firm Shares set forth opposite the
name of such Underwriter under the column "Number of Firm Shares to be
Purchased from the Selling Stockholders" on Schedule II attached hereto,
subject to adjustment in accordance with Section 11 hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be purchased
by each Underwriter shall be the same percentage (adjusted by the
Representatives to eliminate fractions) of the total number of Option
Shares to be purchased by the Underwriters as such Underwriter is
purchasing of the Firm Shares. Such option may be exercised only to
cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the
Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each case
upon written, facsimile or telegraphic notice, or verbal or telephonic
notice confirmed by written, facsimile or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at
least two business days before the Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm
Shares Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company and the Selling
Stockholders of the Firm Shares to the Representatives for the respective
accounts of the Underwriters, and payment of the purchase price by wire
transfer or certified or official bank check or checks payable in New York
Clearing House (same day) funds drawn to the order of the Company for the
shares purchased from the Company and to the Selling Stockholders for the
shares purchased from the Selling Stockholders, against delivery of the
respective certificates therefor to the Representatives, shall take place at
the offices of CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the third
business day following the date of this Agreement, or at such time on such
other date, not later than 10 business days after the date of this Agreement,
as shall be agreed upon by the Company and the Representatives (such time and
date of delivery and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is exercised
in whole or in part on one or more occasions, delivery by the Company of the
Option Shares to the Representatives for the respective accounts of the
Underwriters and payment of the purchase price thereof in immediately available
funds by wire transfer or by certified or official bank check or checks
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payable in New York Clearing House (same day) funds to the Company shall take
place at the offices of CIBC World Markets Corp. specified above at the time
and on the date (which may be the same date as, but in no event shall be
earlier than, the Firm Shares Closing Date) specified in the notice referred
to in Section 1(b) (such time and date of delivery and payment are called the
"Option Shares Closing Date"). The Firm Shares Closing Date and the Option
Shares Closing Date are called, individually, a "Closing Date" and, together,
the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described in Section
l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The Company has
prepared and filed in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the published rules and regulations
thereunder (the "Rules") adopted by the Securities and Exchange Commission (the
"Commission") a Registration Statement (as hereinafter defined) on Form S-3 (No.
333-________), including a preliminary prospectus relating to the Shares, and
such amendments thereof as may have been required to the date of this Agreement.
Copies of such Registration Statement (including all amendments thereof) and of
the related Preliminary Prospectus (as hereinafter defined) have heretofore been
delivered by the Company to you. The term "Preliminary Prospectus" means any
preliminary prospectus (as described in Rule 430 of the Rules) included at any
time as a part of the Registration Statement or filed with the Commission by the
Company with the consent of the Representatives pursuant to Rule 424(a) of the
Rules. The term "Registration Statement" as used in this Agreement means the
initial registration statement (including all exhibits, financial schedules and
information deemed to be a part of the Registration Statement through
incorporation by reference or otherwise), as amended at the time and on the date
it becomes effective (the "Effective Date") including the information (if any)
deemed to be part thereof at the time of effectiveness pursuant to Rule 430A of
the Rules. If the Company has filed an abbreviated registration statement to
register additional Shares pursuant to Rule 462(b) under the Rules (the "462(b)
Registration Statement") then any reference herein to the Registration Statement
shall also be deemed to include such 462(b) Registration Statement. The term
"Prospectus" as used in this Agreement means the prospectus in the form included
in the Registration Statement at the time of effectiveness or, if Rule 430A of
the Rules is relied on, the term Prospectus shall also include the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules.
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date
of this Agreement as the Representatives deem advisable. The Company and the
Selling Stockholders hereby confirm that the Underwriters and dealers have
been authorized to distribute or cause to be distributed each Preliminary
Prospectus and are
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authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied,
and on the date of the Prospectus, the date any post-effective amendment
to the Registration Statement becomes effective, the date any supplement
or amendment to the Prospectus is filed with the Commission and each
Closing Date, the Registration Statement and the Prospectus (and any
amendment thereof or supplement thereto) will comply, in all material
respects, with the applicable provisions of the Securities Act and the
Rules and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder. The
Registration Statement did not, as of the Effective Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and on the Effective Date and the
other dates referred to above neither the Registration Statement nor the
Prospectus, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of
the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement
thereto was first filed with the Commission, such preliminary prospectus
as amended or supplemented complied in all material respects with the
applicable provisions of the Securities Act and the Rules and did not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading. Notwithstanding the
foregoing, none of the representations and warranties in this paragraph
4(a) shall apply to statements in, or omissions from, the Registration
Statement or the Prospectus made in reliance upon, and in conformity
with, information herein or otherwise furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus. With respect to the preceding
sentence, the Company acknowledges that the only information furnished
in writing by the Representatives on behalf of the several Underwriters
for use in the Registration Statement or the Prospectus is the paragraph
with respect to stabilization on the inside front cover page of the
Prospectus and the statements contained under the caption "Underwriting"
in the Prospectus.
(b) The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are threatened under the Securities Act. Any required
filing of the Prospectus and any supplement thereto pursuant to Rule
424(b) of
4
the Rules has been or will be made in the manner and within the time
period required by such Rule 424(b).
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of
the Exchange Act and, when read together and with the other information
in the Registration Statement and the Prospectus, do not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The financial statements of the Company (including all notes
and schedules thereto) included or incorporated by reference in the
Registration Statement and Prospectus present fairly the financial
position, the results of operations, the statements of cash flows and
the statements of stockholders' equity and the other information
purported to be shown therein of the Company and its Subsidiaries (as
hereinafter defined) at the respective dates and for the respective
periods to which they apply; and such financial statements and related
schedules and notes have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the
periods involved, and all adjustments necessary for a fair presentation
of the results for such periods have been made. The summary and selected
financial data included in the Prospectus present fairly the information
shown therein as at the respective dates and for the respective periods
specified and the summary and selected financial data have been
presented on a basis consistent with the consolidated financial
statements so set forth in the Prospectus and other financial
information.
(e) PricewaterhouseCoopers, LLP, whose reports are filed with the
Commission as a part of the Registration Statement, are and, during the
periods covered by their reports, were independent public accountants as
required by the Securities Act and the Rules.
(f) The Company and each of its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of
the state of the jurisdiction of its incorporation. The Company and each
such subsidiary or other entity controlled directly or indirectly by the
Company (collectively, "Subsidiaries") is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in
which the nature of the business conducted by it or location of the
assets or properties owned, leased or licensed by it requires such
qualification, except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or
properties, business, results of operations or financial condition of
the Company (a "Material Adverse Effect"). The Company does not own,
lease or license any asset or property or conduct any business outside
the United States of America. The Company and each of its Subsidiaries
has all requisite corporate power and authority, and all necessary
authorizations, approvals, consents, orders, licenses, certificates and
permits of and from all governmental or regulatory bodies or any other
person or entity (collectively, the
5
"Permits"), to own, lease and license its assets and properties and
conduct its business, all of which are valid and in full force and
effect, as described in the Registration Statement and the
Prospectus, except where the lack of such Permits, individually or in
the aggregate, would not have a Material Adverse Effect. The Company
and each of its Subsidiaries has fulfilled and performed in all
material respects all of its material obligations with respect to
such Permits and no event has occurred that allows, or after notice
or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the Company
thereunder. Except as may be required under the Securities Act and
state and foreign Blue Sky laws, no other Permits are required to
enter into, deliver and perform this Agreement and to issue and sell
the Shares.
(g) The Company and each of its Subsidiaries own or possess
adequate and enforceable rights to use all patents, patent applications,
trademarks, trademark applications, trade names, service marks,
copyrights, copyright applications, licenses, know-how and other similar
rights and proprietary knowledge (collectively, "Intangibles") described
in the Prospectus as being owned by them necessary for the conduct of
their businesses. Neither the Company nor any of its Subsidiaries has
received any notice of, or is not aware of, any infringement of or
conflict with asserted rights of others with respect to any Intangibles.
(h) The Company and each of its Subsidiaries have good and
marketable title in fee simple to all items of real property and good
and marketable title to all personal property described in the
Prospectuses as being owned by them. Any real property and buildings
described in the Prospectuses as being held under lease by the Company
and each of its Subsidiaries is held by them under valid, existing and
enforceable leases, free and clear of all liens, encumbrances, claims,
security interests and defects, except such as are described in the
Registration Statement and the Prospectus or would not have a Material
Adverse Effect.
(i) There are no litigation or governmental proceedings to which
the Company or its Subsidiaries is subject or which is pending or, to
the knowledge of the Company, threatened, against the Company or any of
its Subsidiaries, which, individually or in the aggregate, might have a
Material Adverse Effect, affect the consummation of this Agreement or
which is required to be disclosed in the Registration Statement and the
Prospectus that is not so disclosed.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
described therein, (a) there has not been any material adverse change
with regard to the assets or properties, business, results of operations
or financial condition of the Company; (b) neither the Company nor any
of its Subsidiaries has sustained any loss or interference with its
assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree which would have a Material
6
Adverse Effect; and (c) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus, except as
reflected therein, neither the Company nor any of its Subsidiaries has
(i) issued any securities or incurred any liability or obligation,
direct or contingent, for borrowed money, except such liabilities or
obligations incurred in the ordinary course of business, (ii) entered
into any transaction not in the ordinary course of business or (iii)
declared or paid any dividend or made any distribution on any shares of
its stock or redeemed, purchased or otherwise acquired or agreed to
redeem, purchase or otherwise acquire any shares of its stock.
(k) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required by the Securities Act or
Rules. Each description of a contract, document or other agreement in
the Registration Statement and the Prospectus accurately reflects in all
respects the terms of the underlying document, contract or agreement.
Each agreement described in the Registration Statement and Prospectus or
listed in the Exhibits to the Registration Statement or incorporated by
reference is in full force and effect and is valid and enforceable by
and against the Company or a Subsidiary, as the case may be, in
accordance with its terms. Neither the Company nor any Subsidiary, if
such Subsidiary is a party, nor to the Company's knowledge, any other
party is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event
has occurred which with notice or lapse of time or both would constitute
such a default, in any such case which default or event, individually or
in the aggregate, would have a Material Adverse Effect. No default
exists, and no event has occurred which with notice or lapse of time or
both would constitute a default, in the due performance and observance
of any term, covenant or condition, by the Company or any Subsidiary, if
such Subsidiary is a party thereto, of any other agreement or instrument
to which the Company or any Subsidiary is a party or by which it or its
the Company, any Subsidiary or their respective properties or business
may be bound or affected which default or event, individually or in the
aggregate, would have a Material Adverse Effect.
(l) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its charter or by-laws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation, individually or in
the aggregate, would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and
sale by the Company of the Shares) will give rise to a right to
terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse of time or
both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any of its
7
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which either the Company or any of its
Subsidiaries or any of their properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or any of its Subsidiaries or
violate any provision of the charter or by-laws of the Company or any of
its Subsidiaries, except for such consents or waivers which have already
been obtained and are in full force and effect.
(n) The Company has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the issued
and outstanding shares of Common Stock have been duly and validly issued
and are fully paid and nonassessable. There are no statutory preemptive
or other similar rights to subscribe for or to purchase or acquire any
shares of Common Stock of the Company or any of its Subsidiaries or any
such rights pursuant to their respective Certificates of Incorporation
or by-laws or any agreement or instrument to or by which the Company or
any of its Subsidiaries is a party or bound. The Shares, when issued and
sold pursuant to this Agreement, will be duly and validly issued, fully
paid and nonassessable and none of them will be issued in violation of
any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there is
no commitment, plan or arrangement to issue, any share of stock of the
Company or its Subsidiaries or any security convertible into, or
exercisable or exchangeable for, such stock. The Common Stock and the
Shares conform in all material respects to all statements in relation
thereto contained in the Registration Statement and the Prospectus. All
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, and are fully paid and nonassessable and
are owned directly by the Company or by another wholly-owned subsidiary
of the Company free and clear of any security interests, liens,
encumbrances, equities or claims, other than those described in the
Prospectus.
(o) Other than the Selling Stockholders, no holder of any
security of the Company has the right to have any security owned by such
holder included in the Registration Statement or to demand registration
of any security owned by such holder during the period ending 90 days
after the date of this Agreement. Each five percent stockholder,
director and executive officer of the Company have delivered to the
Representatives such person's enforceable written lock-up agreement.
(p) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares by
the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes and will
constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be
8
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(q) Neither the Company nor any of its Subsidiaries is involved
in any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened, which dispute would have a Material Adverse Effect.
The Company is not aware of any existing or imminent labor disturbance
by the employees of any of its principal suppliers or contractors which
would have a Material Adverse Effect. The Company is not aware of any
threatened or pending litigation between the Company or any of its
Subsidiaries and any of its executive officers which, if adversely
determined, could have a Material Adverse Effect and has no reason to
believe that such officers will not remain in the employment of the
Company.
(r) No transaction has occurred between or among the Company and
any of its officers, directors or five percent stockholders or any
affiliate or affiliates of any such officer, director or five percent
stockholders that is required to be described in and is not described in
the Registration Statement and the Prospectus.
(s) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock to facilitate the sale or resale of any
of the Shares.
(t) The Company and its Subsidiaries have filed all Federal,
state, local and foreign tax returns which are required to be filed
through the date hereof, or has received extensions thereof, and has
paid all taxes shown on such returns and all assessments received by it
to the extent that the same are material and have become due. There are
no tax audits or investigations pending, which if adversely determined
would have a Material Adverse Effect; nor are there any material
proposed additional tax assessments against the Company or any of its
Subsidiaries.
(u) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation
("Nasdaq") National Market System, subject to official Notice of
Issuance. A registration statement has been filed on Form 8-A pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which registration statement complies in all material
respects with the Exchange Act.
(v) The Company has complied with all of the requirements and
filed the required forms as specified in Florida Statutes Section
517.075.
(w) The books, records and accounts of the Company and each of
its Subsidiaries accurately and fairly reflect, in reasonable detail,
the transactions in, and dispositions of, the assets of, and the results
of operations of, the Company and each of
9
its Subsidiaries. The Company and each of its Subsidiaries maintains
a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles and to maintain asset accountability, (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 the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(x) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which
they are engaged or propose to engage after giving effect to the
transactions described in the Prospectus; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its Subsidiaries
or the Company's or its Subsidiaries' respective businesses, assets,
employees, officers and directors are in full force and effect; the
Company and each of its Subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; and neither the
Company nor any Subsidiary of the Company has reason to believe that it
will be able to renew its existing insurance coverage as and when such
coverage expires or obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have a
Material Adverse Effect. Neither the Company nor any Subsidiary has been
denied any insurance coverage which it has sought or for which it has
applied.
(y) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state securities or Blue Sky laws) has been obtained or made
and is in full force and effect.
(z) There are no affiliations with the NASD among the Company's
officers, directors or, to the knowledge of the Company, any five
percent or greater stockholder of the Company, except as set forth in
the Registration Statement or otherwise disclosed in writing to the
Representatives.
(aa) (i) Each of the Company and its Subsidiaries are in
compliance in all material respects with all rules, laws and regulation
relating to the development, testing, manufacturing, sale and
distribution of products regulated by the U.S. Food and Drug
Administration, or similar state or foreign government agency, the use,
treatment, storage and disposal of toxic substances and protection of
health or the environment ("Environmental Law") which are applicable to
its business; (ii) neither the Company nor
10
its Subsidiaries has received any notice from any governmental
authority or third party of an asserted claim under Environmental
Laws; (iii) each of the Company and its Subsidiaries have received
all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and is in
compliance with all terms and conditions of any such permit, license
or approval; (iv) to the Company's knowledge, no facts currently
exist that will require the Company or its Subsidiaries to make
future material capital expenditures to comply with Environmental
Laws; and (v) no property which is or has been owned, leased or
occupied by the Company or its Subsidiaries has been designated as a
Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section
9601, et. seq.) or otherwise designated as a contaminated site under
applicable state or local law. Neither the Company nor any of its
Subsidiaries has been named as a "potentially responsible party"
under the CERCLA 1980.
(bb) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, to
identify and evaluate associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws,
or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis
of such review, the Company has concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material
Adverse Effect.
(cc) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of proceeds thereof as
described in the Prospectus, will not be an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(dd) The Company, its Subsidiaries or any other person associated
with or acting on behalf of the Company or its Subsidiaries including,
without limitation, any director, officer, agent or employee of the
Company or any of its Subsidiaries has not, directly or indirectly,
while acting on behalf of the Company or any of its Subsidiaries (i)
used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
other unlawful payment.
(ee) The Company has reviewed its operations and that of each of
its Subsidiaries to evaluate the extent to which the business or
operations of the Company or any of its subsidiaries will be affected by
the Year 2000 Problem (that is, any significant risk that computer
hardware or software applications used by the Company and its
Subsidiaries will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case
of dates or time periods occurring
11
prior to January 1, 2000). As a result of such review, (i) the
Company has no reason to believe, and does not believe, that (A)
there are not any issues related to the Company's preparedness to
address the Year 2000 Problem that are of a character required to be
described or referred to in the Registration Statement or Prospectus
which have not been accurately described in the Registration
Statement or Prospectus and (B) the Year 2000 Problem will not have a
Material Adverse Effect, or result in any material loss or
interference with the business or operations of the Company and its
Subsidiaries, taken as a whole; and (ii) the Company reasonably
believes, after due inquiry, that the suppliers, vendors, customers
or other material third parties used or served by the Company and
such Subsidiaries are addressing or will address the Year 2000
Problem in a timely manner, except to the extent that a failure to
address the Year 2000 by a supplier, vendor, customer or material
third party would not have a Material Adverse Effect. The Company and
each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or
specific authorization; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (3) access to assets is permitted only in accordance
with management's general or specific authorization; and (4) recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each of
the Selling Stockholders hereby represents and warrants to each Underwriter
as follows:
(a) The Selling Stockholder has caused certificates for the
number of Shares to be sold by such Selling Stockholder hereunder to be
delivered to ______________________________________ (the "Custodian"),
endorsed in blank or with blank stock powers duly executed, with a
signature appropriately guaranteed, such certificates to be held in
custody by the Custodian for delivery, pursuant to the provisions of
this Agreement and an agreement dated November __, 1999, among the
Custodian and the Selling Stockholder (the "Custody Agreement").
(b) The Selling Stockholder has granted an irrevocable power of
attorney (the "Power of Attorney") to the person named therein, on
behalf of such Selling Stockholder, to execute and deliver this
Agreement and any other document necessary or desirable in connection
with the transactions contemplated hereby and to deliver the shares
to be sold by such Selling Stockholder pursuant hereto.
(c) This Agreement, the Custody Agreement, the Power of Attorney
and the Lock-Up Agreement have each been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder and, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes the valid and legally binding agreement of such Selling
Stockholder, enforceable against such Selling Stockholder in accordance
with its terms.
12
(d) The execution and delivery by the Selling Stockholder of this
Agreement and the performance by such Selling Stockholder of its
obligations under this Agreement (i) will not contravene any provision
of applicable law, statute, regulation or filing or any agreement or
other instrument binding upon such Selling Stockholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Stockholder, (ii) does not require any
consent, approval, authorization or order of or registration or filing
with any court or governmental agency or body having jurisdiction over
it, except such as may be required by the Blue Sky laws of the various
states in connection with the offer and sale of the Shares which have
been or will be effected in accordance with this Agreement, (iii) does
not and will not violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to such Selling
Stockholder or (iv) will not result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of such Selling
Stockholder pursuant to the terms of any agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder may be bound or to which any of the property or assets of
such Selling Stockholder is subject.
(e) The Selling Stockholder has, and on the Firm Shares Closing
Date will have, valid and marketable title to the Shares to be sold by
such Selling Stockholder free and clear of any lien, claim, security
interest or other encumbrance, including, without limitation, any
restriction on transfer, except as otherwise described in the
Registration Statement and Prospectus.
(f) The Selling Stockholder has, and on the Firm Shares Closing
Date will have, full legal right, power and authorization, and any
approval required by law, to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder in the manner provided by
this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by the
Selling Stockholder pursuant to this Agreement, the several Underwriters
will receive valid and marketable title to such Shares free and clear of
any lien, claim, security interest or other encumbrance.
(h) All information relating to the Selling Stockholder furnished
in writing by such Selling Stockholder expressly for use in the
Registration Statement and Prospectus is, and on each Closing Date will
be, true, correct, and complete, and does not, and on each 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.
(i) The Selling Stockholder has reviewed the Registration
Statement and Prospectus and, although such Selling Stockholder has not
independently verified the accuracy or completeness of all the
information contained therein, nothing has come to the attention of
such Selling Stockholder that would lead such Selling Stockholder to
believe that (i) on the Effective Date, the Registration Statement
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein in
13
order to make the statements made therein not misleading and (ii) on
the Effective Date the Prospectus contained and, on each Closing Date
contains, no untrue statement of a material fact or omitted or omits
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
misleading.
(j) The sale of Shares by the Selling Stockholder pursuant to
this Agreement is not prompted by such Selling Stockholder's knowledge
of any material information concerning the Company or any of its
Subsidiaries which is not set forth in the Prospectus.
(k) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares.
(l) The Selling Stockholder has no actual knowledge that any
representation or warranty of the Company set forth in Section 4 above
is untrue or inaccurate in any material respect.
(m) The representations and warranties of the Selling Stockholder
in the Custody Agreement are, and on each Closing Date will be, true and
correct.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 7(a) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and
no order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be pending
before or threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of the Commission and the
Representatives.
(c) The representations and warranties of the Company and the
Selling Stockholders contained in this Agreement and in the
certificates delivered pursuant to Section 6(d) shall be true and
correct when made and on and as of each Closing Date as if made on
such date. The Company and each of the Selling Stockholders shall
have performed all covenants and agreements and satisfied all the
conditions contained in this Agreement required to be performed or
satisfied by them at or before such Closing Date.
14
(d) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing
Date, of the chief executive or chief operating officer and the chief
financial officer or chief accounting officer of the Company to the
effect that (i) the signers of such certificate have carefully examined
the Registration Statement, the Prospectus and this Agreement and that
the representations and warranties of the Company in this Agreement are
true and correct on and as of such Closing Date with the same effect as
if made on such Closing Date and the Company has performed all covenants
and agreements and satisfied all conditions contained in this Agreement
required to be performed or satisfied by it at or prior to such Closing
Date, and (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their
knowledge, no proceedings for that purpose have been instituted or are
pending under the Securities Act.
(e) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such
Closing Date, of the Selling Stockholders, to the effect that each of
the Selling Stockholders have carefully examined the Registration
Statement, the Prospectus and this Agreement and that the
representations and warranties of the Selling Stockholders in this
Agreement are true and correct on and as of such Closing Date with
the same effect as if made on such Closing Date and each of the
Selling Stockholders have performed all covenants and agreements and
satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date.
(f) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from
PricewaterhouseCoopers LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance reasonably satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of
the Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and
stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Securities Act
and the Rules;
(ii) on the basis of a reading of the amounts included in
the Registration Statement and the Prospectus under the headings
"Summary Financial Data" and "Selected Financial Data," carrying
out certain procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter, a reading of the minutes of
the meetings of the stockholders and directors of the Company,
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
15
Company as to transactions and events subsequent to the date of
the latest audited financial statements, except as disclosed in
the Registration Statement and the Prospectus, nothing came to
their attention which caused them to believe that:
(A) the amounts in "Summary Financial Data," and
"Selected Financial Data" included in the Registration
Statement and the Prospectus do not agree with the
corresponding amounts in the audited and unaudited
financial statements from which such amounts were derived;
or
(B) with respect to the Company, there were, at a
specified date not more than three business days prior to
the date of the letter, any increases in the current
liabilities and long-term liabilities of the Company or
any decreases in net income or in working capital or the
stockholders' equity in the Company, as compared with the
amounts shown on the Company's audited balance sheet for
the fiscal year ended ____________ and the fiscal year
ended _________________, included in the Registration
Statement;
(iii) they have performed certain other procedures as may
be permitted under Generally Acceptable Auditing Standards as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the
Registration Statement and the Prospectus and reasonably
specified by the Representatives agrees with the accounting
records of the Company; and
(iv) based upon the procedures set forth in clauses (ii)
and (iii) above and a reading of the amounts included in the
Registration Statement under the headings "Summary Financial
Data" and "Selected Financial Data" included in the Registration
Statement and Prospectus and a reading of the financial
statements from which certain of such data were derived, nothing
has come to their attention that gives them reason to believe
that the "Summary Financial Data" and "Selected Financial Data"
included in the Registration Statement and Prospectus do not
comply as to the form in all material respects with the
applicable accounting requirements of the Securities Act and the
Rules or that the information set forth therein is not fairly
stated in relation to the financial statements included in the
Registration Statement or Prospectus from which certain of such
data were derived are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included in the
Registration Statement and Prospectus.
References to the Registration Statement and the Prospectus in
this paragraph (f) are to such documents as amended and supplemented at
the date of the letter.
16
(g) The Representatives shall have received on each Closing Date
from D'Anacona & Xxxxxx, counsel for the Company, an opinion, addressed
to the Representatives and dated such Closing Date, and stating in
effect that:
(i) Each of the Company and its Subsidiaries have been
duly organized and is validly existing as a corporation in good
standing under the laws of the state of the jurisdiction of its
incorporation. Each of the Company and its Subsidiaries is duly
qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or
properties (owned, leased or licensed) or the nature of its
businesses makes such qualification necessary, except for such
jurisdictions where the failure to so qualify, individually or in
the aggregate, would not have a Material Adverse Effect.
(ii) Each of the Company and its Subsidiaries has all
requisite corporate power and authority to own, lease or license
its assets and its properties and conduct its business as now
being conducted and as described in the Registration Statement
and the Prospectus and, with respect to the Company, to enter
into, deliver and perform this Agreement and to issue and sell
the Shares.
(iii) The Company has authorized and issued capital stock
as set forth in the Registration Statement and the Prospectus
under the caption "Capitalization"; the certificates evidencing
the Shares are in due and proper legal form and have been duly
authorized for issuance by the Company; all of the outstanding
shares of Common Stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable and
none of them was issued in violation of any preemptive or other
similar right. The Shares when issued and sold pursuant to this
Agreement will be duly and validly issued, outstanding, fully
paid and nonassessable and none of them will have been issued in
violation of any preemptive or other similar right. To the best
of such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase or any
restriction upon the voting or transfer of any securities of the
Company pursuant to the Company's Certificate of Incorporation or
by-laws or other governing documents or any agreements or other
instruments to which the Company is a party or by which it is
bound. To the best of such counsel's knowledge, except as
disclosed in the Registration Statement and the Prospectus, there
is no outstanding option, warrant or other right calling for the
issuance of, and no commitment, plan or arrangement to issue, any
share of stock of the Company or any security convertible into,
exercisable for, or exchangeable for stock of the Company. The
Common Stock, the Shares and the Warrants conform in all material
respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. The issued and
outstanding shares of capital stock of each of the Company's
Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are owned by the Company or by
another wholly
17
owned subsidiary of the Company, free and clear of any perfected
security interest or, to the knowledge of such counsel, any other
security interests, liens, encumbrances, equities or claims,
other than those contained in the Registration Statement and the
Prospectus.
(iv) Each of the Lock-Up Agreements executed by the
Company's stockholders, directors and officers has been duly and
validly delivered by such persons and constitutes the legal,
valid and binding obligation of each such person enforceable
against each such person in accordance with its terms, except as
the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(v) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery
and performance of this Agreement and the issuance and sale of
the Shares. This Agreement has been duly and validly authorized,
executed and delivered by the Company and this Agreement
constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(vi) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation,
the issuance and sale by the Company of the Shares) will give
rise to a right to terminate or accelerate the due date of any
payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or any event
which with notice or lapse of time, or both, would constitute a
default) under, or require consent or waiver under, or result in
the execution or imposition of any lien, charge, claim, security
interest or encumbrance upon any properties or assets of the
Company or the Subsidiary pursuant to the terms of any indenture,
mortgage, deed trust, note or other agreement or instrument of
which such counsel is aware and to which the Company or the
Subsidiary is a party or by which either the Company or the
Subsidiary or any of their respective properties or businesses is
bound, or any franchise, license, permit, judgment, decree,
order, statute, rule or regulation of which such counsel is aware
or violate any provision of the charter or by-laws of the Company
or the Subsidiary.
(vii) To the best of such counsel's knowledge, no default
exists, and no event has occurred which with notice or lapse of
time, or both, would constitute a default, in the due performance
and observance of any term, covenant or condition by the Company
of any indenture, mortgage, deed of trust, note or any other
agreement or instrument to which the Company is a party or by
which it or any of
18
its assets or properties or businesses may be bound or affected,
where the consequences of such default, individually or in the
aggregate, would have a Material Adverse Effect.
(viii) To the best of such counsel's knowledge, the
Company and its Subsidiaries are not in violation of any term or
provision of their respective charters or by-laws or any
franchise, license, permit, judgment, decree, order, statute,
rule or regulation, where the consequences of such violation,
individually or in the aggregate, would have a Material Adverse
Effect.
(ix) No consent, approval, authorization or order of any
court or governmental agency or regulatory body is required for
the execution, delivery or performance of this Agreement by the
Company or the consummation of the transactions contemplated
hereby or thereby, except such as have been obtained under the
Securities Act and such as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution
of the Shares by the Underwriters.
(x) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending
or threatened against, or involving the assets, properties or
businesses of, the Company which would have a Material Adverse
Effect.
(xi) The statements in the Prospectus under the captions
["Description of Capital Stock," "Liquidity and Capital
Resources," "Business-FAA Certification and Manufacturer
Authorizations," "Shares Eligible for Future Sale,"
"Management-Employment Agreements," "Management-Stock Option and
Bonus Plans," and "Certain Transactions,"] insofar as such
statements constitute a summary of documents referred to therein
or matters of law, are fair summaries in all material respects
and accurately present the information called for with respect to
such documents and matters. Accurate copies of all contracts and
other documents required to be filed as exhibits to, or described
in, the Registration Statement have been so filed with the
Commission or are fairly described in the Registration Statement,
as the case may be.
(xii) The Registration Statement, all preliminary
prospectuses and the Prospectus and each amendment or supplement
thereto (except for the financial statements and schedules and
other financial and statistical data included therein, as to
which such counsel expresses no opinion) comply as to form in all
material respects with the requirements of the Securities Act and
the Rules.
(xiii) The Registration Statement is effective under the
Securities Act, and no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for
that purpose have been instituted or are
19
threatened, pending or contemplated. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b)
under the Securities Act has been made in the manner and within
the time period required by such Rule 424(b).
(xiv) The Shares have been approved for listing on the
Nasdaq National Market.
(xv) The capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock."
(xvi) The Company is not an "investment company" or an
entity controlled by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
To the extent deemed advisable by such counsel, such counsel may rely as
to matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of Illinois, the General Corporation Law of the State of Delaware and
the Federal laws of the United States; provided that such counsel shall state
that in their opinion the Underwriters and they are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished to the Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Company,
representatives of the Representatives and representatives of the independent
certified public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as specified
in the foregoing opinion), on the basis of the foregoing, no facts have come to
the attention of such counsel which lead such counsel to believe that the
Registration Statement at the time it became effective (except with respect to
the financial statements and notes and schedules thereto and other financial
data, as to which such counsel need express no belief) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus as amended or supplemented (except with respect to the
financial statements, notes and schedules thereto and other financial data, as
to which such counsel need make no statement) on the date thereof contained any
untrue statement of a material fact or omitted 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.
(h) The Representatives shall have received on each Closing
Date from ________________, ________________, and ________________,
each special patent counsel for the Company, opinions, addressed
to the Representatives and dated such Closing Date, and stating in
effect that:
20
We have acted as patent counsel to the Company with respect to the
patent matters reflected on Schedule A attached hereto (the "Relevant
Patent Matters").
We have read the Registration Statement and the Prospectus, including in
particular the portions of the Registration Statement and the Prospectus
under the captions ___________________________ ______________________
___________________________ (such portions being referred to herein,
collectively, as the "Technology Portions").
OPINIONS:
1. The statements in the Technology Portions are accurate and fairly
present the matters of law and legal conclusions stated therein.
2. Nothing has come to our attention which has caused us to believe that
the Technology Portions contain any untrue statement of a material fact
with respect to the patent position of the Company, or omit to state any
material fact relating to the patent position of the Company.
3. Nothing has come to our attention which has caused us to believe that
(a) any patent application referred to in the Relevant Patent Matters
was not properly prepared and filed, in accordance with all applicable
legal and procedural requirements, or is not in good standing, (b) the
issued patents (the "Issued Patents") referred to in the Relevant Patent
Matters was not properly obtained, in accordance with all applicable
legal and procedural requirements, or is not in good standing, (c) that
any invention described in any patent application or the issued patent
is not held by the Company, or (d) any relevant prior art has not been
disclosed promptly to the appropriate governmental agency.
4. To our knowledge, the Company has not received any notice asserting
any ownership rights contrary to those of the Company in any of the
Relevant Patent Matters.
5. To our knowledge, the Company has not received any notice challenging
the validity or enforceability of any Relevant Patent Matter.
6. To our knowledge, the Company has not received any notice of
infringement of, or conflict with, rights or claims of others with
respect to any patent, trademark, service xxxx, trade name, copyright or
know-how.
7. To our knowledge, other than proceedings (except re-examination,
reissue or interference proceedings) of the various patent and trademark
offices, there are no legal or governmental proceedings pending relating
to any patent, patent application, trade secret, trademark, service xxxx
or other proprietary information or materials of the Company and, to our
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or others.
21
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus as they related to the matters
set forth in the foregoing opinion were discussed. While such counsel has not
undertaken to independently verify and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the attention of
such counsel with respect to the matters set forth in the foregoing opinion
which lead such counsel to believe that the Registration Statement at the time
it became effective (except with respect to the financial statements and notes
and schedules thereto and other financial data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes and
schedules thereto and other financial data, as to which such counsel need make
no statement) on the date thereof and the date of such opinion contained any
untrue statement of a material fact or omitted 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.
(i) The Representatives shall have received on each Closing
Date from ________________, special regulatory counsel for the
Company, an opinion, addressed to the Representatives and dated such
Closing Date, and stating in effect that:
(i) The statements under the captions _____________
_______________ ___________________ and _______________ in the
Registration Statement and the Prospectus are in all material
respects accurate summaries of applicable U.S. federal law and
regulation under the Federal Food, Drug and Cosmetic Act, as
amended, as applied by the U.S Food and Drug Administration,
subject to the qualifications set forth therein.
(ii) No facts have come to our attention that have caused
us to believe that the information contained under the captions
_____________ __________________ ___________________ and
________________ (a) in the Registration Statement at the time
the Registration Statement became effective contained any untrue
statement of a material fact, or omitted to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(iii) We have no knowledge of any action, suit or proceeding
threatened by the U.S. Food and Drug Administration against the
Company
22
seeking limitation, suspension or revocation of any license,
permit, approval or authorization required by the Company to
conduct its business as described in the Registration Statement
and Prospectus.
(j) The Representatives shall have received on the Firm Shares
Closing Date from ________________________, counsel for the Selling
Stockholders, an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that:
(i) This Agreement has been duly and validly executed and
delivered by or on behalf of each of the Selling Stockholders.
(ii) This Agreement, the Custody Agreement, the Power of
Attorney and the Lock-Up Agreement each constitute the legal,
valid and binding obligation of each of the Selling
Stockholders enforceable against the Selling Stockholders in
accordance with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable
principles; and each of the Selling Stockholders has full
legal right and authority to enter into this Agreement and to
sell, transfer and deliver in the manner provided in this
Agreement, the Shares to be sold by the Selling Stockholders
hereunder.
(iii) The transfer and sale by the Selling Stockholders of
the Shares to be sold by each of the Selling Stockholders as
contemplated by this Agreement will not conflict with, result
in a breach of, or constitute a default under any agreement or
instrument known to such counsel to which such Selling
Stockholder is a party or by which such Selling Stockholder or
any of its properties may be bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation.
(iv) All of the Selling Stockholders' rights in the Shares
to be sold by such Selling Stockholder pursuant to this
Agreement, have been transferred to the Underwriters who have
severally purchased such Shares pursuant to this Agreement,
free and clear of adverse claims, assuming for purposes of
this opinion that the Underwriters purchased the same in good
faith without notice of any adverse claims.
(v) No consent, approval, authorization, license,
certificate, permit or order of any court, governmental or
regulatory agency, authority or body or financial institution is
required in connection with the performance of this
23
Agreement by each of the Selling Stockholders or the
consummation of the transactions contemplated hereby,
including the delivery and sale of the Shares to be delivered
and sold by each of the Selling Stockholders, except such as
may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Shares by
the several Underwriters.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of the Selling Stockholders and on the opinions
of other counsel satisfactory to the Representatives as to matters which are
governed by laws other than the laws of the State of the State of Delaware or
the Federal laws of the United States; provided that such counsel shall state
that in their opinion the Underwriters and they are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished to the Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed. While such counsel has not undertaken to independently verify and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus
(except as specified in the foregoing opinion), on the basis of the foregoing,
no facts have come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective (except
with respect to the financial statements, notes and schedules thereto and other
financial data, as to which such counsel need express no belief) contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus as amended or supplemented (except with respect to the
financial statements, notes and schedules thereto and other financial data, as
to which such counsel need make no statement) on the date thereof and the date
of such opinion contained any untrue statement of a material fact or omitted 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.
(k) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives, and their
counsel and the Underwriters shall have received from XxXxxxxxx, Will &
Xxxxx a favorable opinion, addressed to the Representatives and dated
such Closing Date, with respect to the Shares, the Registration
Statement and the Prospectus, and such other related matters, as the
Representatives may reasonably request, and the Company shall have
furnished to XxXxxxxxx, Will & Xxxxx such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
24
(l) If the Shares have been qualified for sale in Florida, the
Representatives shall have received on each Closing Date certificates,
addressed to the Representatives, and dated such Closing Date, of an
executive officer of the Company, to the effect that the signer of such
certificate has reviewed and understands the provisions of Section
517.075 of the Florida Statutes, and represents that the Company has
complied, and at all times will comply, with all provisions of Section
517.075 and further, that as of such Closing Date, neither the Company
nor any of its affiliates does business with the government of Cuba or
with any person or affiliate located in Cuba.
(m) The Representatives shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section 4(n).
(n) The Company and the Selling Stockholders shall have furnished
or caused to be furnished to the Representatives such further
certificates or documents as the Representatives shall have reasonably
requested.
7. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution
of this Agreement, and any amendments thereto, to become
effective as promptly as possible. The Company shall prepare the
Prospectus in a form approved by the Representatives and file
such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the Commission's close of business on the second
business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the Representatives
in writing (i) when any amendment to the Registration Statement
shall have become effective, (ii) of any request by the
Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (iii) of the
prevention or suspension of the use of any preliminary prospectus
or the Prospectus or of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for
that purpose and (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company shall
not file any amendment of the Registration Statement or
supplement to the Prospectus unless the Company has furnished the
Representatives a copy for its review prior to filing and shall
not file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its best
efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
25
(iii) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act and
the Rules, any event occurs as a result of which the Prospectus
as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend or supplement the Prospectus to
comply with the Securities Act or the Rules, the Company promptly
shall prepare and file with the Commission, subject to the second
sentence of paragraph (ii) of this Section 7(a), an amendment or
supplement which shall correct such statement or omission or an
amendment which shall effect such compliance.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of the
Company during which the Effective Date occurs (or 90 days if
such 12-month period coincides with the Company's fiscal year),
an earning statement (which need not be audited) of the Company,
covering such 12-month period, which shall satisfy the provisions
of Section 11(a) of the Securities Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of
the Registration Statement (including all exhibits thereto and
amendments thereof) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and all
amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or
the Rules, as many copies of any preliminary prospectus and the
Prospectus and any amendments thereof and supplements thereto as
the Representatives may reasonably request.
(vi) The Company shall cooperate with the Representatives
and their counsel in endeavoring to qualify the Shares for offer
and sale in connection with the offering under the laws of such
jurisdictions as the Representatives may designate and shall
maintain such qualifications in effect so long as required for
the distribution of the Shares; provided, however, that the
Company shall not be required in connection therewith, as a
condition thereof, to qualify as a foreign corporation or to
execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business in
any jurisdiction.
(vii) Without the prior written consent of CIBC World
Markets Corp., for a period of 180 days after the date of this
Agreement, the Company and each of its individual directors and
executive officers shall not issue, sell or register with the
Commission (other than on Form S-8 or on any successor form), or
otherwise dispose of, directly or indirectly, any equity
securities of the Company (or any securities convertible into,
exercisable for or exchangeable for equity
26
securities of the Company), except for the issuance of the
Shares pursuant to the Registration Statement and the issuance
of shares pursuant to the Company's existing stock option plan
or bonus plan as described in the Registration Statement and
the Prospectus. In the event that during this period, (i) any
shares are issued pursuant to the Company's existing stock
option plan or bonus plan that are exercisable during such 180
day period or (ii) any registration is effected on Form S-8 or
on any successor form relating to shares that are exercisable
during such 180 period, the Company shall obtain the written
agreement of such grantee or purchaser or holder of such
registered securities that, for a period of 180 days after the
date of this Agreement, such person will not, without the
prior written consent of CIBC World Markets Corp., offer for
sale, sell, distribute, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, or exercise any
registration rights with respect to, any shares of Common
Stock (or any securities convertible into, exercisable for, or
exchangeable for any shares of Common Stock) owned by such
person.
(viii) On or before completion of the offering of the
Shares, the Company shall make all filings required under
applicable securities laws and by the Nasdaq National Market
(including any required registration under the Exchange Act).
(ix) The Company shall file timely and accurate reports in
accordance with the provisions of Florida Statutes Section
517.075, or any successor provision, and any regulation
promulgated thereunder, if at any time after the Effective Date,
the Company or any of its affiliates commences engaging in
business with the government of Cuba or any person or affiliate
located in Cuba.
(x) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those relating
to: (i) the preparation, printing, filing and distribution of the
Registration Statement including all exhibits thereto, each preliminary
prospectus, the Prospectus, all amendments and supplements to the
Registration Statement and the Prospectus, and the printing, filing and
distribution of this Agreement; (ii) the preparation and delivery of
certificates for the Shares to the Underwriters; (iii) the registration
or qualification of the Shares for offer and sale under the securities
or Blue Sky laws of the various jurisdictions referred to in Section
7(a)(vi), including the reasonable fees and disbursements of counsel for
the Underwriters in connection with such registration and qualification
and the preparation, printing, distribution and shipment of preliminary
and supplementary Blue Sky memoranda; (iv) the furnishing (including
costs of shipping and mailing) to the Representatives and to the
Underwriters of copies of each preliminary prospectus, the
27
Prospectus and all amendments or supplements to the Prospectus, and
of the several documents required by this Section to be so furnished,
as may be reasonably requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold; (v) the filing fees of the NASD in
connection with its review of the terms of the public offering and
reasonable fees and disbursements of counsel for the Underwriters in
connection with such review; (vi) inclusion of the Shares for
quotation on the Nasdaq National Market; and (vii) all transfer
taxes, if any, with respect to the sale and delivery of the Shares by
the Company to the Underwriters. Subject to the provisions of Section
10, the Underwriters agree to pay, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated,
all costs and expenses incident to the performance of the obligations
of the Underwriters under this Agreement not payable by the Company
pursuant to the preceding sentence, including, without limitation,
the fees and disbursements of counsel for the Underwriters.
8. INDEMNIFICATION.
(a) The Company and the Selling Stockholders agree, jointly and
severally, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Securities Act, the
Exchange Act or other Federal or state law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto, or in any Blue Sky application
or other information or other documents executed by the Company filed in
any state or other jurisdiction to qualify any or all of the Shares
under the securities laws thereof (any such application, document or
information being hereinafter referred to as a "Blue Sky Application")
or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) in whole or in part
upon any breach of the representations and warranties set forth in
Section 4 hereof, or (iii) in whole or in part upon any failure of the
Company to perform any of its obligations hereunder or under law;
provided, however, that such indemnity shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) on account
of any losses, claims, damages or liabilities arising from the sale of
the Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement thereto, or in any Blue Sky Application in
reliance upon and in conformity with information furnished in writing to
the Company by the Representatives on behalf of any Underwriter
specifically for use therein. Notwithstanding the foregoing, the
liability of the Selling Stockholders pursuant to the provisions of
Section 8(a) shall be limited to an
28
amount equal to the aggregate net proceeds received by each Selling
Stockholder from the sale of the Shares sold by such Selling
Stockholder hereunder. This indemnity agreement will be in addition
to any liability which the Company and Selling Stockholders may
otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, each
director of the Company, and each officer of the Company who signs the
Registration Statement, to the same extent as the foregoing indemnity
from the Company and the Selling Stockholders to each Underwriter, but
only insofar as such losses, claims, damages or liabilities arise out of
or are based upon any untrue statement or omission or alleged untrue
statement or omission which was made in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, contained in the (i) concession and reallowance
figures appearing under the caption "Underwriting" and (ii) the
stabilization information contained under the caption "Underwriting" in
the Prospectus; provided, however, that the obligation of each
Underwriter to indemnify the Company or the Selling Stockholders
(including any controlling person, director or officer thereof) shall be
limited to the net proceeds received by the Company from such
Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served. No indemnification provided for in Section 8(a) or 8(b)
shall be available to any party who shall fail to give notice as
provided in this Section 8(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in
29
writing by the indemnifying parties, (ii) the indemnified party shall
have been advised by counsel that there may be one or more legal
defenses available to it which are different from or in addition to
those available to the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action,
suit, proceeding or claim effected without its written consent, which
consent shall not be unreasonably withheld or delayed.
9. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 8(a) or
8(b) is due in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any
investigation, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting any contribution received by any
person entitled hereunder to contribution from any person who may be liable
for contribution including, without limitation, persons who control the
Company within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) to which the indemnified
party may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Selling Stockholders and the
Underwriters from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result
of the indemnifying party not having received notice as provided in Section 8
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company, the
Selling Stockholders and the Underwriters in connection with the statements
or omissions 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, the Selling Stockholders and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts but before
deducting expenses) received by the Company or the Selling Stockholders, as
set forth in the table on the cover page of the Prospectus, bear to (y) the
underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company,
the Selling Stockholders or the Underwriters shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact related to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Stockholders 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 above. Notwithstanding the provisions of this Section 9, (i) in
no case shall any Underwriter (except as may be provided in the Agreement
Among Underwriters) be liable or
30
responsible for any amount in excess of the underwriting discount applicable
to the Shares purchased by such Underwriter hereunder; (ii) the Company shall
be liable and responsible for any amount in excess of such underwriting
discount; and (iii) in no case shall the Selling Stockholders be liable and
responsible for any amount in excess of the aggregate net proceeds of the
sale of Shares received by the Selling Stockholders; provided, however, that
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. For
purposes of this Section 9, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Securities Act or Section 20(a) of
the Exchange Act shall have the same rights to contribution as such
Underwriter, and each person, if any, who controls the Company within the
meaning of the Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i)
and (ii) in the immediately preceding sentence of this Section 9. Any party
entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or
parties from whom contribution may be sought shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this Section. No party shall
be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent. The Underwriter's obligations to
contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and not joint.
10. TERMINATION. This Agreement may be terminated with respect to the Shares
to be purchased on a Closing Date by the Representatives by notifying the
Company and the Selling Stockholders at any time:
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted, or
in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United States
is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such a
material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of
the Representatives, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission or
trading generally on the New York Stock Exchange, Inc., on the American
Stock Exchange, Inc. or the Nasdaq National Market has been suspended or
limited, or minimum or maximum ranges for prices for securities shall
have been fixed, or maximum ranges for prices for securities have been
required, by said exchanges or by order of the Commission, the National
Association of Securities Dealers, Inc., or any other governmental or
regulatory
31
authority; or (v) if a banking moratorium has been declared by any
state or Federal authority; or (vi) if, in the judgment of the
Representatives, there has occurred a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 6 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions,
neither the Company nor the Selling Stockholders shall be under any liability
to any Underwriter, and no Underwriter shall be under any liability to the
Company, except that (y) if this Agreement is terminated by the
Representatives or the Underwriters because of any failure, refusal or
inability on the part of the Company or the Selling Stockholders to comply
with the terms or to fulfill any of the conditions of this Agreement, the
Company will reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees and disbursements of their counsel) incurred
by them in connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder and (z) no
Underwriter who shall have failed or refused to purchase the Shares agreed to
be purchased by it under this Agreement, without some reason sufficient
hereunder to justify cancellation or termination of its obligations under
this Agreement, shall be relieved of liability to the Company, the Selling
Stockholders or to the other Underwriters for damages occasioned by its
failure or refusal.
11. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters shall
fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 10) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event shall
the maximum number of Shares that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 11 by more
than one-ninth of such number of Shares without the written consent of
such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to one additional business day within
which it may, but is not obligated to, find one or more substitute
32
underwriters reasonably satisfactory to the Representatives to purchase
such Shares upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company or the Selling
Stockholder and without liability on the part of the Company, except in both
cases as provided in Sections 7(b), 8, 9 and 10. The provisions of this Section
shall not in any way affect the liability of any defaulting Underwriter to the
Company or the nondefaulting Underwriters arising out of such default. A
substitute underwriter hereunder shall become an Underwriter for all purposes of
this Agreement.
12. MISCELLANEOUS. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers,
of the Selling Stockholders and of the Underwriters set forth in or made
pursuant to this Agreement shall remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Company
or the Selling Stockholders or any of the officers, directors or controlling
persons referred to in Sections 8 and 9 hereof, and shall survive delivery of
and payment for the Shares. The provisions of Sections 7(b), 8, 9 and 10
shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and the Selling Stockholders and their respective successors and
assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, or the Company, and directors and officers
of the Company, and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser of Shares from any
Underwriter merely because of such purchase.
33
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Representatives, c/o CIBC World Markets Corp., Xxx
Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx Xxxxxx,
with a copy to XxXxxxxxx, Will & Xxxxx, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxxx, Esq., (b) if to
the Company, to its agent for service as such agent's address appears on the
cover page of the Registration Statement with a copy to X'Xxxxxx & Xxxxxx,
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Attention: ________________, Esq., and (c) if to the Selling Stockholders
to ________________, Attention: ________________, with a copy to _____________,
Attention: ________________, Esq.,
________________, Attention: ________________, with a copy to _____________,
Attention: ________________, Esq.
________________, Attention: ________________, with a copy to _____________,
Attention: ________________, Esq.
________________, Attention: ________________, with a copy to _____________,
Attention: ________________, Esq.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
SIGNATURES ON NEXT PAGE
34
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
NORTH AMERICAN SCIENTIFIC, INC.
By:
--------------------------------
Title:
--------------------------
SELLING STOCKHOLDER
-----------------------------------
Print Name of Selling Stockholder
By:
--------------------------------
Name:
--------------------------
Title:
--------------------------
(if applicable)
SELLING STOCKHOLDER
-----------------------------------
Print Name of Selling Stockholder
By:
--------------------------------
Name:
--------------------------
Title:
--------------------------
(if applicable)
SELLING STOCKHOLDER
-----------------------------------
Print Name of Selling Stockholder
By:
--------------------------------
Name:
--------------------------
Title:
--------------------------
(if applicable)
SELLING STOCKHOLDER
-----------------------------------
Print Name of Selling Stockholder
By:
--------------------------------
Name:
--------------------------
Title:
--------------------------
(if applicable)
SELLING STOCKHOLDER
-----------------------------------
Print Name of Selling Stockholder
By:
--------------------------------
Name:
--------------------------
Title:
--------------------------
(if applicable)
Confirmed:
CIBC WORLD MARKETS CORP.
PAINEWEBBER INCORPORATED
LEERINK XXXXX & COMPANY
Acting severally on behalf of itself and as representative of the several
Underwriters named in Schedule I annexed hereto.
By: CIBC WORLD MARKETS CORP.
By:
-----------------------------
Title:
-----------------------
SCHEDULE I
Number of
Firm Shares to
be Purchased
Name From the Company
---- ----------------
CIBC World Markets Corp.
Painewebber Incorporated
Leerink Xxxxx & Company
------
TOTAL
SCHEDULE II
Number of
Firm Shares to
be Purchased
From the
Selling Stockholders Selling Stockholder
-------------------- -------------------
L. Xxxxxxx Xxxxxx 60,000
Xxxx X. Xxxxxx 30,000
Xx. Xxxxx X. Xxxxx 30,000
Xxxxx X. Xxxxxxxxx 50,000
Xxxxxxx X. Xxx 10,000
--------
Total 180,000
