EXHIBIT 1.1
2,500,000 Shares of Common Stock
IVIVI TECHNOLOGIES, INC.
UNDERWRITING AGREEMENT
October 18, 2006
MAXIM GROUP LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
As Representative of the Underwriters
named on Schedule A hereto
Ladies and Gentlemen:
Ivivi Technologies, Inc., a corporation organized and existing under
the laws of New Jersey (the "COMPANY"), confirms its agreement, subject to the
terms and conditions set forth herein, with each of the underwriters listed on
Exhibit A hereto (collectively, the "UNDERWRITERS"), for whom Maxim Group LLC is
acting as representative (in such capacity, the "REPRESENTATIVE"), to sell and
issue to the Underwriters an aggregate of 2,500,000 shares (the "FIRM SHARES")
of its common stock, no par value per share (the "COMMON STOCK"). In addition,
the Company proposes to sell to the Underwriters, upon the terms and conditions
set forth in Section 2 hereof, an aggregate additional amount of 375,000 shares
of Common Stock, representing up to 15% of the Firm Shares (the "ADDITIONAL
SHARES"). The Firm Shares and any Additional Shares purchased by the
Underwriters are referred to herein as the "SHARES." The Shares are more fully
described in the Registration Statement and Prospectus referred to below. The
offering and sale of the Shares contemplated by this underwriting agreement
(this "AGREEMENT") is referred to herein as the "OFFERING."
1. Representations and Warranties of the Company. The Company
represents, warrants and covenants to, and agrees with, each of the Underwriters
that, as of the date hereof and as of the Closing Date and each Additional
Closing Date:
(a) The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form SB-2 (Registration No.
333-122768), and amendments thereto, and related preliminary prospectuses for
the registration under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), of the Shares, which registration statement, as so amended (including
post-effective amendments, if any), has been declared effective by the
Commission and copies of which have heretofore been delivered to the
Underwriters. Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus in accordance with the provisions of
Rule 430A ("RULE 430A") of the rules and regulations of the Commission (the
"RULES AND REGULATIONS") and paragraph (b) of Rule 424 ("RULE 424(b)") of the
Regulations. The information included in such prospectus that was omitted from
Maxim Group LLC
October 18, 2006
Page 2 of 39
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective
pursuant to paragraph (b) of Rule 430A is referred to as "RULE 430A
INFORMATION." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is referred to herein as a "PRELIMINARY PROSPECTUS." Such
registration statement, including the amendments thereto, the exhibits and any
schedules thereto, at the time it became effective, and including the Rule 430A
Information, is herein called the "REGISTRATION STATEMENT." The Preliminary
Prospectus dated October 13, 2006, that was included in the Registration
Statement at the Time of Sale is referred to herein as the "SALE PRELIMINARY
PROSPECTUS", except that if any revised prospectus or prospectus supplement
shall be provided to the Underwriters by the Company for use in connection with
the Offering which differs from the Sale Preliminary Prospectus (whether or not
such revised prospectus or prospectus supplement is required to be filed by the
Company pursuant to Rule 424(b)), the term "Prospectus" shall also refer to such
revised prospectus or prospectus supplement, as the case may be, from and after
the time it is first provided to the Underwriters for such use. For purposes of
this Agreement and the Securities Act, "TIME OF SALE", means 4:30 p.m., New York
City time, on the date of this Agreement. The final prospectus in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities is referred to herein as the "PROSPECTUS." If the Company has filed
or is required pursuant to the terms hereof to file a registration statement
pursuant to Rule 462(b) under the Securities Act registering additional shares
of Common Stock (a "RULE 462(B) REGISTRATION STATEMENT"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462(b) Registration Statement. Other than a Rule
462(b) Registration Statement, which, if filed, becomes effective upon filing,
no other document with respect to the Registration Statement has heretofore been
filed with the Commission. All of the Shares have been registered under the
Securities Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. Based on
communications from the Commission, no stop order suspending the effectiveness
of either the Registration Statement or the Rule 462(b) Registration Statement,
if any, has been issued and, to the Company's knowledge, no proceeding for that
purpose has been initiated or threatened by the Commission. Any reference herein
to the Registration Statement, any Preliminary Prospectus, the Sale Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
exhibits incorporated by reference therein pursuant to the Rules and Regulations
on or before the effective date of the Registration Statement, the date of such
Preliminary Prospectus, the Sale Preliminary Prospectus or the date of the
Prospectus, as the case may be. Any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include: (i) the filing of any document under the Securities Exchange Act of
1934, as amended, and together with the Rules and Regulations promulgated
thereunder (the "EXCHANGE ACT") after the effective date of the Registration
Statement, the date of such Preliminary Prospectus, the Sale Preliminary
Prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference, and (ii) any such document so filed. All
Maxim Group LLC
October 18, 2006
Page 3 of 39
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus, the Sale Preliminary
Prospectus and the Prospectus, or any amendments or supplements to any of the
foregoing shall be deemed to include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX"). The Sale Preliminary Prospectus and the Prospectus delivered to the
Underwriters for use in connection with the Offering were or will be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T. If,
subsequent to the date of this Agreement, the Company or the Representative
determine that, at the Time of Sale, the Sale Preliminary Prospectus included an
untrue statement of a material fact or omitted a statement of material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and have agreed to provide an
opportunity to purchasers of the Firm Units to terminate their old purchase
contracts and enter into new purchase contracts, then the Sale Preliminary
Prospectus will be deemed to include any additional information available to
purchasers at the time of entry into the first such new purchase contract.
(b) At the time of the effectiveness of the Registration Statement or
any Rule 462(b) Registration Statement or the effectiveness of any
post-effective amendment to the Registration Statement, when the Prospectus is
first filed with the Commission pursuant to Rule 424(b), when any supplement to
or amendment of the Prospectus is filed with the Commission, when any document
filed under the Exchange Act was or is filed and at the Closing Date and the
Additional Closing Date (as hereinafter respectively defined), if any, the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus and
any amendments thereof and supplements or exhibits thereto complied or will
comply in all material respects with the applicable provisions of the Securities
Act, the Exchange Act and the Rules and Regulations, and did not and will not
contain an untrue statement of a material fact and did not and will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein: (i) in the case of the Registration Statement, not
misleading, and (ii) in the case of the Sale Preliminary Prospectus or the
Prospectus in light of the circumstances under which they were made, not
misleading. When any Preliminary Prospectus (including the Sale Preliminary
Prospectus) was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) under the Securities Act), and when any
amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the Rules and Regulations and did not
contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No representation and warranty is made in this subsection (b),
however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related Preliminary Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through the Representative specifically for use therein. The
Maxim Group LLC
October 18, 2006
Page 4 of 39
parties acknowledge and agree that such information provided by or on behalf of
any Underwriter consists solely of the names of the Underwriters appearing in
the "Underwriting" section of the Prospectus and the contents of paragraphs 7,
14, 17, 20, 21 and 24 through 34 of the "Underwriting" section of the Prospectus
(the "UNDERWRITERS' INFORMATION").
(c) The Company has filed with the Commission a Form 8-A (File Number
001-33088) providing for the registration under the Exchange Act of the Common
Stock. The registration of the Common Stock under the Exchange Act has been
declared effective by the Commission on the date hereof.
(d) The documents, exhibits or other materials incorporated or deemed
to be incorporated by reference in the Sale Preliminary Prospectus or the
Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the
Securities Act, the Exchange Act and the Rules and Regulations, and, when read
together with the other information in the Sale Preliminary Prospectus or the
Prospectus, do not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. There are no contracts or other documents (including,
without limitation, any voting agreement), which are required to be described in
the Registration Statement, the Sale Preliminary Prospectus and the Prospectus
or filed as exhibits to the Registration Statement by the Securities Act, the
Exchange Act or the Rules and Regulations and which have not been so described,
filed or incorporated by reference.
(e) Raich Ende Xxxxxx & Co. LLP ("REM"), whose reports relating to the
Company are included in the Registration Statement, are independent public
accountants as required by the Securities Act, the Exchange Act, the Rules and
Regulations and the rules and regulations promulgated by the Public Company
Accounting Oversight Board (the "PCAOB"). REM is duly registered and in good
standing with the PCAOB. REM has not, during the periods covered by the
financial statements included in the Registration Statement, the Preliminary
Prospectus and the Prospectus, provided to the Company any non-audit services,
as such term is used in Section 10A(g) of the Exchange Act.
(f) The Shares have been authorized for listing on the American Stock
Exchange ("AMEX") and, to the Company's knowledge, no proceedings have been
instituted or threatened which would effect, and no event or circumstance has
occurred which is reasonably likely to effect, the listing of the Shares on the
AMEX.
(g) The Company has no direct or indirect subsidiaries and owns no
equity interest in any other foreign or domestic individual, corporation, trust,
general or limited partnership, joint venture, limited liability company or
other entity (each, a "PERSON").
Maxim Group LLC
October 18, 2006
Page 5 of 39
(h) Subsequent to the respective dates as of which information is
presented in the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus, and except as disclosed in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus: (i) the Company has not declared,
paid or made any dividends or other distributions of any kind on or in respect
of its capital stock, and (ii) there has been no material adverse change (or any
development which has a high probability of involving a material adverse change
in the future), whether or not arising from transactions in the ordinary course
of business, in or affecting: (A) the business, condition (financial or
otherwise), results of operations, shareholders' equity, properties or prospects
(as such prospects are disclosed or described in the Sale Preliminary Prospectus
and the Prospectus) of the Company; (B) the long-term debt or capital stock of
the Company; or (C) the Offering or consummation of any of the other
transactions contemplated by this Agreement, the Registration Statement or the
Prospectus (a "MATERIAL ADVERSE CHANGE"). Since the date of the latest balance
sheet presented in the Registration Statement, the Sale Preliminary Prospectus
and the Prospectus, the Company has not incurred or undertaken any liabilities
or obligations, whether direct or indirect, liquidated or contingent, matured or
unmatured, or entered into any transactions, including any acquisition or
disposition of any business or asset, which are material to the Company, except
for liabilities, obligations and transactions which are disclosed in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus.
(i) As of the dates indicated in the Sale Preliminary Prospectus and
the Prospectus, the authorized, issued and outstanding shares of capital stock
of the Company were as set forth therein in the column headed "Actual" under the
section thereof captioned "Capitalization" and, after giving effect to the
Offering and the other transactions contemplated by this Agreement and the
Registration Statement, will be as set forth in the column headed "As Adjusted"
in such section. All of the issued and outstanding shares of capital stock of
the Company are fully paid and non-assessable (and those shares of Common Stock
issuable upon conversion of the Company's notes as described in the Registration
Statement and the Prospectus, upon conversion thereof as described in the
Registration Statement, will be fully paid and non-assessable) and have been
duly and validly authorized and issued, in compliance with all applicable state
and federal securities laws, rules and regulations and not in violation of or
subject to any preemptive or similar right that does or will entitle any Person
(as defined below), upon the issuance or sale of any security, to acquire any
Relevant Security from the Company. As used herein, the term "RELEVANT SECURITY"
means any Common Stock or other security of the Company that is convertible
into, or exercisable or exchangeable for Common Stock or equity securities, or
that holds the right to acquire any Common Stock or equity securities of the
Company or any other such Relevant Security, except for such rights as may have
been fully satisfied or waived prior to the effectiveness of the Registration
Statement.
(j) The Shares have been duly and validly authorized and, when issued,
delivered and paid for in accordance with this Agreement and as described in the
Sale Preliminary Prospectus and the Prospectus on each of the Closing Date and
the Additional Closing Date, as applicable, will be duly and validly issued,
fully paid and non-assessable, will have been issued in compliance with all
applicable state and federal laws, rules and regulations and will not have been
issued in violation of or subject to any preemptive or similar right that does
or will entitle any Person to acquire any Relevant Security from the Company
Maxim Group LLC
October 18, 2006
Page 6 of 39
upon issuance or sale of Shares in the Offering. The shares of Common Stock
representing the Shares conform to the descriptions thereof contained in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus.
Except as disclosed in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus, the Company has no outstanding warrants, options
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, or any contracts or commitments to issue or sell, any Relevant
Security.
(k) Except as disclosed in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, no director or officer of the Company
who will be acting as such following the Closing as described in the Sale
Preliminary Prospectus or the Prospectus holds any direct equity, debt or other
pecuniary interest in any Person with whom the Company does business or is in
privity of contract with, other than, in each case, indirectly through the
ownership by such individuals of shares of Common Stock.
(l) The Company has been duly incorporated, and validly exists as a
corporation in good standing under the laws of the State of New Jersey. The
Company has all requisite power and authority to carry on its business as it is
currently being conducted and as described in the Sale Preliminary Prospectus
and the Prospectus, and to own, lease and operate its properties. The Company is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except, in each case, for those failures to be so
qualified or in good standing which (individually and in the aggregate) could
not reasonably be expected to have a material adverse effect on: (i) the
business, condition (financial or otherwise), results of operations,
shareholders' equity, properties or prospects (as such prospects are disclosed
or described in the Sale Preliminary Prospectus and the Prospectus) of the
Company; (ii) the long-term debt or capital stock of the Company; or (iii) the
Offering or consummation of any of the other transactions contemplated by this
Agreement, the Registration Statement or the Prospectus (any such effect being a
"MATERIAL ADVERSE EFFECT").
(m) The Company is not: (i) in violation of its certificate of
incorporation, by-laws or other organizational documents (including
shareholders', voting or similar agreements), (ii) in default under, and no
event has occurred which, with notice or lapse of time or both, would constitute
a default under or result in the creation or imposition of any lien, charge,
mortgage, pledge, security interest, claim, equity, trust or other encumbrance,
preferential arrangement, defect or restriction of any kind whatsoever ("LIEN")
upon any of its property or assets pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its property or assets is subject or
(iii) is in violation in any respect of any law, rule, regulation, ordinance,
directive, judgment, decree or order of any judicial, regulatory or other legal
or governmental agency or body, foreign or domestic, except (in the case of
clause (ii) above) for any Lien disclosed in the Registration Statement, the
Sale Preliminary Prospectus and the Prospectus and except, in the case of each
of clauses (ii) and (iii), for any default, violation or event that would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.
Maxim Group LLC
October 18, 2006
Page 7 of 39
(n) The Company has full right, power and authority to execute and
deliver this Agreement and all other agreements, documents, certificates and
instruments required to be delivered pursuant to this Agreement (collectively,
the "TRANSACTION DOCUMENTS") and to perform its obligations hereunder and
thereunder and to consummate each of the transactions contemplated by each of
the Transaction Documents. The Company has duly and validly authorized each of
the Transaction Documents and each of the transactions contemplated by the
Transaction Documents. Each of the Transaction Documents have been or will be
duly and validly executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company and is enforceable against
the Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and except as enforceability
may be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(o) The execution, delivery, and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby do not
and will not: (i) conflict with, require consent under or result in a breach of
any of the terms and provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default) under, or
result in the creation or imposition of any Lien upon any property or assets of
the Company pursuant to any indenture, mortgage, deed of trust, loan agreement
or other agreement, instrument, franchise, license or permit to which the
Company or its "affiliates" (as such term is defined in Rule 144 under the
Securities Act, "AFFILIATES") is a party or by which the Company or its
properties, operations or assets may be bound or (ii) violate or conflict with
any provision of the certificate of incorporation, by-laws or other
organizational documents of the Company, or (iii) violate or conflict with any
law, rule, regulation, ordinance, directive, judgment, decree or order of any
judicial, regulatory or other legal or governmental agency or body, domestic or
foreign, except, in the case of each of clauses (i) and (iii), for any default,
violation or event that would not, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect.
(p) The Company has all material consents, approvals, authorizations,
orders, registrations, qualifications, licenses, filings and permits of, with
and from all judicial, regulatory and other legal or governmental agencies and
bodies and all third parties, foreign and domestic (collectively, the
"CONSENTS"), to own, lease and operate its properties and conduct its business
as it is now being conducted and as disclosed in the Registration Statement, the
Sale Preliminary Prospectus and the Prospectus, and each such Consent is valid
and in full force and effect. The Company has not received notice of any
investigation or proceedings which results in or, if decided adversely to the
Company, could reasonably be expected to result in, the revocation of any
Consent or reasonably be expected to have a Material Adverse Effect. No Consent
contains a materially burdensome restriction not adequately disclosed in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus.
Maxim Group LLC
October 18, 2006
Page 8 of 39
(q) The Company is in compliance with all applicable laws, rules,
regulations, ordinances, directives, judgments, decrees and orders, foreign and
domestic, including those relating to transactions with Affiliates, the
non-compliance with which would not have a Material Adverse Effect.
(r) [Intentionally Omitted]
(s) No Consent of, with or from any judicial, regulatory or other legal
or governmental agency or body or any third party, foreign or domestic, is
required for the execution, delivery and performance of this Agreement or
consummation of each of the transactions contemplated by this Agreement,
including the issuance, sale and delivery of the Shares to be issued, sold and
delivered hereunder and thereunder, except: (i) the registration under the
Securities Act of the Shares and the approval for listing of the Shares on AMEX,
each of which has become effective and (ii) such Consents as may be required
under state securities or blue sky laws, the National Association of Securities
Dealers, Inc. (the "NASD") or NASD Regulation, Inc. in connection with the
purchase and distribution of the Shares by the Underwriters.
(t) Except as disclosed in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, there is no judicial, regulatory,
arbitral or other legal or governmental proceeding or other litigation or
arbitration, domestic or foreign, pending to which the Company is a party or of
which any property, operations or assets of the Company is the subject which,
either individually or in the aggregate, if determined adversely to the Company,
could reasonably be expected to have a Material Adverse Effect. To the Company's
knowledge, no such proceeding, litigation or arbitration is threatened or
contemplated. The defense of all pending proceedings, litigation and arbitration
against or involving the Company is not reasonably expected by the Company to
have a Material Adverse Effect.
(u) The financial statements, including the notes thereto, and the
supporting schedules included in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus present fairly the financial position
as of the dates indicated and the cash flows and results of operations for the
periods specified of the Company. Except as otherwise stated in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, said financial
statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, subject, in the case of unaudited financial statements, to the
absence of footnotes and year end adjustments required by accounting principles
generally accepted in the United States of America for complete financial
statements. The supporting schedules included in the Registration Statement and
the Prospectus present fairly the information required to be stated therein. No
other financial statements or supporting schedules are required to be included
or incorporated by reference in the Registration Statement. The other financial
and statistical information included in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus present fairly the information
included therein and have been prepared on a basis consistent with that of the
financial statements that are included in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus and the books and records of the
respective entities presented therein.
Maxim Group LLC
October 18, 2006
Page 9 of 39
(v) There are no pro forma or as adjusted financial statements which
are required to be included in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus in accordance with Regulation S-X under the
Securities Act which have not been included as so required. The pro forma and/or
as adjusted financial information included in the Registration Statement, the
Sale Preliminary Prospectus and the Prospectus has been properly compiled and
prepared in accordance with the applicable requirements of the Securities Act
and the Rules and Regulations and include all adjustments necessary to present
fairly in accordance with generally accepted accounting principles the pro forma
and as adjusted financial position of the respective entity or entities
presented therein at the respective dates indicated and their cash flows and the
results of operations for the respective periods specified. The assumptions used
in preparing the pro forma and as adjusted financial information included in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
provide a reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein. The related pro
forma and pro forma as adjusted adjustments give appropriate effect to those
assumptions; and the pro forma and pro forma as adjusted financial information
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts.
(w) The statistical, industry-related and market-related data included
in the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus are based on or derived from sources which the Company reasonably and
in good faith believes are reliable and accurate, and such data agree with the
sources from which they are derived.
(x) Except as disclosed in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, the Company maintains a system of
internal accounting and other controls sufficient to provide reasonable
assurances that: (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with United States
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 accounting for assets
is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(y) The Company's Board of Directors has validly appointed an audit
committee and nominating committee whose composition satisfies the requirements
of the rules and regulations of the AMEX and the Company's Board of Directors
and/or audit committee and the nominating committee has each adopted a charter
that satisfies the requirements of AMEX. Neither the Company's Board of
Directors nor the audit committee thereof has been informed, nor is any director
of the Company aware, of: (i) except as disclosed in the Registration Statement,
the Sale Preliminary Prospectus and the Prospectus, any significant deficiencies
and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
Company's ability to record, process, summarize and report financial
information; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal control over financial reporting.
Maxim Group LLC
October 18, 2006
Page 10 of 39
(z) The Company is in material compliance with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002, as amended ("SARB-OX"), applicable to the Company,
and the rules and regulations promulgated thereunder and related or similar
rules and regulations promulgated by AMEX or any other governmental or self
regulatory entity or agency, except for violations which, singly or in the
aggregate, would not have a Material Adverse Effect. Without limiting the
generality of the foregoing, as of the effective date of the Registration
Statement: (i) all members of the Company's Board of Directors who are required
to be "independent" (as that term is defined under applicable laws, rules and
regulations), including, without limitation, all members of the audit committee
of the Company's Board of Directors, meet the qualifications of independence as
set forth under applicable laws, rules and regulations and (ii) the audit
committee of the Company's Board of Directors has at least one member who is an
"audit committee financial expert" (as that term is defined under applicable
laws, rules and regulations).
(aa) No relationship, direct or indirect, exists between or among any
of the Company or any Affiliate of the Company, on the one hand, and any
director, officer, shareholder, customer or supplier of the Company or any
Affiliate of the Company, on the other hand, which is required by the Securities
Act, the Exchange Act or the Rules and Regulations to be described in the
Registration Statement, the Sale Preliminary Prospectus or the Prospectus which
is not so described as required. Except as disclosed in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, there are no
outstanding loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the Company to or
for the benefit of any of the officers or directors of the Company or any of
their respective family members, except as disclosed in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus. The Company has
not, in violation of Sarb-Ox, directly or indirectly, including through any
Affiliate of the Company (other than as permitted under the Sarb-Ox for
depositary institutions), extended or maintained credit, arranged for the
extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or executive officer of the Company.
(bb) (i) Except as described in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, there are no claims, payments,
arrangements, agreements or understandings relating to the payment of a
finder's, consulting or origination fee by the Company with respect to the sale
of the Shares hereunder or any other arrangements, agreements or understandings
of the Company or, to the Company's knowledge, the Company's officers, directors
and employees that may affect the Underwriters' compensation, as determined by
the NASD.
(ii) Except as previously disclosed to the
Representative in writing, no officer, director, or beneficial owner of any
class of the Company's securities (whether debt or equity, registered or
unregistered, regardless of the time acquired or the source from which derived)
or any other Affiliate is a member or a person associated, or affiliated with a
member of the NASD.
Maxim Group LLC
October 18, 2006
Page 11 of 39
(iii) No proceeds from the sale of the Shares
(excluding underwriting compensation) will be paid to any NASD member, or any
persons associated or affiliated with a member of the NASD, except as
specifically contemplated herein.
(iv) Except as previously disclosed to the
Representative in writing, no person to whom securities of the Company have been
privately issued within the 180-day period prior to the initial filing date of
the Registration Statement has any relationship or affiliation or association
with any member of the NASD.
(cc) (i) The Company owns or possess the right to use sufficient
trademarks, trade names, patent rights, copyrights, domain names, licenses,
approvals, trade secrets, inventions, technology, know-how and other similar
rights (collectively, "INTELLECTUAL PROPERTY RIGHTS") as are necessary or
material: (A) to conduct its business as now conducted and (B) in connection
with the commercialization of the medical technologies described in the
Registration Statement, the Sale Preliminary Prospectus and Prospectus as being
under development by the Company.
(ii) Except as set forth in the Registration
Statement, the Sale Preliminary Prospectus and Prospectus: (A) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding, or
claim by others challenging the Company's rights in or to any Intellectual
Property Rights, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (B) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding, or claim by others
that the Company infringes, misappropriates, or otherwise violates any
Intellectual Property Rights of others, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (C) there is no pending
or, to the Company's knowledge, threatened action, suit, proceeding, or claim by
others challenging the validity or scope of any such Intellectual Property
Rights owned by the Company and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (D) the operation of Company's
business as now conducted and in connection with the development and
commercialization of the medical technology described in the Registration
Statement, the Sale Preliminary Prospectus and Prospectus, as being under
development by the Company (either independently or in collaboration with third
parties), does not infringe any claim of any patent or published patent
application; (E) there is no prior art of which the Company is aware that may
render any patent owned or licensed by the Company invalid or any patent
application owned or licensed by the Company unpatentable which has not been
disclosed to the applicable government patent office; and (F) the patents,
trademarks, and copyrights granted or issued to the Company have been duly
maintained and are in full force and in effect, and none of such patents,
trademarks and copyrights have been adjudged invalid or unenforceable in whole
or in part. The Company is not a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property Rights of any other person
or entity that are required to be set forth in the Registration Statement, the
Sale Preliminary Prospectus and Prospectus and are not described therein in all
material respects.
Maxim Group LLC
October 18, 2006
Page 12 of 39
(ii) The Company has duly and properly filed or
caused to be filed with the U. S. Patent and Trademark Office (the "PTO") and
applicable foreign and international patent authorities all patent applications
owned by the Company (the "COMPANY PATENT APPLICATIONS"). The Company has
complied in all material repsects with the PTO's duty of candor and disclosure
for the Company Patent Applications and has made no material misrepresentation
in the Company Patent Applications. The Company Patent Applications disclose
patentable subject matters, and the Company has not been notified of any
inventorship challenges nor has any interference been declared or provoked nor
is any material fact known by the Company that would preclude the issuance of
patents with respect to the Company Patent Applications or would render such
patents invalid or unenforceable. No third party possesses rights to the
Company's Intellectual Property Rights that, if exercised, could enable such
party to develop products competitive to those the Company intends to develop as
described in the Sale Preliminary Prospectus and the Prospectus.
(iii) Other than as disclosed in the Registration
Statement, the Sale Preliminary Prospectus and Prospectus, there are no
rulemaking or similar proceedings before the U.S. Food and Drug Administration
("FDA") or PTO which affect or involve the Company or any of the processes or
medical technologies that the Company has developed, is developing or proposes
to develop or uses or proposes to use which, if the subject of an action
unfavorable to the Company, would result in a Material Adverse Change.
(iv) The Company has obtained legally binding written
agreements from all employees and third parties with whom the Company has shared
confidential proprietary information: (A) of the Company, or (B) received from
others which the Company is obligated to treat as confidential, which agreements
require such employees and third parties to keep such information confidential.
(dd) Neither the Company nor, to the Company's knowledge, any of the
Company's directors, officers or employees has violated: (i) the Bank Secrecy
Act, as amended, (ii) the Money Laundering Control Act of 1986, as amended,
(iii) the Foreign Corrupt Practices Act, or (iv) the Uniting and Strengthening
of America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations
promulgated under any such law, or any successor law, except for such violations
which, singly or in the aggregate, would not have a Material Adverse Effect.
(ee) Neither the Company nor any of its Affiliates has, prior to the
date hereof, made any offer or sale of any securities which are required to be
"integrated" pursuant to the Securities Act or the Rules and Regulations with
the offer and sale of the Shares pursuant to the Registration Statement.
Maxim Group LLC
October 18, 2006
Page 13 of 39
(ff) Except as disclosed in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, no holder of any Relevant Security
has any rights to require registration of any Relevant Security as part or on
account of, or otherwise in connection with, the offer and sale of the Shares
contemplated hereby, and any such rights so disclosed have either been fully
complied with by the Company or effectively waived by the holders thereof, and
any such waivers remain in full force and effect.
(gg) The Company is not and, at all times up to and including
consummation of the transactions contemplated by this Agreement, and after
giving effect to application of the net proceeds of the Offering, will not be,
subject to registration as an "investment company" under the Investment Company
Act of 1940, as amended, and is not and will not be an entity "controlled" by an
"investment company" within the meaning of such act.
(hh) Except as disclosed in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, there are no contracts, agreements or
understandings between the Company and any Person that would give rise to a
valid claim against the Company or any Underwriter for a brokerage commission,
finder's fee or other like payment in connection with the transactions
contemplated by this Agreement or any arrangements, agreements, understandings,
payments or issuance with respect to the Company or any of its officers,
directors, shareholders, partners, employees or Affiliates that may affect the
Underwriters' compensation as determined by the NASD.
(ii) The Company owns or leases all such properties as are necessary to
the conduct of its business as presently operated and as proposed to be operated
as described in the Registration, the Sale Preliminary Prospectus and the
Prospectus. The Company has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by it, in
each case free and clear of all Liens except such as are described in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus or
such as do not (individually or in the aggregate) materially affect the business
or prospects of the Company. Any real property and buildings held under lease or
sublease by the Company is held by under valid, subsisting and enforceable
leases with such exceptions as are not material to, and do not interfere with,
the use made and proposed to be made of such property and buildings by the
Company. The Company has not received any notice of any claim adverse to its
ownership of any real or personal property or of any claim against the continued
possession of any real property, whether owned or held under lease or sublease
by the Company.
(jj) The Company maintains insurance of the types and in the amounts
which are customary for companies engaged in similar businesses, including, but
not limited to: (i) directors' and officers' insurance (including insurance
covering the Company, its directors and officers for liabilities or losses
arising in connection with this Offering, including, without limitation,
liabilities or losses arising under the Securities Act, the Exchange Act, the
Rules and Regulations and applicable foreign securities laws), (ii) insurance
covering real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, (iii) business interruption insurance and (iv) product
Maxim Group LLC
October 18, 2006
Page 14 of 39
liability insurance. The Company maintains and will continue to maintain
insurance (of which the Company is the beneficiary) with at least $1,500,000 of
coverage of the life of Andre' XxXxxx for a period of three (3) years from the
Closing Date with an insurer rated at least AA or better in the most recent
addition of "Best's Life Reports". There are no claims by the Company under any
policy or instrument described in this paragraph as to which any insurance
company is denying liability or defending under a reservation of rights clause.
All of the insurance policies described in this paragraph are in full force and
effect. The Company has not been refused any insurance coverage sought or
applied for, and the Company has no reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(kk) The Company has accurately prepared and timely filed all federal,
state, foreign and other tax returns that are required to be filed by it and has
paid or made provision for the payment of all taxes, assessments, governmental
or other similar charges, including without limitation, all sales and use taxes
and all taxes which the Company is obligated to withhold from amounts owing to
employees, creditors and third parties, with respect to the periods covered by
such tax returns (whether or not such amounts are shown as due on any tax
return). No deficiency assessment with respect to a proposed adjustment of the
Company's federal, state, local or foreign taxes is presently in effect or is
pending or, to the Company's knowledge, threatened. The accruals and reserves on
the books and records of the Company in respect of tax liabilities for any
taxable period not finally determined are adequate to meet any assessments and
related liabilities for any such period and, since the date of the Company's
most recent audited financial statements, the Company has not incurred any
material liability for taxes other than in the ordinary course of its business.
There is no tax lien, whether imposed by any federal, state, foreign or other
taxing authority, outstanding against the assets, properties or business of the
Company.
(ll) No labor disturbance by the employees of the Company currently
exists or is likely to occur.
(mm) The Company has at all times operated its business in material
compliance with all Environmental Laws, and no material expenditures are or will
be required in order to comply therewith. The Company has not received any
notice or communication that relates to or alleges any actual or potential
violation or failure to comply with any Environmental Laws that will result in a
Material Adverse Effect. As used herein, the term "ENVIRONMENTAL LAWS" means all
applicable laws and regulations, including any licensing, permits or reporting
requirements, and any action by a Federal state or local government entity
pertaining to the protection of the environment, protection of public health,
protection of worker health and safety, or the handling of hazardous materials,
including without limitation, the Clean Air Act, 42 U.S.C. ss. 7401, et seq.,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. ss. 9601, et seq., the Federal Water Pollution Control Act, 33
U.S.C. ss. 1321, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
ss. 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss.
690-1, et seq., and the Toxic Substances Control Act, 15 U.S.C. ss. 2601, et
seq.
Maxim Group LLC
October 18, 2006
Page 15 of 39
(nn) Except as set forth in the Registration Statement, the Sale
Preliminary Prospectus or the Prospectus, the Company is not a party to an
"employee benefit plan," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA") which: (i) is subject to any provision of
ERISA and (ii) is or was at any time maintained, administered or contributed to
by the Company and covers any employee or former employee of the Company or any
ERISA Affiliate (as defined hereafter). These plans are referred to collectively
herein as the "EMPLOYEE PLANS." For purposes of this paragraph, "ERISA
AFFILIATE" of any person or entity means any other person or entity which,
together with that person or entity, could be treated as a single employer under
Section 414(m) of the Internal Revenue Code of 1986, as amended (the "CODE"), or
is an "affiliate," whether or not incorporated, as defined in Section 407(d)(7)
of ERISA, of the person or entity.
(oo) The Representative has been provided with written evidence of each
employment, severance or other similar arrangement or policy and each material
plan or arrangement providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits, severance benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits or
for deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation, or post-retirement
insurance, compensation or benefits which: (i) is not an Employee Plan, (ii) is
entered into, maintained or contributed to, as the case may be, by the Company
or any of their respective ERISA Affiliates, and (iii) covers any employee or
former employee of the Company or any of their respective ERISA Affiliates.
These contracts, plans and arrangements are referred to collectively in this
Agreement as the "BENEFIT ARRANGEMENTS." Each Benefit Arrangement has been
maintained in substantial compliance with its terms and with requirements
prescribed by any and all statutes, orders, rules and regulations that are
applicable to that Benefit Arrangement.
(pp) Except as set forth in the Registration Statement, the Sale
Preliminary Prospectus or the Prospectus, there is no liability in respect of
post-retirement health and medical benefits for retired employees of the Company
or any of their respective ERISA Affiliates other than medical benefits required
to be continued under applicable law, determined using assumptions that are
reasonable in the aggregate, over the fair market value of any fund, reserve or
other assets segregated for the purpose of satisfying such liability (including
for such purposes any fund established pursuant to Section 401(h) of the Code).
With respect to any of the Company's Employee Plans which are "group health
plans" under Section 4980B of the Code and Section 607(1) of ERISA, there has
been material compliance with all requirements imposed there under such that the
Company or their respective ERISA Affiliates have no (and will not incur any)
loss, assessment, tax penalty, or other sanction with respect to any such plan.
(qq) Except as set forth in the Registration Statement, the Sale
Preliminary Prospectus or the Prospectus, and except with respect to the
Company's written agreements or arrangements with certain Company employees
(whose names and remuneration arrangements with the Company have been previously
Maxim Group LLC
October 18, 2006
Page 16 of 39
disclosed in writing by the Company to the Representative), the Company is not a
party to or subject to any employment contract or arrangement providing for
annual future compensation, or the opportunity to earn annual future
compensation (whether through fixed salary, bonus, commission, options or
otherwise) of more than $60,000 to any officer, consultant, director or
employee.
(rr) The execution of this Agreement or any other Transaction Document
and consummation of the transactions contemplated hereby and thereby does not
constitute a triggering event under any Employee Plan or any other employment
contract, whether or not legally enforceable, which (either alone or upon the
occurrence of any additional or subsequent event) will or may result in any
payment (of severance pay or otherwise), acceleration, increase in vesting, or
increase in benefits to any current or former participant, employee or director
of the Company.
(ss) No "prohibited transaction" (as defined in either Section 406 of
the ERISA or Section 4975 of Code), "accumulated funding deficiency" (as defined
in Section 302 of ERISA) or other event of the kind described in Section 4043(b)
of ERISA (other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to any
employee benefit plan for which the Company would have any liability; each
employee benefit plan of the Company is in compliance in all material respects
with applicable law, including (without limitation) ERISA and the Code; the
Company has not incurred and does not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from any "pension
plan"; and each employee benefit plan of the Company that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or by failure to act, which could cause the loss of
such qualification.
(tt) Neither the Company nor, to the Company's knowledge, any of the
Company's officers, directors, employees or agents has at any time during the
last five (5) years: (i) made any unlawful contribution to any candidate for
foreign office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any federal or state governmental officer or
official, or other Person charged with similar public or quasi-public duties,
other than payments that are not prohibited by the laws of the United States of
any jurisdiction thereof.
(UU) the company has not offered, or caused the underwriters to offer,
the firm shares to any person or entity with the intention of unlawfully
influencing: (i) a customer or supplier of the company or its affiliates to
alter the customer's or supplier's level or type of business with the company or
any of its affiliates or (ii) a journalist or publication to write or publish
favorable information about the company, any affiliate or their respective
products or services.
Maxim Group LLC
October 18, 2006
Page 17 of 39
(vv) Except as described in the Sale Preliminary Prospectus, the
Prospectus and the Registration Statement, the Company: (i) is and at all times
has been in full compliance with all statutes, rules, regulations, or guidances
applicable to the ownership, testing, development, manufacture, packaging,
processing, use, distribution, marketing, labeling, promotion, sale, offer for
sale, storage, import, export or disposal of any product manufactured or
distributed by the Company or any component thereof ("APPLICABLE LAWS"); (ii)
has not received any FDA Form 483, notice of adverse finding, warning letter,
untitled letter or other correspondence or notice from the FDA or any other
federal, state, local or foreign governmental authority having authority over
the Company ("GOVERNMENTAL AUTHORITY") alleging or asserting noncompliance with
any Applicable Laws or any licenses, certificates, approvals, clearances,
authorizations, permits and supplements or amendments thereto required by any
such Applicable Laws ("AUTHORIZATIONS"); (iii) possesses all Authorizations and
such Authorizations are valid and in full force and effect and are not in
violation of any term of any such Authorizations; (iv) has not received notice
of any claim, suit, proceeding, hearing, enforcement, audit, investigation,
arbitration or other action from any Governmental Authority or third party
alleging that any product operation or activity is in violation of any
Applicable Laws or Authorizations and has no knowledge that any such
Governmental Authority or third party is considering any such claim, suit,
proceeding, hearing, enforcement, audit, investigation, arbitration or other
action; (v) has not received notice that any Governmental Authority has taken,
is taking or intends to take action to limit, suspend, modify or revoke any
Authorizations and has no knowledge that any such Governmental Authority is
considering such action; (vi) has filed, obtained, maintained or submitted all
reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments as required by any Applicable Laws or
Authorizations and that all such reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments were
complete and correct in all material respects on the date filed (or were
corrected or supplemented by a subsequent submission); and (vii) has not, either
voluntarily or involuntarily, initiated, conducted, or issued or caused to be
initiated, conducted or issued, any recall, market withdrawal or replacement,
safety alert, post sale warning, "dear doctor" letter, or other notice or action
relating to the alleged lack of safety or efficacy of any product or any alleged
product defect or violation and the Company does not have any knowledge that any
third party has initiated, conducted or intends to initiate any such notice or
action, except, in the case of each of clauses (i), (ii) and (iii), for any
default, violation or event that would not, individually or in the aggregate,
have or reasonably be expected to have a Material Adverse Effect..
(ww) The studies, tests and preclinical and clinical trials conducted
or sponsored by or on behalf of the Company that are described or referred to in
the Sale Preliminary Prospectus, the Prospectus and the Registration Statement
were and, if still pending, are being conducted in accordance with experimental
protocols, procedures and controls pursuant to accepted professional scientific
standards and all Applicable Laws and Authorizations; the descriptions of the
results of such studies, tests and trials contained in the Sale Preliminary
Prospectus, the Prospectus and the Registration Statement are accurate and
complete in all material respects and fairly present the data derived from such
studies, tests and trials; except to the extent disclosed in the Sale
Preliminary Prospectus, Prospectus and the Registration Statement, the Company
is not aware of any studies, tests or trials the results of which the Company
believes reasonably call into question the study, test, or trial results
described or referred to in the Sale Preliminary Prospectus. the Prospectus and
Maxim Group LLC
October 18, 2006
Page 18 of 39
the Registration Statement when viewed in the context in which such results are
described and the clinical state of development; and the Company has not
received any notices or correspondence from any Governmental Authority requiring
the termination, suspension or material modification of any studies, tests or
preclinical or clinical trials conducted or sponsored by or on behalf of the
Company.
(xx) As used in this Agreement, references to matters being "MATERIAL"
with respect to the Company shall mean a material event, change, condition,
status or effect related to the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, prospects (as such
prospects are disclosed or described in any Preliminary Prospectus or the
Prospectus), operations or results of operations of the Company.
(yy) As used in this Agreement, the term "KNOWLEDGE OF THE COMPANY" (or
similar language) shall mean the knowledge of the officers and directors of the
Company who are named in the Sale Preliminary Prospectus and the Prospectus,
with the assumption that such officers and directors shall have made reasonable
and diligent inquiry of the matters presented.
(zz) Any certificate signed by or on behalf of the Company and
delivered to the Representative or to Ellenoff Xxxxxxxx & Schole LLP, counsel
for the Representative ("UNDERWRITERS' COUNSEL"), shall be deemed to be a
representation and warranty by the Company to each Underwriter listed on
Schedule A hereto as to the matters covered thereby.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at a purchase
price per share of $5.46, the number of Firm Shares set forth opposite their
respective names on Schedule A hereto together with any additional number of
Shares which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of certificates
representing, the Firm Shares shall be made at the offices of the Underwriters'
Counsel, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place
as shall be agreed upon by the Representative and the Company, at 10:00 A.M.,
New York City time, on the third (3rd) or, as permitted under Rule 15c6-1 under
the Exchange Act, fourth (4th) business day (unless postponed in accordance with
the provisions of Section 9 hereof) following the date of the effectiveness of
the Registration Statement, or such other time not later than ten (10) business
days after such date as shall be agreed upon by the Representative and the
Company as permitted under Rule 15c6-1 under the Exchange Act (such time and
date of payment and delivery being herein called the "CLOSING DATE"). The
closing of the payment of the purchase price for, and delivery of certificates
representing, the Firm Shares is referred to herein as the "CLOSING."
(c) Payment of the purchase price for the Firm Shares shall be made by
wire transfer in immediately available funds to or as directed by the Company
upon delivery of certificates for the Firm Shares to the Representative through
the facilities of The Depository Trust Company for the respective accounts of
the several Underwriters. Certificates for the Firm Shares shall be registered
in such name or names and shall be in such denominations as the Representative
may request at least two (2) business days before the Closing Date.
Maxim Group LLC
October 18, 2006
Page 19 of 39
(d) In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants to the Underwriters an
option to purchase up to an aggregate of 375,000 Additional Shares at the same
purchase price per share to be paid by the Underwriters for the Firm Shares as
set forth in Section 2(a) above, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time and from time to time on or before the forty-fifth
(45th) day following the final date of the Prospectus, by written notice from
the Representative to the Company. Such notice shall set forth the aggregate
number of Additional Shares as to which the option is being exercised and the
date and time, as reasonably determined by the Representative, when the
Additional Shares are to be delivered (any such date and time being herein
sometimes referred to as the "ADDITIONAL CLOSING DATE"); provided, however, that
no Additional Closing Date shall occur earlier than the Closing Date or earlier
than the third (3rd) full business day after the date on which the option shall
have been exercised nor later than the eighth (8th) full business day after the
date on which the option shall have been exercised (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof). Upon any
exercise of the option as to all or any portion of the Additional Shares, each
Underwriter, acting severally and not jointly, agrees to purchase from the
Company the number of Additional Shares that bears the same proportion of the
total number of Additional Shares then being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto (or
such number increased as set forth in Section 9 hereof) bears to the total
number of Firm Shares that the Underwriters have agreed to purchase hereunder,
subject, however, to such adjustments to eliminate fractional shares as the
Representative in its sole discretion shall make.
(e) Payment of the purchase price for, and delivery of certificates
representing, the Additional Shares shall be made at the office of Underwriters'
Counsel, or at such other place as shall be agreed upon by the Representative
and the Company, at 10:00 A.M., New York City time, on the Additional Closing
Date (unless postponed in accordance with the provisions of Section 9 hereof),
or such other time as shall be agreed upon by the Representative and the
Company.
(f) Payment of the purchase price for the Additional Shares shall be
made by wire transfer in immediately available funds to or as directed by the
Company upon delivery of certificates for the Additional Shares to the
Representative through the facilities of The Depository Trust Company for the
respective accounts of the several Underwriters. Certificates for the Additional
Shares shall be registered in such name or names and shall be in such
denominations as the Representative may request at least two (2) business days
before the Additional Closing Date. The Company will permit the Representative
to examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date.
Maxim Group LLC
October 18, 2006
Page 20 of 39
3. Offering. Upon authorization of the release of the Firm Shares or,
as the case may be, the Additional Shares, by the Representative, the
Underwriters propose to offer the Shares for sale to the public upon the terms
and conditions set forth in the Prospectus.
4. Covenants of the Company. The Company acknowledges, covenants and
agrees with the Underwriters that:
(a) The Registration Statement and any amendments thereto have been
declared effective, and if Rule 430A is used or the filing of the Prospectus is
otherwise required under Rule 424(b), the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) within
the prescribed time period and will provide evidence satisfactory to the
Representative of such timely filing.
(b) The Company will notify the Representative immediately (and, if
requested by the Representative, will confirm such notice in writing): (i) when
the Registration Statement and any amendments thereto become effective, (ii) of
any request by the Commission for any amendment of or supplement to the
Registration Statement, the Sale Preliminary Prospectus or the Prospectus or for
any additional information, (iii) of the Company's intention to file or prepare
any supplement or amendment to the Registration Statement or the Prospectus,
(iv) of the mailing or the delivery to the Commission for filing of any
amendment of or supplement to the Registration Statement, the Sale Preliminary
Prospectus or the Prospectus, including but not limited to Rule 462(b) under the
Securities Act, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or of the initiation, or the threatening, of any proceedings
therefor, it being understood that the Company shall make every effort to avoid
the issuance of any such stop order, (vi) of the receipt of any comments from
the Commission, and (vii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Sale Preliminary Prospectus or the
Prospectus (including the prospectus required to be filed pursuant to Rule
424(b)) that differs from the prospectus on file at the time of the
effectiveness of the Registration Statement or file any document under the
Exchange Act if such document would be deemed to be incorporated by reference
into the Prospectus to which the Representative shall object in writing after
being timely furnished in advance a copy thereof. The Company will provide the
Representative with copies of all such amendments, filings and other documents
prior to any filing or other publication thereof and also afford the
Representative a reasonable opportunity and time to review and comment thereon.
Maxim Group LLC
October 18, 2006
Page 21 of 39
(c) The Company shall comply with the Securities Act, the Exchange Act
and all applicable Rules and Regulations to permit completion of the
distribution as contemplated in this Agreement, the Registration Statement and
the Prospectus. If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act, the Exchange Act and all
applicable Rules and Regulations in connection with the sales of Shares, any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances existing at the time of delivery to the
purchaser, not misleading, or if, to comply with the Securities Act, the
Exchange Act or the Rules and Regulations, it shall be necessary at any time to
amend or supplement the Prospectus or Registration Statement, or to file any
document which is an exhibit to the Registration Statement or the Prospectus or
in any amendment thereof or supplement thereto, the Company will notify the
Representative promptly and prepare and file with the Commission, subject to
Section 4(a) hereof, an appropriate amendment or supplement (in form and
substance reasonably satisfactory to the Representative) which will correct such
statement or omission or which will effect such compliance and will use its best
efforts to have any amendment to the Registration Statement declared effective
as soon as possible.
(d) The Company will promptly deliver to the Underwriters and
Underwriters' Counsel a signed copy of the Registration Statement, as initially
filed and all amendments thereto, including all consents and exhibits filed
therewith, and will maintain in the Company's files manually signed copies of
such documents for at least five (5) years after the date of filing thereof. The
Company will promptly deliver to each of the Underwriters such number of copies
of the Sale Preliminary Prospectus, the Prospectus, the Registration Statement,
and all amendments of and supplements to such documents, if any, and all
documents which are exhibits to the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, as the Underwriters may reasonably
request. Prior to 10:00 A.M., New York time, on the business day next succeeding
the date of this Agreement and from time to time thereafter, the Company will
furnish the Underwriters with copies of the Prospectus in New York City in such
quantities as the Underwriters may reasonably request.
(e) The Company consents to the use and delivery of the Sale
Preliminary Prospectus by the Underwriters in accordance with Rule 430 and
Section 4(b) of the Securities Act.
(f) If the Company elects to rely on Rule 462(b) under the Securities
Act, 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 Securities Act by the earlier of: (i) 10:00
p.m., New York City time, on the date of this Agreement, and (ii) the time that
confirmations are given or sent, as specified by Rule 462(b)(2).
Maxim Group LLC
October 18, 2006
Page 22 of 39
(g) During the period of 180 days after the effective date of the
Registration Statement, neither the Company nor any of its Affiliates will
directly or indirectly, take any action which constitutes or is designed to
cause or result in, or which could reasonably be expected to constitute, cause
or result in, the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Shares.
(h) The Company will use its best efforts, in cooperation with the
Representative, at or prior to the time of effectiveness of the Registration
Statement, to qualify the Shares for offering and sale under the securities laws
relating to the offering or sale of the Shares of such jurisdictions, domestic
or foreign, as the Representative may designate and to maintain such
qualification in effect for so long as required for the distribution thereof;
except that in no event shall the Company be obligated in connection therewith
to qualify as a foreign corporation or to execute a general consent to service
of process under the laws of any such state where it is not presently qualified
or where it would be subject to taxation as a foreign corporation.
(i) The Company will make generally available to its security holders
and to the Underwriters as soon as practicable, but in any event not later than
twelve (12) months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Securities Act), an audited earnings statement
of the Company complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Company, Rule 158).
(j) During the twelve (12) months following the Closing Date, without
the consent of the Representative which shall not be unreasonably withheld, the
Company will not file any registration statement relating to the offer or sale
of any of the Company's securities, including any Registration Statement on Form
S-8, except: (i) a Form S-8 filed with the Commission in connection with the
Company's Stock Option Plan and (ii) a registration statement to register the
resale of certain shares of Common Stock representing accrued interest owed to
or held by certain private placement investors of the Company and shares of
Common Stock to Ajax Capital, LLC, Xxxxxxx X. Xxxxxxxxxx & Co., Inc., Valor
Capital Management, LP and Millennium Partners, L.P.
(k) Each of the Company's officers and directors and certain of its
shareholders (the "INSIDER LOCK-UP PARTIES") shall, prior to the Closing, enter
into a written "lock-up" agreement with the Representative in the form in the
form attached hereto as Annex IV. The names of the Insider Lock-Up Parties will
be as previously agreed to by the Company and the Representative.
(l) Certain of the Company's shareholders who were investors in
previous private placements of the Company's securities (the "INVESTOR LOCK-UP
PARTIES") shall, prior to the Closing, enter into a written "lock-up" agreement
with the Representative in the form in the form attached hereto as Annex V. The
names of the Investor Lock-Up Parties will be as previously agreed to by the
Company and the Representative.
Maxim Group LLC
October 18, 2006
Page 23 of 39
(m) During the twelve (12) month period following the Closing Date,
offer, the Company shall not, without the prior written consent of the
Representative, sell or distribute any of its securities, other than pursuant
the Company's 2004 Employee Stock Option Plan or the Company's 2004 Incentive
Stock Option Plan or pursuant to the terms of any securities exercisable or
convertible into shares of the Company's capital stock that are outstanding at
the Closing Date.
(n) During the twenty-four (24) months following the Closing, offer,
sell or distribute any convertible securities convertible at a price that may,
at the time of conversion, be less than the Fair Market Value of the Common
Stock on the date of the original sale, without the consent of the
Representative, which consent shall not be unreasonably withheld, conditioned or
delayed. For purposes of this Section 4, the term "FAIR MARKET VALUE" shall mean
the greater of: (i) the average of the volume weighted average price of the
Company's common stock for each of the 30 trading days prior to the date of the
original sale; and (ii) the last sale price of the Common Stock, during normal
operating hours, as reported on the AMEX, or any other exchange or electronic
quotation system on which the Common Stock is then listed.
(o) The Company agrees that it will, upon completion of the proposed
public offering contemplated herein, for a period of no less than three (3)
years, engage a designee of Representative as an observer ("OBSERVER") to its
Board of Directors where such Observer shall attend meetings of the Board,
receive all notices and other correspondence and communications sent by the
Company to members of its Board of Directors provided, that such Observer shall
not be entitled to any compensation, other than reimbursement for all costs
incurred in attending such meetings including, food, lodging, and
transportation. The Company further agrees that, during said three (3) year
period, it shall schedule no less than four (4) formal and "in person" meetings
of its Board of Directors in each such year at which meetings such Observer
shall be permitted to attend as set forth herein; said meetings shall be held
quarterly each year and ten (10) days advance notice of such meetings shall be
given to the Observer. Further, during such three (3) year period, the Company
shall give notice to the Representative with respect to any proposed
acquisitions, mergers, reorganizations or other similar transactions. The
Company shall, to the extent permissible under law, indemnify and hold such
Observer harmless against any and all claims, actions, damages, costs and
expenses, and judgments arising solely out of the attendance and participation
of such Observer at any such meeting described herein, and, if the Company
maintains a liability insurance policy affording coverage for the acts of its
officers and directors, it shall, if possible, include such Observer as an
insured under such policy.
(p) For a period of three (3) years from the effective date of the
Registration Statement, the Company, at its expense, shall provide the
Representative on a weekly basis with a copy of the Company's weekly transfer
sheets from the previous week and securities positions listings.
(q) The Company will, at its expense: (i) as promptly as is practicable
following the Closing (but in no event later than 30 days from the Closing),
obtain a listing in the Standard & Poors Manual and (ii) for a period of two (2)
years from the date of such listing, keep such listing in the Standard & Poors
Manual current (it being agreed that the Company shall apply for such listing
prior to the Closing);
Maxim Group LLC
October 18, 2006
Page 24 of 39
(r) During the period of three (3) years from the effective date of the
Registration Statement, the Company will furnish or make available via XXXXX to
the Underwriters copies of all reports or other communications (financial or
other) furnished to security holders or from time to time published or publicly
disseminated by the Company, and will deliver to the Underwriters: (i) as soon
as they are available, copies of any reports, financial statements and proxy or
information statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as the Representative may from time to time reasonably
request.
(s) The Company will not issue press releases or engage in any other
publicity, without the Representative's prior written consent (which consent
shall not unreasonably be withheld, conditioned or delayed), for a period ending
at 5:00 p.m. Eastern time on the first business day following the thirtieth
(30th) day following the Closing Date.
(t) The Company will use its good faith best efforts to maintain its
key person life insurance with a insurer rated at least AA or better in the most
recent addition of "Best's Life Reports" in the amount of $1,500,000 on the life
of Andre' XxXxxx in full force and effect for a period of three (3) years from
the Closing Date. The Company shall be the sole beneficiary of such policy.
(u) Upon conclusion of the Offering, the Company will engage (for no
less than two (2) years from the Closing Date) a financial public relations firm
mutually acceptable to the Company and the Representative.
(v) The Company has or will retain a transfer agent reasonably
acceptable to the Representative for the Shares and shall continue to retain
such transfer agent (or another transfer agent reasonably acceptable to the
Representative) for a period of three (3) years following the Closing Date.
(w) The Company will apply the net proceeds from the sale of the Shares
as set forth under the caption "Use of Proceeds" in the Prospectus. Without the
written consent of the Representative, no proceeds of the Offering will be used
to pay outstanding loans from officers, directors or shareholders or to pay any
accrued salaries or bonuses to any employees or former employees, except as
disclosed in the Prospectus.
(x) The Company will use its best efforts to effect and maintain the
listing of the Shares on the AMEX.
(y) The Company, during the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act, will use its best
efforts to file all documents required to be filed with the Commission pursuant
to the Securities Act, the Exchange Act and the Rules and Regulations within the
time periods required thereby.
Maxim Group LLC
October 18, 2006
Page 25 of 39
(z) The Company will do and perform all things required to be done or
performed under this Agreement by the Company prior to the Closing Date or the
Additional Closing Date, as the case may be, and satisfy all conditions
precedent to the delivery of the Firm Shares and the Additional Shares.
(aa) The Company will not take, and will cause its Affiliates not to
take, directly or indirectly, any action which constitutes or is designed to
cause or result in, or which could reasonably be expected to constitute, cause
or result in, the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Shares or any other shares of Common Stock.
(bb) The Company shall cause to be prepared and delivered to the
Representative, at its expense, within one (1) business day from the effective
date of this Agreement, an Electronic Prospectus to be used by the Underwriters
in connection with the Offering. As used herein, the term "ELECTRONIC
PROSPECTUS" means a form of prospectus, and any amendment or supplement thereto,
that meets each of the following conditions: (i) it shall be encoded in an
electronic format, reasonably satisfactory to the Representative, that may be
transmitted electronically by the other Underwriters to offerees and purchasers
of the Shares for at least the period during which a Prospectus relating to the
Shares is required to be delivered under the Securities Act; (ii) it shall
disclose the same information as the paper prospectus and prospectus filed
pursuant to XXXXX, except to the extent that graphic and image material cannot
be disseminated electronically, in which case such graphic and image material
shall be replaced in the electronic prospectus with a fair and accurate
narrative description or tabular representation of such material, as
appropriate; and (iii) it shall be in or convertible into a paper format or an
electronic format, reasonably satisfactory to the Representative, that will
allow recipients thereof to store and have continuously ready access to the
prospectus at any future time, without charge to such recipients (other than any
fee charged for subscription to the Internet as a whole and for on-line time).
The Company hereby confirms that it has included or will include in the
Prospectus filed pursuant to XXXXX or otherwise with the Commission and in the
Registration Statement at the time it was declared effective an undertaking
that, upon receipt of a request by an investor or his or her representative
within the period when a prospectus relating to the Shares is required to be
delivered under the Securities Act, the Company shall transmit or cause to be
transmitted promptly, without charge, a paper copy of the Prospectus.
(cc) The Company represents and agrees that, unless it obtains the
prior consent of Representative, it has not made and will not make any offer
relating to the Shares that would constitute an "issuer free writing
prospectus," as defined in Rule 433 promulgated under the Securities Act, or
that would otherwise constitute a "free writing prospectus," as defined in Rule
405 promulgated under the Securities Act, required to be filed with the
Commission. Any such free writing prospectus consented to by the Representative
is hereinafter referred to as a "PERMITTED FREE WRITING PROSPECTUS." The Company
represents that it has treated or agrees that it will treat each Permitted Free
Writing Prospectus as an "issuer free writing prospectus," as defined in Rule
433 promulgated under the Securities Act, and has complied and will comply with
the requirements said Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record keeping.
Maxim Group LLC
October 18, 2006
Page 26 of 39
5. Consideration; Payment of Expenses.
(a) In consideration of the services to be provided for hereunder, the
Company shall pay to the Underwriters or their respective designees their pro
rata portion (based on the Shares purchased) of the following compensation:
(i) An underwriting discount of nine percent (9.0%); and
(ii) a non-accountable expense allowance equal to two and
four-tenths percent (2.4%) of the gross proceeds of the Offering (exclusive of
proceeds from the sale of Additional Shares), less $75,000 previously paid.
(b) The Representative reserves the right to reduce any item of its
compensation or adjust the terms thereof as specified herein in the event that a
determination shall be made by the NASD to the effect that the Underwriters'
aggregate compensation is in excess of NASD rules or that the terms thereof
require adjustment.
(c) Whether or not the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus are consummated or this Agreement is
terminated, the Company hereby agrees to pay all costs and expenses incident to
the performance of its obligations hereunder, including the following:
(i) all expenses in connection with the preparation, printing,
"edgarization" and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and any and all amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers;
(ii) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Securities Act and the Offering;
(iii) the cost of producing this Agreement and any agreement
among Underwriters, blue sky survey, closing documents and other instruments,
agreements or documents (including any compilations thereof) in connection with
the Offering, the cost of eight (8) bound volumes of such documents for the
Representative and the cost of eight (8) lucite deal cubes;
(iv) the cost of two (2) "tombstone" advertisements to be
placed in appropriate daily or weekly periodicals of the Representative's choice
(i.e., The Wall Street Journal and The New York Times) up to $40,000;
Maxim Group LLC
October 18, 2006
Page 27 of 39
(v) all expenses in connection with the qualification of the
Shares for offering and sale under state or foreign securities or blue sky laws,
including the fees and disbursements of Underwriters' Counsel as set forth in
Section 5(d) hereof in connection with such qualification and in connection with
any blue sky survey undertaken by such counsel;
(vi) the filing fees incident to securing any required review
by the NASD of the terms of the Offering;
(vii) all fees and expenses in connection with listing the
Shares on the AMEX;
(viii) all expenses incurred in connection with attending or
hosting meetings with prospective purchasers of the Shares ("ROAD SHOW
EXPENSES");
(ix) any stock transfer taxes incurred in connection with this
Agreement or the Offering;
(x) the cost of preparing stock certificates representing the
Shares;
(xi) the cost and charges of any transfer agent or registrar
for the Shares; and
(xii) all other costs and expenses incident to the performance
of the Company obligations hereunder which are not otherwise specifically
provided for in this Section 5.
(d) At the closing, the company shall issue a payment of $5,000 to
underwriters' counsel in consideration of "blue sky" services rendered if the
common stock sold in this offering is listed on the amex or nasdaq global
market. The Company shall also pay, as due, state registration, qualification
and filing fees, NASD filing fees and accountable out-of-pocket disbursements in
connection with such registration, qualification or filing.
(e) [Intentionally Omitted]
(f) It is understood, however, that except as provided in this Section,
and Sections 6, 7 and 10 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel. Notwithstanding
anything to the contrary in this Section 5, in the event that this Agreement is
terminated pursuant to Section 5 or 10(b) hereof, or subsequent to a Material
Adverse Change, the Company will pay all out-of-pocket accountable expenses of
the Underwriters (including but not limited to the reasonable fees and
disbursements of counsel to the Underwriters, up to $90,000) incurred in
connection herewith, less any amounts previously advanced to the Representative.
Maxim Group LLC
October 18, 2006
Page 28 of 39
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares
as provided herein shall be subject to: (i) the accuracy of the representations
and warranties of the Company herein contained in all material respects, as of
the date hereof and as of the Closing Date, (ii) the absence from any
certificates, opinions, written statements or letters furnished to the
Representative or to Underwriters' Counsel pursuant to this Section 6 of any
material misstatement or omission, (iii) the performance in all material
respects by the Company of its obligations hereunder, and (iv) each of the
following additional conditions. For purposes of this Section 6, the terms
"Closing Date" and "Closing" shall refer to the Closing Date for the Firm Shares
and any Additional Closing Date, if different, for the Additional Shares, and
each of the foregoing and following conditions must be satisfied as of each
Closing.
(a) The Registration Statement shall have become effective and all
necessary regulatory or listing approvals shall have been received not later
than 5:30 P.M., New York time, on the date of this Agreement, or at such later
time and date as shall have been consented to in writing by the Representative.
If the Company shall have elected to rely upon Rule 430A under the Securities
Act, the Prospectus shall have been filed with the Commission in a timely
fashion in accordance with the terms hereof and a form of the Prospectus
containing information relating to the description of the Shares and the method
of distribution and similar matters shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period; and, at or prior to
the Closing Date or the actual time of the Closing, no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) The Representative shall have received the favorable written
opinion of Xxxxxxxxxx Xxxxxxx PC, legal counsel for the Company, dated as of the
Closing Date addressed to the Underwriters in the form attached hereto as Annex
I.
(c) The Representative shall have received the favorable written
opinion of Xxxxxxxxx Traurig, LLP, special FDA regulatory counsel for the
Company, dated as of the Closing Date addressed to the Underwriters in the form
attached hereto as Annex II.
(d) The Representative shall have received the favorable written
opinion of Xxx Xxxxxx, Patent Attorney, special intellectual property counsel
for the Company, dated as of the Closing Date addressed to the Underwriters in
the form attached hereto as Annex III.
(e) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory in
form and substance to the Representative and to Underwriters' Counsel.
(f) [Intentionally Omitted]
Maxim Group LLC
October 18, 2006
Page 29 of 39
(g) The Representative shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, dated as of the
Closing Date to the effect that: (i) the condition set forth in subsection (a)
of this Section 6 has been satisfied, (ii) as of the date hereof and as of the
applicable Closing Date, the representations and warranties of the Company set
forth in Section 1 hereof are accurate in all material respects, (iii) as of the
applicable Closing Date, all agreements, conditions and obligations of the
Company to be performed or complied with hereunder on or prior thereto have been
duly performed or complied with in all material respects, (iv) the Company has
not sustained any material loss or interference with their respective
businesses, whether or not covered by insurance, or from any labor dispute or
any legal or governmental proceeding, (v) no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof has been issued and no proceedings therefor have been initiated or
threatened by the Commission, (vi) there are no pro forma or as adjusted
financial statements that are required to be included or incorporated by
reference in the Registration Statement and the Prospectus pursuant to the Rules
and Regulations which are not so included or incorporated by reference and (vii)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus there has not been any material
adverse change or any development involving a prospective material adverse
change, whether or not arising from transactions in the ordinary course of
business, in or affecting: (x) the business, condition (financial or otherwise),
results of operations, shareholders' equity, properties or prospects (as such
prospects are disclosed or described in any Preliminary Prospectus or the
Prospectus) of the Company; (y) the long-term debt or capital stock of the
Company; or (z) the Offering or consummation of any of the other transactions
contemplated by this Agreement, the Registration Statement and the Prospectus.
(h) On the date of this Agreement, on the Closing Date and, as the case
may be, on each Additional Closing Date, the Representative shall have received
a "cold comfort" letter from REM dated, respectively, as of the date of the date
of delivery and addressed to the Underwriters and in form and substance
satisfactory to the Representative and Underwriters' Counsel, confirming that
they are independent certified public accountants with respect to the Company
within the meaning of the Securities Act and the Rules and Regulations, and
stating, as of the date of delivery (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five (5) days prior to the date of such letter), the conclusions and findings of
such firm with respect to the financial information and other matters relating
to the Registration Statement covered by such letter and, with respect to
letters issued as of Additional Closing Dates, confirming the conclusions and
findings set forth in such prior letter.
(i) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any material change in the
capital stock or long-term debt of the Company or any change or development
involving a change, whether or not arising from transactions in the ordinary
course of business, in the business, condition (financial or otherwise), results
of operations, shareholders' equity, properties or prospects (as such prospects
Maxim Group LLC
October 18, 2006
Page 30 of 39
are disclosed or described in any Preliminary Prospectus or the Prospectus) of
the Company, including but not limited to the occurrence of any fire, flood,
storm, explosion, accident, act of war or terrorism or other calamity, the
effect of which, in any such case described above, is, in the sole judgment of
the Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the Offering on the terms and in the manner
contemplated in the Prospectus (exclusive of any supplement).
(j) The Representative shall have received lock-up agreements: (i) from
each Insider Lock-Up Party, duly executed by the applicable Insider Lock-Up
Party, in the form attached hereto as Annex IV and (ii) from each Investor
Lock-Up Party, duly executed by the applicable Investor Lock-Up Party, in the
form attached hereto as Annex IV.
(k) The Shares shall have been approved for listing on the AMEX.
(l) The NASD shall have confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(m) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that would, as of the Closing Date,
prevent the issuance or sale of the Shares; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Shares.
(n) The Company shall have been duly and lawfully assigned from ADM
Tronics Unlimited, Inc., as beneficiary, a life insurance policy in he amount of
$2,000,000 on the life of Andre' XxXxxx, and the Company shall have provided
written evidence of such assignment to the Representative.
(o) The Company shall have furnished the Underwriters and Underwriters'
Counsel with such other certificates, opinions or other documents as they may
have reasonably requested.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the
Representative or to Underwriters' Counsel pursuant to this Section 6 shall not
be reasonably satisfactory in form and substance to the Representative and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by the Representative at, or at any time prior to, the consummation of
the Closing, and the obligations of the Underwriters to purchase the Additional
Shares may be cancelled by the Representative at, or at any time prior to, the
Additional Closing Date. Notice of such cancellation shall be given to the
Company in writing, or by telephone. Any such telephone notice shall be
confirmed promptly thereafter in writing.
Maxim Group LLC
October 18, 2006
Page 31 of 39
7. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter and
each Person, if any, who controls each Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including, but not limited to, reasonable attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact made by such
party contained in the Registration Statement, as originally filed or any
amendment thereof, or any related Preliminary Prospectus (including the Sale
Preliminary Prospectus) or the Prospectus (in light of the circumstances in
which such statement was made), or in any supplement thereto or amendment
thereof, or arise out of or are based upon the omission or alleged omission made
by such party to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will be liable in any such case to the extent but only to the extent
that any such loss, liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with the
Underwriters' Information. This indemnity agreement will be in addition to any
liability, which the Company may otherwise have, including but not limited to
other liability under this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other Person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus (including the Sale Preliminary Prospectus) or
the Prospectus, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with the
Underwriters' Information; provided, however, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares to be purchased by such
Underwriter hereunder.
Maxim Group LLC
October 18, 2006
Page 32 of 39
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
the indemnifying party from any liability which it may have under this Section 7
to the extent that it is not materially prejudiced as a result thereof and in
any event shall not relieve it from any liability that such indemnifying party
may have otherwise than on account of the indemnity agreement hereunder). In
case any such claim or action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate, at its own expense in the defense of such
action, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party; provided however, that counsel to the indemnifying party
shall not (except with the written consent of the indemnified party) also be
counsel to the indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties shall
not have employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, (iii) the
indemnifying party does not diligently defend the action after assumption of the
defense, or (iv) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified parties, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened claim,
investigation, action or proceeding in respect of which indemnity or
contribution may be or could have been sought by an indemnified party under this
Section 7 or Section 8 hereof (whether or not the indemnified party is an actual
or potential party thereto), unless (x) such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such claim, investigation, action or proceeding and
(ii) does not include a statement as to or an admission of fault, culpability or
any failure to act, by or on behalf of the indemnified party, and (y) the
indemnifying party confirms in writing its indemnification obligations hereunder
with respect to such settlement, compromise or judgment.
Maxim Group LLC
October 18, 2006
Page 33 of 39
8. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from Persons, other than the Underwriters, who may also be liable
for contribution, including Persons who control the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, officers
of the Company who signed the Registration Statement and directors of the
Company) as incurred to which the Company and one or more of the Underwriters
may be subject, in such proportions as is appropriate to reflect the relative
benefits received by the Company and the Underwriters from the Offering or, if
such allocation is not permitted by applicable law, in such proportions as are
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as: (x) the total proceeds from the Offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company bears to (y) the underwriting discount or commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of each of the Company and of
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any judicial, regulatory or other legal or
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 8: (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which the
discounts and commissions applicable to the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii) no Person
Maxim Group LLC
October 18, 2006
Page 34 of 39
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each Person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 8 or
otherwise. The obligations of the Underwriters to contribute pursuant to this
Section 8 are several in proportion to the respective number of Shares to be
purchased by each of the Underwriters hereunder and not joint.
9. Underwriter Default.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates (the
"DEFAULT SHARES") do not (after giving effect to arrangements, if any, made by
the Representative pursuant to subsection (b) below) exceed in the aggregate 10%
of the number of Firm Shares or Additional Shares, each non-defaulting
Underwriter, acting severally and not jointly, agrees to purchase from the
Company that number of Default Shares that bears the same proportion of the
total number of Default Shares then being purchased as the number of Firm Shares
set forth opposite the name of such Underwriter on Schedule A hereto bears to
the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters, subject, however, to such adjustments to eliminate
fractional shares as the Representative in its sole discretion shall make.
(b) In the event that the aggregate number of Default Shares exceeds
10% of the number of Firm Shares or Additional Shares, as the case may be, the
Representative may in their discretion arrange for itself or for another party
or parties (including any non-defaulting Underwriter or Underwriters who so
agree) to purchase the Default Shares on the terms contained herein. In the
event that within five calendar days after such a default the Representative do
not arrange for the purchase of the Default Shares as provided in this Section
9, this Agreement or, in the case of a default with respect to the Additional
Shares, the obligations of the Underwriters to purchase and of the Company to
sell the Additional Shares shall thereupon terminate, without liability on the
part of the Company with respect thereto (except in each case as provided in
Sections 5, 7, 8, 10 and 11(d)) or the Underwriters, but nothing in this
Agreement shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
Maxim Group LLC
October 18, 2006
Page 35 of 39
(c) In the event that any Default Shares are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or parties
as aforesaid, the Representative or the Company shall have the right to postpone
the Closing Date or Additional Closing Date, as the case may be for a period,
not exceeding five (5) business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or in
any other documents and arrangements, and the Company agrees to file promptly
any amendment or supplement to the Registration Statement or the Prospectus
which, in the reasonable opinion of Underwriters' Counsel, may thereby be made
necessary or advisable. The term "Underwriter" as used in this Agreement shall
include any party substituted under this Section 9 with like effect as if it had
originally been a party to this Agreement with respect to such Firm Shares and
Additional Shares.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Company and the Underwriters
contained in this Agreement or in certificates of officers of the Company
submitted pursuant hereto, including the agreements contained in Section 5, the
indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling Person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling Person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The covenants
and agreements contained in Sections 5, 7, 8, this Section 10 and Sections 14
and 15 hereof shall survive any termination of this Agreement, including
termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the later of: (i)
receipt by the Representative and the Company of notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement.
(b) The Representative shall have the right to terminate this Agreement
at any time prior to the consummation of the Closing or to terminate the
obligations of the Underwriters to purchase the Additional Shares at any time
prior to the consummation of any closing to occur on an Additional Closing Date,
as the case may be, if: (i) a Material Adverse Change with respect to the
Company shall have occurred; or (ii) any domestic or international event or act
or occurrence has materially disrupted, or in the opinion of the Representative
will in the immediate future materially disrupt, the market for the Company's
securities or securities in general; or (iii) trading on the New York Stock
Exchange, The NASDAQ Global Market, the NASDAQ Capital Market or the AMEX shall
have been suspended or been made subject to material limitations, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the New York Stock Exchange, The
NASDAQ Global Market, the NASDAQ Capital Market or the AMEX or by order of the
Commission or any other governmental authority having jurisdiction; or (iv) a
banking moratorium has been declared by any state or federal authority or if any
material disruption in commercial banking or securities settlement or clearance
Maxim Group LLC
October 18, 2006
Page 36 of 39
services shall have occurred; or (v) (A) there shall have occurred any outbreak
or escalation of hostilities or acts of terrorism involving the United States or
there is a declaration of a national emergency or war by the United States or
(B) there shall have been any other calamity or crisis or any change in
political, financial or economic conditions if the effect of any such event in
(A) or (B), in the judgment of the Representative, makes it impracticable or
inadvisable to proceed with the offering, sale and delivery of the Firm Shares
or the Additional Shares, as the case may be, on the terms and in the manner
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than pursuant to Section 9(b) hereof), or if the sale
of the Shares provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth herein is not satisfied or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will, subject
to demand by the Representative, reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees and expenses of their
counsel), incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to the Representative or any Underwriter, shall be mailed,
delivered, or faxed and confirmed in writing, to Maxim Group LLC, 000 Xxxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X. Xxxxxx, Director of Investment
Banking, in each case, with a copy to Underwriters' Counsel at Ellenoff Xxxxxxxx
& Schole LLP, 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
Attention: Xxxxxxx X. Xxxxxxxx, Esq.; and
(b) if sent to the Company shall be mailed, delivered, or faxed and
confirmed in writing to the Company at the addresses set forth in the
Registration Statement, with a copy to Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq.;
provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to the Representative, which
address will be supplied to any other party hereto by the Representative upon
request. Any such notices and other communications shall take effect at the time
of receipt thereof.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company and the controlling
Persons, directors, officers, employees and agents referred to in Sections 6 and
7 hereof, and their respective successors and assigns, and no other Person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
Maxim Group LLC
October 18, 2006
Page 37 of 39
to be for the sole and exclusive benefit of the parties hereto and said
controlling Persons and their respective successors, officers, directors, heirs
and legal representatives, and it is not for the benefit of any other Person.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
14. Governing Law. This Agreement shall be deemed to have been executed
and delivered in New York and both this Agreement and the transactions
contemplated hereby shall be governed as to validity, interpretation,
construction, effect, and in all other respects by the laws of the State of New
York, without regard to the conflicts of laws principals thereof (other than
Section 5-1401 of The New York General Obligations Law). Each of the
Underwriters and the Company: (a) agrees that any legal suit, action or
proceeding arising out of or relating to this Agreement and/or the transactions
contemplated hereby shall be instituted exclusively in the Supreme Court of the
State of New York, New York County, or in the United States District Court for
the Southern District of New York, (b) waives any objection which it may have or
hereafter to the venue of any such suit, action or proceeding, and (c)
irrevocably consents to the jurisdiction of Supreme Court of the State of New
York, New York County, or in the United States District Court for the Southern
District of New York in any such suit, action or proceeding. Each of the
Underwriters and the Company further agrees to accept and acknowledge service of
any and all process which may be served in any such suit, action or proceeding
in the Supreme Court of the State of New York, New York County, or in the United
States District Court for the Southern District of New York and agrees that
service of process upon the Company mailed by certified mail to the Company's
address or delivered by Federal Express via overnight delivery shall be deemed
in every respect effective service of process upon the Company, in any such
suit, action or proceeding, and service of process upon the Underwriters mailed
by certified mail to the Underwriters' address or delivered by Federal Express
via overnight delivery shall be deemed in every respect effective service
process upon the Underwriter, in any such suit, action or proceeding. THE
COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON
BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT, THE SALE PRELIMINARY PROSPECTUS AND
THE PROSPECTUS.
15. Entire Agreement. This Agreement, together with the schedule and
exhibits attached hereto and as the same may be amended from time to time in
accordance with the terms hereof, contains the entire agreement among the
parties hereto relating to the subject matter hereof and there are no other or
further agreements outstanding not specifically mentioned herein.
Maxim Group LLC
October 18, 2006
Page 38 of 39
16. Severability. If any term or provision of this Agreement or the
performance thereof shall be invalid or unenforceable to any extent, such
invalidity or unenforceability shall not affect or render invalid or
unenforceable any other provision of this Agreement and this Agreement shall be
valid and enforced to the fullest extent permitted by law.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Delivery of
a signed counterpart of this Agreement by facsimile transmission shall
constitute valid and sufficient delivery thereof.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[Signature Pages Follow]
Maxim Group LLC
October 18, 2006
Page 39 of 39
If the foregoing correctly sets forth your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.
Very truly yours,
IVIVI TECHNOLOGIES, INC.
By: /s/ Andre' XxXxxx
-------------------------
Name: Andre' XxXxxx
Title: Co-Chief Executive Officer
ACCEPTED BY THE REPRESENTATIVE, ACTING FOR ITSELF AND AS REPRESENTATIVE OF THE
UNDERWRITERS NAMED ON SCHEDULE A ATTACHED HERETO, AS OF THE DATE FIRST WRITTEN
ABOVE:
MAXIM GROUP LLC
By: /s/ Xxxxxxxx Xxxxxx
----------------------------
Name: Xxxxxxxx Xxxxxx
Title: Director of Investment Banking
[Signature Page to Underwriting Agreement]
SCHEDULE A
UNDERWRITERS
---------------------------------------------- ------------------------------ ---------------------------------------
UNDERWRITER TOTAL NUMBER OF FIRM SHARES NUMBER OF ADDITIONAL SHARES TO BE
TO BE PURCHASED PURCHASED IF OPTION IS FULLY EXERCISED
---------------------------------------------- ------------------------------ ---------------------------------------
Maxim Group LLC 1,875,000 281,250
---------------------------------------------- ------------------------------ ---------------------------------------
Xxxxx Xxxxxx, Carret & Co., LLC 625,000 89,750
---------------------------------------------- ------------------------------ ---------------------------------------
TOTAL 2,500,000 375,000
---------------------------------------------- ------------------------------ ---------------------------------------
