EXHIBIT 1.1
__________ Shares of Common Stock
ELECTRO-OPTICAL SCIENCES, INC.
FORM OF UNDERWRITING AGREEMENT
____________, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. Inc.
A Representative of the Several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
And
Stanford Group Company
A Representative of the Several Underwriters
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies/Gentlemen:
Electro-Optical Sciences, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
________ shares (the "Firm Shares") of its common stock, par value $.001 per
share (the "Common Stock") and, for the sole purpose of covering over-allotments
in connection with the sale of the Firm Shares, at the option of the
Underwriters, up to an additional _________ shares (the "Additional Shares") of
Common Stock. 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.
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. ("Ladenburg") and Stanford Group Company
("Stanford Group") are acting as the co-lead managers (the "Co-Lead Managers")
in connection with the offering and sale of the Shares contemplated herein (the
"Offering").
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No.
333-___________), 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. The registration statement, as amended at the time it became
effective, including the prospectus, financial statements, schedules, exhibits
and other information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A or 434(d) under the
Securities Act, is hereinafter referred to as the "Registration Statement." 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 under the Securities Act 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. No stop order suspending the
effectiveness of either the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened by the
Commission. The Company, if required by the Securities Act and the rules and
regulations of the Commission (the "Rules and Regulations"), proposes to file
the Prospectus with the Commission pursuant to Rule 424(b) under the Securities
Act ("Rule 424(b)"). The final prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became effective
and the prospectus supplement relating to the offering of the Shares, are
collectively hereinafter referred to as the "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 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. Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act is hereafter
called a "Preliminary Prospectus." All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a 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
("▇▇▇▇▇").
(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) or Rule 434 under the
Securities Act ("Rule 434"), when any supplement to or amendment of the
Prospectus is filed with the Commission and at the Closing Date and the
Additional Closing Date, if any (as hereinafter respectively defined), the
Registration Statement and the Prospectus and any amendments thereof and
supplements 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
Prospectus or any related Preliminary Prospectus in
2
light of the circumstances under which they were made, not misleading. When any
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 Ladenburg specifically for use therein. The parties
acknowledge and agree that such information provided by or on behalf of any
Underwriter consists solely of the material included under the caption
"Underwriting" in the Prospectus and the last paragraph on the front cover page
concerning the delivery of the Shares (the "Underwriters' Information").
(c) ▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇"), who has certified certain of the
financial statements of the Company that are included or incorporated by
reference in the Registration Statement, are an independent public accounting
firm as required by the Securities Act, the Exchange Act and the Rules and
Regulations. ▇▇▇▇▇▇ has not, during the periods covered by the financial
statements included in the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange Act.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as disclosed in
the Registration Statement and the Prospectus, 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 there has been no 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:
(i) the business, condition (financial or otherwise), results of operations,
stockholders' equity, properties or prospects of the Company, individually or
taken as a whole (other than losses as disclosed in the Registration Statement
and the Prospectus that will continue reduce stockholders equity); (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 (a "Material Adverse Effect").
Since the date of the latest balance sheet presented, or incorporated by
reference, in the Registration Statement 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 and the
Prospectus.
(e) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column headed "Actual" under
the caption "Capitalization"
3
and, after giving effect to the Offering and the other transactions contemplated
by this Agreement, the Registration Statement and the Prospectus, will be as set
forth in the column headed "As Adjusted" under the caption "Capitalization,"
except for the shares of capital stock specifically excluded from such
presentation as disclosed in the Registration Statement and the Prospectus. All
of the issued and outstanding shares of capital stock of the Company are fully
paid and non-assessable and have been duly and validly authorized and issued, in
compliance with all applicable state, federal and foreign securities laws and
not in violation of or subject to any preemptive or similar right that does or
will entitle any person, upon the issuance or sale of any security, to acquire
from the Company any Common Stock or other security of the Company or any
security convertible into, or exercisable or exchangeable for, Common Stock or
any other such security (any "Relevant Security"), except for such rights as may
have been fully satisfied or waived prior to the effectiveness of the
Registration Statement.
(f) The Shares have been duly and validly authorized and, when
delivered in accordance with this Agreement, will be duly and validly issued,
fully paid and non-assessable, will have been issued in compliance with all
applicable state, federal and foreign securities laws 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
upon issuance or sale of Shares in the Offering. The Common Stock and the Shares
conform in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. Except as disclosed in the
Registration Statement and the Prospectus, the Company does not have 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.
(g) Except as otherwise disclosed in the Registration Statement and
the Prospectus, the Company holds no ownership or other interest, nominal or
beneficial, direct or indirect, in any corporation, partnership, joint venture
or other business entity. The Company does not have any subsidiaries (as defined
in Rule 405 of the Rules and Regulations).
(h) The Company has been duly organized and validly exists as a
corporation, partnership or limited liability company in good standing under the
laws of its jurisdiction of organization. The Company has all requisite power
and authority to carry on its business as it is currently being conducted and as
described in the Prospectus, and to own, lease and operate its respective
properties. The Company is duly qualified to do business and is in good standing
as a foreign corporation, partnership or limited liability company 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 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, stockholders' equity, properties or prospects
of the Company, individually or taken as a whole; (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").
4
(i) Except as disclosed in the Registration Statement and the
Prospectus, the Company has all necessary 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 and
the Prospectus, and each such Consent is valid and in full force and effect, and
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, or imposition of a materially burdensome
restriction on, any Consent. The Company is in compliance with all applicable
laws, rules, regulations, ordinances, directives, judgments, decrees and orders,
foreign and domestic, except where failure to be in compliance could not
reasonably be expected to have a Material Adverse Effect. No Consent contains a
materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.
(j) The Company has full right, power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated by this Agreement, the Registration Statement and
the Prospectus. This Agreement and the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus have been duly and
validly authorized by the Company. This Agreement has been duly and validly
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as rights to indemnification hereunder may be limited by
applicable law and 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).
(k) The execution, delivery, and performance of this Agreement and
consummation of the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus 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, charge or encumbrance 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 is a party or by which the Company or its properties, operations or
assets may be bound; (ii) violate or conflict with any provision of the
certificate or articles of incorporation, by-laws, certificate of formation,
limited liability company agreement, partnership agreement 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 clauses (i) and (iii) above) as could not
reasonably be expected to have a Material Adverse Effect.
(l) 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 by the Company of the
5
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus, including the issuance, sale and delivery of the Shares to be
issued, sold and delivered hereunder, except the registration under the
Securities Act of the Shares, which has become effective, and such Consents as
may be required under state securities or blue sky laws or the by-laws and rules
of the National Association of Securities Dealers, Inc. (the "NASD") or NASD
Regulation, Inc. ("NASDR") in connection with the purchase and distribution of
the Shares by the Underwriters and to list the Shares on The NASDAQ National
Market ("NASDAQ"), each of which has been obtained and is in full force and
effect.
(m) Except as disclosed in the Registration Statement 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, individually or in the aggregate, if
determined adversely to the Company, could reasonably be expected to have a
Material Adverse Effect; to the best of the Company's knowledge, no such
proceeding, litigation or arbitration is threatened or contemplated; and the
defense of all such proceedings, litigation and arbitration against or involving
the Company could not reasonably be expected to have a Material Adverse Effect.
(n) The Company's use of proceeds from the Offering hereunder will
not violate the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto, and the Company will not use such proceeds, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended, to the extent that such Act
applies to the Company.
(o) The financial statements and pro forma data, including the notes
thereto, and the supporting schedules included or incorporated by reference in
the Registration Statement 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 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; and
the supporting schedules included or incorporated by reference 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 by the Rules and Regulations to be included in the
Registration Statement. The other financial and statistical information derived
from the financial statements or supporting schedules included or incorporated
by reference in the Registration Statement 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 or incorporated by reference
in the Registration Statement and the Prospectus and the books and records of
the respective entities presented therein.
6
(p) There are no pro forma or as adjusted financial statements which
are required by the Rules and Regulations to be included or incorporated by
reference in the Registration Statement and the Prospectus in accordance with
Regulation S-X which have not been included as so required. The pro forma and as
adjusted financial information included or incorporated by reference in the
Registration Statement and the Prospectus has been properly compiled and
prepared in accordance with the applicable requirements of the Securities Act,
the Exchange Act and the Rules and Regulations and includes all adjustments and
reconciliations necessary to present fairly in accordance with United States
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.
(q) The assumptions used in preparing the pro forma and as adjusted
financial information included in the Registration Statement and the Prospectus
provide a reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein; the related
adjustments made in the preparation of such pro forma and as adjusted financial
information give appropriate effect to those assumptions; and such pro forma and
as adjusted financial information reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
(r) The statistical, industry-related and market-related data
included in the Registration Statement 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.
(s) The Company is subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act and files reports with the Commission on the
▇▇▇▇▇ System. The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and the outstanding shares of Common Stock (other than the Shares)
are listed for quotation on the NASDAQ (as defined in Section 11(b) below), the
Shares have been approved for quotation on the NASDAQ upon issuance or sale and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the NASDAQ, nor has the Company received any
notification that the Commission or the NASDAQ is contemplating terminating such
registration or listing.
(t) 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.
(u) The Company is in compliance in all material respects with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act") that are
currently applicable to the Company and is actively taking steps to ensure that
it will be in compliance
7
with other applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act upon the
effectiveness of such provisions.
(v) The Company has established and maintains "disclosure controls
and procedures" (as defined in Rules 13a-14(c) and 15d-14(c) of the Exchange
Act); the Company's "disclosure controls and procedures" are reasonably designed
to ensure that all information (both financial and non-financial) required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Rules and Regulations, and that all such information is
accumulated and communicated to the Company's management as appropriate to allow
timely decisions regarding required disclosure and to make the certifications of
the Chief Executive Officer and Chief Financial Officer of the Company required
under the Exchange Act with respect to such reports.
(w) Since the date of the filing of the Registration Statement, the
Company's auditors and the audit committee of the board of directors of the
Company (or persons fulfilling the equivalent function) have not been advised
of: (i) any significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record, process,
summarize and report financial data nor any material weaknesses in internal
controls; or (ii) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's internal
controls.
(x) Since the date of the filing of the Registration Statement,
there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(y) No event or circumstance has occurred or arisen since the date
of the filing of the Registration Statement that could reasonably be expected to
give rise to a requirement that the Company make additional disclosure on Form
8-K and has not been so disclosed.
(z) Neither the Company nor, to the Company's knowledge, any of its
affiliates (within the meaning of Rule 144 under the Securities Act) has taken,
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.
(aa) Neither Company nor, to the Company's knowledge, any of its
affiliates has, prior to the date hereof, made any offer or sale of any
securities which could be "integrated" for purposes of the Securities Act or the
Rules and Regulations with the offer and sale of the Shares pursuant to the
Registration Statement. Except as disclosed in the Registration Statement and
the Prospectus, neither Company nor any of its affiliates has sold or issued any
Relevant Security during the six-month period preceding the date of the
Prospectus, including but not limited to any sales pursuant to Rule 144A or
Regulation D or S under the Securities Act, other than shares of Common Stock
issued pursuant to employee benefit plans, qualified stock
8
option plans or the employee compensation plans or pursuant to or in exchange
for outstanding options, rights or warrants as described in the Registration
Statement and the Prospectus.
(bb) Except as disclosed in the Registration Statement 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, enforceable against the parties thereto.
(cc) The Company has complied to the Commission's satisfaction with
all requests for additional or supplemental information.
(dd) The documents incorporated or deemed to be incorporated by
reference in 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
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.
(ee) The Company is not and, at all times up to and including
consummation of the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus, 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.
(ff) There are no contracts or other documents (including, without
limitation, any voting agreement), which are required to be described in the
Registration Statement 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 or filed.
(gg) 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, stockholder, 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 or the Prospectus which is not so described and described
as required. 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 and the Prospectus. The Company has not,
in violation of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, directly or indirectly, extended or
maintained credit, arranged for the extension of credit, or renewed or amended
an extension of credit, in the form of a personal loan to or for any director or
executive officer of the Company.
9
(hh) Except as disclosed in the Registration Statement 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, the
Registration Statement and the Prospectus or, to the Company's knowledge, 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 as described in the
Registration Statement 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 them, in each case free and clear of any lien,
charge, mortgage, pledge, security interest, claim, equity, trust or other
encumbrance, preferential arrangement, defect or restriction of any kind
whatsoever (any "Lien") except such as are described in the Registration
Statement and the Prospectus or such as do not (individually or in the
aggregate) materially affect the value of such property or interfere with the
use made or proposed to be made of such property by the Company; and any real
property and buildings held under lease or sublease by the Company is held by it
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: (i) owns or possesses adequate right to use all
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses, formulae,
customer lists, and know-how and other intellectual property (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, "Intellectual Property") necessary for the
conduct of their respective businesses as now conducted and as described in the
Registration Statement and Prospectus and (ii) have no reason to believe that
the conduct of their respective businesses does or will conflict with, and have
not received any notice of any claim of conflict with, any such right of others.
To the best of the Company's knowledge, all material technical information
developed by and belonging to the Company which has not been patented has been
kept confidential. Except as disclosed in the Registration Statement and the
Prospectus, the Company has not granted or assigned to any other person or
entity any right to manufacture, have manufactured, assemble or sell the current
products and services of the Company or those products and services described in
the Registration Statement and Prospectus. To the knowledge of the Company and
except as disclosed in the Registration Statement and the Prospectus, there is
no infringement by third parties of any such Intellectual Property; 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 such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; and there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others that the
Company infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary
10
rights of others, and the Company is unaware of any other fact which would form
a reasonable basis for any such claim.
(kk) The Company maintains insurance in such amounts and covering
such risks as the Company reasonably considers adequate for the conduct of its
business and the value of its properties and as is customary for companies of a
similar size engaged in similar businesses in similar industries, all of which
insurance is in full force and effect, except where the failure to maintain such
insurance could not reasonably be expected to have a Material Adverse Effect.
There are no material claims by the Company under any such policy or instrument
as to which any insurance company is denying liability or defending under a
reservation of rights clause. The Company reasonably believes that it will be
able to renew its existing insurance as and when such coverage expires or will
be able to obtain replacement insurance adequate for the conduct of the business
and the value of its properties and for similar coverages at a cost that would
not have a Material Adverse Effect.
(ll) The Company has in effect insurance covering the Company, its
directors, officers and the Underwriters 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.
(mm) 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), except where the failure to file or pay could not
reasonably be expected to have a Material Adverse Effect. No deficiency
assessment with respect to a proposed adjustment of the Company's federal,
state, local or foreign taxes is pending or, to the best of 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 date of most recent audited financial statements, the
Company has not incurred any 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.
(nn) No labor disturbance by the employees of the Company exists or,
to the best of the Company's knowledge, is imminent and the Company is not aware
of any existing or imminent labor disturbances by the employees of any of its
principal suppliers, manufacturers, customers or contractors.
(oo) No "prohibited transaction" (as defined in either Section 406
of the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA") or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time (the
"Code")), "accumulated funding deficiency" (as defined in Section 302 of ERISA)
or other event of the kind described in Section 4043(b) of
11
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; each employee benefit plan for which the Company would
have any liability 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
plan for which the Company would have any liability 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.
(pp) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or caused by
the Company (or, to the Company's knowledge, any other entity for whose acts or
omissions the Company is or may be liable) upon any other property now or
previously owned or leased by the Company, or upon any other property, which
would be a violation of or give rise to any liability under any applicable law,
rule, regulation, order, judgment, decree or permit relating to pollution or
protection of human health and the environment ("Environmental Law"), except for
violations and liabilities which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. There has been no
disposal discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other wastes or
other hazardous substances with respect to which the Company has knowledge
(without independent investigation or inquiry), except as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has not agreed to assume, undertake or provide
indemnification for any liability of any other person under any Environmental
Law, including any obligation for cleanup or remedial action, except as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. There is no pending or, to the best of the Company's knowledge,
threatened administrative, regulatory or judicial action, claim or notice of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company.
(qq) Neither the Company nor, to the Company's knowledge, any of its
employees or agents has at any time during the last five 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 required or permitted
by the laws of the United States of any jurisdiction thereof.
(rr) Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
12
(ss) The Company is not: (i) in violation of its certificate or
articles of incorporation, by-laws, certificate of formation, limited liability
company agreement, partnership agreement or other organizational documents; (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 or encumbrance 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) 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 clauses (ii) and (iii) above)
violations or defaults that could not (individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect and except (in the case
of clause (ii) alone) for any lien, charge or encumbrance disclosed in the
Registration Statement and the Prospectus.
(tt) Except as set forth in the Registration Statement and the
Prospectus, no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator, including, without limitation, the
United States Food and Drug Administration (the "FDA"), involving the Company or
its properties is pending or, to the knowledge of the Company, threatened that:
(i) could materially impede the performance of this Agreement or the
consummation of any of the transactions contemplated hereby; or (ii) could have
a Material Adverse Effect.
(uu) The Company has not failed to file with applicable regulatory
authorities (including, but not limited to, the FDA) any material statement,
report, information or form required by any applicable law, regulation or order.
No deficiencies have been asserted by any regulatory commission, agency or
authority with respect to any such filings or submissions, except for any such
failures to be in compliance or deficiencies which would not, individually and
in the aggregate, have a Material Adverse Effect.
(vv) The studies, tests and preclinical and clinical trials
conducted by or on behalf of the Company that are described in the Registration
Statement and the Prospectus accurately describes the results of such studies,
tests and trials in all material respects. Except as disclosed in the
Registration Statement and the Prospectus, the Company has not received any
notices or correspondence from the FDA or other governmental agency, foreign or
domestic, requiring the termination, suspension or material modification of any
preclinical or clinical trials conducted by, or on behalf, of the Company or in
which the Company has participated.
(ww) The Company has established a compliance program (including a
written compliance policy) to assist the Company and its directors, officers and
employees in complying with applicable regulatory agency guidelines (including,
without limitation, those regulations and guidelines published by FDA), and to
provide compliance policies governing applicable areas for medical device
companies.
Any certificate signed by or on behalf of the Company and delivered to
the Representatives or to counsel for the Underwriters' shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
13
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 $_______, the number of Firm Shares set forth opposite their
respective names on Schedule I 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 the Firm
Shares in either (i) the form of definitive certificates, issued in such names
and in such denominations as Ladenburg may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York time, on the second full
business day preceding the Closing Date (as defined below) or (ii) in accordance
with The Depository Trust Company's standard procedures that include the
electronic delivery of capital shares, shall be made at the office of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, LLP, The Met Life Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("Underwriters' Counsel"), or at such other place as shall be agreed upon by
Ladenburg and the Company, at 10:00 A.M., New York City time, on the fifth, or
such other time not later than ten business days after such date as shall be
agreed upon by Ladenburg and the Company (such time and date of payment and
delivery being herein called the "Closing Date").
Payment of the purchase price for the Firm Shares shall be made by wire
transfer in same day funds to or as directed by the Company upon delivery of
certificates for the Firm Shares to the Representatives 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 Ladenburg may request at least
two business days before the Closing Date. The Company will permit Ladenburg to
examine and package such certificates for delivery at least one full business
day prior to the Closing Date.
(c) 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,
acting severally and not jointly, the option to purchase up to ________
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, in
whole or in part on one or more occasions, on or before the forty-fifth (45th)
day following the date of the Prospectus, by written notice from Ladenburg 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 Ladenburg, 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 second full
business day after the date on which the option shall have been exercised nor
later than the eighth 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
14
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 in Schedule I 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
Ladenburg in its sole discretion shall make.
(d) Payment of the purchase price for, and delivery of the
Additional Shares in either (i) the form of definitive certificates, issued in
such names and in such denominations as Ladenburg may direct by notice in
writing to the Company given at or prior to 12:00 Noon, New York time, on the
second full business day preceding the Additional Closing Date or (ii) in
accordance with The Depository Trust Company's standard procedures that include
the electronic delivery of capital shares, shall be made at the office of
Underwriters' Counsel, or at such other place as shall be agreed upon by
Ladenburg 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 Ladenburg and the
Company.
Payment of the purchase price for the Additional Shares shall be made
by wire transfer in same day funds to or as directed by the Company upon
delivery of certificates for the Additional Shares to the Representatives
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
Ladenburg may request at least two business days before the Additional Closing
Date. The Company will permit Ladenburg to examine and package such certificates
for delivery at least one full business day prior to the Additional Closing
Date.
3. Offering. Upon authorization of the release of the Firm Shares by
Ladenburg, 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 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) or Rule 434, 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 Ladenburg of such timely filing. If the Company elects to rely on Rule 434,
the Company will prepare and file a term sheet that complies with the
requirements of Rule 434, and the Prospectus shall not be "materially different"
(as such term is used in Rule 434) from the Prospectus included in the
Registration Statement at the time it became effective.
The Company will notify you immediately (and, if requested by
Ladenburg, 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
15
the Registration Statement 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 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
reasonable 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 Prospectus
(including the prospectus required to be filed pursuant to Rule 424(b) or Rule
434) that differs from the prospectus on file at the time of the effectiveness
of the Registration Statement to which Ladenburg shall object in writing after
being timely furnished in advance a copy thereof. The Company will provide the
Co-Lead Managers and Underwriters' Counsel with copies of all such amendments,
filings and other documents a sufficient time prior to any filing or other
publication thereof to permit the Co-Lead Managers a reasonable opportunity to
review and comment thereon.
(b) The Company shall comply with the Securities Act and the
Exchange Act 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 or the Exchange Act 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, the Company will notify you
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 Ladenburg) which will correct such statement or omission or
which will effect such compliance and will use its commercially reasonable
efforts to have any amendment to the Registration Statement declared effective
as soon as possible.
(c) The Company will promptly deliver to each of you 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 years after the date of filing. The Company
will promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, and all documents
incorporated by reference in the
16
Registration Statement and Prospectus or any amendment thereof or supplement
thereto, and any documents as you 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 you may
reasonably request.
(d) The Company consents to the use and delivery of the Preliminary
Prospectus by the Underwriters in accordance with Rule 430 and Section 5(b) of
the Securities Act.
(e) The Company will use its commercially reasonable efforts, in
cooperation with the Co-Lead Managers, 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 Co-Lead Managers 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.
(f) 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 months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), an earnings statement of
the Company (which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the option of the
Company, Rule 158).
(g) During the period of two hundred seventy (270) days from the
date of the Prospectus, without the prior written consent of Ladenburg the
Company: (i) will not, directly or indirectly, issue, offer, sell, agree to
issue, offer or sell, solicit offers to purchase, grant any call option, warrant
or other right to purchase, purchase any put option or other right to sell,
pledge, borrow or otherwise dispose of any Relevant Security, or make any
announcement of any of the foregoing; (ii) will not establish or increase any
"put equivalent position" or liquidate or decrease any "call equivalent
position" (in each case within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder) with respect to any Relevant
Security, and (iii) will not otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in part, any
economic consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration; and the Company will obtain an
undertaking in substantially the form of Annex V hereto of each of its officers
and directors and its stockholders listed on Schedule II attached hereto not to
engage in any of the aforementioned transactions on their own behalf, other than
the sale of Shares as contemplated by this Agreement and the Company's issuance
of Common Stock upon (i) the conversion or exchange of convertible or
exchangeable securities outstanding on the date hereof (including the Warrant
Exchange as described in the Registration Statement and the Prospectus); (ii)
the exercise of currently outstanding options; (iii) the exercise of currently
outstanding warrants; and (iv) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, employee stock option plans in effect
on the date hereof, each as described in the Registration Statement and the
Prospectus. The Company will not, during such period, file a
17
registration statement under the Securities Act in connection with any
transaction by the Company or any person that is prohibited pursuant to the
foregoing, except for registration statements on Form S-8 relating to employee
benefit plans or Form S-4 relating to corporate reorganizations or other
transactions under Rule 145.
(h) During the period of five (5) years from the effective date of
the Registration Statement, the Company will furnish to you 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 you: (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
you may from time to time reasonably request (such financial information to be
on a consolidated basis to the extent the accounts of the Company and any
subsidiaries are consolidated in reports furnished to its security holders
generally or to the Commission). For purposes of this Section 4(h), items filed
by the Company with the Commission on ▇▇▇▇▇ will be deemed to have been
furnished to you on the date of such filing.
(i) 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.
(j) The Company shall cooperate with the Representatives and counsel
for the Representatives to qualify or register the Shares for sale under (or
obtain exemptions from the application of) the state securities or blue sky laws
or other foreign laws of those jurisdictions designated by the Representatives,
shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution
of the Common Shares. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company will advise
the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Shares for offering,
sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall use
its commercially reasonable efforts to obtain the withdrawal thereof at the
earliest possible moment.
(k) The Company shall engage and maintain, at its expense, an
independent, qualified and experienced registrar and transfer agent for the
Common Stock (it being understood and agreed that American Stock Transfer and
Trust Company so qualifies).
(l) Prior to the Closing Date, the Company will furnish the
Representatives as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company for
any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
18
(m) Upon written request of any Underwriter, the Company shall
furnish, or cause to be furnished, to such Underwriter an electronic version of
the Company's trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Underwriter for the purpose of facilitating
the on-line offering of the Shares; (the "License"); provided, however, that the
License shall be used solely for the purpose described above, is granted without
any fee and may not be assigned or transferred.
(n) The Company will use its best efforts to list the Shares,
subject to notice of issuance, for quotation on the NASDAQ.
(o) The Company, during the period when the Prospectus is required
to be delivered under the Securities Act or the Exchange Act, will 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.
(p) The Company will use its commercially reasonable efforts to 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 to satisfy all conditions precedent to the delivery of the Firm
Shares and the Additional Shares.
(q) The Company will not take, and will cause its affiliates (within
the meaning of Rule 144 under the Securities Act) 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.
5. Payment of Expenses.
(a) The Company agrees to pay all reasonable and accountable
out-of-pocket costs, fees and expenses incurred in connection with the
performance of its obligations hereunder up to a maximum of $100,000 less any
deposits previously paid by the Company to Ladenburg and the lodging and
transportation expenses, if any, of any Underwriter incurred in connection with
the road show and paid by the Company (the "Expense Cap"), including without
limitation (i) all expenses incident to the issuance and delivery of the Shares
(including all printing and engraving costs); (ii) all fees and expenses of the
registrar and transfer agent of the Common Stock; (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Shares to the several Underwriters; (iv) all reasonable and accountable
out-of-pocket fees and expenses of the Company's counsel, independent public or
certified public accountants and other advisors; (v) all reasonable and
accountable out-of-pocket costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, and this Agreement; (vi) all filing
fees, reasonable and accountable attorneys' fees and expenses incurred by the
Company or the Representatives in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Shares for offer and sale under the state securities or blue sky laws and
preparing and printing a "Blue Sky Survey" or memorandum, and any supplements
thereto, advising the
19
Underwriters of such qualifications, registrations and exemptions; (vii) the
filing fees incident to, and the reasonable and accountable out-of-pocket fees
and expenses of counsel for the Representatives in connection with, the NASD's
review and approval of the Underwriters' participation in the offering and
distribution of the Common Shares; (viii) the fees and expenses associated with
including the Shares on the NASDAQ; (ix) all other fees, costs and expenses as
set forth in Item 13 of Part II of the Registration Statement; (x) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the Shares, including without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged by the Company or the
Representative in connection with the road show presentations and the lodging
and transportation expenses of officers of and consultants to the Company
incurred in connection with the road show (but excluding the lodging and
expenses of the Representatives incurred in connection with the road show); (xi)
a nonaccountable expense allowance payable to the Representatives equal to one
percent (1%) of the public offering price of the Firm Shares payable on the
Closing Date, and (xii) all reasonable and accountable out-of-pocket expenses of
the Representatives in connection with due diligence meetings with the
investment community. Except as otherwise provided herein, the Underwriters
shall pay their own expenses, including the fees and disbursements of their
counsel, stock transfer taxes on the resale of any Shares by them and any
advertising expenses connected with any offers they make.
(b) On the Closing Date, the Company shall sell to the
Representatives for an aggregate of $___, the Underwriters' Warrant entitling
the Underwriters to purchase up to an aggregate of _______ shares of the
Company's Common Stock, at an exercise price of $______ (subject to adjustment
as set forth therein), which shall first become exercisable one year after the
Effective Date and shall remain exercisable for a period of four (4) years
thereafter. The Underwriters' Warrant shall be subject to certain transfer
restrictions and shall be in substantially the form annexed as Annex VI hereto.
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 the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Underwriters' Counsel
pursuant to this Section 6 of any material misstatement or omission, to the
performance by the Company of its obligations hereunder, and to each of the
following additional conditions:
(a) The Registration Statement shall have become effective and all
necessary regulatory or stock exchange 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 Ladenburg; if
the Company shall have elected to rely upon Rule 430A or Rule 434 under the
Securities Act, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) 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 no stop order
20
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) At the Closing Date you shall have received the written opinion
of ▇▇▇▇▇▇ LLP, counsel for the Company, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., General
Counsel of the Company, dated the Closing Date addressed to the Underwriters
substantially in the forms annexed as Annexes I and II hereto.
(c) The Company shall have requested and caused: (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇, LLP, special regulatory counsel for the Company, to have
furnished to the Underwriters its opinion, dated the Closing Date and addressed
to the Underwriters, substantially in the form annexed as Annex III hereto; and
(ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, registered patent agent for the Company, to have furnished
to the Underwriters a certificate, dated the Closing Date, substantially in the
form annexed as Annex IV hereto.
(d) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be reasonably
satisfactory in form and substance to Ladenburg and to Underwriters' Counsel,
and the Underwriters shall have received from Underwriters' Counsel a favorable
written opinion, dated as of the Closing Date, with respect to the issuance and
sale of the Shares, the Registration Statement and the Prospectus and such other
related matters as Ladenburg may require, and the Company shall have furnished
to Underwriters' Counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(e) At the Closing Date you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company, dated 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
Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate; (iii) as of the 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; (iv)
the Company has not sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident or
other calamity, 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 in the Registration
Statement and the Prospectus pursuant to the Rules and Regulations that have not
been included as required; 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, stockholders' equity,
properties or prospects of the Company, individually or taken as a whole; (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.
21
(f) At the time this Agreement is executed and at the Closing Date,
you shall have received a comfort letter, from ▇▇▇▇▇▇, independent public
accountants for the Company, dated as of the date of this Agreement and as of
the Closing Date addressed to the Underwriters and in form and substance
satisfactory to the Underwriters and Underwriters' Counsel.
(g) 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 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, stockholders' equity, properties or prospects of the Company,
including but not limited to the occurrence of any fire, flood, storm,
explosion, accident or other calamity at any of the properties owned or leased
by the Company, the effect of which, in any such case described above, is, in
the reasonable judgment of Ladenburg, 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).
(h) On the Closing Date, the Representatives shall have received the
written certificates executed by the Secretary of the Company, dated as of the
Closing Date, in the form and substance reasonably satisfactory to the
Representatives, certifying as to: (i) the incumbency and the signatures of
those officers of the Company executing this Agreement and such other
certificates or documents contemplated under this Agreement; (ii) the
Certificate of Incorporation and Bylaws of the Company; and (iii) the
resolutions of the Board of Directors of the Company authorizing the execution
and delivery of this Agreement and such other certificates or documents
contemplated under this Agreement, a copy of such resolutions to be attached to
said certificate.
(i) You shall have received a duly executed lock-up agreement from
each person who is a director or officer of the Company and each shareholder
listed on Schedule II hereto, in each case substantially in the form annexed as
Annex V hereto.
(j) At the Closing Date, the Shares shall have been approved for
quotation, upon notice of issuance, on the NASDAQ.
(k) At the Closing Date, 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.
(l) 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.
22
(m) 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 you or to
Underwriters' Counsel pursuant to this Section 6 shall not be satisfactory in
form and substance to Ladenburg and to Underwriters' Counsel, all obligations of
the Underwriters hereunder may be cancelled by Ladenburg at, or at any time
prior to, the Closing Date and the obligations of the Underwriters to purchase
the Additional Shares may be cancelled by Ladenburg 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.
7. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
and all losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to reasonable attorneys' fees and any and all other
reasonable 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) directly arise out of or are
directly based upon: (i) any untrue statement or alleged untrue statement of a
material fact contained in (A) the Registration Statement, as originally filed
or any amendment thereof, or any related Preliminary Prospectus or the
Prospectus, or in any supplement thereto or amendment thereof; or (B) in any
written materials or information provided to investors by, or with the approval
of, the Company in connection with the marketing of the offering of the Shares,
including any road show or investor presentations made to investors by the
Company (whether in person or electronically) ("Marketing Materials"); or (ii)
the omission or alleged omission to state in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or in any
Marketing Materials, a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
Company will not be liable in any such case to the extent but only to the extent
that (i) any such loss, liability, claim, damage or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, as originally filed or any
amendment thereof, or any related Preliminary Prospectus or the Prospectus, or
in any supplement thereto or amendment thereof, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through Ladenburg expressly for use therein and (ii) a court of
competent jurisdiction shall have determined by a final judgment that such loss,
liability, claim, damage or expense resulted from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter, other than any action
or failure to act undertaken at the written request or with the prior written
consent of the Company and such action or failure to act is performed in
accordance
23
with such request or within the scope of such consent, through its gross
negligence, bad faith or willful misconduct. The parties agree that such
information provided by or on behalf of any Underwriter through Ladenburg
consists solely of the material referred to in the last sentence of Section 1(b)
hereof. 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. The foregoing indemnity agreement with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter who
failed to deliver a Prospectus (as then amended or supplemented, provided by the
Company to such Underwriter in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the Closing Date) to the person asserting
any losses, liabilities, claims, damages or expenses caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if (i) such Prospectus is true and correct in
all material respects, (ii) such Prospectus was required by law to be delivered
at or prior to the written confirmation of sale to such person and (iii) such
loss, liability, claim, damage or expense resulted from failure to deliver such
Prospectus.
(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 reasonable attorneys' fees and any and all other
reasonable 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) directly arise out of or are
directly 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 or the Prospectus,
or in any amendment thereof or supplement thereto, or directly arise out of or
are directly 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
information furnished in writing to the Company by or on behalf of any
Underwriter through Ladenburg specifically for use therein; 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. The parties agree that such information provided by
or on behalf of any Underwriter through Ladenburg consists solely of the
material referred to in the last sentence of Section 1(b) hereof.
(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
24
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, except to the extent that it is prejudiced as a
result thereof). Each indemnified party, as a condition to the indemnity
agreements contained in subsection (a) or (b) above, shall use all reasonable
efforts to cooperate with the indemnifying party in the defense of such claim or
action. 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
reasonably 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 the assumption of the defense; or (iv) such indemnified party or parties
shall have reasonably concluded (based on advice of counsel) 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 (it being
understood, however, that the Company shall not be liable for the expenses of
more than one separate law firm for the Underwriters or controlling persons in
any one action or series of related actions in the same jurisdiction). 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 (A) includes an unconditional
release of the indemnified party from all liability arising out of such claim,
investigation, action or proceeding and (B) 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.
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
reasonable 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,
25
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
discounts and commissions applicable to the Shares underwritten by it and
distributed to the public and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 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, except to
the extent such failure prejudiced such
26
party. 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
Ladenburg 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 in Schedule I 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 Ladenburg 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,
Ladenburg may in its 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 Ladenburg does 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 and 10) 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.
(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, Ladenburg 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 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 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 Underwriters and the Company
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
27
contribution agreements contained in Section 8, 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 representations contained in Section 1 and the agreements
contained in Sections 5, 7, 8, 10, 11, 12 and 14 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 execution of this
Agreement. Notwithstanding any termination of this Agreement, the provisions of
this Section 11 and of Sections 1, 5, 7, 8 and 12 through 19, inclusive, shall
remain in full force and effect at all times after the execution hereof.
(b) Ladenburg shall have the right to terminate this Agreement at
any time prior to the Closing Date or to terminate the obligations of the
Underwriters to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if: (i) any domestic or
international event or act or occurrence has materially disrupted, or in the
reasonable opinion of Ladenburg will in the immediate future materially disrupt,
the market for the Company's securities or securities in general; or (ii)
trading on NASDAQ 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 NASDAQ
or by order of the Commission or any other governmental authority having
jurisdiction; or (iii) a banking moratorium has been declared by the State of
New York or any federal authority or if any material disruption in commercial
banking or securities settlement or clearance services shall have occurred; (iv)
in the reasonable judgment of Ladenburg a Material Adverse Effect has occurred
since the date of the Prospectus; 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 reasonable judgment of Ladenburg, 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 and delivered pursuant to Section 12 hereof.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than pursuant to (i) notification by Ladenburg as
provided in Section 11(a) hereof or (ii) 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 Ladenburg, reimburse the Underwriters for all reasonable and
accountable out-of-pocket
28
expenses (including the reasonable and accountable fees and expenses of their
counsel), incurred by the Underwriters in connection herewith up to the Fee Cap.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or faxed
and confirmed in writing, to such Underwriter ▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. Inc.,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Managing Director, with a copy to Underwriter's Counsel (which shall not
constitute notice hereunder) at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, P.A. ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇,
Esq.; or
(b) if sent to the Company, shall be mailed, delivered, or faxed and
confirmed in writing to the Company and its counsel (which notice to such
counsel shall not constitute notice hereunder) at the addresses set forth in the
Registration Statement, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., President and Chief
Executive Officer, and ▇▇▇▇▇▇▇ ▇. Price, 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 Ladenburg, which address
will be supplied to any other party hereto by Ladenburg upon request. Any such
notices and other communications shall take effect at the time of receipt
thereof. Any change of address for receipt of communications hereunder by any
party shall be made by giving written notice in accordance with this Section 12
to the other parties.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 7 and
8 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
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,
firm or corporation. 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 and Jurisdiction; Waiver of Jury Trial. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK FOR CONTRACTS MADE AND TO BE FULLY PERFORMED IN SUCH STATE
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company and each of the
Underwriters irrevocably (a) submits to the jurisdiction of any court of the
State of New York or the United State District Court for the Southern District
of the State of New York for the purpose of any suit, action, or other
proceeding arising out of this Agreement, or any of the agreements or
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus (each, a "Proceeding"); (b) agrees that all claims in respect of any
Proceeding may be heard and determined in any such court; (c) waives, to the
fullest extent permitted by law, any immunity from jurisdiction of any
29
such court or from any legal process therein; (d) agrees not to commence any
Proceeding other than in such courts, and (e) waives, to the fullest extent
permitted by law, any claim that such Proceeding is brought in an inconvenient
forum. 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 IT 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 AND THE PROSPECTUS.
15. Severability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
16. General Provisions. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof (including, without limitation, that
certain agreement between the Company and Ladenburg dated April 12, 2005). This
Agreement may not be amended or modified unless in writing signed by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
30
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,
ELECTRO-OPTICAL SCIENCES, INC.
By:
---------------------------------
Name:
Title:
Accepted as of the date first above written on behalf of themselves and the
other Underwriters named in Schedule I hereto
LADENBURG ▇▇▇▇▇▇▇▇ & CO. INC.
By:
---------------------------------------
Name:
Title:
STANFORD GROUP COMPANY
By:
---------------------------------------
Name:
Title:
SCHEDULE I
Number of Additional
Total Number of Firm Shares to be Purchased if
Underwriter Shares to be Purchased Option is Fully Exercised
----------- ---------------------- -------------------------
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
Stanford Group Company
Total......
---------------------- -------------------------
SCHEDULE II
1. ▇▇▇▇▇ & Company Incorporated
2. ▇▇▇▇▇ & Company LLC
3. Arcadian Venture Partners, LP
4. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust (▇▇▇ ▇. ▇▇▇▇▇▇, trustee)
5. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
6. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Brilliant
7. ▇▇▇▇▇▇▇ Brilliant
8. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
9. Caremi Partners Ltd. (beneficial holder, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
10. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
11. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
12. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
13. ▇▇▇▇ ▇. ▇▇▇▇▇▇
14. Double D Venture Fund, LLC
15. ▇▇▇▇▇ ▇▇▇▇▇▇
16. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Living Trust (▇▇▇ ▇. ▇▇▇▇▇▇, trustee)
17. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Living Trust (▇▇▇ ▇. ▇▇▇▇▇▇, trustee)
18. ▇▇▇ ▇. ▇▇▇▇▇▇ & Associates
19. Elise G.B. Lufkin Living Trust (▇▇▇ ▇. ▇▇▇▇▇▇, trustee)
20. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
21. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
22. ▇▇▇▇ Gutkowicz-Krusin
23. ▇▇▇▇ ▇▇▇▇▇▇
24. ▇▇▇ ▇▇▇▇▇▇▇
25. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
26. ▇▇▇▇▇▇ ▇▇▇▇
27. ▇▇▇ ▇. ▇▇▇▇▇▇
28. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
29. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D.
ANNEX I
Form of Opinion of Company Counsel
1. The Company has been duly organized and validly exists as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with full power and authority to own its properties and conduct
its business as described in the Registration Statement and the Prospectus.
2. The Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus. All of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are not in violation of or subject to any preemptive
or, to the knowledge of such counsel, similar rights that entitle or will
entitle any person to acquire any Shares from the Company upon issuance or sale
thereof. The Shares and the Underwriters' Warrant to be delivered on the Closing
Date and the Additional Closing Date, if any, have been duly and validly
authorized and, when delivered in accordance with the Underwriting Agreement,
will be duly and validly issued, fully paid and non-assessable and will not have
been issued in violation of or subject to preemptive or, to the knowledge of
such counsel, similar rights that entitle or will entitle any person to acquire
any Shares from the Company upon issuance or sale thereof, and the shares of
Common Stock for which the Underwriters' Warrant is exercisable at the initial
exercise price has been duly authorized and, when issued and delivered in the
manner contemplated by the Underwriting Agreement, will be duly and validly
issued, fully paid and non-assessable and will not have been issued in violation
of or subject to preemptive or, to the knowledge of such counsel, similar rights
that entitle or will entitle any person to acquire any Shares from the Company
upon issuance or sale thereof. The Common Stock, the Firm Shares, the Additional
Shares and the Underwriters' Warrant conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
3. The Common Stock currently outstanding is listed, and the Shares
and shares of Common Stock for which the Underwriters' warrant is exercisable
are duly authorized for listing on the NASDAQ National Market.
4. The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable 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).
5. To the knowledge of such counsel and other than as set forth in
the Prospectus, there are no judicial, regulatory or other legal or governmental
proceedings pending to which the Company is a party or of which any property of
the Company is the subject which, if determined adversely to the Company, would
individually or in the aggregate have a Material Adverse Effect; and, to the
knowledge of such counsel, no such proceedings are threatened or contemplated.
1
6. The execution, delivery, and performance of the Underwriting
Agreement and consummation of the transactions contemplated by Underwriting
Agreement, the Registration Statement and the Prospectus do not and will not (A)
conflict with 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, charge or encumbrance upon any property or assets of the Company
pursuant to, any indenture, mortgage, deed of trust, loan agreement or any other
agreement, instrument, franchise, license or permit known to such counsel to
which the Company is a party or by which any of the Company or its properties or
assets may be bound or (B) violate or conflict with any provision of the
certificate of incorporation or by-laws of the Company, or, to the knowledge,
after due inquiry, of such counsel, any judgment, decree, order, statute, rule
or regulation of any court or any judicial, regulatory or other legal or
governmental agency or body.
7. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any judicial,
regulatory or other legal or governmental agency or body is required for the
execution, delivery and performance of this Agreement or consummation of the
transactions contemplated by the Underwriting Agreement, the Registration
Statement and the Prospectus, except for (1) such as may be required under state
securities or blue sky laws in connection with the purchase and distribution of
the Shares by the Underwriters (as to which such counsel need express no
opinion); (2) such as have been made or obtained under the Securities Act and
(3) such as are required by the NASD.
8. The Registration Statement and the Prospectus and any amendments
thereof or supplements thereto (other than the financial statements and
schedules and other financial data included or incorporated by reference
therein, as to which no opinion need be rendered) comply as to form in all
material respects with the requirements of the Securities Act, the Exchange Act
and the Rules and Regulations. The documents filed under the Exchange Act and
incorporated by reference in the Registration Statement and the Prospectus or
any amendment thereof or supplement thereto (other than the financial statements
and schedules and other financial data included or incorporated by reference
therein, as to which no opinion need be rendered) when they became effective or
were filed with the Commission, as the case may be, complied as to form in all
material respects with the Securities Act or the Exchange Act, as applicable,
and the Rules and Regulations.
9. The statements under the captions "_____________",
"_____________", "_____________", "_____________", "_____________",
"_____________", "Description of Capital Stock" and "Underwriting" in the
Prospectus and Items 14 and 15 of Part II of the Registration Statement, insofar
as such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings.
10. The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Registration Statement and the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
11. The Registration Statement is effective under the Securities
Act, and, to the knowledge, after due inquiry, of such counsel, no stop order
suspending the effectiveness of
2
the Registration Statement or any post-effective amendment thereof has been
issued and no proceedings therefor have been initiated or threatened by the
Commission and all filings required by Rule 424(b) and Rule 430A under the
Securities Act have been made.
12. The Company has full right, power and authority to execute and
deliver this Agreement, the Shares and the Underwriters' Warrant and to perform
its obligations hereunder, and all corporate action required to be taken for the
due and proper authorization, execution and delivery of this Agreement, the
Shares and the Underwriters' Warrant and consummation of the transactions
contemplated by Underwriting Agreement, the Registration Statement and the
Prospectus and as described in the Registration Statement and the Prospectus
have been duly and validly taken.
13. To the knowledge, after due inquiry, of such counsel, no
contract or agreement is required to be filed as an exhibit to the Registration
Statement that is not so filed.
14. The Company is not in violation of its respective charter or
by-laws and, to the knowledge of such counsel after due inquiry, the Company is
not in default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company, individually or taken
as a whole, to which the Company is a party or by which the Company or its
property is bound.
15. The Company has not violated any environmental law, any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or any provisions of the Foreign Corrupt Practices Act, or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
16. The Company has such authorizations of, and has made all filings
with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals, including,
without limitation, under any applicable environmental laws, as are necessary to
own, lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such authorization or to make any
such filing or notice would not, singly or in the aggregate, have a Material
Adverse Effect; each such authorization is valid and in full force and effect
and the Company is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such authorization; and such authorizations contain no
restrictions that are burdensome to the Company; except where such failure to be
valid and in full force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not, singly or in the
aggregate, have a Material Adverse Effect.
17. Except as set forth in the Prospectus, no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator, including, without limitation, the United States Food and Drug
Administration (the "FDA"), involving the Company or its or its properties is
pending or, to the knowledge of such counsel, threatened that (i)
3
could have a material adverse effect on the performance of the Underwriting
Agreement or the consummation of any of the transactions contemplated hereby or
(ii) could have a Material Adverse Effect.
18. Except as set forth in the Prospectus, (A) the Company possesses
all permits, licenses, provider numbers, certificates, approvals, consents,
orders, certifications and other authorizations (collectively, "Governmental
Licenses") issued by, and have made all declarations and filings with, the
appropriate Federal, state, local or foreign regulatory agencies or bodies,
including without limitation, the FDA, necessary to conduct the business now
operated by the Company except where the failure to possess such Governmental
Licenses or to make such declarations and filings would not result in a Material
Adverse Effect; the Company is in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply would not,
individually and in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and (B) the Company has not received any notice of proceedings relating
to the revocation or modification of any such Governmental Licenses which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
19. The Company owns or possesses all U.S. patents and patent
applications listed on Schedule A hereto (collectively, the "Intellectual
Property"). All such Intellectual Property is in Good Standing, Valid, and
Enforceable.
20. Based on our review of certain third party rights made known to
us and written certificates from the Company's registered patent agent and its
Director of Intellectual Property, which certificates are listed on Schedule B
hereto, we have no knowledge of any valid United States or foreign patent that
is or would be infringed by the activities of the Company in the manufacture,
use or sale of any existing product as currently manufactured, used, or sold,
the technologies currently employed by the Company, or its current method of use
in any existing product, each as described in the Prospectus.
21. The Company patent applications have been properly prepared and
filed, and are being diligently pursued by the Company and the inventions
described in the Company patent applications are owned by, or are licensed to
the Company.
22. Except as disclosed in the Prospectus, we have no knowledge of
any basis for a right or claim by any party or individual in any of the
inventions, patents or patent applications listed on Schedule A hereto, except
for such right or claim, which if the subject of an unfavorable decision, ruling
or finding, would not have a Material Adverse Effect, and to the knowledge of
such counsel, the Company's patent applications discloses patentable subject
matter.
23. The Company's Intellectual Property licenses are in full force
and effect, no default or threatened default exists under such licenses and, to
our knowledge, no basis exists for the same.
24. We know of no legal or governmental proceedings that are pending
or, to our knowledge, that are threatened, relating to any Intellectual
Property, except (A) as disclosed
4
in the Prospectus or (B) which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would not have a Material Adverse
Effect.
In addition, such opinion shall also contain a statement that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters at which the contents and the Prospectus and related
matters were discussed and, no facts have come to the attention of such counsel
which would lead such counsel to believe that either the Registration Statement,
at the time it became effective (including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to Rule 430A(b)
or Rule 434, if applicable), or any amendment thereof made prior to the Closing
Date, as of the date of such amendment, contained or incorporated by reference
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (including the documents incorporated by
reference therein), as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect to
the financial statements and schedules and other financial data included or
incorporated by reference therein).
5
ANNEX II
Form of Opinion of General Counsel to the Company
1. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
to be in good standing would not result in a Material Adverse Effect.
2. The statements contained or incorporated by reference in the
Prospectus under the headings "_________", "_________", "_________", insofar as
such statements purport to summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such legal
matters, agreements, documents and proceedings.
3. No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the sale of
the Shares or the Underwriters' Warrant as contemplated by the Underwriting
Agreement, except as may be required under the securities and blue sky laws in
connection with the purchase and distribution of the Shares by the Underwriter
in the manner contemplated by the Underwriting Agreement and the Prospectus.
4. The sale of the Shares and the Underwriters' Warrant as
contemplated by the Underwriting Agreement will not conflict with, result in a
breach or violation of or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to; (i) the charter or by-laws; (ii)
the terms of any indenture or other agreement, obligation, condition, covenant
or instrument known to me to which the Company is a party or bound or to which
its or their property is subject or (iii) any statute, law, rule, regulation,
judgment, order or decree known to me to be applicable to the Company of any
court, regulatory body, administrative agency, governmental body, arbitratory or
other authority having jurisdiction over the Company or any of its properties,
except, in the case of each of (ii) and (iii) above, for any such conflict,
breach, violation or imposition that would have a Material Adverse Effect.
5. Except as set forth in the Prospectus, no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator, including, without limitation, the United States Food and Drug
Administration (the "FDA"), involving the Company or its properties is pending
or, to my knowledge, threatened that (i) could have a material adverse effect on
the performance of the Underwriting Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could have a Material Adverse Effect.
6. Except as set forth in the Prospectus, (A) the Company possesses
all permits, licenses, provider numbers, certificates, approvals, consents,
orders, certifications and other authorizations (collectively, "Governmental
Licenses") issued by, and have made all declarations and filings with, the
appropriate Federal, state, local or foreign regulatory agencies or bodies,
including without limitation, the FDA, necessary to conduct the business now
operated
1
by the Company except where the failure to possess such Governmental Licenses or
to make such declarations and filings would not result in a Material Adverse
Effect; the Company is in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
individually and in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and (B) the Company has not received any notice of proceedings relating
to the revocation or modification of any such Governmental Licenses which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
7. There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as required.
8. The documents incorporated by reference in the Registration
Statement and the Prospectus, when they became effective or were filed with the
Commission, as the case may be, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the Rules and Regulations, except that in
each case, I do not express an opinion as to the financial statement schedules
or other financial data included in the Registration Statement or the Prospectus
or excluded therefrom and I do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained therein.
9. The Company owns, has rights under, licenses or has other rights
to use, on commercially reasonable terms, all intellectual property necessary
for the conduct of their businesses as now conducted; and other than as
described in the Prospectus, the Company has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
intellectual property, which infringement or conflict, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding would
result in a Material Adverse Effect.
10. The Company owns or possesses all U.S. patents and patent
applications listed on Schedule A hereto (collectively, the "Intellectual
Property"). All such Intellectual Property is in good standing, valid, and
enforceable.
11. Based on my review of certain third party rights made known to
me and written certificates from the Company's registered patent agent and its
Director of Intellectual Property, which certificates are listed on Schedule B
hereto, I have no knowledge of any valid United States or foreign patent that is
or would be infringed by the activities of the Company in the manufacture, use
or sale of any existing product as currently manufactured, used, or sold, the
technologies currently employed by the Company, or its current method of use in
any existing product, each as described in the Prospectus.
12 The Company's patent applications have been properly prepared and
filed, and are being diligently pursued by the Company, and the inventions
described in the Company patent applications are owned by the Company.
2
13 All of the Company's Intellectual Property licenses are in full
force and effect, no default or threatened default exists under such licenses
and, to my knowledge, no basis exists for the same.
14 I know of no legal or governmental proceedings that are pending
or, to my knowledge, that are threatened, relating to any Intellectual Property,
except (A) as disclosed in the Prospectus or (B) which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
not have a Material Adverse Effect.
15 Except as disclosed in the Prospectus, I have no knowledge of any
basis for a right or claim by any party or individual in any of the inventions,
patents or patent applications listed on Schedule A hereto, except for such
right or claim, which if the subject of an unfavorable decision, ruling or
finding, would not have a Material Adverse Effect, and to my knowledge, each of
the Company's patent applications discloses patentable subject matter.
16. The execution and delivery of the Underwriting Agreement and the
consummation of the sale of the Shares and Underwriters' Warrant does not
conflict with or result in a breach of any terms or provisions of, or constitute
a default under, the Company's certificate of incorporation or by-laws and any
agreement or instrument to which the Company is a party or by which the Company
may be bound, and will not conflict with or result in a breach or violation of
any statute or any order, rule or regulation known to me and applicable to the
transactions contemplated by the Underwriting Agreement.
17. No facts have come to my attention that have led me to believe
that the Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date and as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that I
express no belief with respect to the financial statements, financial statement
schedules and other financial data included therein or excluded therefrom or the
exhibits to the Registration Statement.
3
ANNEX III
Form of Opinion of Regulatory Counsel
1. The Company has obtained such licenses, permits, approvals, and
authorizations required by the United States Food and Drug Administration
("FDA") that are necessary for the conduct of the business of the Company as it
is currently conducted and described in the Prospectus and to our knowledge such
authorizations are in effect.
2. To our knowledge except as disclosed in the Prospectus, we are
not aware of any lawsuit or regulatory proceeding, pending or threatened,
brought by or before the FDA, in which the Company is or would be the defendant
or respondent, nor are we aware of any adverse judgment, decree, or order
currently in effect that has been issued by the FDA against the Company.
3. No facts have come to our attention that have led us to believe
that the Regulatory Disclosure in the Registration Statement, at the time the
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Regulatory Disclosure in the Prospectus, as of the date of the Prospectus and as
of the date hereof, contained or contains an untrue statement of a material fact
or omitted or omits to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
1
ANNEX IV
Form of Certificate of Registered Patent Agent
1. To my knowledge, the Company owns or possesses all Intellectual
Property currently employed by it in connection with the business now operated
by it except where the failure to own or possess or otherwise be able to acquire
such Intellectual Property could not, individually or in the aggregate, have a
Material Adverse Effect.
2. Based upon a review of the third party rights made known to me
and discussions with scientific personnel of the Company, I am not aware of any
valid United States or foreign patent that is or would be infringed by the
activities of the Company in the manufacture, use or sale of any existing or
presently proposed product, the technologies employed by the Company or the
method of its use in any existing or presently proposed product, each as
described in the Prospectus and as such are related to the foregoing technology
and products.
3. I have reviewed the Company's patent applications which are
identified in the Patent Schedule included with this letter, and in my opinion
the Company's patent applications have been properly prepared and filed, and are
being diligently pursued by the Company, and the inventions described in the
Company's patent applications are owned by, have been assigned to or are
licensed to the Company.
4. To my knowledge except as disclosed in the Prospectus, no party
or individual has any right or claim in any of the inventions, patents or patent
applications listed in the Patent Schedule and to my knowledge each of the
Company's patent applications discloses patentable subject matter.
5. To our knowledge, the Company is not infringing or otherwise
violating any Intellectual Property of others, unless otherwise disclosed in the
Prospectus. To my knowledge, except as disclosed in the Prospectus, the Company
has not received any notice of infringement of or conflict with asserted rights
of others with respect to any Intellectual Property.
6. All of the Company's Intellectual Property licenses are in full
force and effect, no default or threatened default exists under such licenses
and, to my knowledge, no basis exists for the same.
7. I know of no legal or governmental proceedings that are pending
or, to my knowledge, that are threatened, relating to any Intellectual Property,
except (A) as disclosed in the Prospectus or (B) which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
not have a Material Adverse Effect.
8. No facts have come to my attention that have led me to believe
that the Intellectual Property Disclosure in the Registration Statement, at the
time the Registration Statement became effective, contained an untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
1
misleading or that the Intellectual Property Disclosure in the Prospectus, as of
the date of the Prospectus and as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
2
ANNEX V
Form of Lock-Up Agreement
[Date]
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
A Representative of the Several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
And
Stanford Group Company
A Representative of the Several Underwriters
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Electro-Optical Sciences, Inc. Lock-Up Agreement
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by Electro-Optical Sciences, Inc., a Delaware
corporation (the "Company"), of its common stock, $.001 par value (the "Stock").
In order to induce you and the other underwriters for which you act as
representatives (the "Underwriters") to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Ladenburg ▇▇▇▇▇▇▇▇ &
Co. Inc. ("Ladenburg"), during the period from the date hereof until two hundred
seventy (270) days from the date of the final prospectus for the Offering (the
"Lock-Up Period"), the undersigned (a) will not, directly or indirectly, offer,
sell, agree to offer or sell, solicit offers to purchase, grant any call option
or purchase any put option with respect to, pledge, borrow or otherwise dispose
of any Relevant Security (as defined below), and (b) will not establish or
increase any "put equivalent position" or liquidate or decrease any "call
equivalent position" with respect to any Relevant Security (in each case within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder), or otherwise enter into
any swap, derivative or other transaction or arrangement that transfers to
another, in whole or in part, any economic consequence of ownership of a
Relevant Security, whether or not such transaction is to be settled by delivery
of Relevant Securities, other securities, cash or other consideration. As used
herein "Relevant Security" means the Stock, any other equity security of the
Company or any of its subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Stock or other such equity security.
The undersigned hereby authorizes the Company during the Lock-Up Period to
cause any transfer agent for the Relevant Securities to decline to transfer, and
to note stop transfer
restrictions on the stock register and other records relating to, Relevant
Securities for which the undersigned is the record holder and, in the case of
Relevant Securities for which the undersigned is the beneficial but not the
record holder, agrees during the Lock-Up Period to cause the record holder to
cause the relevant transfer agent to decline to transfer, and to note stop
transfer restrictions on the stock register and other records relating to, such
Relevant Securities. The undersigned hereby further agrees that, without the
prior written consent of Ladenburg, during the Lock-up Period the undersigned
(x) will not file or participate in the filing with the Securities and Exchange
Commission of any registration statement, or circulate or participate in the
circulation of any preliminary or final prospectus or other disclosure document
with respect to any proposed offering or sale of a Relevant Security and (y)
will not exercise any rights the undersigned may have to require registration
with the Securities and Exchange Commission of any proposed offering or sale of
a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.
Very truly yours,
By: _____________________________
Print Name: _______________________
2
ANNEX VI
FORM OF UNDERWRITERS' WARRANT AGREEMENT
WARRANT AGREEMENT dated as of , 2005 between Electro-Optical
Sciences, Inc., a Delaware corporation (the "Company"), and the Underwriters
listed on Appendix 1 (hereinafter referred to as the "Underwriters").
WITNESSETH:
WHEREAS, the Company proposes to issue to the Underwriters warrants
(the "Warrants") to purchase up to an aggregate of __________ (as such number
may be adjusted from time to time pursuant to Article 7 of this Warrant
Agreement) shares (the "Shares") of common stock, $.001 par value per share (the
"Common Stock"), of the Company; and
WHEREAS, the Underwriters have agreed, pursuant to the underwriting
agreement (the "Underwriting Agreement") dated , 2005 between the Underwriters
and the Company, to act as Underwriters in connection with the Company's
proposed public offering (the "Public Offering") of ________ shares of Common
Stock (the "Public Shares") at an initial public offering price of $[ ] per
Public Share; and
WHEREAS, the Warrants issued pursuant to this Agreement are being
issued by the Company to the Underwriters or to their designees who are officers
or partners of the respective Underwriter (collectively, the "Designees"), in
consideration for, and as part of the Underwriter's compensation in connection
with, the Underwriters acting as Underwriters pursuant to the Underwriting
Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the
Underwriters to the Company of the aggregate amount of ________ dollars
($___.00), the agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Grant. The Underwriters and/or the Designees are hereby granted
the right to purchase, up to an aggregate of _________ fully-paid and
non-assessable Shares at an initial exercise price, as more particularly
described on Appendix 1 (subject to adjustment as provided in Article 6 hereof)
of $[ ] per Share at any time from , 2006 until 5:00 P.M., New York
City time, on , 2010 (the "Underlying Share Warrant Term"). Except as
provided in Article 12 hereof, the Shares are in all respects identical to the
Public Shares being sold to the public pursuant to the terms and provisions of
the Underwriting Agreement.
2. Exercise of Warrant.
2.1. Cash Exercise. The Warrants initially are exercisable at
a price of $[_____] per Share purchased, payable in cash or by check
to the order of the
Company, or any combination thereof, subject to adjustment as
provided in Article 7 hereof. Upon surrender of the Warrant
Certificate(s) with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as
hereinafter defined) for the Shares, at the Company's principal
office in New York (currently located at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇), the registered holder of a Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a
certificate or certificates for the Shares so purchased. The
purchase rights represented by the Warrant Certificate are
exercisable at the option of the Holder hereof, in whole or in part.
In the case of the purchase of less than all of the Shares
purchasable under any Warrant Certificate, the Company shall cancel
said Warrant Certificate upon the surrender thereof and shall
execute and deliver a new Warrant Certificate of like tenor for the
balance of the Shares.
2.2. Cashless Exercise. At any time during the Warrant
Exercise Term, the Holder may, at the Holder's option, exchange, in
whole or in part, the Warrants represented by such Holder's Warrant
Certificate which are exercisable for the purchase of Shares, into
the number of Shares determined in accordance with this Section 2.2
(a "Warrant Exchange"), by surrendering such Warrant Certificate at
the principal office of the Company or at the office of its transfer
agent, accompanied by a notice stating such Holder's intent to
effect such exchange, the number of Warrants to be so exchanged and
the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take
place on the date specified in the Notice of Exchange or, if later,
the date the Notice of Exchange is received by the Company (the
"Exchange Date"). Certificates for the Shares issuable upon such
Warrant Exchange and, if applicable, a new Warrant Certificate of
like tenor representing the Warrants which were subject to the
surrendered Warrant Certificate and not included in the Warrant
Exchange, shall be issued as of the Exchange Date and delivered to
the Holder within three (3) days following the Exchange Date. In
connection with any Warrant Exchange, the Holder shall be entitled
to subscribe for and acquire (i) the number of Shares (rounded to
the next highest integer) which would, but for such Warrant
Exchange, then be issuable pursuant to the provisions of Section 2.1
above upon the exercise of the Warrants specified by the Holder in
its Notice of Exchange (the "Total Share Number") less (ii) the
number of Shares equal to the quotient obtained by dividing (a) the
product of the Total Share Number and the existing Exercise Price
per Share (as hereinafter defined) by (b) the Market Price (as
hereinafter defined) of a Public Share on the day preceding the
Warrant Exchange. "Market Price" at any date shall be deemed to be
the last reported sale price, or, in case no such reported sales
takes place on such day, the average of the last reported sale
prices for the last three (3) trading days, in either case as
officially reported by the principal securities exchange on which
the Common Stock is listed or admitted to trading or as reported in
the NASDAQ National Market System, or, if the Common Stock is not
listed or admitted to trading on any national securities exchange or
quoted on the NASDAQ National Market System, the closing bid price
as furnished by (i) the
4
National Association of Securities Dealers, Inc. through NASDAQ or
(ii) the OTC Bulletin Board or successor trading market.
3. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for the Shares purchased shall be made no later than
three (3) business days thereafter without charge to the Holder thereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall (subject to the provisions of
Article 4 hereof) be issued in the name of, or in such names as may be directed
by, the Holder thereof; provided, however, that the Company shall not be
required to pay any transfer tax which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificates in a name other
than that of the Holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
The certificates representing the Shares shall be executed on behalf of
the Company by the manual or facsimile signature of the present or any future
Chief Executive Officer or President of the Company under its corporate seal (if
any) reproduced thereon, attested to by the manual or facsimile signature of the
present or any future Secretary or Assistant Secretary of the Company. Warrant
Certificates shall be dated the date of execution by the Company upon initial
issuance, division, exchange, substitution or transfer.
Upon exercise, in part or in whole, of the Warrants, certificates
representing the Shares purchased, (the "Warrant Securities"), shall bear a
legend substantially similar to the following:
"The securities represented by this certificate and the other
securities issuable upon exercise thereof have not been registered
for purposes of public distribution under the Securities Act of
1933, as amended (the "Act"), and may not be offered or sold except
(i) pursuant to an effective registration statement under the Act,
(ii) to the extent applicable, pursuant to Rule 144 under the Act
(or any similar rule under such Act relating to the disposition of
securities), or (iii) upon the delivery by the holder to the Company
of an opinion of counsel, reasonably satisfactory to counsel to the
Company, stating that an exemption from registration under such Act
is available."
4. Restriction on Transfer of Warrants. The Holder of a Warrant
Certificate, by the Holder's acceptance thereof, covenants and agrees that the
Warrants are being acquired as an investment and not with a view to the
distribution thereof, and that the Warrants may not be sold during the Public
Offering, or sold, transferred, assigned, pledged or hypothecated, or be the
subject of any hedging, short sale, derivative, put or call transaction that
would result in the effective economic disposition of the Warrants for
5
a period of one (1) year from , 2005, except to the Underwriters or the
Designees, provided that any portion of the warrant so transferred shall remain
subject to the above restriction for the remainder of the restriction period.
5. Price.
5.1. Initial and Adjusted Exercise Price. The initial exercise price
of each Warrant shall be $[ ] per Share. The adjusted exercise price per
Share shall be the prices which shall result from time to time from any
and all adjustments of the initial exercise price per Share in accordance
with the provisions of Article 7 hereof.
5.2. Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
6. Registration Rights.
6.1. Registration Under the Securities Act of 1933. None of the
Warrants or the Shares have been registered for purposes of public
distribution under the Securities Act of 1933, as amended (the "Act").
6.2. Registrable Securities. As used herein the term "Registrable
Security" means each of the Warrants, the Shares, and any shares of Common
Stock issued upon any stock split or stock dividend in respect of such
Shares; provided, however, that with respect to any particular Registrable
Security, such security shall cease to be a Registrable Security when, as
of the date of determination, (i) it has been effectively registered under
the Act and disposed of pursuant thereto, (ii) registration under the Act
is no longer required for subsequent public distribution of such security
under Rule 144(k) promulgated under the Act or otherwise, or (iii) it has
ceased to be outstanding. The term "Registrable Securities" means any
and/or all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure
affecting the Common Stock, such adjustment shall be made in the
definition of "Registrable Security" as is appropriate in order to prevent
any dilution or enlargement of the rights granted pursuant to this Article
6.
6.3. Piggyback Registration. If, within seven (7) years following
the effective date of the Public Offering, the Company proposes to prepare
and file one or more post-effective amendments to the registration
statement filed in connection with the Public Offering or any new
registration statement or post-effective amendments thereto covering
equity or debt securities of the Company, or any such securities of the
Company held by its shareholders (in any such case, other than in
connection with a merger, acquisition or pursuant to Form S-8 or successor
form) (for purposes of this Article 6, collectively, the "Registration
Statement"), it will give written notice of its intention to do so by
certified mail,
6
return receipt requested ("Notice"), at least thirty (30) business days
prior to the filing of each such Registration Statement, to all Holders of
the Registrable Securities. Upon the written request of such a Holder (a
"Requesting Holder"), made within twenty (20) business days after receipt
by the Holder of the Notice, that the Company include any of the
Requesting Holder's Registrable Securities in the proposed Registration
Statement, the Company shall, as to each such Requesting Holder, use its
best efforts to effect the registration under the Act of the Registrable
Securities which it has been so requested to register ("Piggyback
Registration"), at the Company's sole cost and expense and at no cost or
expense to the Requesting Holders (except as provided in Section 6.5(b)
hereof).
Notwithstanding the provisions of this Section 6.3, the Company
shall have the right at any time after it shall have given written notice
pursuant to this Section 6.3 (irrespective of whether any written request
for inclusion of Registrable Securities shall have already been made) to
elect not to file any such proposed Registration Statement, or to withdraw
the same after the filing but prior to the effective date thereof.
6.4. Demand Registration.
(a) At any time within five (5) years following the effective
date of the Public Offering, any "Majority Holder" (as such term is
defined in Section 6.4(c) below) of the Registrable Securities shall
have the right (which right is in addition to the piggyback
registration rights provided for under Section 6.3 hereof),
exercisable by written notice to the Company (the "Demand
Registration Request"), to have the Company prepare and file with
the Securities and Exchange Commission (the "Commission") on one
occasion, at the sole expense of the Company (except as provided in
Section 6.5(b) hereof), a Registration Statement and such other
documents, including a prospectus, as may be necessary (in the
opinion of both counsel for the Company and counsel for such
Majority Holder) in order to comply with the provisions of the Act,
so as to permit a public offering and sale of the Registrable
Securities by the Holders thereof. The Company shall use its best
efforts to cause the Registration Statement to become effective
under the Act, so as to permit a public offering and sale of the
Registrable Securities by the Holders thereof. Once effective, the
Company will use its best efforts to maintain the effectiveness of
the Registration Statement until the earlier of (i) the date that
all of the Registrable Securities have been sold or (ii) the date
the Holders thereof receive an opinion of counsel to the Company
that all of the Registrable Securities may be freely traded without
registration under the Act, under Rule 144(k) promulgated under the
Act or otherwise.
(b) The Company covenants and agrees to give written notice of
any Demand Registration Request to all Holders of the Registrable
Securities within ten (10) business days from the date of the
Company's
7
receipt of any such Demand Registration Request. After receiving
notice from the Company as provided in this Section 6.4(b), holders
of Registrable Securities may request the Company to include their
Registrable Securities in the Registration Statement to be filed
pursuant to Section 6.4(a) hereof by notifying the Company of their
decision to have such securities included within ten (10) days of
their receipt of the Company's notice.
(c) The term "Majority Holder" as used in Section 6.4 hereof
shall mean any Holder or any combination of Holders of Registrable
Securities, if included in such Holders' Registrable Securities,
that hold an aggregate number of shares of Common Stock (including
Shares already issued, Shares issuable pursuant to the exercise of
outstanding Warrants) as would constitute a majority of the
aggregate number of shares of Common Stock outstanding (including
Shares already issued and Shares issuable pursuant to the exercise
of outstanding Warrants) that are Registrable Securities.
6.5. Covenants of the Company With Respect to Registration. The
Company covenants and agrees as follows:
(a) In connection with any registration under Section 6.4
hereof, the Company shall file the Registration Statement as
expeditiously as possible, but in any event no later than twenty
(20) days following receipt of any demand therefor, shall use its
best efforts to have any such Registration Statement declared
effective at the earliest possible time, and shall furnish each
Holder of Registrable Securities such number of prospectuses as
shall reasonably be requested.
(b) The Company shall pay all costs, fees and expenses (other
than underwriting fees, discounts and nonaccountable expense
allowance applicable to the Registrable Securities and fees and
expenses of counsel retained by the Holders of Registrable
Securities) in connection with all Registration Statements filed
pursuant to Sections 6.3 and 6.4(a) hereof including, without
limitation, the Company's legal and accounting fees, printing
expenses, and blue sky fees and expenses.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities
included in the Registration Statement for offering and sale under
the securities or blue sky laws of such states as are reasonably
requested by the Holders of such securities.
(d) The Company shall indemnify any Holder of the Registrable
Securities to be sold pursuant to any Registration Statement and any
underwriter or person deemed to be an underwriter under the Act
8
and each person, if any, who controls such Holder or underwriter or
person deemed to be an underwriter within the meaning of Section 15
of the Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended ("Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever)
to which any of them may become subject under the Act, the Exchange
Act or otherwise, arising from such registration statement to the
same extent and with the same effect as the provisions pursuant to
which the Company has agreed to indemnify the Underwriters as set
forth in Section 7 of the Underwriting Agreement and to provide for
just and equitable contribution as set forth in Section 8 of the
Underwriting Agreement.
(e) Any Holder of Registrable Securities to be sold pursuant
to a registration statement, and such Holder's successors and
assigns, shall severally, and not jointly, indemnify, the Company,
its officers and directors and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, against all loss, claim, damage or expense or
liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of
such Holder, or such Holder's successors or assigns, for specific
inclusion in such Registration Statement to the same extent and with
the same effect as the provisions pursuant to which the Underwriters
have agreed to indemnify the Company as set forth in Section 7 of
the Underwriting Agreement and to provide for just and equitable
contribution as set forth in Section 8 of the Underwriting
Agreement.
(f) Nothing contained in this Agreement shall be construed as
requiring any Holder to exercise the Warrants held by such Holder
prior to the initial filing of any registration statement or the
effectiveness thereof.
(g) The Company shall not permit the inclusion of any
securities other than the Registrable Securities to be included in
any Registration Statement filed pursuant to Section 6.4 hereof,
without the prior written consent of the Majority Holders, which
consent shall not be unreasonably withheld.
(h) The Company shall promptly deliver copies of all
correspondence between the Commission and the Company, its counsel
or its auditors and all memoranda relating to discussions with the
Commission or its staff with respect to the Registration Statement
to each Holder of Registrable Securities included for registration
in such Registration Statement pursuant to Section 6.3 hereof or
Section 6.4
9
hereof requesting such correspondence and memoranda and to the
managing underwriter, if any, of the offering in connection with
which such Holder's Registrable Securities are being registered and
shall permit each Holder of Registrable Securities and such
underwriter to do such reasonable investigation, upon reasonable
advance notice, with respect to information contained in or omitted
from the Registration Statement as it deems reasonably necessary to
comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. Such investigation shall
include access to books, records and properties and opportunities to
discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such
reasonable times and as often as any such Holder of Registrable
Securities or underwriter shall reasonably request.
7. Adjustments of Exercise Price and Number of Securities. The following
adjustments apply to the Exercise Price of the Warrants with respect to the
Shares and the number of Shares purchasable upon exercise of the Warrants.
7.1. Computation of Adjusted Price. In case the Company shall at any
time after the date hereof pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock, then upon such dividend or
distribution, the Exercise Price in effect immediately prior to such
dividend or distribution shall forthwith be reduced to a price determined
by dividing:
(a) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution
multiplied by the Exercise Price in effect immediately prior to such
dividend or distribution, by
(b) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with
the provisions of this Section 7.1, the Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall be deemed
to have been issued immediately after the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution.
7.2. Subdivision and Combination. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination.
7.3. Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Article 7, the number of
Shares
10
issuable upon the exercise of each Warrant shall be adjusted to the
nearest full number by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Shares
issuable upon exercise of the Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise
Price.
7.4. Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding shares of Common Stock
(other than a change in par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in the case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding shares of Common Stock,
except a change as a result of a subdivision or combination of such shares
or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of all or substantially all of the
assets of the Company, the Holders shall thereafter have the right to
purchase the kind and number of shares of stock and other securities and
property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holders were the owners of the Shares
immediately prior to any such events, at a price equal to the product of
(x) the number of shares of Common Stock issuable upon exercise of the
Holders' Warrants and (y) the exercise prices for the Warrants in effect
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance as if such Holders had exercised
the Warrants.
7.5. Determination of Outstanding Common Shares. The number of
Common Shares at any one time outstanding shall include the aggregate
number of shares issued and the aggregate number of shares issuable upon
the exercise of options, rights, warrants and upon the conversion or
exchange of convertible or exchangeable securities.
7.6. Dividends and Other Distributions with Respect to Outstanding
Securities. In the event that the Company shall at any time prior to the
exercise of all Warrants make any distribution of its assets to holders of
its Common Stock as a liquidating or a partial liquidating dividend, then
the Holder of Warrants who exercises its Warrants after the record date
for the determination of those Holders of Common Stock entitled to such
distribution of assets as a liquidating or partial liquidating dividend
shall be entitled to receive for the Warrant Price per Warrant, in
addition to each share of Common Stock, the amount of such distribution
(or, at the option of the Company, a sum equal to the value of any such
assets at the time of such distribution as determined by the Board of
Directors of the Company in good faith) which would have been payable to
such Holder had he been the Holder of record of the Common Stock
receivable upon exercise of his Warrant on the record date for the
determination of those entitled to such distribution. At the time of any
such dividend or distribution, the Company shall make
11
appropriate reserves to ensure the timely performance of the provisions of
this Subsection 7.6.
8. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of securities in such denominations as shall
be designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrant
Certificate, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
9. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of Shares upon the exercise of the
Warrants, nor shall it be required to issue scrip or pay cash in lieu of
fractional interests, it being the intent of the parties that all fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of Shares.
10. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock as shall be issuable upon the exercise thereof. The
Company covenants and agrees that, upon exercise of the Warrants and payment of
the Exercise Price therefor, all Shares issuable upon such exercise shall be
duly and validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any shareholder. As long as the Warrants shall be
outstanding, the Company shall use its best efforts to cause all shares of
Common Stock issuable upon the exercise of the Warrants to be listed on the
NASDAQ National Market, or any successor trading market on which the Common
Stock may be listed and/or quoted.
11. Notices to Warrant Holders. Nothing contained in this Agreement shall
be construed as conferring upon the Holder or Holders the right to vote or to
consent or to receive notice as a shareholder in respect of any meetings of
shareholders for the election of directors or any other matter, or as having any
rights whatsoever as a shareholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive
a dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of current or
retained earnings, as
12
indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale
of all or substantially all of its property, assets and business as
an entirety shall be proposed; or
(d) reclassification or change of the outstanding shares of
Common Stock (other than a change in par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination), consolidation of the Company with, or merger of the
Company into, another corporation (other than a consolidation or
merger in which the Company is the surviving corporation and which
does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision
or combination of such shares or a change in par value, as
aforesaid), or a sale or conveyance to another corporation of the
property of the Company as an entirety is proposed; or
(e) the Company or an affiliate of the Company shall propose
to issue any rights to subscribe for shares of Common Stock or any
other securities of the Company or of such affiliate to all the
shareholders of the Company;
then, in any one or more of said events, the Company shall give written notice
to the Holder or Holders of such event at least fifteen (15) days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, options or
warrants, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to give such notice or any
defect therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividend or distribution, or the
issuance of any convertible or exchangeable securities or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding up or
sale.
12. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
13
(a) if to a registered Holder of the Warrants, to the
address of such Holder as shown on the books of the Company; or
(b) if to the Company, to the address set forth in Section 2.1
of this Agreement or to such other address as the Company may
designate by notice to the Holders.
13. Supplements and Amendments. The Company and the Representative (as
defined in the Underwriting Agreement) may from time to time supplement or amend
this Agreement without the approval of any Holders of the Warrants and/or
Warrant Securities in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Representative may deem
necessary or desirable and which the Company and the Representative deem not to
adversely affect the interests of the Holders of Warrant Certificates.
14. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
15. Termination. This Agreement shall terminate at the close of business
on August , 2010. Notwithstanding the foregoing, this Agreement will terminate
on any earlier date when all Warrants have been exercised and all Warrant
Securities have been resold to the public; provided, however, that the
provisions of Section 6 shall survive any termination pursuant to this Section
15.
16. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
New York and for all purposes shall be construed in accordance with the laws of
said State, other than its conflicts of laws provisions.
17. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Underwriter and any other registered Holder or Holders of the Warrant
Certificates or Warrant Securities any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company and the Underwriter and any other Holder or Holders of
the Warrant Certificates or Warrant Securities.
18. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
ELECTRO-OPTICAL SCIENCES, INC.
By:
---------------------------------
Name:
Title:
LADENBURG ▇▇▇▇▇▇▇▇ & CO. INC.
By:
---------------------------------
Name:
Title:
AND
STANFORD GROUP COMPANY
By:
---------------------------------
Name:
Title:
Acting on behalf of itself and as the
Representatives of the several Underwriters
15
APPENDIX 1
UNDERWRITERS' SHARES
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
Stanford Group Company
Total :
16
EXHIBIT A
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, , 2010
No. W- ______________ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that or his, her or its
registered assigns, is the registered holder of Warrants to
purchase, at any time from , 2006 until 5:00 P.M. New York City
time on , 2010 ("Expiration Date"), up to fully-paid
and non-assessable shares (the "Shares") of the common stock, $.001 par value
per share (the "Common Stock"), of Electro-Optical Sciences, Inc., a New York
corporation (the "Company"), at an initial exercise price, subject to adjustment
in certain events (the "Exercise Price"), of $ per Share, upon surrender of this
Warrant Certificate and payment of the Exercise Price at an office or agency of
the Company, but subject to the conditions set forth herein and in the warrant
agreement dated as of , 2005 between the Company and Ladenburg
▇▇▇▇▇▇▇▇ & Co. Inc. and Stanford Group Company (the "Warrant Agreement").
Payment of the Exercise Price may be made in cash or by check payable to the
order of the Company, or any combination thereof.
No Warrant may be exercised after 5:00 P.M., New York City time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby
17
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" means the registered holders or registered holder) of the
Warrants.
The Warrant Agreement provides that upon the occurrence of certain events,
the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
18
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed.
Dated: , 2005 ELECTRO-OPTICAL SCIENCES, INC.
By:
---------------------------------
Name:
Title:
19
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase Shares of
Common Stock and herewith tenders in payment for such securities, cash or check
payable to the order of Electro-Optical Sciences, Inc. in the amount of $ ,
all in accordance with the terms hereof. The undersigned requests that a
certificate for such securities be registered in the name of ,
whose address is , and that such Certificate be delivered
to , whose address is .
Dated: Signature:
----------------------------
(Signature must conform in all respects to the name of holder as specified on
the face of the Warrant Certificate or with the name of the assignee appearing
in the assignment form, if any.)
--------------------------------------------------------------------------------
(Insert Social Security or Tax Identification Number of Holder)
20
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED, _________________________ hereby sells, assigns and
transfers unto _______________________________________________ (Please print
name, address and social security or tax identification number of assignee) this
Warrant Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint , Attorney, to transfer the
within Warrant Certificate on the books of the within-named Company, with full
power of substitution.
Dated: Signature:
---------------------------
(Signature must conform in all respects to the name of holder as specified on
the face of the Warrant Certificate or with the name of the assignee appearing
in the assignment form, if any.)
--------------------------------------------------------------------------------
(Insert Social Security or Tax Identification Number of Holder)
21
[CASHLESS EXERCISE FORM]
(To be executed upon exercise of Warrant pursuant to Section 2.2)
To: ELECTRO-OPTICAL SCIENCES, INC.
The undersigned hereby irrevocably elects a cashless exercise of the right
to purchase represented by the attached Warrant Certificate for, and to purchase
thereunder, Shares, as provided for in Section 2.2 therein.
Please issue a certificate or certificates for such Shares in the name of:
Name:
------------------------------------------------------
(Please print name)
Address:
----------------------------------------------------
and deliver such certificate or certificates to (if different from above):
Name:
------------------------------------------------------
(Please print name)
Address:
----------------------------------------------------
Dated: Signature:
---------------------------------
--------------------------------------------------------------------------------
(Insert Social Security or Tax Identification Number of Holder)
NOTE: The above signature should correspond exactly with the name on the
first page of this Warrant Certificate or with the name of the assignee
appearing in the assignment form, if any.
And if said number of shares shall not be all the shares purchasable under
the attached Warrant Certificate, a new Warrant Certificate is to be issued in
the name of the undersigned for the remaining balance of the shares purchasable
thereunder.
22