NONINVASIVE MEDICAL TECHNOLOGIES, INC. 1,500,000 Units Each Unit consisting of Two shares of Common Stock, One Redeemable Class A Warrant and One Non- Redeemable Class B Warrant
NONINVASIVE
MEDICAL TECHNOLOGIES, INC.
1,500,000 Units
Each
Unit
consisting of
Two
shares of Common Stock,
One
Redeemable Class A Warrant
and
One
Non-Redeemable Class B Warrant
February __, 2007 |
US
EURO
Securities, Inc.
00000
Xxxxxxx Xxx Xxxxx
Xxxxxxxxx
Xxxxxxx
Xxx, XX 00000
Attention:
Xxxxxxx Xxxxxx
As
Representative of the Several Underwriters
Gentlemen:
NONINVASIVE
MEDICAL TECHNOLOGIES, INC., a Delaware corporation (the “Company”),
proposes to issue and sell to the underwriters named in Schedule I to this
Agreement (the “Underwriters”)
for
whom US EURO Securities, Inc. is acting as the representative (the “Representative”):
(i)
1,500,000 units (the “Firm
Units”),
each
Firm Unit consisting of two shares of the Company’s common stock, $0.0001 par
value (the “Common
Stock”),
(ii)
one redeemable Class A warrant to purchase one share of Common Stock (the
“Redeemable
Class A Warrant”)
and
(iii) one non-redeemable Class B warrant to purchase one share of Common Stock
(the “Non-Redeemable
Class B Warrant”),
the
Firm Units consisting of an aggregate 3,000,000 shares (the “Firm
Shares”)
of
Common Stock, 1,500,000 Redeemable Class A Warrants (the “Firm
Class A Warrants”)
and
1,500,000 Non-Redeemable Class B Warrants (the “Firm
Class B Warrants”).
In
addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase up to: (i) 225,000
additional units (the “Additional
Units”),
consisting of an aggregate of 450,000 shares of Common Stock (the “Additional
Shares”),
225,000 Redeemable Class A Warrants (the “Additional
Class A Warrants”)
and
225,000 Non-Redeemable Class B warrants (the “Additional
Class B Warrants”).
The
Firm Units and Additional Units are hereinafter collectively referred to as
the
“Units”;
the
Firm Shares and the Additional Shares are hereinafter collectively referred
to
as the “Shares”;
the
Firm Class A Warrants and the Additional Class A Warrants are hereinafter
collectively referred to as the “Class
A Warrants”;
the
Firm Class B Warrants and the Additional Class B Warrants are hereinafter
collectively referred to as the “Class
B Warrants”;
and
the Class A Warrants and the Class B Warrants are hereinafter collectively
referred to as the “Warrants.”
Each
Class A Warrant will entitle the holder to purchase one share of Common Stock
at
an initial exercise price of ____ per share, on the terms and subject to the
conditions set forth in a Warrant Agreement dated as of _________ __, 2007
(the
“Class
A Warrant Agreement”)
between the Company and ______________________, as warrant agent (the
“Warrant
Agent”)
and
each Class B Warrant will entitle the holder to purchase one share of Common
Stock at an initial exercise price of ____ per share, on the terms and subject
to the conditions set forth in a Warrant Agreement dated as of _________ __,
2007 (the “Class
B Warrant Agreement”)
between the Company and the Warrant Agent. The Class A Warrant Agreement and
the
Class B Warrant Agreement are herein collectively referred to as the
“Warrant
Agreements.”
The
Units, Shares and Warrants are more fully described in the Registration
Statement and Prospectus referred to below. The Company confirms its agreement
with the Representative and the other several Underwriters as follows:
1.
REGISTRATION
STATEMENT AND PROSPECTUS.
The
Company has prepared and filed with the Securities and Exchange Commission
(the
“Commission”),
in
accordance with the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder (the “Rules
and Regulations,”
and
together with said Act, the “Securities
Act”),
a
registration statement on Form SB-2 (File No. 33-__________) and may have filed
one or more amendments thereto, including in such registration statement and
in
certain amendments thereto a related preliminary prospectus for the registration
under the Securities Act of the Units, Shares, Warrants and shares of Common
Stock issuable upon exercise of the Warrants. In addition, subject to the
provisions of Section 4(e) hereof, the Company has filed or will promptly file
a
further amendment to such registration statement prior to the effectiveness
of
such registration statement, unless an amendment is not required pursuant to
Rule 430A of the Rules and Regulations. As used in this Agreement, the term
“Registration
Statement”
means
such registration statement, including the Prospectus (as hereinafter defined),
financial statements and schedules thereto, exhibits and other documents filed
as part thereof, as amended when, and in the form in which, it is declared
effective by the Commission, and, in the event any post-effective amendment
thereto is filed thereafter and on or before the Closing Date (as hereinafter
defined), shall also mean (from and after the date such post-effective amendment
is effective under the Securities Act) such registration statement as so
amended, provided that such Registration Statement, at the time it becomes
effective, may omit such information as is permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A of the
Rules and Regulations, which information (“Rule
430 Information”)
shall
be deemed to be included in such Registration Statement when a final prospectus
is filed with the Commission in accordance with Rules 430A and 424(b)(1) or
(4)
of the Rules and Regulations; the term “Preliminary
Prospectus”
means
each Prospectus included in the Registration Statement, or any amendments
thereto, before it becomes effective under the Securities Act, the form of
Prospectus omitting Rule 430A Information included in the Registration Statement
when it becomes effective, if applicable (the “Rule
430A Prospectus”),
and
any prospectus filed by the Company with the consent of the Underwriters
pursuant to Rule 424(a) of the Regulations; the term “Prospectus”
means
the final prospectus included as part of the Registration Statement, except
that
(i) if any prospectus (including any Preliminary Prospectus) which differs
from
the prospectus included in the Registration Statement is provided to the
Representative for use in connection with the offering of the Units (whether
or
not such differing prospectus is required to be filed by the Company pursuant
to
Rule 424(b) under the Securities Act), the term “Prospectus”
as
used
herein shall mean such differing prospectus from and after the date on which
it
shall have been first used, and (ii) in the event any supplement to or amendment
of such prospectus is made after the date on which the Registration Statement
is
declared effective and on or prior to the Closing Date, the term “Prospectus”
shall
also mean (with respect to any supplement, from and after the date such
supplement is first used or, with respect to any amendment, the date such
amendment is effective under the Securities Act) such prospectus as so
supplemented or amended; and the term “Effective
Date”
means
(i) if the Company and the Representative have determined not to proceed
pursuant to Rule 430A under the Securities Act, the date on which the
Registration Statement becomes effective, or (ii) if the Company and the
Representative have determined to proceed pursuant to Rule 430A under the
Securities Act, the date of this Agreement.
2
2.
AGREEMENTS
TO SELL AND PURCHASE.
The
Company agrees to sell to each Underwriter listed on Schedule I hereto (for
whom
you are acting as Representative) and upon the basis of the representations,
warranties, covenants and agreements of the Company herein contained but subject
to all the terms and conditions of this Agreement, each Underwriter agrees,
severally and not jointly, to purchase from the Company, the number of Firm
Units set forth opposite such Underwriter’s name in Schedule I hereto, at a
purchase price of $___ per Firm Unit.
The
Company hereby grants the Underwriters the option to purchase all or any portion
of up to 225,000 Additional Units at a purchase price of $____ per Additional
Unit. Additional Units may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Units. If
any
Additional Units are to be purchased, each Underwriter, severally, agrees to
purchase from the Company that proportion (subject to such adjustments as the
Representative may determine to avoid fractional Additional Units) of the number
of Additional Units to be purchased which the number of Firm Units set forth
opposite the name of such Underwriter (or such number increased as set forth
in
Section 9 hereof) bears to the total number of Firm Units set forth on Schedule
I. Additional Units may be purchased at any time and from time to time on or
before the thirtieth business day following the date of this Agreement upon
written notice from the Representative to the Company specifying the number
of
Additional Units to be purchased.
The
Underwriters will offer the Units for sale at the initial public offering price
set forth on the cover of the Prospectus. After the initial public offering,
the
Representative may from time to time decrease the public offering price, in
their sole discretion, by reason of changes in general market conditions or
otherwise.
3.
DELIVERY
AND PAYMENT.
Delivery
of and payment for the Firm Units shall be made at the offices of Jenkens &
Xxxxxxxxx, LLP, 00000 Xxxxxxxx Xxxx., 00xx
Xxxxx,
Xxx Xxxxxxx, XX 00000 (“Jenkens
& Xxxxxxxxx”)
(or
such other place as shall be mutually agreed upon) at such time and date, not
earlier than the fifth full business day following the Effective Date, but
not
later than tenth business days after such Effective Date, as the Representative
shall designate by at least forty-eight hours prior notice to the Company (the
“Closing
Date”).
Delivery
of and payment for Additional Units shall be made at said offices of Jenkens
& Xxxxxxxxx, or at such other place, and at such time(s) and date(s) (each
an “Optional
Closing Date”
as
may
be agreed upon in writing by the Representative and the Company; provided,
however, that in no event may an Optional Closing Date be (i) earlier than
the
Closing Date, or (ii) earlier than three or later than ten business days after
the date on which the related notice to purchase Additional Units is given.
3
The
Closing Date, the Optional Closing Date(s) and the time and place of delivery
of
and payment for the Units may be varied by agreement among the Representative
and the Company. Delivery of certificates for the Units (in definitive form
and
registered in such names and in such denominations as the Representative shall
request at least two business days prior to the Closing Date or the Optional
Closing Date, as the case may be, by written notice to the Company) shall be
made to the Representative for the accounts of the several Underwriters against
payment of the purchase price therefor by certified or official bank check
or
checks payable in New York Clearing House funds to the order of the Company.
For
the purpose of expediting the checking and packaging of certificates for the
Units, the Company agrees to make such certificates available for inspection
at
the offices of the Representative at least 24 hours prior to the Closing Date
and each Optional Closing Date as the case may be. Subject to its consent,
the
Representative understands that the Shares and the Warrants will not be
separately transferable until a date to be determined by the Representative
(the
“Separation
Date”)
that
is at least thirty (30) days following the closing of the offering of the Units
pursuant to the Registration Statement. In this connection, the Company will
deposit, upon issuance thereof, stock certificates and warrant certificates
representing the shares of Common Stock and the Warrants comprising the Units
offered hereby with the Warrant Agent. Prior to the Separation Date, beneficial
ownership of the Shares and the Warrants will be evidenced by Unit certificates
and transfer of the Warrants may be effected only by and in connection with
the
transfer of the Shares represented by such certificates.
On
the
Closing Date, at the time of the delivery and payment for the Firm Units, the
Company shall: (i) pay to the Representative as a non-accountable expense
allowance a sum equal to 3% of the gross proceeds of the offering by certified
or official bank check or checks payable in New York Clearing House funds
payable to the order of the Representative in accordance with instructions
from
the Representative; and (ii) issue, sell and deliver to the Representative
warrants to purchase up to an aggregate of 200,000 units, for an aggregate
purchase price of $____ ($____ per warrant) (the “Representative’s Warrants”),
substantially in the form filed as an exhibit to the Registration Statement.
The
units issuable upon exercise of the Representative’s Warrants (the “Representative’s
Units”)
will
each consist of two shares of Common Stock, one Redeemable Class A Warrant
and
one Non-Redeemable Class B Warrant. The shares of Common Stock included in
the
Representative’s Units are hereinafter referred to collectively as the
“Representative’s Shares.”
The
shares of Common Stock issuable upon exercise of the Redeemable Class A Warrants
and the Non-Redeemable Class B Warrants included in the Representative’s Units
are hereinafter collectively referred to as the “Representative’s
Warrant Shares.”
The
Representative’s Warrants will be exercisable at an initial exercise price of
$____ per warrant at any time and from time to time, in whole or in part, during
a [___] year period commencing one year following the Effective Date.
On
each
Additional Closing Date, at the time of the delivery and payment for the
Additional Units, the Company shall pay to the Representative as a
non-accountable expense allowance, a sum equal to 3% of the gross proceeds
of
the offering on such date by certified official bank check or checks payable
in
New York Clearing House funds payable to the order of the Representative in
accordance with instructions from the Representative.
4.
COVENANTS
AND AGREEMENTS OF THE COMPANY.
The
Company covenants and agrees with the several Underwriters as
follows:
(a) The
Company will notify the Representative promptly by telephone and (if requested
by the Representative) will confirm such advice in writing, (1) when the
Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) if Rule 430A under the Securities
Act
is used, or the Prospectus is otherwise required to be filed with the Commission
pursuant to Rule 424(b) under the Securities Act, when the Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Securities Act, (3) of
any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (4) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement, preventing or suspending the use of the Preliminary
Prospectus, the Prospectus, the Registration Statement or any amendment or
supplement thereto, or refusing to permit the effectiveness of the Registration
Statement (“Stop
Order”),
or
the initiation of any proceedings for any of those purposes, (5) of the
happening of any event during the period mentioned in paragraph (f) below which
in the reasonable judgment of the Company makes any statement made in the
Registration Statement or the Prospectus untrue or which requires the making
of
any changes in the Registration Statement or the Prospectus in order to make
the
statements therein not misleading, and (6) of the receipt of any comments from
the Commission or the Blue Sky or securities authorities of any jurisdiction
regarding the Registration Statement, any post-effective amendment thereto,
the
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto.
The Company will use its best efforts to prevent the issuance of any Stop Order
by the Commission or any notification from the Blue Sky or securities
authorities of any jurisdiction suspending the qualification or registration
of
the Units, Shares, Warrants or shares of Common Stock issuable upon exercise
of
the Warrants (the “Warrant
Shares,”
and
together with the Units, Shares, Warrants, Representative’s Units,
Representative’s Shares and the Representative’s Warrant Shares, the
“Securities”)
for
sale in such jurisdictions, and if at any time the Commission shall issue any
Stop Order, or if the Blue Sky or securities authorities of any jurisdiction
shall issue notification suspending the qualification or registration of the
Securities, the Company will make every reasonable effort to obtain the
withdrawal of such Stop Order or notification at the earliest possible moment.
The Company will promptly advise the Representative of its receipt of any
notification with respect to the suspension of the qualification or registration
of the Securities for offer or sale in any jurisdiction or the initiation or
threatening of any action or proceeding for such purpose.
4
(b) Prior
to
any
public offering of the Units by the Underwriters, the Company will endeavor
in
good faith, in cooperation with the Representative and its counsel, to register
or qualify the Securities for offer or sale, and the Warrant Shares for
issuance, as may be required under the Blue Sky or securities laws, rules or
regulations of such jurisdictions as the Representative may request; provided
that in no event shall the Company be obligated to register or qualify to do
business as a foreign corporation in any jurisdiction where it is not now so
registered or qualified or to take any action which would subject it to general
service of process, or to taxation as a foreign corporation doing business,
in
any jurisdiction where it is not now so subject. The Company will pay all fees
and expenses relating to the registration or qualification of the Securities
under such Blue Sky or securities laws of such jurisdictions as the
Representative may designate (including legal fees of counsel for the
registration or qualification of the Securities, and in all cases, all
disbursements and expenses incurred by such counsel in connection therewith).
After registration, qualification or exemption of the Securities for offer
and
sale, and the Warrant Shares for issuance, in such jurisdictions, and for as
long as any offering pursuant to this Agreement continues, the Company, at
the
Representative’s request, will file and make such statements or reports, and pay
the fees applicable thereto, at such times as are or may be required by the
laws, rules or regulations of such jurisdictions in order to maintain and
continue in full force and effect the registration, qualification or exemption
for offer or sale of the Securities, and the issuance of the Warrant Shares
upon
exercise of the Warrants, in such jurisdictions. After the termination of the
offering contemplated hereby, and as long as any of the Securities are
outstanding, the Company will file and make, and pay all fees applicable
thereto, such statements and reports and renewals of registration as are or
may
be required by the laws, rules or regulations of such jurisdictions to maintain
and continue in full force and effect the registration, qualification or
exemption for secondary market transactions in the Units, the Common Stock
and
the Warrants, and the issuance of the Warrant Shares upon the exercise of the
Warrants, in the various jurisdictions in which the Units, Shares and Warrants
were originally registered, qualified or exempted for offer or sale.
5
(c) The
Company will furnish to the Representative and its counsel, without charge,
two
copies (one of which shall be manually signed) of the Registration Statement
as
originally filed on Form SB-2 and of any amendments (including post-effective
amendments thereto), including financial statements and schedules, if any,
and
all consents, certificates and exhibits (including those incorporated therein
by
reference to the extent not previously furnished to the Representative),
heretofore or hereafter made, signed by or on behalf of its officers whose
signatures are required thereon and a majority of its board of directors, and
will furnish to the Representative, without charge, for transmittal to each
of
the other Underwriters a copy of the Registration Statement and each
post-effective amendment thereto, including financial statements and schedules,
if any, but without exhibits.
(d) The
Company will use its best efforts to cause the Registration Statement to become
effective under the Securities Act. Upon such effectiveness, if the Company
and
the Representative have determined not to proceed pursuant to Rule 430A under
the Securities Act, the Company will timely file a Prospectus pursuant to,
and
in conformity with, Rule 424(b), if required, and if the Company and the
Representative have determined to proceed pursuant to Rule 430A under the
Securities Act, the Company will timely file a Prospectus pursuant to, and
in
conformity with, Rules 424(b) and 430A under the Securities Act.
(e) The
Company will give the Representative and its counsel advance notice of its
intention to file any amendment to the Registration Statement or any amendment
or supplement to the Prospectus, whether before or after the effective date
of
the Registration Statement, and will not file any such amendment or supplement
unless the Company shall have first delivered copies of such amendment or
supplement to the Representative and its counsel and the Representative and
its
counsel shall have given consent to the filing of such amendment or supplement,
which consent shall not be unreasonably withheld. Any such amendment or
supplement shall comply with the Securities Act.
(f) From
and
after the Effective Date, the Company will deliver to each of the Underwriters,
without charge, as many copies of the Prospectus or any amendment or supplement
thereto as the Representative may reasonably request. The Company consents
to
the use of the Prospectus or any amendment or supplement thereto by the several
Underwriters and by all dealers to whom the Units may be sold, both in
connection with the offering or sale of the Units for such period of time
thereafter as the Prospectus is required by law to be delivered in connection
therewith. If during such period of time any event shall occur which in the
judgment of the Company or counsel to the Representative should be set forth
in
the Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement
or
amendment thereto, and will deliver to each of the Underwriters, without charge,
such number of copies thereof as the Representative may reasonably request.
(g) The
Company will promptly pay all expenses in connection with (1) the preparation,
printing, filing, distribution and mailing (including, without limitation,
express delivery service) of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and the preliminary and final forms of Blue Sky
memoranda (if any); (2) the issuance and delivery of the Units, the Warrants
and
the Shares; (3) the fees and expenses of legal counsel and independent
accountants for the Company relating to, among other things, opinions of
counsel, audits, review of unaudited financial statements and cold comfort
review; (4) the fees and expenses of any registrar, transfer agent and Warrant
Agent for the Common Stock and the Warrants; (5) the printing, filing,
distribution and mailing (including, without limitation, express delivery
service) of this Agreement, the Agreement Among Underwriters, the Selected
Dealer Agreement, the Warrant Agreements and the Underwriters’ Questionnaire;
(6) furnishing such copies of the Registration Statement, the Prospectus and
any
Preliminary Prospectus, and all amendments and supplements thereto, as may
be
requested for use in connection with the offering and sale of the Units by
the
Underwriters or by dealers to whom the Units may be sold; (7) any fees and
communication expenses with respect to filings required to be made by the
Underwriters with the National Association of Securities Dealers, Inc. (the
“NASD”);
and
(8) the expenses of tombstone advertisements, due diligence meetings and lucite
cubes. The Company will also pay all expenses in connection with the Company’s
application to list the Units, Shares and Warrants on The Nasdaq Stock Market,
Inc. (“NASDAQ”)
or on
the American Stock Exchange (“AMEX”).
In
addition, the Company hereby agrees to pay to the Representative a
non-accountable expense allowance set forth in Section 3 above.
6
(h) On
each
of the Closing Dates, the Company shall sell to the Representative (or its
executive officers), Representative’s Warrants described in Section 3
above.
(i) If
this
Agreement shall be terminated pursuant to any of the provisions hereof
(otherwise than pursuant to Section 9 hereof or by notice given by the
Representative pursuant to Section 8 hereof) or if for any reason the Company
shall be unable to perform its obligations hereunder, the Company will reimburse
the several Underwriters for all of their out-of-pocket expenses (including
fees
and expenses of counsel to the Representative) reasonably incurred by them
in
connection herewith.
(j) Until
ninety (90) days after the Effective Date, without the prior written consent
of
the Representative, the Company will not offer, issue, sell, contract to sell,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any securities of the Company, except as provided for and as
contemplated by this Agreement.
(k) On
or
prior to the Closing Date, the Company shall obtain from each of its officers,
directors and existing stockholders and the holders of stock options or other
rights to acquire shares of Common Stock, his, her or its enforceable written
agreement, in form and substance satisfactory to counsel to the Representative,
that for a period of six months
after the Effective Date (or any longer period required by any jurisdiction
in
which the offer and sale of the Units is to be registered or qualified), he,
she
or it will not offer for sale, sell, contract to sell, assign, pledge, transfer,
grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any securities of the Company (including without limitation any
shares of Common Stock), owned by him, her or it as of the Closing Date without
the prior written consent of the Company (the “Offering
Restrictions”)
and
the Company agrees not to release such persons from the restrictions without
prior written consent of the Representative. In addition, the Company will
instruct the transfer agent accordingly and the certificates representing these
securities will bear a legend to the foregoing effect.
(l) The
Company has reserved and shall continue to reserve and keep available the
maximum number of shares of its authorized but unissued Common Stock and other
securities for issuance upon exercise of the Warrants and the Representative’s
Warrants.
(m) For
a
period of five years after the date of this Agreement, the Company
shall:
(i) retain
Singer Lewak Xxxxxxxxx & Xxxxxxxxx, LLP or another nationally recognized
firm of independent public accountants, as its auditors, and at its own expense,
shall cause such independent certified public accountant to review (but not
audit) the Company’s financial statements
for each of the first three fiscal quarters of each fiscal year prior to the
announcement of quarterly financial information, the filing of the Company’s
Form 10-Q quarterly
reports and the mailing of quarterly financial information to its stockholders,
provided this shall not require the inclusion of such a review report in the
Company’s quarterly filings.
7
(ii) cause
the
Company’s Board of Directors to meet not less frequently than quarterly, upon
proper notice, and cause an agenda and minutes of the preceding meeting to
be
distributed to directors prior to each such meeting;
(iii) distribute
to its security holders, within 120 days after the end of each fiscal year,
an
annual report (containing certified financial statements) prepared in accordance
with, and satisfying the substantive disclosure requirements of Rule 14a-3(b)
of
Regulation 14A promulgated by the Commission under the Securities Exchange
Act
of 1934, as amended; and
(iv) appoint
a
transfer agent for the Common Stock and Warrant Agent for the Warrants, in
each
case acceptable to the Representative.
(n)
For a
period of five years after the date of this Agreement, the Company shall furnish
each of the Underwriters without
charge, the following:
(i)
within
ninety (90) days after the end of each fiscal year, financial statements
certified by the independent certified public accountants referred to in Section
4(m)(i) above, including a balance sheet, statement of operations, statement
of
stockholders’ equity and statement of cash flows, in each case for the Company
and its then existing subsidiaries (if any), with, supporting schedules,
prepared in accordance with generally accepted accounting principles, as at
the
end of such fiscal year and for the twelve months then ended, accompanied by
a
copy of the certificate or report thereon of such independent certified public
accountants;
(ii) (x)
for
so long as the Company is a reporting company under any of Sections 12(b),
12(g)
or 15(d) of the Securities Exchange Act of 1934, as amended, and the rules
and
regulations of the Commission promulgated thereunder (collectively, the
“Exchange
Act”),
promptly after filing with the Commission, copies of all reports and proxy
soliciting material which the Company is required to file under the Exchange
Act, or (y) at such times as the Company is not a reporting company under the
aforesaid provisions of the Exchange Act, as soon as practicable after the
end
of each of the first three fiscal quarters of each fiscal year, financial
statements of the Company, including a balance sheet, statement of operations,
statement of stockholders’ equity and statement of cash flows as at the end of,
or for each such fiscal quarter and the comparable period of the preceding
year,
which statements need not be audited.
(iii) as
soon
as practicable after they have first been distributed to stockholders of the
Company, copies of each annual and interim financial or other report or
communication sent by the Company to its stockholders (except to the extent
duplicative of information pursuant to any other clause of this Section
4(n));
(iv) as
soon
as practicable following release or other dissemination, copies of every press
release and every material news item and article in respect of the Company
or
its affairs and released or otherwise disseminated by the Company;
(v) promptly
following receipt thereof, copies of the Company’s daily transfer sheets
prepared by the Company’s transfer agent and Warrant Agent and a list of
stockholders; and
(vi) such
additional documents and information with respect to the Company and its affairs
and the affairs of its subsidiaries, if any, as the Representative may from
time
to time reasonably request.
(o) On
or
prior to the Effective Date, the Company will have accomplished the listing
of
the Units, Shares and Warrants on NASDAQ or the AMEX, subject only to notice
of
issuance and the registration of such securities under the Exchange Act. For
a
period of five years from the date of this Agreement, the Company agrees, at
its
sole cost and expense, to take all necessary and appropriate action such that
its securities continue to be listed on NASDAQ or the AMEX, provided that the
Company otherwise complies with the prevailing requirements of NASDAQ or the
AMEX.
8
(p) Within
a
reasonable period after (i) the last Optional Closing Date, or (ii) if the
Underwriters do not elect to purchase any Additional Units, the thirtieth day
after the date hereof, the Company shall prepare and deliver (at its own cost
and expense) to the Representative one bound volume and to counsel to the
Representative three bound volumes containing copies of all documents and
correspondence filed with, or received from, the Commission, the NASD, NASDAQ
and the AMEX relating to the offering of the Units and the closing thereof,
including related matters.
(q) So
long
as any Warrants or Representative’s Warrants are outstanding, the Company will
maintain a current prospectus satisfying the requirements of Section 10(a)(3)
of
the Securities Act and, in connection therewith, expeditiously file with the
Commission, at its own expense, any post-effective amendments to the
Registration Statement which may be required and cause such post-effective
amendments to become effective in compliance with the Securities Act, without
lapse of time between the effectiveness of any such post-effective amendments,
and cause a copy of the Prospectus, as then amended or supplemented, to be
delivered to each holder of record of Warrants and furnish to each Underwriter
and dealer as many copies of each such Prospectus as such Underwriter or dealer
may reasonably request.
(r) The
Company will make generally available to its security holders and to the
registered holders of the Warrants and deliver to the Representative as soon
as
it is practicable to do so, but in no event later than ninety days after the
end
of its first four full fiscal quarters following the effective date of the
Registration Statement occurs, an earnings statement (which need not be audited)
covering a period of at least twelve consecutive months commencing after the
effective date of the Registration Statement, which shall satisfy the
requirements of Section 11(a) of the Securities Act.
(s)
The
Company will, promptly upon the Representative’s request, prepare and file with
the Commission any amendments or supplements to the Registration Statement,
any
Preliminary Prospectus or the Prospectus and take any other action, which in
the
reasonable opinion of Xxxxxx &
Xxxxx
LLP, counsel to the Representative, may be reasonably necessary or advisable
in
connection with the distribution of the Units, and will use its best efforts
to
cause the same to become effective as promptly as possible.
(t) The
Company will furnish to the Representative as early as practicable prior to
the
Closing Date and any Optional Closing Date, as the case may be, but no less
than
two full business days prior thereto, a copy of the latest available unaudited
interim financial statements of the Company which have been reviewed by the
Company’s independent certified public accountants, as stated in their letters
to be furnished pursuant to Section 7(d) hereof.
(u) The
Company will apply the net proceeds from the issuance and sale of the securities
for the purposes and in the manner set forth under the caption “Use of Proceeds”
in the Prospectus, and will file on a timely basis such reports with the
Commission with respect to the sale of the securities and the application of
the
proceeds therefrom as may be required pursuant to Rule 463 under the Securities
Act. The Company will operate its business in such a manner and, pending
application of the net proceeds of the offering for the purposes and in the
manner set forth under the caption “Use of Proceeds” in the Prospectus, will
invest such net proceeds in certain types of securities so as not to become
an
“investment company” as such term is defined under the Investment Company Act of
1940, as amended (the “Investment
Company Act”).
9
(v) The
Company has filed a registration statement on Form 8-A covering the Units,
Common Stock and Warrants pursuant to Section 12(b) of the Exchange Act and
will
use its best efforts to cause said registration statement to become effective
on
the Effective Date. The Company will comply with all registration, filing and
reporting requirements of the Exchange Act, which may from time to time be
applicable to the Company. The Company shall comply with the provisions of
all
undertakings contained in the Registration Statement.
(w) Prior
to
the Closing Date or any Optional Closing Date, as the case may be, the Company
shall neither issue any press release or other communication, directly or
indirectly, nor hold any press conference with respect to the offering of the
securities of the Company or its business, results of operations, condition
(financial or otherwise), property, assets, liabilities or prospects, without
the prior written consent of the Representative.
(x) For
a
period of ninety (90) days after the date hereof, the Company will not, directly
or indirectly, take any action designed, or which will constitute or which
might
reasonably be expected to cause or result in, stabilization or manipulation
of
the market price of the Units, Common Stock or Warrants.
(y) The
Company will maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to cash and cash equivalents is permitted only
in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for cash and cash equivalents is compared with the
existing cash and cash equivalents at reasonable intervals and appropriate
action is taken with respect to any differences.
(z) There
are
no business relationships or related party transactions of the nature described
in Item 404 of Regulation S-B involving the Company and any person referred
to
in said Item 404, except as required to be described in the Prospectus and
as so
described.
(aa) The
Company will not grant any person or entity registration rights with respect
to
any of its securities, except such rights as are pari
passu
to the
registration rights contained in the Representative’s Warrants and registered or
qualified for sale under the Blue Sky or state securities law, rules or
regulations of the jurisdictions in which such securities are to be offered
for
sale.
5.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each Underwriter that:
(a) When
the
Registration Statement becomes effective, and at all times subsequent thereto
to
and including the Closing Date and each Optional Closing Date, and during such
longer period as the Prospectus may be required to be delivered in connection
with sales by the Underwriters or any dealer, and during such longer period
until any post-effective amendment thereto shall become effective, the
Registration Statement (and any post-effective amendment thereto) and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement to the Registration Statement or
the
prospectus) will contain all statements which are required to be
stated
therein in accordance with the Securities Act, will comply with the Securities
Act, and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the
statements therein not misleading, and no event will have occurred which should
have been set forth in an amendment or supplement to the Registration Statement
or the Prospectus which has not then been set forth in such an amendment or
supplement if a Rule 430A Prospectus is included in the Registration Statement
at the time it becomes effective, the Prospectus filed pursuant to Rules 430A
and 424(b)(1) or (4) will contain all Rule 430A Information and all statements
which are required to be stated therein in accordance with the Securities Act,
will comply with the Securities Act, and will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and each
Preliminary Prospectus, as of the date filed with the Commission, did not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (except
as such statements are corrected in subsequent Preliminary Prospectus filing);
except that no representation or warranty is made in this Section 5(a) with
respect to statements or omissions made in reliance upon and in conformity
with
written information furnished to the Company as stated in Section 6(b) with
respect to any Underwriter by or on behalf of such Underwriter through the
Representative expressly for inclusion in any Preliminary Prospectus, the
Registration Statement, or the Prospectus or any amendment or supplement
thereto.
10
(b) Neither
the Commission nor the Blue Sky or securities authorities of any jurisdiction
has issued an order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus, the Prospectus,
the Registration Statement, or any amendment or supplement thereto, refusing
to
permit the effectiveness of the Registration Statement, or suspending the
registration or qualification of the Units, Shares, Warrants, Representative’s
Warrants or the Warrant Shares, nor has the Commission or any of such
authorities instituted or threatened to institute any proceedings with respect
to such an order.
(c) The
Company is a corporation duly incorporated and validly existing in good standing
under the laws of Delaware, its jurisdiction of incorporation. The Company
has
full corporate power and authority and has obtained all necessary consents,
authorizations, approvals, orders, licenses, certificates, declarations and
permits of and from, and has made all required filings with, all federal, state,
local and other governmental authorities and all courts and other tribunals,
to
own, lease, license and use its properties and assets and to carry on its
business in the manner described in the Prospectus. All such consents,
authorizations, approvals, orders, licenses, certificates, declarations; permits
and filings are in full force and effect and the Company is in all material
respects complying therewith. The Company is duly registered or qualified to
do
business as a foreign corporation and is in good standing in each other
jurisdiction in which its ownership, leasing, licensing, or use of property
and
assets or the conduct of its business requires such registration or
qualification.
(d) The
authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock of which _______ shares are outstanding, and 5,000,000 shares of preferred
stock, par value $0.0001 per share (the “Preferred
Stock”),
of
which no shares are outstanding. Each outstanding share of Common Stock is
duly
authorized, validly issued, fully paid, and non-assessable, without any personal
liability attaching to the ownership thereof, and has not been issued and is
not
owned or held in violation of any preemptive rights of stockholders. There
is no
commitment, plan or arrangement to issue, and no outstanding option, warrant
or
other right calling for the issuance of, any share of capital stock of the
Company or any security or other instrument which by its terms is convertible
into, exercisable for, or exchangeable for capital stock of the Company, except
as disclosed in the Prospectus. There is outstanding no security or other
instrument which by its terms is convertible into or exchangeable for capital
stock of the Company.
(e) The
financial statements of the Company included in the Registration Statement
and
the Prospectus fairly present the financial position, the results of operations
and the other information purported to be shown therein at the respective dates
and for the respective periods to which they apply. Such financial statements
have been prepared in accordance with generally accepted accounting principles
and are prepared in accordance with the books and records of the Company. The
accountants whose reports on the audited financial statements are filed with
the
Commission as a part of the Registration Statement are, and during the periods
covered by their report(s) included in the Registration Statement and the
Prospectus were, independent certified public accountants with respect to the
Company and within the meaning of the Securities Act. No other financial
statements are required by Form SB-2 or otherwise to be included in the
Registration Statement or the Prospectus. Except as disclosed in the Prospectus,
there has at no time been a material adverse change in the condition (financial
or otherwise), results of operations, business, property, assets, liabilities
or
prospects of the Company from the latest information set forth in the
Registration Statement or the Prospectus.
11
(f) There
is
no litigation, arbitration, claim, governmental or other proceeding (formal
or
informal), or investigation pending, or to the Company’s knowledge, threatened
(or any basis therefore known to the Company), with respect to the Company,
its
operations, business, property or assets, except as disclosed in the Prospectus
or such as individually or in the aggregate do not now have and are not expected
to have a material adverse effect upon the operations, business, property
assets, condition (financial or otherwise) or prospects of the Company. The
Company is not in violation of, or in default with respect to, any material
law,
rule, regulation, order judgment, or decree, except as disclosed in the
Prospectus or such as individually or in the aggregate do not now have and
are
not expected to have material adverse effect upon the operations, business,
property, assets, condition (financial or otherwise) prospects of the Company;
nor is the Company required to take any action in order to avoid any such
violation or default.
(g) The
Company has good and marketable title in fee simple absolute to all real
properties and good title to all other properties and assets which the
Prospectus indicates are owned by it, free and clear of all liens, security
interests, pledges, charges, mortgages and other encumbrances (except as may
be
required to be disclosed in the Prospectus). The properties held under lease
by
the Company are held by it under valid and enforceable leases and the interests
of the Company in such leases are free and clear of all liens, encumbrances
and
defects, except as disclosed in the Prospectus, and the Company is in full
compliance with all material terms and conditions thereunder and such leases
are
in full force and effect. No real property owned, leased, licensed or used
by
the Company is situated in an area which is, or to the knowledge of the Company,
will be, subject to zoning, use, or building code restrictions which would
prohibit (and no state of facts relating to the actions or inaction of another
person or entity or his or its ownership, leasing, licensing, or use of any
real
or personal property exists or will exist which would prevent) the continued
effective ownership, leasing, licensing, or use of such real property in the
business of the Company as presently conducted or as the Prospectus indicates
any of them contemplate conducting.
(h) Neither
the Company nor any other party is now or is expected by the Company to be
in
violation or breach of, or in default with respect to complying with, any
material provision of any indenture, mortgage, deed of trust, debenture, note
or
other evidence of indebtedness, contract, agreement, instrument, lease or
license, or arrangement or understanding which is material to the Company,
and
each such indenture, mortgage, deed of trust, debenture, note or other evidence
of indebtedness, contract, agreement, instrument, lease or license is in full
force and is the legal, valid and binding obligation of the Company, and to
the
knowledge of the Company, of the other contracting party and is enforceable
as
to the Company in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally and by equitable
principles affecting the availability of remedies in the nature of specific
performance. The Company enjoys peaceful and undisturbed possession under all
leases and licenses under which it is operating. The Company is not a party
to
nor bound by any contract, agreement, instrument, lease, license, arrangement
or
understanding, or subject to any charter or other restriction, which has had
or
is expected in the future to have a material adverse effect on the condition
(financial or otherwise), results of operations, business, property, assets
or
liabilities of the Company. The Company is not in violation or breach of, or
in
default with respect to, any term of its Certificate of Incorporation or
By-laws.
12
(i) Except
as
disclosed in the Prospectus, the Company does not own or have any licensed
rights to, in or under any patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, technology, know-how
or
other intangible properties or assets (all of the foregoing being herein called
“Intangibles”)
that
are material to the business of the Company. Except as disclosed in the
Prospectus, there is no right under any Intangibles of the Company necessary
to
the business of the Company as presently conducted or as proposed to be
conducted as indicated in the Prospectus. The Company has not received notice
of
infringement with respect to asserted Intangibles of others. To the knowledge
of
the Company, there is no infringement by others of Intangibles of the Company.
To the knowledge of the Company, there is no Intangible of others which has
had
or may in the future have a materially adverse effect on the condition
(financial or otherwise), results of operations, business, property, assets,
liabilities or prospects of the Company.
(j) None
of
the Company, any director or officer of the Company, or to
the
knowledge of the Company, any agent, employee, or other person authorized to
act
on behalf of the Company has, directly or indirectly: used any corporate funds
of the Company for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; made any unlawful payment
to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds of the Company; violated
any
provision of the Foreign Corrupt Practices Act of 1977, as amended, as relates
to the business of the Company; or made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment in connection with the business
of
the Company.
(k) Any
contract, agreement, instrument, lease or license required to be described
in
the Registration Statement or the Prospectus has been properly described therein
in all material respects. Any contract, agreement, instrument, lease or license
required to be filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to or has been incorporated as an exhibit
by
reference into the Registration Statement.
(l) The
Company has all requisite corporate power and authority to execute, deliver
and
perform under the terms and conditions of this Agreement and each of the Warrant
Agreements. All necessary corporate proceedings of the Company have been duly
taken to authorize the execution, delivery and performance by the Company of
this Agreement and each of the Warrant Agreements. This Agreement has been
duly
authorized, executed and delivered by the Company, and assuming the valid
execution thereof by the other parties thereto, is a legal, valid, and binding
agreement of the Company, and is enforceable as to the Company in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights and remedies
of
creditors generally and by equitable principles affecting the availability
of
remedies in the nature of specific performance. Each of the Warrants has been
duly authorized by the Company and, when executed and delivered by the Company,
assuming the due execution and delivery thereof by the other parties thereto,
will be a legal, valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the
rights and remedies of creditors generally and by equitable principles affecting
the availability of remedies in the nature of specific performance. Each of
the
Warrants, the Representative’s Warrants and the Warrants included in the Units
issuable upon exercise of the Representative’s Warrants (the “Underlying
Warrants”)
has
been duly authorized by the Company and, when executed, issued and delivered
by
the Company and paid for by the Underwriters (in the case of the Warrants),
the
Representative (or its executive officers) or the holders of the
Representative’s Warrants (in the case of the Underlying Warrants), as the case
may be, in accordance with the provisions of this Agreement or the
Representative’s Warrants, as the case may be, will be legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
and
remedies of creditors generally and by equitable principles affecting the
availability of remedies in the nature of specific performance. No consent,
authorization, approval, order, license, certificate, declaration or permit
of
or from, or filing with, any governmental or regulatory authority, agent, board
or other body is required for the execution, delivery or performance by the
Company of this Agreement, the Warrant Agreements, the Warrants, the
Representative’s Warrants or the Underlying Warrants (except filings with and
orders of the Commission pursuant to the Securities Act which have been or
will
be made or obtained prior to the Closing Date, and such filings, consents or
permits as are required under Blue Sky or securities laws in connection with
the
transactions contemplated by this Agreement). No consent of any party to any
contract, agreement, instrument, lease, license, arrangement or understanding
to
which the Company is a party, or to which any of its property or assets are
subject, is required for the execution, delivery or performance of this
Agreement, the Warrant Agreements, the Warrants, the Representative’s Warrants
or the Underlying Warrants (except as described in the exhibits to the
Registration Statement); and the execution, delivery and performance of this
Agreement, the Warrant Agreements, the Warrants, the Representative’s Warrants
and the Underlying Warrants will not violate, result in a breach of, conflict
with, or (with or without the giving of notice or the passage of time or both)
entitle any party to terminate or call a default under any such contract,
agreement, instrument, lease, license, arrangement or understanding, result
in
the creation or imposition of, any lien, security interest, pledge, charge,
or
other encumbrance upon any of the property or assets of the Company pursuant
to
the terms of any indenture, mortgage, deed of trust, loan or credit agreement,
lease or other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or assets of the
Company is subject or violate or result in a breach of any term of the
Certificate of Incorporation or By-laws of the Company, or violate, result
in a
breach of, or conflict with any law, rule, regulation, order, judgment or decree
binding on the Company or to which any of its operations, businesses, properties
or assets are subject.
13
(m) The
Units
and the Shares are validly authorized. The Shares, when issued, paid for and
delivered in accordance with this Agreement, will be validly issued, fully
paid
and non-assessable, without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive rights of
stockholders. The Underwriters will receive good title to the Securities
purchased by them, upon payment of the purchase price therefor in accordance
with the provisions of this Agreement, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders’ agreements and voting
trusts (collectively, “Encumbrances”).
The
Representative (or its executive officers) will receive good title to the
Representative’s Warrants purchased by them, upon payment of the purchase price
thereof in accordance with the provisions of this Agreement, free and clear
of
all Encumbrances.
(n) The
Warrant Shares are validly authorized and reserved for issuance and, when
issued, paid for, and delivered upon exercise of the Warrants in accordance
with
the provisions of the Warrant Agreement, will be validly issued, fully paid
and
non-assessable and will not be issued in violation of any preemptive rights
of
stockholders and the holders of the Warrant Shares will receive good title
to
them, free and clear of all Encumbrances.
(o) The
Representative’s Shares and the Representative’s Warrant Shares are duly
authorized and reserved for issuance and, when issued, paid for and delivered
upon exercise of the Representative’s Warrants or the Underlying Warrants, as
the case may be, in accordance with the provisions of the Representative’s
Warrants and the Warrant Agreement, respectively, will be validly issued, fully
paid and non-assessable and will not be issued in violation of any preemptive
rights of stockholders; and the holders of the Representative’s Shares and the
Representative’s Warrant Shares will receive good title to them, free and clear
of all Encumbrances.
14
(p)
The
Units, the Shares, the Warrants, the Warrant Shares, the Representative’s
Warrants and the Common Stock, conform in all material respects to all
statements relating thereto contained in the Registration Statement and the
Prospectus.
(q) Since
the
respective dates as of which information is given in the Registration Statement
and the Prospectus, and except as otherwise may be stated therein, (i) the
Company has not entered into any transaction or incurred any liability or
obligation, contingent or otherwise, which is material to the Company, except
in
the ordinary course of business, (ii) there has not been any change in the
outstanding capital stock of the Company or any issuance of options, warrants
or
rights to purchase the capital stock of the Company or any material increase
in
the long-term debt of the Company or any material adverse change in the
business, condition (financial or otherwise) or results of operations of the
Company, (iii) no loss or damage (whether or not insured) to the properties
of
the Company have been sustained which is material to the Company, (iv) the
Company has not paid or declared any dividend or other distribution with respect
to its capital stock, and (v) there has not been any change, contingent or
otherwise, in the direct or indirect control of the Company nor, to the
knowledge of the Company, do there exist any circumstances which would likely
result in such a change.
(r) Neither
the Company nor any of its officers, directors or Affiliates (as defined in
Rule
405 of the Rules and Regulations), has taken or will take, directly or
indirectly, prior to the termination of the offering contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which has caused or resulted in, or which might
in
the future 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 any of the Units, Shares or Warrants.
(s) The
Company has not incurred, directly or indirectly, any liability for a fee,
commission or other compensation on account of the employment of a broker or
finder in connection with the offering of the Units contemplated by this
Agreement.
(t) The
Company is not, and does not intend to conduct its business in a manner in
which
it would become, an “investment company” as defined in Section 3(a) of the
Investment Company Act.
(u) The
Offering Restrictions are in full force and effect and certificates representing
the Securities subject to such restrictions bear an appropriate legend.
(v)
No
person or entity has the right to require registration of shares of Common
Stock
or other securities of the Company because of the filing or effectiveness of
the
Registration Statement who has not waived such right.
(w) The
Company has filed all federal, state and local tax returns required to be filed
(or has obtained extensions therefor) and has paid all taxes shown on such
returns and all assessments received by it to the extent that payment has become
due. The Company has made adequate accruals for all taxes which may be owed
by
it, but have not been paid.
(x) The
Company has adequately insured its properties against loss or damage by fire,
maintain adequate insurance against liability for negligence and maintain such
other insurance as is usually maintained by companies engaged in the same or
similar businesses, including product liability insurance.
15
6.
INDEMNIFICATION
AND CONTRIBUTION.
(a) The
Company agrees to indemnify and hold harmless each Underwriter, its officers,
directors, partners, employees, agents and counsel, and each person, if any,
who
controls any Underwriter within the meaning of Section 15 of the Securities
Act
or Section 20(a) of the Exchange Act, against any and all loss, liability,
claim, damage, and expense whatsoever (which shall include, for all purposes
of
this Section 6, but not be limited to, attorneys’ fees and any and all expenses
whatsoever incurred in investigating, preparing, or defending against any
investigation, litigation or proceeding, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of any claim or
litigation) as and when incurred arising out of, based upon, or in connection
with (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Rule 430A Prospectus, the
Registration Statement, or the Prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or (B) in any application
or other document or communication (in this Section 6 collectively called an
“application”)
executed by or on behalf of the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order
to
qualify the Units, Shares and Warrants under the Blue Sky or securities laws
thereof (or the rules and regulations promulgated thereunder) or filed with
the
Commission or any securities exchange or automated quotation system; or any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, unless
such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company as stated in Section 6(b} with respect
to
any Underwriter by or on behalf of such Underwriter through the Representative
for inclusion in any Preliminary Prospectus, the Rule 430A Prospectus, the
Registration Statement, or the Prospectus or any amendment or supplement
thereto, or in any application, as the case may be, or (ii) any breach of any
representation, warranty, covenant or agreement of the Company contained in
this
Agreement. The foregoing agreement to indemnify shall be in addition to any
liability the Company may otherwise have, including liabilities arising under
this Agreement.
If
any
investigation is initiated or action is brought against an Underwriter or any
of
its officers, directors, partners, employees, agents or counsel, or any
controlling persons of an Underwriter (each, an “Indemnified
or
Indemnifying Party”
and
collectively “Indemnified
Parties”)
in
respect of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such Indemnified Party or Indemnified Parties shall
promptly notify the Company in writing of the institution of such action (but
the failure so to notify shall not relieve the Company from any liability it
may
have pursuant to this Section 6(a)) and the Company shall promptly assume the
defense of such action, including the employment of counsel (reasonably
satisfactory to such Indemnified Party or Indemnified Parties) and payment
of
expenses. Such Indemnified Party or Indemnified Parties shall have the right
to
employ its or their own counsel in any such case, but the fees and expenses
of
such counsel shall be at the expense of such Indemnified Party or Indemnified
Parties, unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action or the
Company shall not have promptly employed counsel reasonably satisfactory to
such
Indemnified Party or Indemnified Parties to have charge of the defense of such
action or such Indemnified Party or Indemnified Parties shall have reasonably
concluded that there may be one or more legal defenses available to it or them
or to other Indemnified Parties which are different from or additional to those
available to the Company, in any of which events such reasonable fees and
expenses shall be borne by the Company and the Company shall not have the right
to direct the defense of such action on behalf of the Indemnified Party or
Indemnified Parties. Anything in this paragraph to the contrary notwithstanding,
the Company shall not be liable for any settlement of any such claim or action
effected without its prior written consent. The Company agrees promptly to
notify the Underwriters of the commencement of any litigation or proceedings
against the Company or any of its officers or directors in connection with
the
sale of the Units, Shares and Warrants, any Preliminary Prospectus, the Rule
430A Prospectus, the Registration Statement, or the Prospectus, or any amendment
or supplement thereto, or any application.
16
(b) Each
Underwriter severally agrees to indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who shall have signed
the
Registration Statement, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20(a) of
the
Exchange Act, to the same extent as the foregoing indemnity from the Company
to
the several Underwriters in Section 6(a), but only with respect to statements
or
omissions, if any, made in any Preliminary Prospectus, the Rule 430A Prospectus,
the Registration Statement, or the Prospectus (as from time to time amended
and
supplemented), or any amendment or supplement thereto, or in any application,
in
reliance upon and in conformity with written information furnished to the
Company with respect to any Underwriter by or on behalf of such Underwriter
through the Representative expressly for inclusion in any Preliminary
Prospectus, the Rule 430A Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto, or in any application,
as
the case may be; provided, however, that the obligation of each Underwriter
to
provide indemnity under the provisions of this Section 6(b) shall be limited
to
the amount which represents the sum of the product of the number of Firm Units
and Additional Units underwritten by such Underwriter, hereunder and the initial
public offering price per Unit set forth on the cover page of the Prospectus.
For all purposes of this Agreement, the public offering price, the amounts
of
the selling concession and re-allowance set forth in the Prospectus, the
information in the [third] paragraph under “Underwriting” constitute the only
information furnished in writing by or on behalf of any Underwriter expressly
for inclusion in any Preliminary Prospectus, the Rule 430A Prospectus, the
Registration Statement or the Prospectus (as from time to time amended or
supplemented), or any amendment or supplement thereto, or in any application,
as
the case may be. If any action hall be brought against the Company or any other
person so indemnified based upon any Preliminary Prospectus, the Rule 430A
Prospectus, the Registration Statement, or the Prospectus, or any amendment
or
supplement thereto, or any application, and in respect of which indemnity may
be
sought against any Underwriter pursuant to this Section 6(b), such Underwriter
shall have the rights and duties given to the Company, and the Company and
each
other person so indemnified shall have the rights and duties given to the
Indemnified Parties, by the provisions of Section 6(a).
(c) To
provide for just and equitable contribution, if (i) an Indemnified Party makes
a
claim for indemnification pursuant to Section 6(a) or 6(b) (subject to the
limitations thereof) but it is found in a final judicial determination, not
subject to further appeal, that such indemnification may not be enforced in
such
case, even though this Agreement expressly provides for indemnification in
such
case, or (ii) any Indemnified Party or Indemnifying Party seeks contribution
under the Securities Act, the Exchange Act, or otherwise, then the Company
(including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed the Registration
Statement, and any controlling person of the Company), as one entity, and the
Underwriters in the aggregate (including for this purpose any contribution
by or
on behalf of an Indemnified Party), as a second entity, shall contribute to
the
losses, liabilities, claims, damages and expenses whatsoever to which any of
them may be subject, so that the Underwriters are responsible for the proportion
thereof equal to the percentage which the underwriting discount per Unit set
forth on the cover page of the Prospectus represents of the initial public
offering price of such securities set forth on the cover page of the Prospectus
and the Company is responsible for the remaining portion, provided, however,
that if applicable law does not permit such allocation, then other relevant
equitable considerations such as the relative fault of the Company and the
Underwriters in the aggregate in connection with the facts which resulted in
such losses, liabilities, claims, damages and expenses shall also be considered.
The relative fault, in the case of an untrue statement, alleged untrue
statement, omission, or alleged omission, shall be determined by, among other
things, whether such statement, alleged statement, omission, or alleged omission
relates to information supplied by the Company or by the Underwriters, and
the
parties’ relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement, alleged statement, omission or alleged
omission. The Company and the Underwriters agree that it would be unjust and
inequitable if the respective obligations of the Company and the Underwriters
for contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages and expenses (even if the
Underwriters and the other Indemnified Parties were treated as one entity for
such purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 6(c). In no case shall
any
Underwriter be responsible for a portion of the contribution obligation imposed
on all Underwriters in excess of its pro rata share based on the number of
Firm
Units and Additional Units underwritten by it as compared to the number of
Firm
Units and Additional Units underwritten by all Underwriters who do not default
in their obligations under this Section 6(c). No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. For purposes of this Section 6(c), each person,
if
any, who controls an Underwriter within the meaning of 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 the provisions of this Section 6(c). Anything in this Section
6(c)
to the contrary notwithstanding, no party shall be liable for contribution
with
respect to the settlement of any claim or action effected without its written
consent. This Section 6(c) is intended to supersede any right to contribution
under the Securities Act, the Exchange Act or otherwise.
17
7.
CONDITIONS
OF UNDERWRITERS’ OBLIGATIONS.
The
obligations of each Underwriter hereunder are subject to the continuing accuracy
of the representations and warranties of the Company contained herein and in
each certificate and document contemplated under this Agreement to be delivered
to the Representative, as of the date hereof, as of the Closing Date, and each
Optional Closing Date, as the case may be, to the performance by the Company
of
its obligations hereunder, and to the following additional
conditions:
(a) Notification
that the Registration Statement has become effective shall be received by the
Representative not later than 6:30 p.m., New York City time, on the date of
this
Agreement or at such later date and time as shall be consented to in writing
by
the Representative. If the Company has elected to rely upon Rule 430A of the
Rules and Regulations, the price of the Units and any price related information
previously omitted from the effective Registration Statement pursuant to such
Rule 430A shall have been transmitted to the Commission for filing pursuant
to
Rule 424(b) of the Rules and Regulations within the prescribed time period,
and
prior to the Closing Date the Company shall have provided evidence satisfactory
to the Representative of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared effective
in accordance with the requirements of Rule 430A of the Rules and Regulations.
(b) The
Commission shall not have issued a Stop Order and no Blue Sky or securities
authority of any jurisdiction shall have issued an order suspending the
registration or qualification of the Securities, and no proceedings for such
purpose shall have been instituted or shall be pending, or to the knowledge
of
the Company, be threatened or contemplated by the Commission or the Blue Sky
or
securities authorities of any such jurisdiction.
(c) The
Representative shall have received an opinion, dated the Closing Date and
satisfactory in form and substance to counsel for the Representative from
Jenkens & Xxxxxxxxx, LLP, counsel to the Company, to the effect that:
(i) The
Company is a corporation duly incorporated and validly existing in good standing
under the laws of Delaware, its jurisdiction of incorporation, with full
corporate power and authority to own its property and conduct its business
in
the manner described in the Prospectus. To the knowledge of such counsel, the
Company has obtained all necessary consents, authorizations, approvals, orders,
licenses, certificates, declarations and permits of and from, and has made
all
required filings with, all federal, state, local and other governmental
authorities and all courts and other tribunals, to own, lease, license and
use
its property and assets and to carry on the business in the manner described
in
the Prospectus. The Company is duly registered or qualified to do business
as a
foreign corporation and is in good standing in each other jurisdiction in which
its ownership, leasing, licensing, or use of property and assets or the conduct
of its business requires such registration or qualification, except where the
failure to so qualify would not have a material adverse effect on the
operations, business, property, assets or condition (financial or otherwise)
of
the Company. Other than as set forth in Section 4(c)(ii) below, the Company
has
no subsidiaries and its only predecessors in interest is Noninvasive Medical
Technologies, LLC, a Michigan limited liability company.
18
(ii) Noninvasive
Medical Technologies, LLC, a Nevada limited liability company, and Wantagh,
Inc., a Pennsylvania corporation, the only two subsidiaries of the Company,
are
each incorporated or formed, as the case may be, and validly existing in good
standing under the laws of the state of Nevada and Pennsylvania, their
respective jurisdictions of incorporation and are dormant.
(iii) The
authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock, of which 10, 691,640 shares are outstanding, and 5,000,000 shares of
Preferred Stock, of which no shares are outstanding. Each outstanding share
of
Common Stock is validly authorized, validly issued, fully paid, and
non-assessable, with no personal liability attaching to the ownership thereof,
has not been issued and is not owned or held in violation of any preemptive
right of stockholders. There is no commitment, plan or arrangement to issue,
and
no outstanding option, warrant or other right calling for the issuance of,
any
share of capital stock of the Company or any security or other instrument which
by its terms is convertible into, exercisable for, or exchangeable for capital
stock of the Company, except as disclosed in the Prospectus. There is
outstanding no security or other instrument which by its terms is convertible
into or exchangeable for capital stock of the Company.
(iv) To
the
knowledge of such counsel, there is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending
or threatened, with respect to the Company or any of its operations, business,
property or assets, except as disclosed in the Prospectus or such as
individually or in the aggregate do not now have and are not expected to have
a
material adverse effect on the operations, business, property, assets or
condition (financial or otherwise) of the Company. The Company is not in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment or decree, except as disclosed in the Prospectus or such as
individually or in the aggregate do not now have and are not expected to have
a
material adverse effect on the operations, business, property, assets or
condition (financial or otherwise) of the Company; nor is the Company required
to take any action in order to avoid any such violation or default.
(v) Except
as
disclosed in the Prospectus, neither the Company nor to the knowledge of such
counsel, any other party, is now in violation or breach of, or in default with
respect to complying with, any material provision of any indenture, mortgage,
deed of trust, debenture, note or other evidence of indebtedness, contract,
agreement, instrument, lease or license, or arrangement or understanding known
to such counsel which is material to the Company, and each such indenture,
mortgage, deed of trust, debenture, note or other evidence of indebtedness,
contract, agreement, instrument, lease or license is in full and force and
is
the legal, valid and binding obligation of the Company, enforceable against
the
Company in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the
rights and remedies of creditors generally and by equitable principles affecting
the availability of remedies in the nature of specific performance, and except
that such counsel need express no opinion as to the enforceability of the
non-competition provisions in the Company’s employment agreements.
19
(vi) The
Company is not in violation or breach of, or in default with respect to, any
term of its Certificate of Incorporation or By-laws.
(vii) The
Company has all requisite corporate power and authority to execute, deliver
and
perform this Agreement and each of the Warrant Agreements. All necessary
corporate proceedings of the Company have been taken to authorize the execution,
delivery, and performance by the Company of this Agreement and each of the
Warrant Agreements. This Agreement and each of the Warrant Agreements have
been
duly authorized, executed and delivered by the Company, and constitute legal,
valid and binding agreements of the Company, enforceable as to the Company
in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the
rights and remedies of creditors generally and by equitable principles affecting
the availability of remedies in the nature of specific performance, and except
as the enforceability of the indemnification and contribution provisions of
this
Agreement may be limited under applicable securities laws. Each of the Warrants,
the Representative’s Warrants and the Underlying Warrants have been duly
authorized by the Company and, when executed, issued and delivered by the
Company and paid for by the Underwriters (in the case of the Warrants), the
Representative (or its executive officers) or the holders of the
Representative’s Warrants (in the case of the Underlying Warrants), in
accordance with the provisions of this Agreement and the Warrant Agreements,
will be legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws
affecting the rights and remedies of creditors generally and by equitable
principles affecting the availability of remedies in the nature of specific
performance.
(viii) All
legally required proceedings in connection with the authorization, issue and
sale of the Units, Shares and Warrants by the Company in accordance with the
provisions of this Agreement have been taken, and no consent, authorization,
approval, order, license, certificate, declaration or permit of or from, or
filing with, any governmental or regulatory authority, agency, board, bureau
or
other body is required for the execution, delivery or performance by the Company
of this Agreement, each of the Warrant Agreements, the Warrants, the
Representative’s Warrants or the Underlying Warrants (except filings with and
orders of the Commission pursuant to the Securities Act which have been made
or
received and matters under Blue Sky or state securities laws, rules or
regulations, as to which such counsel need not express an opinion).
(ix) No
consent of any party to any material contract, agreement, instrument, lease
or
license, or arrangement or understanding known to such counsel, to which the
Company is a party, or to which any of its property or assets are subject,
is
required for the execution, delivery or performance of this Agreement, the
Warrant Agreements, the Warrants, the Representative’s Warrants or the
Underlying Warrants (except as set forth in the exhibits to the Registration
Statement); and the execution, delivery and performance of this Agreement,
each
of the Warrant Agreements, the Representative’s Warrants and the Underlying
Warrants will not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle any party
to terminate or call a default under any such contract, agreement, instrument,
lease, license, arrangement or understanding, result in the creation or
imposition of any lien, security interest, pledge, charge or other encumbrance
upon any of the property or assets of the Company pursuant to the terms of
any
indenture, mortgage, deed of trust, loan or credit agreement, lease or other
agreement or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject,
known to such counsel, or violate or result in a breach of any term of the
Certificate of Incorporation or By-laws of the Company, or violate, result
in a
breach of, or conflict with any law, rule, regulation, order, judgment or decree
binding on the Company or to which any of its operations, business, property
or
assets are subject.
20
(x) The
Units
and the Shares are validly authorized. Upon payment of the purchase price
thereunder in accordance with the provisions of this Agreement, the Warrants
and
the Representative’s Warrants will be duly delivered. The Shares, when issued,
paid for and delivered in accordance with the provisions of this Agreement,
will
be validly issued, fully paid and non-assessable, without any personal liability
attaching to the ownership thereof, and will not be issued in violation of
any
preemptive rights of stockholders. Upon payment of the purchase price therefor
in accordance with the provisions of this Agreement, the Underwriters will
receive good title to the Units, Shares and Warrants purchased by them from
the
Company, free and clear of all Liens, and the Representative (and its executive
officers) will receive good title to the Representative’s Warrants purchased by
them from the Company, free and clear of all Liens.
(xi) The
Warrant Shares are validly authorized and reserved for issuance, and, when
issued, paid for and delivered upon exercise of the Warrants, in accordance
with
the provisions of the Warrant Agreement, will be validly issued, fully paid
and
non-assessable and will not be issued in violation of any preemptive rights
of
stockholders, and the holders of the Warrant Shares will -receive good title
to
them, free and clear of all Encumbrances.
(xii) The
Representative’s Shares and the Representative’s Warrant Shares are validly
authorized and have been duly and validly reserved for issuance, and when
issued, paid for and delivered upon exercise of the Representative’s Warrants or
the Underlying Warrants, as the case may be, in accordance with the provisions
of the Representative’s Warrants and the Warrant Agreement, as the case may be,
will be validly authorized, validly issued, fully paid, and non-assessable,
with
no personal liability attaching to the ownership thereof, and will not have
been
issued in violation of any preemptive rights of stockholders, and the holders
of
the Representative’s Shares and the Representative’s Warrant Shares will receive
good title to them, free and clear of all Encumbrances.
(xiii) The
Units, the Preferred Stock, the Common Stock, the Shares, the Warrants, the
Representative’s Warrants and the Warrant Shares conform to all statements
relating thereto contained in the Registration Statement and the Prospectus.
(xiv) To
the
knowledge of such counsel, any contract, agreement, instrument, lease or license
required to be described in the Registration Statement or the Prospectus has
been properly described therein. To the knowledge of such counsel, any contract,
agreement, instrument, lease, or license required to be filed as an exhibit
to
the Registration Statement has been filed with the Commission as an exhibit
to
or has been incorporated as an exhibit by reference into the Registration
Statement.
(xv) To
the
knowledge of such counsel, no person or entity has the right to require
registration of shares of Common Stock or other securities of the Company
because of the filing or effectiveness of the Registration Statement who has
not
waived such right.
(xvi) The
Company is not an “investment company” by reason of its assets and operations as
defined in Section 3(a) of the Investment Company Act.
21
(xvii) None
of
the Securities issued by the Company prior to the date hereof have been offered
and sold by the Company in violation of the Securities Act or applicable Blue
Sky or state securities laws or rules or regulations. All shares of Common
Stock
outstanding as of the date hereof have been duly authorized and validly issued,
and are fully paid and non-assessable, with no personal liability attaching
to
the ownership thereof, and have not been issued in violation of any preemptive
rights of stockholders.
(xviii) The
statements in the Prospectus under captions “Business”, “Use of Proceeds”,
“Management” and “Description of Our Securities” have been reviewed by such
counsel and insofar as such statements refer to descriptions of agreements,
instruments or leases, summarize the status of litigation or other proceedings,
or the
provisions of orders, judgments or decrees, or constitute statements of law,
descriptions of statutes, rules or regulations, or conclusions of law, such
statements fairly present the information called for and are accurate and
complete in all material respects.
(xix) The
Registration Statement has become effective under the Securities Act, and to
the
knowledge of such counsel, no Stop Order has been issued and no proceedings
for
that purpose have been instituted or threatened.
(xx) The
Registration Statement, any Rule 430A Prospectus, and the Prospectus, and any
amendment or supplement thereto (except for the financial statements and the
notes and schedules related thereto, and other financial information and
statistical data contained therein or omitted therefrom, as to which such
counsel need express no opinion), comply as to form in all material respects
with the applicable requirements of the Securities Act.
(xxi) Such
counsel has participated in the preparation of the Registration Statement and
the Prospectus and any amendments or supplements thereto, and in the course
thereof participated in conferences with officers and other representatives
of
the Company, representatives of the independent certified public accountants
for
the Company and representatives of the Underwriters at which the contents of
the
Registration Statement and Prospectus and related matters were discussed and,
although such counsel is riot passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus, or any amendment or
supplement thereto, on the basis of the foregoing, no facts have come to the
attention of such counsel which lead them to believe that either the
Registration Statement or any amendment thereto at the time such Registration
Statement or such amendment became effective or the Prospectus as of its date
of
any amendment or supplement thereto as of its date contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (it being
understood that such counsel need express no comment with respect to the
financial statements, and the notes and schedules related thereto, and other
financial information and statistical data included in the Registration
Statement or Prospectus).
(xxii) To
the
knowledge of such counsel, since the effective date of the Registration
Statement, no event has occurred which should have been set forth in an
amendment or supplement to the Registration Statement or the Prospectus which
has not been set forth in such an amendment or supplement.
In
rendering such opinion, counsel for the Company may rely (A) as to matters
involving the application of laws other than the laws of the United States
and
the General Corporation Law of the State of Delaware and the Laws of the State
of New York, to the extent counsel for the Company deems proper and to the
extent specified in such opinion, upon opinion or opinions of local counsel
(in
form and substance satisfactory to counsel for the Representative) acceptable
to
counsel for the Representative, familiar with the applicable laws, in which
case
the opinion of counsel for the Company shall state that the opinion or opinions
of such other counsel are satisfactory in scope, form and substance to counsel
for the Company and that reliance thereon by counsel for the Company is
reasonable; (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company; and (C) to the extent
they
deem proper, upon written statements or certificates of officers of departments
of various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to counsel for the Representative.
22
(d) You
shall
have received letters
addressed to you and dated the date hereof and the Closing Date from
Singer
Lewak Xxxxxxxxx & Xxxxxxxxx LLP,
independent certified public accountants for the Company, addressed to you,
and
in form and substance satisfactory to you, to the effect that:
(i) Such
accountants are independent public accountants as required by the Securities
Act
and the rules and regulations of the Commission thereunder and no information
need be supplied with respect to them in answer to Item 13 of Form
SB-2.
(ii) In
their
opinion, the financial statements and related notes of the Company examined
by
them, at all dates and for all periods referred to in their report therein,
and
included in the Registration Statement and the Prospectus on their authority
as
experts comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Rules and Regulations
of
the Commission promulgated thereunder.
(iii) On
the
basis of limited procedures not constituting an audit, including a reading
of
the latest available unaudited interim financial statements of the Company
and
the financial data and accounting records of the Company, inquiries of officials
of the Company and others responsible for financial and accounting matters,
a
reading of the minute books of the Company, including without limitation the
minutes (if any) of meetings or consents in lieu of meetings of the shareholders
and of the Board of Directors (and any committees thereof) of the Company,
and
other specified procedures and inquiries requested by you, if any, nothing
has
come to their attention which causes them to believe that:
(A) |
except
as disclosed in or contemplated by the Registration Statement and
the
Prospectus, during the period from the date of the last audited balance
sheet of the Company included in the Registration Statement and Prospectus
to a specified date not more than five (5) days prior to the date
of such
letter, there were any decreases, as compared with the corresponding
period of the preceding year, in net sales, cost of goods sold, operating,
selling, general and administrative expenses, earnings from operations,
the total or per share amounts of net earnings, or the weighted average
number of shares outstanding;
|
(B) |
except
as disclosed in or contemplated by the Registration Statement and
the
Prospectus, during the period from the date of the last audited balance
sheet of the Company included in the Registration Statement and Prospectus
to a specified date not more than five (5) days prior to the date
of such
letter, there has been any change in the capital stock or other securities
of the Company or any payment or declaration of any dividend or other
distribution in respect thereof or in exchange therefor, or any increase
in the long-term debt of the Company or any decrease in the net current
assets or net assets of the Company as compared with the amounts
shown on
the last audited balance sheet of the Company, included in the
Registration Statement and the Prospectus (other than in the ordinary
course of business); and
|
23
(C) |
On
the basis of their examinations referred to in their report and consent
included in the Registration Statement and Prospectus and the indicated
procedures and inquiries referred to above, nothing has come to their
attention which, in their judgment, would cause them to believe or
indicate that the financial statements and related notes and schedules
of
the Company included in the Registration Statement and Prospectus
do not
present fairly the financial position and results of operations of
the
Company, as at the dates and for the periods indicated, in conformity
with
generally accepted accounting principles applied on a consistent
basis,
and are not in all material respects a fair presentation of the
information purported to be shown.
|
(iv) In
addition to their examination referred to in their report included in the
Registration Statement and the Prospectus and the inquiries and limited
procedures referred to in clause (ii) of this Section 7(d), they have performed
other procedures, not constituting an audit, with respect to certain numerical
data, percentages, dollar amounts and other financial information appearing
in
the Registration Statement and the Prospectus, which are derived from the
general accounting records of the Company, and have compared certain of such
data and information with the accounting records of the Company and found them
to be in agreement.
(v) Such
other matters as you may have reasonably requested.
(e) The
representations and warranties of the Company in this Agreement shall be true
and correct with the same effect as if made on and as of the Closing Date and
the Company shall have complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Closing Date.
(f) The
Registration Statement and the Prospectus and any amendments or supplements
thereto shall contain all statements which are required to be stated therein
in
accordance with the Securities Act and the Rules and Regulations, and shall
in
all material respects conform to the requirements thereof, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(g) There
shall have been, since the respective dates as of which information is given
in
the Registration Statement and the Prospectus, no material adverse change in
the
business, property, condition (financial or otherwise), results of operations,
capital stock, long-term or short-term debt or general affairs of the Company,
except changes which the Registration Statement and the Prospectus indicate
might occur after the effective date of the Registration Statement, and the
Company shall not have incurred any material liabilities or entered into any
agreements not in the ordinary course of business, except as disclosed in the
Registration Statement and the Prospectus.
(h) No
action, suit or proceeding, at law or in equity, shall be pending or, to the
knowledge of the Company, threatened against the Company which would be required
to be set forth in the Registration Statement, and no proceedings shall be
pending or, to the knowledge of the Company, threatened against the Company
before or by any commission, board or administrative agency in the United States
or elsewhere, wherein an unfavorable decision, ruling or finding would have
a
materially adverse effect on the business, property, condition (financial or
otherwise), results of operations or general affairs of the Company.
24
(i) The
Representative shall have received an officers’ certificate, dated as of the
Closing Date, signed by each of the President and chief financial officer of
the
Company and in form and substance satisfactory to the Representative, to the
effect set forth in Sections 7(a), (b), (e), (f), (g) and (h).
(j) The
NASD,
upon review of the terms of the public offering of the Units, shall have
indicated that it has no objections to the underwriting arrangements pertaining
to the sale of the Units and the participation by the Underwriters in such
sale.
(k) Prior
to
or on the Closing Date, the Company shall have entered into each of the Warrant
Agreements.
(l) Prior
to
or on the Closing Date, the Company shall have delivered to the Representative
executed copies of the agreements related to the Offering Restrictions.
(m) Subsequent
to the date hereof, there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the business or
financial affairs of the Company which, in your opinion as Representative of
the
several Underwriters, would materially and adversely affect the market for
the
Units.
(n) Subsequent
to the date hereof, no executive officer of the Company listed as such in the
Prospectus shall have died, become physically or mentally disabled, resigned
or
have been removed or discharged.
(o) The
Company shall furnish the Representative with such further certificates and
documents as the Representative or its counsel shall have reasonably requested.
All opinions, certificates, letters and other documents required by this Section
7 to be delivered to the Representative by the Company will be in compliance
with the provisions hereof only if they are satisfactory in form and substance
to the Representative and its counsel. The Company will furnish the
Representative with such conformed copies of such opinions, certificates,
letters and other documents as the Representative shall reasonably
request.
(p) Upon
the
exercise, in whole or in part, by the Underwriters of the option to purchase
the
Additional Units referred to in Section 2 hereof, the obligations of the several
Underwriters to purchase and pay for the Additional Units will be subject to
the
continuing accuracy of the representations and warranties of the Company
contained herein and in each certificate and document contemplated under this
Agreement to be delivered to the Representative, as of the date hereof and
as of
each Optional Closing Date, to the performance by the Company of its obligations
hereunder, and the following additional conditions:
(i) The
Registration Statement shall remain effective at the Optional Closing Date,
and
no Stop Order shall have been issued by the Commission and no proceedings for
that purpose shall have been instituted or shall be pending, or to the
Representative’s knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any reasonable request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of Xxxxxx & Xxxxx, counsel to the Representative.
25
(ii) The
Representative shall have received an opinion, dated the Optional Closing Date
and satisfactory in form and substance to counsel to the Representative, from
Jenkens & Xxxxxxxxx, LLP, counsel to the Company, which opinion shall be
substantially the same in scope and substance as the opinion furnished to the
Representative on the Closing Date pursuant to Section 7(c) hereof, except
that
such opinion, where appropriate, shall cover the Additional Units, the
Additional Shares and the Additional Warrants.
(iii) The
Representative shall have received a letter in form and substance satisfactory
to the Representative from Singer Lewak Xxxxxxxxx & Xxxxxxxxx, LLP
independent certified public accountants for the Company, dated the Optional
Closing Date and addressed to the Representative confirming the information
in
their letter referred to in Section 7(d) hereof and stating that nothing has
come to their attention during the period from the ending date of their review
referred to in said letter to a date not more than five days prior to the
Optional Closing Date, which would require any change in said letter if it
were
required to be dated the Optional Closing Date.
(iv)
The
Representative shall have received a certificate of the President of the
Company, dated the Optional Closing Date, in for and substance satisfactory
to
the Representative, substantially the same in scope and substance as the
certificate furnished to the Representative on the Closing Date pursuant to
Section 7(i) hereof.
8.
EFFECTIVE
DATE OF AGREEMENT; TERMINATION.
(a) This
Agreement shall become effective at 9:30 a.m., New York City time, on the first
full business day following the day on which the Registration Statement becomes
effective or at the time of the initial public offering by the Underwriters
of
the Units, whichever is earlier. The
time
of the initial public offering shall mean the time, after the Registration
Statement becomes effective, of the release by the Representative for
publication of the first newspaper advertisement which is subsequently published
relating to the Units or the time, after the Registration Statement becomes
effective, when the Units are first released by the Representative for offering
by the Underwriters and dealers by letter or telegram, whichever shall first
occur.
The
Representative or the Company may prevent this Agreement from becoming effective
without liability of any party to any other party, except as noted below in
this
Section 8, by giving the notice indicated in Section 8(c) before the time this
Agreement becomes effective.
(b) In
addition to the right to terminate this Agreement pursuant to Sections 7 hereof
by reason of the Company’s failure, refusal or inability to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder prior to the Closing Date or Optional Closing Date, as the case may
be, the Representative shall have the right to terminate this Agreement at
any
time prior to the Closing Date or any Optional Closing Date, as the case may
be,
by giving notice to the Company, if the Company shall have sustained a material
loss or material adverse interference with its business or properties from
fire,
flood, accident, hurricane, earthquake, theft, sabotage, or other calamity
or
malicious act, whether or not covered by insurance, or from any labor dispute
or
any court or governmental action, order or decree, of such a character as to
have a material adverse effect with the conduct of the business and operations
of the Company; or if there shall have been a general suspension of, or a
general limitation on prices for, trading in securities on the New York Stock
Exchange, the AMEX or in the over-the-counter market; or if a banking moratorium
has been declared by a state or federal authority; or if there shall have been
an outbreak of major hostilities between the United States and any foreign
power, or any other insurrection, armed conflict or national calamity, which
in
the judgment of a majority-in-interest of the underwriters, makes it
impracticable or inadvisable to proceed with the offering, sale or delivery
of
the Firm Units or the Additional Units, as the case may be.
26
(c) If
the
Representative elects to prevent this Agreement from becoming effective as
provided in this Section 8, or to terminate this Agreement pursuant to Sections
7 or 10, or this Section 8, the Representative shall notify the Company promptly
by telephone, telecopier, telex, or telegram, confirmed by letter. If, as so
provided in this Section 8, the Company elects to prevent this Agreement from
becoming effective, the Company shall notify the Representative promptly by
telephone, telecopier, telex, or telegram, confirmed by letter.
(d) Anything
in this Agreement to the contrary notwithstanding other than Section 8(e),
if
this Agreement shall not become effective by reason of an election pursuant
to
this Section 8 or if this Agreement shall terminate or shall otherwise not
be
carried out within the time specified herein by reason of any failure on the
part of the Company to perform any covenant or agreement or satisfy any
condition of this Agreement by it to be performed or satisfied, the sole
liability of the Company to the several Underwriters, in addition to the
obligations the Company assumed pursuant to Section 4(g), will be to reimburse
the Underwriters for such out-of-pocket expenses (including the reasonable
fees
and disbursements of their counsel) as shall have been incurred by them in
connection with this Agreement or the proposed offer, sale, and delivery of
the
Units; and upon demand the Company agrees to pay promptly the full amount
thereof to the Underwriters.
(e) Notwithstanding
any election hereunder or any termination of this Agreement, and whether or
not
this Agreement is otherwise carried out, the provisions of Sections 4(b),
4(g),
6,
l0(b) and l0(c) shall not be in any way affected by such election or termination
or failure to carry out the terms of this Agreement or any part
hereof
9.
SUBSTITUTION
OF UNDERWRITERS.
If
any
one or more of the Underwriters shall fail or refuse to purchase any of the
Units which it or they have agreed to purchase hereunder, and the number of
Units which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of Units,
the other Underwriters shall be obligated, severally, to purchase the Units
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase, in the proportions which the number of Units which they have
respectively agreed to purchase pursuant to Section 2 hereof bears to the
aggregate number of Units which all such non-defaulting Underwriters have so
agreed to purchase or in such other proportions as the Representative may
specify, provided that in no event shall the maximum number of Units which
any
Underwriter has become obligated to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 9 by more than one-ninth of such number
of
Units without the written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Units and the aggregate number
of Units which such defaulting Underwriter or Underwriters agreed but failed
or
refused to purchase exceeds one-tenth of the aggregate number of Units and
arrangements satisfactory to the Representative and the Company for the purchase
of such Units are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company for the purchase or sale of any Units under this Agreement.
In
any such case either the Representative or the Company shall have the right
to
postpone the Closing Date, but in no event for longer than five business days,
in order that the required changes, if any, in the Registration Statement and
in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10.
MISCELLANEOUS.
(a) Notices
required to be in writing shall be mailed or delivered (i) to the Company at
its
office at Noninvasive Medical Technologies, Inc., 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxx
Xxxxx, XX 00000, Attention: Xxxxxx XxXxxxxxx, with copies to Jenkens &
Xxxxxxxxx, LLP, 00000 Xxxxxxxx Xxxx., 00xx
Xxxxx,
Xxx Xxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxx, Esq. or (ii) to the
Representative or Underwriters, at the office of US EURO Securities, Inc.,
00000
Xxxxxxx Xxx Xxxxx, Xxxxxxxxx, Xxxxxxx Xxx, XX 00000, Attention: Xxxxxxx Xxxxxx
with copies to Xxxxxx &
Eilen,
LLP, 00000 Xxxxx Xxxx 0, Xxxxx 000, Xxxx Xxxxx, XX 00000 Attention: Xxxx Xxxxxx,
Esq., and shall be deemed given when received. Any notice not required to be
in
writing, including but not limited to notices under Section (b)
(c)
(d) 7(a), 8 or 9 hereof, may be made by telex, telecopier or telephone and
shall
be deemed given at the time the telex, or telecopied communication is received
or the telephone call is made, but if so made shall be subsequently confirmed
in
writing.
27
(b) The
covenants, agreements, representations and warranties of the Company, and the
indemnity and contribution agreements, contained in Sections 4, 5 and 6 of
this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter, the Company or any of its officers
or
directors or any controlling persons of any Underwriter or the Company and
will
survive acceptance of and payment for any of the Units and the termination
of
this Agreement.
(c) This
Agreement has been and is made solely for the benefit of the several
Underwriters and the Company and the controlling persons, directors and officers
referred to in Section 6 hereof and their respective successors and assigns,
and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term “successors and assigns” as used in this Agreement shall not
include a purchaser, as such purchaser, of Units from any of the several
Underwriters.
(d) This
Agreement shall be governed by and construed in accordance with the laws of
the
State
of
New York, applicable to contracts made and to be performed entirely with such
State, without regard to conflict of laws provisions thereof.
28
Please
confirm that the foregoing correctly sets forth the agreement among the Company
and the
Representative.
NONINVASIVE MEDICAL TECHNOLOGIES, INC. | ||
|
|
|
By: | ||
Name: |
||
Title: |
Confirmed,
as of the date first above mentioned.
US EURO SECURITIES, INC. | |||
By: | |||
Name: |
|||
Title:
|
29
SCHEDULE
I
Underwriting
Agreement, dated _______ __, 2007
Underwriter
|
Number
of Firm Shares
|
|
US
EURO Securities, Inc.
|
__________
shares
|
|
_______________________
|
__________
shares
|
|
_______________________
|
__________
shares
|
|
Total
|
__________
shares
|
30