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DRAFT 12-16-97
1,700,000
IOMED, INC.
Common Shares
FORM UNDERWRITING AGREEMENT
December __, 1997
EVEREN SECURITIES, INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ INC.
WEDBUSH ▇▇▇▇▇▇ SECURITIES
As Representatives of the Several Underwriters
c/o EVEREN SECURITIES, INC.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Iomed, Inc., a Utah corporation (the "Company"), proposes to
issue and sell an aggregate of 1,700,000 common shares, without par value (the
"Initial Securities"), to the several Underwriters named in Schedule I hereto
(the "Underwriters") for whom EVEREN Securities, Inc. ("EVEREN"), ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ Inc. and Wedbush ▇▇▇▇▇▇ Securities are acting as representatives (the
"Representatives"). In addition, solely for the purpose of covering
over-allotments, the Company proposes to grant to the several Underwriters, upon
the terms and conditions set forth in Section 2 hereof, an option to purchase up
to an additional 255,000 common shares of the Company (the "Option Securities").
The Company also proposes to issue and sell to the Representatives warrants (the
"Representatives' Warrants") pursuant to the Representatives' Warrant Agreement
between the Company and the Representatives for the purchase of an additional
170,000 common shares. The 170,000 common shares issuable upon exercise of the
Representatives' Warrants are herein referred to as the "Representatives'
Securities." The Initial Securities, the Option Securities and the
Representatives' Securities are hereinafter collectively referred to as the
"Securities." The Company's common
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shares, without par value, including the Securities, are hereinafter referred to
as the "Common Shares." The Company wishes to confirm as follows its agreements
with you and the other Underwriters on whose behalf you are acting in connection
with the several purchases by the Underwriters of the Securities:
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-1 (No. 333-____) covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus, or prospectuses, and either (A)
has prepared and filed, prior to the effective date of such registration
statement, an amendment to such registration statement, including a final
prospectus or (B) if the Company has elected to rely upon Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"), will prepare and file a prospectus, in accordance with
the provisions of Rule 430A and Rule 424(b) ("Rule 424(b)") of the 1933 Act
Regulations, promptly after execution and delivery of this Agreement.
Additionally, if the Company has elected to rely upon Rule 434 ("Rule 434") of
the 1933 Act Regulations, the Company will prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b),
promptly after execution and delivery of this Agreement. The information, if
any, included in such prospectus or in such Term Sheet, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it becomes effective (a)
pursuant to paragraph (b) of Rule 430A, is referred to herein as the "Rule 430A
Information," or (b) pursuant to paragraph (d) of Rule 434, is referred to
herein as the "Rule 434 Information." Each prospectus used before the time such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information that was used
after effectiveness and prior to the execution and delivery of this Agreement is
herein called a "preliminary prospectus." Such registration statement, including
the exhibits and schedules thereto, at the time it became effective and
including, if applicable, the Rule 430A Information or the Rule 434 Information,
is herein called the "Registration Statement." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"Rule 462(b) Registration Statement," and after such filing the term
Registration Statement shall include the Rule 462(b) Registration Statement. The
final prospectus in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein referred to as the
"Prospectus." If Rule 434 is relied upon, the term "Prospectus" shall refer to
the
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preliminary prospectus last furnished to the Underwriters in connection with the
offering of the Securities, together with the Term Sheet, and all references to
the date of the Prospectus shall mean the date of the Term Sheet.
2. AGREEMENTS TO SELL AND PURCHASE. Upon the basis of the
representations, warranties and agreements contained herein and subject to all
the terms and conditions set forth herein, the Company hereby agrees to issue
and sell to each Underwriter and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $ per share
(the "purchase price per share"), the number of Initial Securities set forth in
Schedule I opposite the name of such Underwriter under the column "Number of
Initial Securities to be Purchased from the Company" (or such number of Initial
Securities increased as set forth in Section 10 hereof).
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein,
the Company hereby grants an option (the "over-allotment option") to the
Underwriters to purchase from the Company, at the purchase price per share, up
to an aggregate of 255,000 Option Securities. Option Securities may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Securities. Such option shall expire at 5:00 P.M., Chicago time,
on the 30th day after the date of this Agreement (or, if such 30th day shall be
a Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading). Such over-allotment option may be
exercised at any time or from time to time until its expiration. Upon any
exercise of the over-allotment option, each Underwriter, severally and not
jointly, agrees to purchase from the Company that proportion of the total number
of Option Securities as is equal to the percentage of Initial Securities that
such Underwriter is purchasing from the Company (or such number of Initial
Securities increased as set forth in Section 10 hereof), subject to such
adjustments as you may determine to avoid fractional shares.
On the Closing Date, the Company shall issue and sell to the
Representatives, Representatives' Warrants at an aggregate purchase price of
$[______], which warrants shall entitle the holders thereof to purchase, after
the first anniversary date of this Prospectus, an aggregate of 170,000
Representatives' Securities at an exercise price equal to (i) one hundred
twenty-five percent (125%) of the initial public offering price of the Initial
Securities after the first anniversary date of the Prospectus and (ii) one
hundred fifty percent (150%) of the initial public offering price of the Initial
Securities after the third
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anniversary of the date of the Prospectus. The Representatives' Warrants shall
expire on the fifth anniversary of the date of the Prospectus. The
Representatives' Warrant Agreement shall be substantially in the form filed as
Exhibit ___ to the Registration Statement. Payment for the Representatives'
Warrants shall be made on the Closing Date.
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you
that the Underwriters propose to make a public offering of the Securities as
soon after the Registration Statement and this Agreement have become effective
as in your judgment is advisable and initially to offer the Securities upon the
terms set forth in the Prospectus.
4. DELIVERY OF THE SECURITIES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Initial Securities shall be made at the
office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 9:00 A.M., Chicago time, on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern Time) on any given
day) business day after the date hereof (unless postponed in accordance with the
provisions of Section 10 hereof) (the "Closing Date"). The place of closing for
the Initial Securities and the Closing Date may be varied by agreement among you
and the Company.
Delivery to the Underwriters of and payment for any Option Securities to
be purchased by the Underwriters shall be made at the aforementioned office of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) at such time on such date (an
"Option Closing Date"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from you on behalf of the Underwriters to
the Company of the Underwriters' determination to purchase a number, specified
in such notice, of Option Securities. The place of closing for any Option
Securities and the Option Closing Date for such Option Securities may be varied
by agreement between you and the Company.
Certificates for the Initial Securities and for any Option Securities to
be purchased hereunder shall be registered in such names and in such
denominations as you shall request by written notice (it being understood that a
facsimile transmission shall be deemed written notice) prior to 9:30 A.M.,
Chicago time, on the second business day preceding the Closing Date or any
Option Closing Date, as the case may be. Such certificates shall be made
available to you in Chicago, Illinois or New York, New York, as
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requested by you in the aforesaid notice, for inspection and packaging not later
than 9:30 A.M., Chicago time, on the business day next preceding the Closing
Date or an Option Closing Date, as the case may be. The certificates evidencing
the Initial Securities and any Option Securities to be purchased hereunder shall
be delivered to you on the Closing Date or the Option Closing Date, as the case
may be, against payment of the purchase price therefor by certified or official
bank check or checks payable in New York Clearing House (next day) funds to the
order of the Company. It is understood that each Underwriter has authorized you,
for its account, to accept delivery of, acknowledge receipt of, and make payment
of the purchase price for, the Initial Securities and the Option Securities, if
any, which it has agreed to purchase. EVEREN, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose check has not been
received by the Closing Date or the Option Closing Date, as the case may be, but
such payment shall not relieve such Underwriter from its obligations hereunder.
5. AGREEMENTS OF THE COMPANY. The Company covenants and agrees with
the several Underwriters as follows:
a. The Company will notify the Underwriters immediately,
and confirm the notice in writing, (i) of the effectiveness of the Registration
Statement and any amendment thereto, (ii) of the receipt of any comments from
the Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the suspension of
qualification of the Securities for offering or sale in any jurisdiction or the
initiation of any proceedings for such purpose and (v) during the period when
the Prospectus is required to be delivered under the 1933 Act or Securities
Exchange Act of 1934, as amended (the "1934 Act"), of any change, or any event
or occurrence which could result in such a change, in the Company's condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company or the happening of any event, including the filing of any
information, documents or reports pursuant to the 1934 Act, that makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
in order to state a material fact required by the 1933 Act or the 1933 Act
Regulations to be stated therein or necessary in order to make
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the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus to comply with the 1933 Act, the 1933 Act Regulations
or any other law. The Company shall use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, and, if at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption of the
Securities under any state securities or Blue Sky laws, the Company shall use
every reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
b. The Company will give the Underwriters notice of its
intention to prepare or file any amendment to the Registration Statement
(including any post-effective amendment), any Rule 462(b) Registration
Statement, any Term Sheet or any amendment or supplement to the Prospectus
(including any revised prospectus or Term Sheet and preliminary prospectus which
the Company proposes for use by the Underwriters in connection with the offering
of the Securities which differs from the prospectus on file at the Commission at
the time the Registration Statement becomes effective, whether or not such
revised prospectus or Term Sheet and preliminary prospectus is required to be
filed pursuant to Rule 424(b)), whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Underwriters with copies of any Rule 462(b)
Registration Statement, Term Sheet, amendment or supplement a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not
file any such Rule 462(b) Registration Statement, Term Sheet, amendment or
supplement or use any such prospectus to which the Underwriters or counsel for
the Underwriters shall object.
c. The Company has furnished or will deliver to the
Underwriters and their counsel, without charge, as many signed and conformed
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference
therein) as the Underwriters may reasonably request.
d. The Company will furnish to each Underwriter, without
charge, from time to time during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request for the purposes contemplated by the 1933 Act, the 1934 Act, the 1933
Act
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Regulations or the rules and regulations of the Commission under the 1934 Act
(the "1934 Act Regulations").
e. The Company will comply with the 1933 Act and the 1933
Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time when a prospectus is required by the 1933 Act, the 1934 Act, the 1933 Act
Regulations or the 1934 Act Regulations to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 5(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
f. During the period of five years hereafter, the Company
will furnish to you (i) as soon as available, a copy of each report of the
Company mailed to stockholders or filed with the Commission or the Nasdaq
National Market ("NASDAQ"), and (ii) from time to time such other information
concerning the Company as you may request.
g. The Company will use its best efforts, in cooperation
with counsel to the Underwriters, to qualify the Securities for offering and
sale under the applicable securities or Blue Sky laws of such states and other
jurisdictions of the United States as the Underwriters may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation in any jurisdiction in which it is
not so qualified. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such
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qualification in effect for a period of not less than one year from the later of
the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
h. The Company will make generally available to its
security holders as soon as practicable, but not later than 45 days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the 1933 Act Regulations) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
i. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
j. If, at the time that the Registration Statement becomes
effective, any Rule 430A Information or Rule 434 Information shall have been
omitted therefrom, then immediately following the execution of this Agreement,
the Company will prepare, and file or transmit for filing with the Commission in
accordance with Rule 430A or Rule 434 and Rule 424(b), copies of a Prospectus or
Term Sheet containing such Rule 430A Information and Rule 434 Information,
respectively, or, if required by Rule 430A, a post-effective amendment to the
Registration Statement (including an amended Prospectus), containing such Rule
430A Information.
k. If the Company elects to rely upon Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 of the 1933 Act Regulations by the earlier of (i) 10:00 P.M. Eastern
Time on the date hereof and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
l. The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file all
documents required to be filed with the Commission pursuant to Section 13, 14 or
15 of the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
m. During a period of 180 days from the date of the
Prospectus, the Company will not, without the prior written consent of EVEREN,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise
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transfer or dispose of, directly or indirectly, any Common Shares or any
securities convertible into or exercisable or exchangeable for Common Shares or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
Common Shares issued by the Company upon the exercise of an option or warrant or
the conversion of security outstanding on the date hereof and referred to in the
Prospectus, (C) any Common Shares issued or options to purchase Common Shares
granted pursuant to existing employee benefit plans of the Company referred to
in the Prospectus or (D) any Common Shares issued pursuant to any non-employee
director stock plan.
n. The Company has furnished or will furnish to you
"lock-up" letters, in form and substance satisfactory to you, signed by each of
its current officers and directors and each of its stockholders who collectively
hold an aggregate of at least _____ Common Shares.
o. The Company will supply the Underwriters with copies of
all correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Securities under the ▇▇▇▇
▇▇▇.
p. Prior to the Closing Date, the Company shall furnish to
the Underwriters, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Company and Dermion, Inc. (the
"Subsidiary"), for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the Prospectus.
q. Prior to the Closing Date, the Company will issue no
press release or other communications directly or indirectly and hold no press
conference with respect to the Company or the Subsidiary, the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of any of them, or the offering of the Securities, without the prior written
consent of the Representatives unless in the judgment of the Company and its
counsel, and after notification to the Representatives, such press release or
communication is required by law.
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r. The Company has not taken, nor will it take, directly or
indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Shares to facilitate the sale or resale of the Securities.
s. The Company will use its best efforts to have the
Securities approved for listing on NASDAQ.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
a. When the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto becomes
effective, at the date of the Prospectus, if different, and at the Closing Date
and the Option Closing Date, as the case may be, the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements thereto
complied or will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
The Prospectus and any supplements or amendments thereto will not at the date of
the Prospectus, at the date of any such supplements or amendments, or at the
Closing Date or the Option Closing Date, if any, include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially different,"
as such term is used in Rule 434, from the Prospectus included in the
Registration Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus relating to any Underwriter made in
reliance upon and in conformity with information furnished to the Company in
writing by any Underwriter, through EVEREN expressly for use in the Registration
Statement or Prospectus. The Company has not distributed any offering materials
in connection with the offering or sale of the Securities other than the
Registration Statement, the preliminary prospectus, the Prospectus, the Term
Sheet, if applicable, or any other materials, if any, permitted by the 1933 Act
or the 1933 Act Regulations.
b. Each preliminary prospectus and the prospectus filed as
part of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424
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under the 1933 Act, complied when so filed in all material respects with the
1933 Act Regulations.
c. The accountants who certified the financial statements
and supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
d. The financial statements included in the Registration
Statement and the Prospectus present fairly the consolidated financial position
of the Company and its Subsidiary as of the dates indicated and the results of
their operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis; and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The financial
information and statistical data set forth in the Prospectus are prepared on an
accounting basis consistent with such financial statements.
e. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (i) there has been no material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and the Subsidiary considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) there have been
no transactions entered into by the Company or the Subsidiary, other than those
in the ordinary course of business, which are material with respect to the
Company, and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock. The
Company has no material contingent obligations which are not disclosed in the
Registration Statement.
f. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of Utah
with corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify
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would not, singly or in the aggregate, have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and the Subsidiary considered as one enterprise.
g. The Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material adverse effect
on the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and the Subsidiary considered as one
enterprise; all of the issued and outstanding capital stock of the Subsidiary
has been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, free and clear of any security interest, mortgage,
pledge, lien, charge, encumbrance, claim or equity. There are no outstanding
subscriptions, options, warrants, commitments, convertible or exchangeable
securities or other rights granted by the Company or the Subsidiary to acquire
any shares of capital stock of or ownership interests in the Subsidiary and
there are no commitments, plans or arrangements to do so. Except with respect to
the Subsidiary, the Company does not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture, association or
other entity.
h. The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement or pursuant to
reservations, agreements, employee or director benefit plans or the exercise of
convertible securities referred to in the Prospectus); the shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable and have not been issued in
violation of or are not otherwise subject to any preemptive or other similar
rights; the Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and the Representatives' Warrant
Agreement, when issued and delivered by the Company pursuant to this Agreement
or the Representatives' Warrant Agreement against payment of the consideration
set forth herein or therein, will be validly issued and fully paid and
non-assessable; the certificates evidencing the
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Securities are in due and proper form under Utah law; the authorized capital
stock of the Company, including the Securities, conforms to all statements
relating thereto contained in the Prospectus; and the issuance of the Securities
is not subject to preemptive or other similar rights. There are no outstanding
subscriptions, options, warrants, convertible or exchangeable securities or
other rights granted to or by the Company to purchase Common Shares or other
securities of the Company and there are no commitments, plans or arrangements to
issue any Common Shares or any security convertible into or exchangeable for
Common Shares, in each case other than as described in the Prospectus.
i. Except as disclosed in the Registration Statement and
except as would not, singly or in the aggregate, reasonably be expected to have
a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and the
Subsidiary considered as one enterprise, (A) the Company and the Subsidiary are
each in compliance with all applicable Environmental Laws, (B) the Company and
its Subsidiary have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with the requirements
of such permits authorizations and approvals, (C) there are no pending or, to
the best knowledge of the Company, threatened Environmental Claims against the
Company or the Subsidiary and (D) to the best knowledge of the Company, under
applicable law, there are no circumstances with respect to any property or
operations of the Company or the Subsidiary that are reasonably likely to form
the basis of an Environmental Claim against the Company or the Subsidiary.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) Federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgement, relating to the environment,
health, safety or any chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority. "Environmental
Claims" means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental Law.
j. Neither the Company nor the Subsidiary is in violation
of its charter or in default in the performance or observance of any material
obligation, agreement, covenant or
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condition contained in any contract, indenture, mortgage, loan agreement, deed,
trust, note, lease, sublease, voting agreement, voting trust, or other
instrument or agreement to which the Company or the Subsidiary is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or the Subsidiary is subject; and the execution, delivery and
performance of this Agreement and the Representatives' Warrant Agreement and the
consummation of the transactions contemplated herein and therein and compliance
by the Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or the Subsidiary pursuant to, any contract, indenture, mortgage, loan
agreement, deed, trust, note, lease, sublease, voting agreement, voting trust or
other instrument or agreement to which the Company or the Subsidiary is a party
or by which it or any of them may be bound, or to which any of the property or
assets of the Company or the Subsidiary is subject, nor will such action result
in any violation of the provisions of the charter or bylaws of the Company or
the Subsidiary or any applicable statute, law, rule, regulation, ordinance,
decision, directive or order.
k. No labor dispute with the employees of the Company or
the Subsidiary exists or, to the best knowledge of the Company, is imminent; and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors which
might, singly or in the aggregate, be expected to result in any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and the Subsidiary considered as
one enterprise.
l. There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the Company or
the Subsidiary, which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which, singly or in the aggregate, might
result in any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
the Subsidiary considered as one enterprise, or which, singly or in the
aggregate, might materially and adversely affect the properties or assets
thereof or which might materially and adversely affect the consummation of this
Agreement; all pending legal or governmental proceedings to which the Company or
the Subsidiary is a party or of which any of their
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respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and there are no
contracts or documents of the Company or the Subsidiary which are required to be
filed as exhibits to the Registration Statement by the 1933 Act or by the 1933
Act Regulations which have not been so filed.
m. The Company and the Subsidiary own or are licensed to
use all patents, patent applications, inventions, trademarks, trade names,
applications for registration of trademarks, service marks, service ▇▇▇▇
applications, copyrights, know-how, manufacturing processes, formulae, trade
secrets, licenses and rights in any thereof and any other intangible property
and assets (herein called the "Proprietary Rights") which are material to the
businesses of the Company and the Subsidiary as now conducted and as proposed to
be conducted, in each case as described in the Prospectus. The description of
the Proprietary Rights is correct in all material respects and fairly and
correctly describes the Company's and the Subsidiary's rights with respect
thereto. Except as described in the Prospectus, the Company does not have any
knowledge of, and the Company has not given or received any notice of, any
pending conflicts with or infringement of the rights of others with respect to
any Proprietary Rights or with respect to any license of Proprietary Rights. No
action, suit, arbitration, or legal, administrative or other proceeding, or
investigation is pending, or, to the best knowledge of the Company, threatened,
which involves any Proprietary Rights. Neither the Company nor the Subsidiary is
subject to any judgment, order, writ, injunction or decree of any court or any
Federal, state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
arbitrator, or has entered into or is a party to any contract which restricts or
impairs the use of any such Proprietary Rights in a manner which would have a
material adverse effect on the use of any of the Proprietary Rights. To the best
knowledge of the Company, no Proprietary Rights used by the Company or the
Subsidiary, and no services or products sold by the Company or the Subsidiary,
conflict with or infringe upon any proprietary rights available to any third
party. Neither the Company nor the Subsidiary has received written notice of any
pending conflict with or infringement upon such third-party proprietary rights.
Neither the Company nor the Subsidiary has entered into any consent,
indemnification, forbearance to ▇▇▇ or settlement agreement with respect to
Proprietary Rights other than in the ordinary course of business. No claims have
been asserted by any person with respect to the validity of the Company's or the
Subsidiary's ownership or right to use the Proprietary Rights and, to the best
knowledge of
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the Company, there is no reasonable basis for any such claim to be successful.
The Proprietary Rights are valid and enforceable and no registration relating
thereto has lapsed, expired or been abandoned or cancelled or is the subject of
cancellation or other adversarial proceedings, and all applications therefore
are pending and are in good standing. The Company and the Subsidiary have
complied, in all material respects, with their respective contractual
obligations relating to the protection of the Proprietary Rights used pursuant
to licenses. To the best knowledge of the Company, no person is infringing on or
violating the Proprietary Rights owned or used by the Company or the Subsidiary.
n. No registration, authorization, approval, qualification
or consent of any court or governmental authority or agency is necessary in
connection with the offering, issuance or sale of the Securities hereunder or
under the Representatives' Warrant Agreement, except such as may be required
under the 1933 Act or the 1933 Act Regulations or state securities or Blue Sky
laws (or such as may be required by the National Association of Securities
Dealers, Inc. ("NASD")).
o. The Company and the Subsidiary each possess and are
operating in compliance with all licenses, certificates, consents, authorities,
approvals and permits (collectively, "permits") from all state, Federal, foreign
and other regulatory agencies or bodies necessary to conduct the businesses now
operated by them, and neither the Company nor the Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
permit or any circumstance which would lead it to believe that such proceedings
are reasonably likely which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely affect
the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and the Subsidiary considered as one
enterprise.
p. Each of this Agreement and the Representatives' Warrant
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by Federal or state securities laws or the public
policy underlying such laws.
q. Except as described in the Prospectus, there are no
persons with registration or other similar rights to have any
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securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
r. No order preventing or suspending the use of any
preliminary prospectus has been issued and no proceedings for that purpose are
pending, threatened, or, to the knowledge of the Company, contemplated by the
Commission; and to the best knowledge of the Company, no order suspending the
offering of the Securities in any jurisdiction designated by the Underwriters
pursuant to Section 5(g) of this Agreement has been issued and, to the best
knowledge of the Company, no proceedings for that purpose have been instituted
or threatened or are contemplated.
s. The Company and the Subsidiary each have good and
marketable title to their respective properties, free and clear of all material
security interests, mortgages, pledges, liens, charges, encumbrances, claims and
equities of record. The properties of the Company and the Subsidiary are, in the
aggregate, in good repair (reasonable wear and tear excepted), and suitable for
their respective uses. Any real properties held under lease by the Company and
the Subsidiary are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the conduct
of the business of the Company and the Subsidiary considered as one enterprise.
t. The Company and the Subsidiary maintain a system of
internal accounting controls-sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
u. The Company and the Subsidiary have conducted and are
conducting their respective businesses in compliance with all applicable
Federal, state, local and foreign statutes, laws, rules, regulations,
ordinances, codes, decisions, decrees, directives and orders, except where the
failure to do so would not, singly or in the aggregate, have a material adverse
effect on the condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and the Subsidiary considered as
one enterprise.
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v. To the best of the Company's knowledge, neither the
Company nor the Subsidiary nor any employee or agent of the Company or the
Subsidiary has made any payment of funds of the Company or to Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
w. The Company is not now, and after sale of the Securities
to be sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds" will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
x. All offers and sales of capital stock of the Company
prior to the date hereof were at all relevant times duly registered or exempt
from the registration requirements of the 1933 Act and were duly registered or
subject to an available exemption from the registration requirements of the
applicable state securities or Blue Sky laws.
y. The Common Shares are registered pursuant to Section
12(g) of the 1934 Act. The Securities have been duly authorized for quotation on
NASDAQ. The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Shares under the 1934 Act
or delisting the Common Shares from NASDAQ, nor has the Company received any
notification that the Commission or NASDAQ is contemplating terminating such
registration or listing.
z. Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates has taken, and at the Closing Date and at any
later Option Closing Date, neither the Company nor, to its knowledge, any of its
officers, directors or affiliates will have taken, directly or indirectly, any
action which has constituted, or might reasonably be expected to constitute, the
stabilization or manipulation of the price of sale or resale of the Securities.
aa. The Company and the Subsidiary maintain insurance of the
types and in amounts adequate for its and its Subsidiary's business and
consistent with insurance coverage maintained by similar companies in similar
business, including but not limited to, insurance covering clinical trial
liability, product liability and real and personal property owned or leased
against theft, damage, destruction, acts of vandalism and all other
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risks customarily insured against, all of which insurance is in full force and
effect.
ab. The Company and the Subsidiary have filed all material
tax returns required to be filed, which returns are true and correct in all
material respects, and neither the Company nor the Subsidiary is in default in
the payment of any taxes, including penalties and interest, assessments, fees
and other charges, shown thereon due or otherwise assessed, other than those
being contested in good faith and for which adequate reserves have been provided
or those currently payable without interest which were payable pursuant to said
returns or any assessments with respect thereto.
ac. Except as described in the Prospectus, to the best of
the Company's knowledge, there are no rulemaking or similar proceedings before
The United States Food and Drug Administration or comparable Federal, state,
local or foreign government bodies which involve or affect the Company or the
Subsidiary, which, if the subject of an action unfavorable to the Company or the
Subsidiary, could involve a prospective material adverse change in or effect on
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Subsidiary considered as one
enterprise.
ad. The Company has not received any communication (whether
written or oral) relating to the termination or threatened termination or
modification or threatened modification of any material, consulting, licensing,
marketing, research and development, cooperative or any similar agreement,
including, without limitation, the collaborative research and license agreements
listed under the section of the Prospectus entitled, "Business-Collaborative
Relationships and Licenses." Each such collaborative and licensing agreement is
in effect substantially as described in such section of the Prospectus.
ae. To the knowledge of the Company, if any full-time
employee identified in the Prospectus has entered into any non-competition,
non-disclosure, confidentiality or other similar agreement with any party other
than the Company or the Subsidiary, such employee is neither in violation
thereof nor is expected to be in violation thereof as a result of the business
conducted or expected to be conducted by the Company or the Subsidiary as
described in the Prospectus or such person's performance of his obligations to
the Company or the Subsidiary; and neither the Company nor the Subsidiary has
received written notice that any consultant or scientific advisor of the Company
or the Subsidiary is in violation of any non-competition, non-disclosure,
confidentiality or similar agreement.
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7. INDEMNIFICATION AND CONTRIBUTION.
a. The Company agrees to indemnify and hold harmless (i)
each Underwriter and (ii) each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act (any of the persons referred to
in this clause (ii) being hereinafter referred to as a "controlling person") and
(iii) the respective directors, officers, partners and employees of any of the
Underwriters or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Person") to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities and expenses whatsoever (including, without limitation, all
reasonable costs of pursuing, investigating and defending any claim, suit or
action or any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of counsel
to any Indemnified Person), directly or indirectly, caused by, related to, based
upon or arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any amendment thereto, including the Rule 430A Information and Rule 434
Information, if applicable, or any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading or caused by, related to, based upon, arising
out of or in connection with any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such Underwriter furnished in writing to the Company by or on behalf
of any Underwriter through you expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph a. with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter (or related Indemnified Person) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Securities by such
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the 1933 Act or the
1933 Act Regulations, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in
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such preliminary prospectus was corrected in the Prospectus (or any amendment or
supplement thereto), provided that the Company has delivered the Prospectus to
the several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending.
b. If any action, suit or proceeding shall be brought
against any Indemnified Person in respect of which indemnity may be sought
against the Company, such Indemnified Person shall promptly notify the parties
against whom indemnification is being sought (the "indemnifying parties"), and
such indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Indemnified
Person shall have the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel or (iii) the named parties to any such action, suit,
investigation or proceeding (including any impleaded parties) include both such
Indemnified Person and the indemnifying parties and representation of such
Indemnified Person and any indemnifying party by the same counsel would, in the
reasonable judgment of the Indemnified Person, be inappropriate due to actual or
potential differing interests between them (in which case the indemnifying party
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Indemnified Person). It is understood, however,
that the indemnifying parties shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Indemnified Persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by EVEREN, and that all such fees and expenses shall be reimbursed as
they are incurred. The indemnifying parties shall not be liable for any
settlement of any such action, suit or proceeding effected without their written
consent, which consent shall not be unreasonably withheld, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless any Indemnified Person, to the extent provided in the preceding
paragraph, from and against any loss, claim, damage, liability or expense by
reason of such settlement or judgment.
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c. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person who controls the Company within the
meaning of Section 15 of the 1933 Act, to the same extent as the foregoing
indemnity from the Company to each Indemnified Person, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf of
such Underwriter through EVEREN expressly for use in the Registration Statement,
the Prospectus or any preliminary prospectus, or any amendment or supplement
thereto. If any action, suit, investigation or proceeding shall be brought
against the Company, any of its directors, any such officer or any such
controlling person based on the Registration Statement, the Prospectus or any
preliminary prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any Underwriter pursuant to this
paragraph (c), such Underwriter shall have the rights and duties given to the
Company by paragraph (b) above, and the Company, its directors, any such officer
and any such controlling person shall have the rights and duties given to the
Indemnified Persons by paragraph (a) above.
d. If the indemnification provided for in this Section 7 is
unavailable to, or insufficient to hold harmless, an indemnified party under
paragraphs (a) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law
or judicial determination, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other hand, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus or, if Rule
434 is used, the corresponding location on the Term Sheet. The relative fault of
the Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact
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or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or by the Underwriters on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The indemnity and contribution obligations of the Company set forth herein shall
be in addition to any liability or obligation the Company may otherwise have to
any Indemnified Person.
e. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 7, no
Underwriter (or any of its related Indemnified Persons) shall be required to
contribute (whether pursuant to subsection (a) or (c) or otherwise) any amount
in excess of the underwriting discount applicable to the Securities underwritten
by such Underwriter. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective numbers of Securities set forth opposite their
names in Schedule I hereto (or such numbers of Securities increased as set forth
in Section 10 hereof) and not joint.
f. No indemnifying party shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such action, suit or proceeding.
g. Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified party
as such losses,
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claims, damages, liabilities or expenses are incurred. The indemnity and
contribution agreements contained in this Section 7 and the representations and
warranties of the Company set forth in this Agreement shall remain operative and
in full force and effect, regardless of (i) any investigation made by or on
behalf of any Indemnified Person, the Company, its directors or officers or any
person controlling the Company, (ii) acceptance of any Securities and payment
therefor hereunder and (iii) any termination of this Agreement.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase the Initial Securities hereunder are subject to
the following conditions:
a. The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective on the date hereof; no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission. If the Company has elected to rely upon Rule 430A, Rule 430A
Information previously omitted from the effective Registration Statement
pursuant to Rule 430A shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) within the prescribed time period and the Company shall
have provided evidence satisfactory to the Underwriters 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. If the Company has elected to rely upon Rule 434, a Term Sheet shall
have been transmitted to the Commission for filing pursuant to Rule 424(b)
within the prescribed time period.
b. The Underwriters shall have received:
(i) The favorable opinion, dated as of the Closing
Date, of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
A. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Utah.
B. The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus and to enter
into and perform its obligations under this
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Agreement and the Representatives' Warrant Agreement.
C. To the best of their knowledge and information, the
Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification
is required.
D. The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans or the exercise of convertible
securities referred to in the Prospectus), and the shares of issued and
outstanding capital stock of the Company, including the Common Shares,
have been duly authorized and validly issued and are fully paid and
non-assessable and, to their knowledge and information, have not been
issued in violation of or are not otherwise subject to any preemptive
rights or other similar rights.
E. The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued and fully
paid and non-assessable; and the issuance of the Securities is not
subject to preemptive or other similar rights.
F. The Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and, to the best of their
knowledge and information, is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required; all of the issued and outstanding
capital stock of the Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of their
knowledge and information, is owned by the Company,
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free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, except as described in the Prospectus.
G. To the best of their knowledge and information, except
as described in the Prospectus, there are no outstanding options,
warrants or other rights granted to or by the Company to purchase Common
Shares or other securities of the Company and there are no commitments,
plans or arrangements to issue any Common Shares or other securities.
H. Each of this Agreement and the Representatives' Warrant
Agreement has been duly authorized, executed and delivered by the
Company.
I. At the time the Registration Statement became effective
and at the Closing Date, the Registration Statement (other than the
financial statements and supporting schedules included therein, as to
which no opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
J. The form of certificate used to evidence each of the
Securities is in due and proper form and complies with all applicable
statutory requirements.
K. To the best of their knowledge and information, there
are no legal or governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement other than those
disclosed therein, and all pending legal or governmental proceedings to
which the Company or the Subsidiary is a party or to which any of their
property is subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material.
L. The information in the Prospectus under
"Business--Government Regulation," "Description of Capital Shares,"
Business--Collaborative Relationships," "Management--Employee Benefit
Plans," "Certain Transactions," and "Shares
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Eligible for Future Sale" and Item 15 of Part II of the Registration
Statement to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions, has been
reviewed by them and is correct in all material respects and fairly and
correctly presents the information called for with respect thereto.
M. To the best of their knowledge and information, there
are no contracts, indentures, mortgages, loan agreements, deeds, trusts,
notes, leases, subleases, voting trusts, voting agreements or other
instruments or agreements required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto, the
descriptions thereof or references thereto are correct; and to the best
of their knowledge and information, no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any material contract, indenture,
mortgage, loan agreement, deed, trust, note, lease, sublease, voting
trust, voting agreement or other instrument or agreement of the Company
or the Subsidiary.
N. No authorization, approval, consent or order of any
court or governmental authority or agency is required in connection with
the offering, issuance or sale of the Securities to the Underwriters,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or state securities or Blue Sky laws or such as may be
required by the NASD; and the execution, delivery and performance of
this Agreement and the Reprsentatives' Warrant Agreement and the
consummation of the transactions contemplated herein and therein and the
compliance by the Company with its obligations hereunder and thereunder
will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Subsidiary pursuant
to, any contract, indenture, mortgage, loan agreement, note, deed,
trust, lease, sublease, voting trust,
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voting agreement or other instrument or agreement to which the Company
or the Subsidiary is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or the
Subsidiary is subject, nor will such action result in any violation of
the provisions of the charter or bylaws of the Company or the
Subsidiary, or any applicable statute, law, rule, regulation, ordinance,
code, decision, directive or order.
O. Except as described in the Prospectus, to the best of
their knowledge and information, there are no persons with registration
or other similar rights to have any securities registered pursuant to
the Registration Statement or otherwise registered by the Company under
the 1933 Act.
P. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Q. All sales of the Company's capital stock during the
three years immediately prior to the date hereof were at all relevant
times duly registered or exempt from the registration requirements of
the 1933 Act.
R. To the best of their knowledge and information, the
Company and the Subsidiary are in compliance with, and conduct their
respective businesses in conformity with, all applicable laws and
regulations relating to the operation of its business as described in
the Registration Statement, except to the extent that any failure so to
comply or conform would not have a material adverse effect upon the
business or condition, financial or otherwise, of the Company and the
Subsidiary considered as one enterprise.
S. The Representatives' Warrants are exercisable for Common
Shares in accordance with the terms of the Representatives' Warrant
Agreement and at the prices therein provided; the Common Shares issuable
upon the exercise of the Representatives' Warrants have been duly
authorized and reserved for issuance upon such exercise and such shares,
when issued upon such exercise in
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accordance with the terms of the Representatives' Warrant Agreement,
will be duly authorized, validly issued, fully paid and nonassessable;
and there are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any Common
Shares issuable upon exercise of the Representatives' Warrants pursuant
to the Company's charter or by-laws or any agreement or other
outstanding instrument.
T. The Registration Statement has become effective under
the 1933 Act; any required filing of the Prospectus, and any supplements
thereto or the Term Sheet, pursuant to Rule 424(b) and if applicable,
Rule 434, has been made in the manner and within the time period
required; and to their best knowledge and information, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings therefor have been instituted
or are pending or contemplated under the 1933 Act.
(ii) The favorable opinion, dated as of the Closing
Date, of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, patent counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
A. The information in the Prospectus under "Risk
Factors--Patents and Proprietary Rights" "Business--Collaborative
Relationships and Licenses" and "Business-Patents and Proprietary
Rights" to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings, or legal conclusions, has been
reviewed by them and is correct in all material respects and fairly and
correctly presents the information called for with respect thereto.
B. To the best of their knowledge, there are no pending or
threatened legal or governmental proceedings, nor allegations on the
part of any person of infringement, relating to patent rights, trade
secrets, trademarks, service marks, copyrights or other proprietary
information or know-how of the Company and, to the best of their
knowledge, no such proceedings are threatened or contemplated.
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C. To the best of their knowledge, the Company is not
infringing or otherwise violating any patents, trade secrets,
trademarks, service marks, copyrights or other proprietary information
or know-how of any persons, and no person is infringing or otherwise
violating any of the Company's patents, trade secrets, trademarks,
service marks, copyrights or other proprietary information or know-how
of the Company in a way in which could materially affect the use thereof
by the Company.
D. To the best of their knowledge, the Company owns or
possesses sufficient licenses or other rights to use all patents, trade
secrets, trademarks, service marks or other proprietary information or
know-how necessary to conduct the business now being or proposed to be
conducted by the Company as described in the Prospectus.
E. The Company is listed in the records of the United
States Patent and Trademark Office ("PTO") as the sole assignee of
record of each of the patents listed on Schedule I hereto (herein called
the "Patents") and each of the applications listed on Schedule II hereto
(herein called the "Applications"). To the best of their knowledge,
there are no asserted or unasserted claims of any persons relating to
the scope or ownership of the Patents or the Applications, there are no
liens which have been filed against any of the Patents or the
Applications, there are no material defects of form in the preparation
or filing of the Applications, the Applications are being diligently
prosecuted, and none of the Applications has been finally rejected or
abandoned.
F. The Company is listed in the records of the appropriate
foreign patent offices as the sole assignee of record of each of the
foreign patents listed on Schedule III hereto (herein called the
"Foreign Patents") and each of the foreign applications listed on
Schedule IV hereto (herein called the "Foreign Applications"). To the
best of their knowledge, there are no asserted or unasserted claims of
any persons relating to the scope or ownership of the Foreign Patents or
the Foreign Applications, there are no liens which have
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been filed against any of the Foreign Patents or the Foreign
Applications, there are no material defects of form in the preparation
or filing of the Foreign Applications, the Foreign Applications are
being diligently prosecuted, and none of the Foreign Applications has
been finally rejected or abandoned.
G. Nothing has come to their attention that leads them to
believe that the Applications and the Foreign Applications will not
eventuate in issued patents, or that any patents issued in respect of
any such Applications or Foreign Applications will not be valid or will
not afford the Company reasonable patent protection relative to the
subject matter thereof.
H. The Company is the non-exclusive licensee of the United
States and foreign patents and patent applications listed on Schedule V
and is the exclusive licensee of the United States and foreign patents
and patent applications listed on Schedule VI. All such licenses are
duly executed, validly binding and enforceable in accordance with their
terms and, to the best of their knowledge, the Company is not in default
(declared or undeclared) of any material provision of any such licenses.
I. To the best of their knowledge, all pertinent prior art
references known to the Company or its counsel during the prosecution of
the Patents and the Applications were disclosed to the PTO and, to the
best of their knowledge, neither such counsel nor the Company made any
misrepresentation to, or concealed any material fact from, the PTO
during such prosecution.
J. To the best of their knowledge, the Company takes
security measures adequate to assert trade secret protection in its
non-patented technology.
K. The agreements executed by the Company's employees,
consultants and other advisors respecting trade secrets,
confidentiality, or intellectual property rights are valid, binding and
enforceable in accordance with their express terms.
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L. Nothing has come to their attention that leads them to
believe that, with respect to licenses, patents, trade secrets,
copyrights or other proprietary information or know-how owned or used by
the Company which are the subject of the foregoing opinions, the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of its date (unless
the term "Prospectus" refers to a prospectus which has been provided to
the Underwriters by the Company for use in connection with the offering
of the Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective, in
which case at the time it is first provided to the Underwriters for such
use) or at the Closing Date or the Option Closing Date, as the case may
be, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(iii) The favorable opinion, dated as of the Closing
Date, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, regulatory counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
A. The information in the Prospectus under "Risk
Factors--Uncertainties Related to Product Development; Clinical Trails,"
"Risk Factors--Government Regulation," "Risk Factors--Health Care
Reimbursement," and "Business--Government Regulation," (such sections
collectively referred to as the "Regulatory Sections") insofar as such
statements purport to summarize applicable provisions of the Federal
Food, Drug, and Cosmetic Act and the regulations promulgated thereunder,
are accurate summaries in all material respects of the provisions
purported to be summarized under such captions in the Prospectus.
B. No facts have come to their attention which cause them
to believe that the statements in
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the Regulatory Sections insofar as such statements relate to FDA
regulatory matters at the time the Registration Statement became
effective, contain an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or as of the Closing Date
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(iv) The favorable opinion, dated as of the Closing
Date, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), counsel for the
Underwriters with respect to the issuance and sale of the Securities, the
Registration Statement and the Prospectus and such other related matters as the
Underwriters shall reasonably request.
(v) In giving their opinions required by subsections
(b)(i) and (b)(iv), respectively, of this Section 8, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ and
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) shall each additionally state
that nothing has come to their attention that leads them to believe that the
Registration Statement (except for financial statements and schedules and other
financial information included therein, as to which counsel need make no
statement), at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus (except for financial statements and schedules and other financial
information included therein, as to which counsel need make no statement), as of
its date (unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Company for use in connection with the
offering of the Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective, in which
case at the time it is first provided to the Underwriters for such use) or at
the Closing Date or the Option Closing Date, as the case may be, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
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c. (i) There shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and the Subsidiary considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) the
representations and warranties of the Company in Section 6 hereof shall be true
and correct with the same force and effect as though expressly made at and as of
the Closing Date, except to the extent that any such representation or warranty
relates to a specific date, (iii) the Company shall have complied in all
material respects with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Date, (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission and (v) the Representatives shall have received a certificate, dated
the Closing Date and signed by the President or any Vice President and the chief
financial or accounting officer of the Company to the effect set forth in
clauses (i), (ii), (iii) and (iv) above.
d. At the time of the execution of this Agreement, the
Underwriters shall have received from Ernst & Young LLP a letter dated such
date, in form and substance satisfactory to the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
e. The Underwriters shall have received from Ernst & Young
LLP a letter, dated as of the Closing Date, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not more
than three business days prior to the Closing Date.
f. The Securities shall have been approved for quotation on
NASDAQ.
g. In the event that the Underwriters exercise their option
provided in Section 2 hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company contained herein
and the statements in
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35
any certificates furnished by the Company hereunder shall be true and correct as
of the Option Closing Date and, at the relevant Option Closing Date, the
Underwriters shall have received:
(1) A certificate, dated such Option Closing Date,
of the President or any Vice President of the Company and of the chief
financial or accounting officer of the Company confirming that the
certificate delivered at the Closing Date pursuant to Section 8 (c)
hereof remains true and correct as of such Option Closing Date.
(2) The favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Option Closing Date, relating
to the Option Securities to be purchased on such Option Closing Date and
otherwise to the same effect as the opinion required by Sections 8
(b)(i) and 8 (b)(v) hereof.
(3) The favorable opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, in form and substance satisfactory to counsel for the
Underwriters, dated such Option Closing Date to the same effect as the
opinion required by Section 8(b)(ii) hereof.
(4) The favorable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, in
form and substance satisfactory to counsel for the Underwriters, dated
such Option Closing Date to the same effect as the opinion required by
Section 8(b)(iii) hereof.
(5) The favorable opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), counsel for the Underwriters, dated such
Option Closing Date, relating to the Option Securities to be purchased
on such Option Closing Date and otherwise to the same effect as the
opinion required by Sections 8 (b)(iv) and 8 (b)(v) hereof.
(6) A letter from Ernst & Young LLP in form and
substance satisfactory to the Underwriters and dated such Option Closing
Date, substantially the same in form and substance as the letter
furnished to the Underwriters pursuant to Section 8(e) hereof, except
that the "specified date" in the letter furnished pursuant to
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36
this Section 8(g)(5) shall be a date not more than three business days
prior to such Option Closing Date.
h. At the date of this Agreement, the Underwriters shall
have received lock-up agreements in form and substance satisfactory to the
Underwriters by the persons owning an aggregate of at least ______ Common
Shares.
i. Counsel for the Underwriters shall have been furnished
with such documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein contemplated
and related proceedings, or in order to evidence the accuracy of any of the
representations or warranties or the fulfillment of any of the conditions herein
contained; and all proceedings taken by the Company in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the Underwriters and counsel for the Underwriters.
j. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
k. Any certificate or document signed by any officer of the
Company and delivered to you, as Representatives of the Underwriters, or to
counsel for the Underwriters, shall be deemed a representation and warranty by
the Company to each Underwriter as to the statements made therein.
l. on or before the Closing Date, the Company shall have
executed and delivered to the Representatives (i) the Representatives' Warrant
Agreement in final form and substance satisfactory to the Representatives and
(ii) the Representatives' Warrants issued in the names of the Representatives.
m. If any condition specified in this Section 8 shall not
have been fulfilled when and as required to be fulfilled, this Agreement, or, in
the case of any condition to the purchase of Option Securities, on an Option
Closing Date which is after the Closing Date, the obligations of the several
Underwriters to purchase the relevant Option Securities, may be terminated by
the Representatives by notice to the Company at any time at or prior to Closing
Date or such an Option Closing Date as the case may be, and such termination
shall be without liability of any party to any other party except as provided in
Section 9 and except that Sections 6 and 7 shall survive any such termination
and remain in full force and effect.
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9. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each preliminary prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight and charges for
counting and packaging) of such copies of the Registration Statement, each
preliminary prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any stamp
taxes in connection with the original issuance and sale of the Securities; (iv)
the printing (or reproduction) and delivery of this Agreement, the preliminary
and supplemental Blue Sky Memoranda and all other agreements or documents
printed (or reproduced) and delivered in connection with the original issuance
and sale of the Securities; (v) the registration of the Common Shares under the
1934 Act and the quotation of the Securities on NASDAQ; (vi) the registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of one counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the reasonable fees and expenses of
counsel for the Underwriters incident to securing any required review by the
NASD; and (viii) the fees and expenses of the Company's accountants and the fees
and expenses of counsel (including local and special counsel) for the Company.
In addition to, but not in lieu of, the foregoing expenses, at Closing Company
agrees to pay the Representatives $245,000 for other expenses incurred in
connection with the Offering.
If this Agreement shall terminate or shall be terminated after execution
pursuant to any provisions hereof (otherwise than pursuant to the second
paragraph of Section 10 or pursuant to clauses (ii), (iii), (iv) and (v) of
Section 11 hereof) or if this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company to comply, in any
material respect, with the terms or fulfill, in any material respect, any of the
conditions of this Agreement, the Company agrees to reimburse the
Representatives for all reasonable out-of-
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pocket expenses (including reasonable fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by or on behalf of the
parties hereto; or (ii) if, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Securities
may commence, when notification of the effectiveness of the Registration
Statement or such post-effective amendment has been released by the Commission.
Until such time as this Agreement shall have become effective, it may be
terminated by the Company, by notifying you, or by you, as Representatives of
the several Underwriters, by notifying the Company.
If one or more of the Underwriters shall fail on the Closing Date to
purchase the Initial Securities which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
a. if the number of Defaulted Securities does not exceed
10% of the number of Initial Securities, the non-defaulting Underwriters shall
be obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
b. if the number of Defaulted Securities exceeds 10% of the
number of Initial Securities, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone the Closing Date for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other
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documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
Any notice under this Section 10 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. a. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Date
or Option Closing Date, as the case may be, (i) if there has been, since the
date of this Agreement or since the respective dates as of which information is
given in the Registration Statement, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Subsidiary considered as one
enterprise, whether or not arising in the ordinary course of business, (ii) if
there has occurred any change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which is such as to make it, in your judgement,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, (iii) if trading in the Common Shares has been
suspended by the Commission, or if trading generally on the American Stock
Exchange, the New York Stock Exchange or in the over-the-counter markets has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange or
markets or by order of the Commission or any other governmental authority, or if
a banking moratorium has been declared by either Federal, New York or Illinois
authorities, (iv) the enactment, publication, decree or other promulgation of
any Federal or state statute, regulation, rule or order of any court or other
governmental authority which in your judgement materially and adversely affects
or may materially or adversely affect the business or operations of the Company
and the Subsidiary or (v) the taking of any action by any Federal, state or
local government or agency in respect of its monetary or fiscal affairs which in
your judgement has a material adverse effect on the securities markets in the
United States, and would in your judgement make it impracticable or inadvisable
to market the Securities or to enforce any contract for the sale thereof. Notice
of such termination may be given by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
b. If this Agreement is terminated pursuant to this Section
11, such termination shall be without liability of any
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party to any other party except as provided in Section 9 and provided further
that Sections 6 and 7 shall survive such termination and remain in full force
and effect.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover page, and the statements under the caption "Underwriting" in
any preliminary prospectus and in the Prospectus constitute the only information
furnished by or on behalf of the Underwriters through you as such information is
referred to in Sections 5(a) and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the Company at the office of the
Company at, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, Chairman; or (ii) if to you, as Representatives of the several
Underwriters, care of EVEREN Securities, Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois applicable
to contracts made and to be performed within the State of Illinois. This
Agreement may be signed in various counterparts which together constitute one
and the same instrument. If signed in counterparts, this Agreement shall not
become effective unless at least one counterpart hereof shall have been executed
and delivered on behalf of each party hereto.
15. SUCCESSORS. This Agreement has been and is made solely for the
benefit of the several Underwriters, the Company, its directors and officers,
the other persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Securities in his
status as such purchaser.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
IOMED, INC.
By: ___________________________________
President and Chief
Executive Officer
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
EVEREN Securities, Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Inc.
Wedbush ▇▇▇▇▇▇ Securities
As Representatives of the Several Underwriters
By EVEREN Securities, Inc.
By: ________________________________
Vice President
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SCHEDULE I
IOMED, INC.
Number of Initial
Securities Purchased
Underwriter from the Company
----------- ----------------
EVEREN Securities, Inc. .........................
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Inc. ............................
Wedbush ▇▇▇▇▇▇ Securities .......................
----------
Total
