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EXHIBIT 10.72
ACCUMED INTERNATIONAL, INC.
AGENCY AGREEMENT
Commonwealth Associates
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
February 13, 1998
Gentlemen:
AccuMed International, Inc., a Delaware corporation (the
"Company"), proposes to exchange up to $6,000,000 principal amount of 12%
convertible promissory notes ("Notes") in an exchange offer (the "Exchange
Offer") for shares (the "Shares") of Series A Convertible Preferred Stock, $0.01
par value per share, of the Company and common stock purchase warrants
("Warrants"). The Exchange Offer will be made pursuant to those terms and
conditions acceptable to you as reflected in the Confidential Exchange Offer
Memorandum dated February 13, 1998, including all exhibits, attachments and
supplements thereto (the "Memorandum"). The Exchange Offer is being made
pursuant to the Memorandum and related documents in accordance with Section 4(2)
of the Securities Act of 1933, as amended (the "Securities Act") and Regulation
D promulgated thereunder.
Commonwealth Associates is sometimes referred to herein as the
"Placement Agent." The Memorandum (including the exhibits thereto), as it may be
amended from time to time, and the form of proposed subscription agreement and
registration rights agreement between the Company and each subscriber (the
"Subscription Agreement") and the exhibits which are part of the Memorandum
and/or Subscription Agreement, respectively, are collectively referred to herein
as the "Offering Documents."
The Company will prepare and deliver to the Placement Agent a
reasonable number of copies of the Offering Documents in form and substance
satisfactory to counsel to the Placement Agent.
Each prospective investor desiring to exchange Notes for the
Shares and Warrants ("Subscriber") will be required to deliver, among other
things, the Subscription Agreement and a confidential purchaser questionnaire
("Questionnaire") in the form to be provided to offerees. Capitalized terms used
herein, unless otherwise defined or unless the context otherwise indicates,
shall have the same meanings provided in the Offering Documents.
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1. Appointment of Placement Agent.
(a) You are hereby appointed exclusive Placement Agent of
the Company (subject to your right to have Selected Dealers, as defined in
Section 1(c) hereof, participate in the Exchange Offer) during the Offering
Period herein specified for the purposes of assisting the Company in soliciting
the exchange of Notes described in the Offering Documents. The Offering Period
shall commence on the day the Offering Documents are first made available to you
by the Company for delivery in connection with the Exchange Offer and shall
continue through 5:00 p.m. New York time on February 19, 1998 (the "Expiration
Date") (unless extended under circumstances specified in the Memorandum).
(b) Subject to the performance by the Company of all of
its obligations to be performed under this Agreement and to the completeness and
accuracy of all representations and warranties of the Company contained in this
Agreement, Commonwealth Associates hereby accepts such agency and agrees to use
its best efforts to assist the Company with the Exchange Offer described in the
Offering Documents. It is understood that the Placement Agent has no commitment
to complete the Exchange Offer. Your agency hereunder is not terminable by the
Company except upon termination of the Offering Period.
(c) You may engage American Equities or such other
persons, selected by you in your discretion, that are members of the National
Association of Securities Dealers, Inc., ("NASD") and that have executed a
Selected Dealers Agreement substantially in the form attached hereto as Schedule
A, to assist you in the Exchange Offer (each such person being hereinafter
referred to as a "Selected Dealer") and you may allow such persons such part of
the compensation and payment of expenses payable to you hereunder as you shall
determine. Each Selected Dealer shall be required to agree in writing to comply
with the provisions of, and to make the representations, warranties and
covenants contained in this Section 1.
(d) The exchange of Notes by Subscribers shall be
evidenced by the execution by Subscribers of a Subscription Agreement and Letter
of Transmittal accompanying the Memorandum. No exchange shall be effective
unless and until it is accepted by the Company. The Placement Agent shall not
have any obligation to independently verify the accuracy or completeness of any
information contained in any Subscription Agreement or the authenticity,
sufficiency, or validity of the Notes delivered in exchange for the Shares and
Warrants.
2. Representations and Warranties of the Company. The Company
represents and warrants to the Placement Agent, as follows:
(a) Securities Law Compliance. The Offering Documents
conform in all respects with the requirements of Section 4(2) of the Securities
Act and Regulation D promulgated thereunder and with the requirements of all
other published rules and regulations of the Securities and Exchange Commission
(the "Commission") currently in effect relating to
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"private offerings" to "accredited investors" of the type contemplated by the
Company. The Offering Documents will not contain an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading. If at any time prior to the completion of the Exchange Offer or
other termination of this Agreement any event shall occur as a result of which
it might become necessary to amend or supplement the Offering Documents so that
they do not include any untrue statement of any material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances then existing, not misleading, the Company will
promptly notify you and will supply you with amendments or supplements
correcting such statement or omission. The Company will also provide the
Placement Agent for delivery to all offerees and purchasers and their
representatives, if any, any information, documents and instruments which the
Placement Agent deems necessary to comply with applicable state and federal law.
(b) Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own and lease its properties, to carry on its business as currently
conducted and as proposed to be conducted, to execute and deliver this Agreement
and to carry out the transactions contemplated by this Agreement, as appropriate
and is duly licensed or qualified to do business as a foreign corporation in
each jurisdiction in which the conduct of its business or ownership or leasing
of its properties requires it to be so qualified, except where the failure to so
qualify would not have a material adverse effect on the business of the Company.
AccuMed International Limited ("AccuMed International") and Oncometrics Imaging
Corp. ("Oncometrics") are entities possessing substantially the same
characteristics under the laws of the United Kingdom and the Yukon Territory,
respectively.
(c) Capitalization. The authorized, issued and outstanding
capital stock of the Company prior to the consummation of the transactions
contemplated hereby is as set forth on Exhibit C hereto. All issued and
outstanding shares of the Company are validly issued, fully paid and
nonassessable and have not been issued in violation of the preemptive rights of
any stockholder of the Company. All prior sales of securities of the Company
were either registered under the Act and applicable state securities laws or
exempt from such registration, and no security holder has any rescission rights
with respect thereto.
(d) Warrants, Preemptive Rights, Etc. Except for the
warrants to purchase shares of Common Stock to be issued to you or your
designees in consideration for your acting as Placement Agent hereunder (the
"Agent's Warrants"), and except as set forth in or contemplated by the Offering
Documents, the Form S-3 Prospectus or set forth on Exhibits C and D, there are
not, nor will there be immediately after the Expiration Date (as hereinafter
defined), any outstanding warrants, options, agreements, convertible securities,
preemptive rights to subscribe for or other commitments pursuant to which the
Company is, or may become, obligated to issue any shares of its capital stock or
other securities of the Company and this Exchange Offer will not cause any
anti-dilution adjustments to such securities or commitments.
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(e) Subsidiaries and Investments. The Company has no
subsidiaries other than Oncometrics and AccuMed International (the
"Subsidiaries") and the Company does not own, directly or indirectly, any
capital stock or other equity ownership or proprietary interests in any other
corporation, association, trust, partnership, joint venture or other entity. All
of the issued and outstanding capital stock of each of the Subsidiaries has been
duly authorized and validly issued and is fully paid and (except for the shares
of Oncometrics not owned by the Company) is owned by the Company free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or equity,
except that certain of the shares of AccuMed International are subject to a lien
securing the Company's indebtedness to Transamerica Business Credit Corporation.
(f) Financial Statements. The financial information
contained in the Offering Documents is accurate in all material respects. The
Company's Form 10-QSB for the nine month period ended September 30, 1997, as
amended by Amendment No. 1, contains the Company's (i) Balance Sheets at
December 31, 1996 and at September 30, 1997 (hereinafter, September 30, 1997
being referred to as the "Balance Sheet Date"), (ii) Statements of Operations
for the three and nine months ended September 30, 1996, and 1997 and (iii)
Statements of Cash Flows for each of the nine months ended September 30, 1996
and September 30, 1997 (such financial statements attached to the Offering
Documents hereinafter referred to collectively as the "Financial Statements").
The Financial Statements have been prepared in conformity with generally
accepted accounting principles consistently applied and show all material
liabilities, absolute or contingent, of the Company required to be recorded
thereon and present fairly the financial position and results of operations of
the Company as of the dates and for the periods indicated.
(g) Absence of Changes. Since the Balance Sheet Date and
except as described in the Offering Documents or set forth in Exhibit G hereto,
neither the Company nor the Subsidiaries have incurred any liabilities or
obligations, direct or contingent, not in the ordinary course of business, or
entered into any transaction not in the ordinary course of business, which is
material to the business of the Company or the Subsidiaries, and, except as set
forth in Exhibit G to this Agreement and except as described in the Memorandum,
there has not been any change in the capital stock of, or any incurrence of
long-term debt by, the Company or the Subsidiaries, or any issuance of options,
warrants or other rights to purchase the capital stock of the Company or the
Subsidiaries, or any adverse change or any development involving, so far as the
Company can now reasonably foresee, a prospective adverse change in the
condition (financial or otherwise), net worth, results of operations, business,
key personnel or properties which would be material to the business or financial
condition of the Company and the Subsidiaries, taken as a whole, and neither the
Company nor the Subsidiaries has become a party to, and neither the business nor
the property of the Company or the Subsidiaries has become the subject of, any
material litigation whether or not in the ordinary course of business.
(h) Title. Except as set forth on Exhibit H hereto, each
of the Company and the Subsidiaries have good and marketable title to all
properties and assets, owned
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by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as are not materially significant or important in relation to the
Company's or the Subsidiaries' business. All of the material leases and
subleases under which the Company or the Subsidiaries are the lessor or
sublessor of properties or assets or under which the Company or the Subsidiaries
hold properties or assets as lessee or sublessee are in full force and effect,
and neither the Company nor the Subsidiaries are in default in any material
respect with respect to any of the terms or provisions of any of such leases or
subleases, and to the Company's knowledge, no material claim has been asserted
by anyone adverse to rights of the Company or the Subsidiaries as lessor,
sublessor, lessee or sublessee under any of the leases or subleases mentioned
above, or affecting or questioning the right of the Company or the Subsidiaries
to continued possession of the leased or subleased premises or assets under any
such lease or sublease. The Company and the Subsidiaries own or lease all such
properties as are necessary to their respective operations as now conducted and
to be conducted, as presently planned.
(i) Proprietary Rights. Except as set forth in Exhibit I
hereto and except as set forth in the Offering Documents, the Company and the
Subsidiaries own or possess adequate and enforceable rights to use all patents,
patent applications, trademarks, service marks, copyrights, trade secrets,
processes, formulations, technology or know-how used or proposed to be used in
the conduct of their respective business as described in the Offering Documents
(the "Proprietary Rights"). Neither the Company nor the Subsidiaries have
received any notice of any claims, nor does the Company have knowledge of any
threatened claims or facts which would form the basis of any claim, asserted by
any person to the effect that the sale or use of any product or process now used
or offered by the Company or the Subsidiaries or proposed to be used or offered
by the Company or the Subsidiaries infringes on any patents or infringes upon
the use of any such Proprietary Rights of another person and, except as set
forth on Exhibit I to the best of the Company's knowledge, no others have
infringed the Company's or the Subsidiaries' Proprietary Rights.
(j) Litigation. Except as set forth in the Memorandum or
in an Exhibit thereto which has been incorporated therein or Exhibit I, there is
no material action, suit, investigation, customer complaint, claim or proceeding
at law or in equity by or before any arbitrator, governmental instrumentality or
other agency now pending or, to the knowledge of the Company, threatened against
the Company or the Subsidiaries the adverse outcome of which would materially
adversely affect the Company's or the Subsidiaries' business or prospects, taken
as a whole. Neither the Company nor the Subsidiaries are subject to any
judgment, order, writ, injunction or decree of any Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign which would materially adversely affect the
Company's and the Subsidiaries' business or prospects, taken as a whole.
(k) Non-Defaults; Non-Contravention. Neither the Company
nor the Subsidiaries are in violation of or default under, nor will the
execution and delivery of this Agreement or any of the Offering Documents, the
Shares, the Warrant Agreement, or the Agent's
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Warrants (as defined herein) or consummation of the transactions contemplated
herein or therein result in a violation of or constitute a default in the
performance or observance of any obligation (i) under its Certificate of
Incorporation, or its By-laws, or any indenture, mortgage, contract, material
purchase order or other agreement or instrument to which the Company or the
Subsidiaries are a party or by which it or its property is bound or affected or
(ii) with respect to any material order, writ, injunction or decree of any court
of any Federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, and there exists
no condition, event or act which constitutes, nor which after notice, the lapse
of time or both, could constitute a default under any of the foregoing, which in
each case would have a material adverse effect on the business, financial
condition or prospects of the Company and the Subsidiaries, taken as a whole.
(l) Taxes. The Company has filed all Federal, state, local
and foreign tax returns which are required to be filed by it and all such
returns are true and correct in all material respects. Except for tax
obligations subject to reasonable dispute by the Company, the Company has paid
all taxes pursuant to such returns or pursuant to any assessments received by it
or which it is obligated to withhold from amounts owing to any employee,
creditor or third party. The Company has properly accrued all taxes required to
be accrued. The tax returns of the Company are not currently the subject of any
audit by any state, local or Federal authorities of which such authority has
notified the Company. The Company has not waived any statute of limitations with
respect to taxes or agreed to any extension of time with respect to any tax
assessment or deficiency.
(m) Compliance With Laws; Licenses, Etc. Except as set
forth in the Offering Documents, neither the Company nor the Subsidiaries have
received notice of any violation of or noncompliance with any Federal, state,
local or foreign, laws, ordinances, regulations and orders applicable to its
respective business which has not been cured, the violation of, or noncompliance
with which, would reasonably be expected to have a materially adverse effect on
the business or operations of the Company and the Subsidiaries, taken as a
whole. Each of the Company and the Subsidiaries have all licenses and permits
and other governmental certificates, authorizations and permits and approvals
(collectively, "Licenses") required by every Federal, state and local government
or regulatory body for the operation of their respective business as currently
conducted and the use of its properties, except where the failure to be licensed
would not have a material adverse effect on the business of the Company and the
Subsidiaries, taken as a whole. The Licenses are in full force and effect and no
violations are or have been recorded in respect of any License and no proceeding
is pending or, to the knowledge of the Company, threatened to revoke or limit
any thereof.
(n) Authorization of Agreement, Etc. This Agreement has
been duly and validly authorized, executed and delivered by the Company and the
execution, delivery and performance by the Company of this Agreement, the
Subscription Agreement and the Warrant Agreement have been duly authorized by
all requisite corporate action by the Company and when
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delivered, constitute or will constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their respective
terms.
(o) Authorization of Shares and Warrants Etc. The
issuance, sale and delivery of the Shares and Warrants in exchange for the Notes
and the Agent's Warrants have been duly authorized by all requisite corporate
action of the Company. When so issued, sold and delivered, the Shares and the
Warrants will be duly executed, issued and delivered and will constitute valid
and legal obligations of the Company enforceable in accordance with their
respective terms and, in each case, will not be subject to preemptive or any
other similar rights of the stockholders of the Company or others which rights
shall not have been waived prior to the Expiration Date.
(p) Authorization of Reserved Shares. The issuance, sale
and delivery by the Company of the shares of Common Stock issuable upon
conversion and/or exercise of the Shares and Warrants, respectively, including
the Agent's Warrants (the "Reserved Shares") have been duly authorized by all
requisite corporate action of the Company, and the Reserved Shares have been
duly reserved for issuance upon conversion and/or exercise of all or any of the
Shares, Warrants and the Agent's Warrants and when so issued, sold, paid for and
delivered, the Reserved Shares will be validly issued and outstanding, fully
paid and nonassessable, and not subject to preemptive or any other similar
rights of the stockholders of the Company or others which rights shall not have
been waived prior to the Expiration Date.
(q) Exemption from Registration. Assuming (i) the accuracy
of the information provided by the respective Subscribers in the Offering
Documents and (ii) that the Placement Agent has complied in all material
respects with the provisions of Regulation D promulgated under the Securities
Act, the exchange of the Notes for the Shares and Warrants pursuant to the terms
of this Agreement are exempt from the registration requirements of the
Securities Act and the rules and regulations promulgated thereunder (the
"Regulations"). The Company is not disqualified from the exemption under
Regulation D by virtue of the disqualifications contained in Rule 505(b)(2)(iii)
or Rule 507 promulgated thereunder.
(r) Registration Rights. Except as set forth on Schedule
(r) hereto and except with respect to holders of the Shares and Warrants and the
Agent's Warrants, and except as referenced or described in the Offering
Documents, no person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company on the
date hereof.
(s) Brokers. Neither the Company nor any of its officers,
directors, employees or stockholders has employed any broker or finder in
connection with the transactions contemplated by this Agreement other than the
Placement Agent.
(t) Title to Securities. When certificates representing
the Shares and Warrants and/or the Reserved Shares shall have been duly
delivered to the purchasers and
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payment shall have been made therefor in accordance with the terms of the
Offering Documents or the Warrant Agreement, as applicable, the Subscribers
shall have good and marketable title to the Shares and Warrants and/or the
Reserved Shares, as the case may be, free and clear of all liens, encumbrances
and claims whatsoever (with the exception of claims arising or through the acts
of the purchasers and except as arising from applicable Federal and state
securities laws), and the Company shall have paid all taxes, if any, in respect
of the original issuance thereof.
(u) Right of First Refusal. Except as set forth on
Schedule U, no person, firm or other business entity is a party to any
agreement, contract or understanding, written or oral entitling such party to a
right of first refusal with respect to the transactions contemplated by this
Agreement, except such as have been waived prior to the Expiration Date.
(v) Securities Exchange Act Compliance. The Company has
filed with the Securities and Exchange Commission ("SEC") on a timely basis all
filings required of a company whose securities have been registered under the
Securities Exchange Act of 1934, as amended ("Exchange Act"), during the prior
three years. All information contained in such filings is true, accurate and
complete in all material respects. For a period of five years from the date of
this Agreement, the Company covenants to maintain the registration of its Common
Stock under the Exchange Act and to make all filings thereunder on a timely
basis. For the purpose of this paragraph, filings pursuant to Rule 12b-25 of the
Exchange Act shall be deemed timely.
3. Expiration Date; Placement and Fees.
(a) Expiration Date. Provided Notes have been tendered,
the Company in its sole discretion, may reject or accept tenders of Notes in
full or part. If tenders are accepted on the Expiration Date, the Notes shall be
exchanged for the Shares and Warrants and the certificates representing the
Shares and Warrants will be delivered to Subscribers therefor promptly following
the Expiration Date. In addition, subsequent exchanges (if applicable) may be
scheduled at the discretion of the Company and Placement Agent. In such event,
the date of any such subsequent exchange will be deemed an "Expiration Date"
hereunder.
(b) Conditions to Placement Agent's Obligations. The
obligations of the Placement Agent hereunder will be subject to the accuracy of
the representations and warranties of the Company herein contained as of the
date hereof and as of the Expiration Date, to the performance by the Company of
its obligations hereunder and to the following additional conditions:
(i) Due Qualification or Exemption. (A) The Exchange
Offer will become qualified or be exempt from qualification under the securities
laws of the several states pursuant to paragraph 4(c) below not later than the
Expiration Date, and (B) at the Expiration Date no stop order suspending the
exchange of the Notes shall have been issued, and no proceeding for that purpose
shall have been initiated or threatened;
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(ii) No Material Misstatements. Neither the Blue Sky
qualification materials nor the Memorandum contains an untrue statement of a
fact which is material, or omits to state a fact, which is material and is
required to be stated therein, or is necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(iii) Compliance with Agreements. The Company will
have complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Expiration Date except as to
obligations which by their nature are herein contemplated to be performed after
the Expiration Date;
(iv) Corporate Action. The Company will have taken
all necessary corporate action, including, without limitation, obtaining the
approval of the Company's board of directors, for the execution and delivery of
this Agreement, the performance by the Company of its obligations hereunder and
under the Exchange Offer contemplated hereby;
(v) Opinion of Counsel. The Placement Agent shall
receive the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇, dated the Expiration Date(s),
substantially to the effect that:
(A) the Company has been duly organized and is
validly existing and in good standing under the laws of the State of its
incorporation, has all requisite power and authority necessary to own or hold
its properties and conduct its business and is duly qualified or licensed to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the ownership or leasing of its properties or conduct of its business
requires such qualification, except where the failure to so qualify or be
licensed would not have a material adverse effect on the business and condition
(financial or otherwise) of the Company; AccuMed International and Oncometrics
are entities duly organized and validly existing under the laws of the United
Kingdom and the Yukon Territory, respectively;
(B) each of this Agreement, the Warrant
Agreement, the Subscription Agreement and Registration Rights Agreement, the
Agent's Warrants and the Share Certificates has been duly authorized, executed
and delivered by the Company, and the Certificate of Designation has been duly
executed by the Company and filed with the Secretary of State of Delaware, and
each of them constitutes a legal, valid and binding obligation of the Company,
enforceable against it in accordance with their respective terms, subject to any
applicable bankruptcy, insolvency or other laws affecting the rights of
creditors generally and to general equitable principles;
(C) the authorized, issued and outstanding
capital stock of the Company (before giving effect to the transactions
contemplated by this Agreement) is as set forth in Exhibit C. Except for the
Shares, Warrants and Agent's Warrants to be issued as contemplated by this
Agreement, to such counsel's knowledge, there are no outstanding warrants,
options, agreements, convertible securities, preemptive rights or other
commitments pursuant to
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which the Company is, or may become, obligated to issue any shares of its
capital stock or other securities of the Company other than as set forth in
Exhibit D. All of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid (except
for the shares in an escrow described in the Company's Pre-Effective Amendment
No. 3 to the Registration Statement on Form S-3 (Regis. No. 333-28125)) and
nonassessable and have not been issued in violation of the preemptive rights of
any securityholder of the Company. The offers and sales during the three years
immediately prior to the date hereof of such outstanding securities were either
registered under the Act and applicable state securities laws or exempt from
such registration requirements. The Shares, when issued in accordance with the
terms of the Exchange Offer and the Certificate of Designation, Preferences and
Rights, will be validly issued and will be fully paid and nonassessable, with no
personal liability attaching to the ownership thereof. The Reserved Shares have
been duly reserved, and when issued in accordance with the terms of the Shares,
the Warrants and the Agent's Warrants will be validly issued, fully paid and
nonassessable and not subject to preemptive or any other similar rights and no
personal liability will attach to the ownership thereof;
(D) assuming (i) the accuracy of the
information provided by the Subscribers in the Offering Documents and (ii) that
the Placement Agent has complied in all material respects with the requirements
of Section 4(2) of the Securities Act (and the provisions of Regulation D
promulgated thereunder), the exchange of the Notes for Shares and Warrants is
exempt from registration under the Securities Act and Regulation D promulgated
thereunder;
(E) neither the execution and delivery of this
Agreement, the Shares, the Warrants, the Warrant Agreement, the Subscription
Agreement and Registration Rights Agreement, or the Agent's Warrants nor
compliance with the terms hereof or thereof, nor the consummation of the
transactions herein or therein contemplated, has, nor will, conflict with,
result in a breach of, or constitute a default under the Certificate of
Incorporation or By-laws of the Company or the Subsidiaries, or, to such
counsel's knowledge, any material contract, instrument or document to which the
Company or the Subsidiaries are a party, or by which the Company, the
Subsidiaries or any of their respective properties are bound, or, to such
counsel's knowledge, violate any applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court having jurisdiction over the
Company or the Subsidiaries or any of their respective properties or businesses;
(F) to such counsel's knowledge, there are no
claims, actions, suits, investigations or proceedings before or by any
arbitrator, court, governmental authority or instrumentality pending or
threatened against or affecting the Company or the Subsidiaries or involving the
properties of the Company or the Subsidiaries which might materially and
adversely affect the business, properties or financial condition of the Company
or the Subsidiaries or which might materially adversely affect the transactions
or other acts contemplated by this Agreement or the validity or enforceability
of this Agreement, except as set forth in or contemplated by the Offering
Documents; and
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(G) such counsel has participated in the
preparation of the Offering Documents and nothing has come to the attention of
such counsel to cause her to have reason to believe that the Offering Documents
contained any untrue statement of a material fact required to be stated therein
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading (except for the financial
statements, notes thereto and other financial information and statistical data
contained therein, as to which such counsel need express no opinion).
(vi) The Placement Agent shall receive a certificate
of the Company, signed by the Chairman and Chief Executive Officer or Chief
Financial Officer and Chief Operating Officer and Secretary thereof, that the
representations and warranties contained in Section 2 hereof are true and
accurate in all material respects at the Expiration Date with the same effect as
though expressly made at the Expiration Date.
(vii) Promptly after the Expiration Date, if
applicable, the Placement Agent shall receive copies of all letters from the
Company to the investors transmitting the Shares and Warrants.
(c) Blue Sky. A summary blue sky survey shall be prepared
by counsel to the Placement Agent stating the extent to which and the conditions
upon which the exchange of the Notes may be made in certain jurisdictions. It is
understood that such survey may be based on or rely upon (i) the representations
of each Subscriber set forth in the Subscription Agreement delivered by such
Subscriber, (ii) the representations, warranties and agreements of the Company
set forth in Section 2 of this Agreement, (iii) the representations and
warranties of the Placement Agent, and (iv) the representations of the Company
set forth in the certificate to be delivered at the Expiration Date pursuant to
paragraph (iii) of Section 3(b).
(d) Placement Fee and Expenses. Simultaneously with the
exchange of the Notes at the Expiration Date as provided in paragraph 3(a)
above, the Company shall at the Expiration Date pay to the Placement Agent (i) a
commission equal to five percent (5%) of the aggregate principal amount of the
Notes exchanged (payable 60 days following the Expiration Date); and (ii)
reimbursement for accountable expenses. In addition, the Placement Agent shall
have previously received a copy of written documentation from the Company to the
registrar and transfer agent for the Common Stock instructing it to issue to the
Placement Agent a certificate representing 50,000 shares of Common Stock in lieu
of a cash retainer. The Company shall also pay all expenses in connection with
the qualification of the Shares and Warrants under the securities or Blue Sky
laws of the states which the Placement Agent shall designate. The Company will,
at the Expiration Date, issue to you or your designees (which may include any
Selected Dealer or any officer of the Placement Agent or a Selected Dealer) the
Agent's Warrants in the form annexed hereto as Exhibit 1 to purchase 5% of the
shares of Common Stock underlying the Shares and Warrants issued in exchange for
the Notes. The Agent's Warrants will be exercisable for a period of seven years
from the Expiration Date. Moreover, an aggregate of 200,000 warrants previously
issued to the Placement Agent or its designees in connection with
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the private placement of the Notes, exercisable at an exercise price of $3.125
per share, will be exchanged for Warrants having identical terms except that the
Warrants will have an exercise price of $1.125 per share. The Placement Agent
will be entitled to receive the Transaction Fee whether or not the exchange is
solicited by the Placement Agent, the Company or any third party.
(e) Bring-Down Opinions and Certificates. If there is more
than one Expiration Date, then at each such Expiration Date with respect to
which Notes are exchanged there shall be delivered to the Placement Agent
updated opinions and certificates as described in (v), (vi) and (vii) of Section
3(b) above, respectively.
(f) No Adverse Changes. There shall not have occurred, at
any time prior to the Expiration Date or, if applicable, any additional
Expiration Date, (i) any domestic or international event, act or occurrence
which has materially disrupted, or in the Placement Agent's opinion will in the
immediate future materially disrupt, the securities markets; (ii) a general
suspension of, or a general limitation on prices for, trading in securities on
the New York Stock Exchange or the American Stock Exchange or in the
over-the-counter market; (iii) any outbreak of major hostilities or other
national or international calamity; (iv) any banking moratorium declared by a
state or federal authority; (v) any moratorium declared in foreign exchange
trading by major international banks or other persons; (vi) any material
interruption in the mail service or other means of communication within the
United States; (vii) any material adverse change in the business, properties,
assets, results of operations, or financial condition of the Company; or (viii)
any change in the market for securities in general or in political, financial,
or economic conditions which, in the Placement Agent's reasonable judgment,
makes it inadvisable to proceed with the exchange of the Notes.
4. Covenants of the Company.
(a) Expenses of Offering. The Company shall be responsible
for, and shall bear all expenses directly incurred in connection with, the
proposed Exchange Offer including, but not limited to, legal fees (including
those of counsel to the Placement Agent) relating to the costs of preparing the
Offering Documents and all amendments, supplements and exhibits thereto;
preparing and delivering all placement agent and selling documents, including,
but not limited to, the Agency Agreement with the Placement Agent and the blue
sky memorandum; Share and Warrant certificates, blue sky fees, filing fees and
the fees and disbursements of counsel in connection with blue sky matters (the
"Company Expenses"). Such expenses shall not include the cost of the Placement
Agent's reasonable mailing, telephone, telegraph, travel, due diligence meeting
and other similar expenses (the "Placement Agent Expenses") which are covered by
the accountable expense allowance set forth in Section 3(d) above, payable by
the Company to the Placement Agent.
(b) Notification. The Company shall notify the Placement
Agent immediately, and in writing, (A) when any event shall have occurred during
the period
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commencing on the date hereof and ending on the Expiration Date as a result of
which the Offering Documents would include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) of the receipt
of any notification with respect to the modification, rescission, withdrawal or
suspension of the qualification or registration of the Shares or Warrants, or of
any exemption from such registration or qualification, in any jurisdiction. The
Company will use its best efforts to prevent the issuance of any such
modification, rescission, withdrawal or suspension and, if any such
modification, rescission, withdrawal or suspension is issued and you so request,
to obtain the lifting thereof as promptly as possible.
(c) Blue Sky. The Company will use its commercially
reasonable efforts to qualify or register the Shares and Warrants for offering
and sale under, or establish an exemption from such qualification or
registration under, the securities or "blue sky" laws of such jurisdictions as
you may reasonably request; provided however, that the Company will not be
obligated to qualify as a dealer in securities or be subject to general service
of process in any jurisdiction in which it is not so qualified or subject. The
Company will not consummate the exchange of the Notes in any jurisdiction in
which it is not so qualified or in any manner in which such sale may not be
lawfully made.
(d) Form D Filing. The Company shall file five copies of a
Notice of Sales of Securities on Form D with the Securities and Exchange
Commission (the "Commission") no later than 15 days after the Expiration Date.
The Company shall file promptly such amendments to such Notices on Form D as
shall become necessary and shall also comply with any filing requirement imposed
by the laws of any state or jurisdiction in which offers and sales are made. The
Company shall furnish the Placement Agent with copies of all such filings.
(e) Press Releases, Etc. The Company shall not, during the
period commencing on the date hereof and ending on the Expiration Date, issue
any press release or other communication, or hold any press conference with
respect to the Company, its financial condition, results of operations,
business, properties, assets, or liabilities, or the Exchange Offer, without the
prior consent of the Placement Agent, which consent shall not be unreasonably
withheld unless, in the opinion of Company counsel, the press release is
required under the securities laws of the United States or the rules or policies
of Nasdaq.
(f) Form 10-K. The Company will provide to the Placement
Agent, promptly upon the filing thereof with the Commission (and in any event no
later than 5 days after such filing), a copy of its Annual Report on Form 10-K
for the year ended December 31, 1997.
(g) Restrictions on Issuance of Securities. Prior to the
Expiration Date, the Company will not, without the prior written consent of the
Placement Agent, issue additional shares of Common Stock or grant any warrants,
options or other securities of the Company except for issuances of shares upon
(i) the exercise of outstanding options and warrants, and (ii) the transactions
contemplated on Exhibit D.
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5. Indemnification.
(a) (i) The Company agrees to indemnify and hold harmless
the Placement Agent and its shareholders, directors, officers, agents and
controlling persons (an "Placement Agent Indemnified Party") against any and all
loss, liability, claim, damage and expense whatsoever (and all actions in
respect thereof), and to reimburse the Placement Agent for legal fees and
related expenses as incurred (including, but not limited to the costs of giving
testimony or furnishing documents in response to a subpoena or otherwise, and
the costs of investigating, preparing or defending any such action or claim
whether or not in connection with litigation in which the Placement Agent is a
party), arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Offering Documents or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(ii) The Placement Agent agrees to indemnify and hold
harmless the Company and its respective shareholders, directors, officers,
agents and controlling persons (a "Company Indemnified Party" and collectively
as the context requires, with the Placement Agent Indemnified Party, the
"Indemnified Party") against any and all loss, liability, claim, damage and
expense whatsoever (and all actions in respect thereof), and to reimburse the
Company for legal fees and related expenses (including, but not limited to the
costs of giving testimony or furnishing documents in response to a subpoena or
otherwise, and the costs of investigating, preparing or defending any such
action or claim whether or not in connection with litigation in which the
Placement Agent is a party), arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Offering Documents or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
the Placement Agent to the Company specifically for inclusion in the Offering
Documents. In no event shall the liability of the Placement Agent hereunder be
greater in amount than the dollar amount of the Notes exchanged in the Exchange
Offer.
(b) The Company agrees to indemnify and hold harmless a
Placement Agent Indemnified Party to the same extent as the foregoing indemnity,
against any and all loss, liability, claim, damage and expense whatsoever
directly arising out of the exercise by any person of any right under the
Securities Act or the Exchange Act or the securities or Blue Sky laws of any
state on account of violations of the representations, warranties or agreements
set forth in Section 2 hereof.
(c) Promptly after receipt by a person entitled to
indemnification pursuant to the foregoing subsection (a) or (b) under this
Section of notice of the commencement of any action, the Indemnified Party will,
if a claim in respect thereof is to be made against the
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indemnifying party under this Section, notify in writing the indemnifying party
of the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to the
Indemnified Party otherwise than under this Section 5. In case any such action
is brought against an Indemnified Party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, subject to
the provisions herein stated, with counsel reasonably satisfactory to the
Indemnified Party, and after notice from the indemnifying party to the
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to the Indemnified Party under this
Section 5 for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation. The Indemnified Party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall not be at the expense of the
indemnifying party if the indemnifying party has assumed the defense of the
action with counsel reasonably satisfactory to the Indemnified Party; provided
that the fees and expenses of such counsel shall be at the expense of the
indemnifying party if (i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party or (ii) the named parties to any
such action (including any impleaded parties) include both the Indemnified Party
or parties and the indemnifying party and, in the judgment of the Indemnified
Party, it is advisable for the Indemnified Party or parties to be represented by
separate counsel (in which case the indemnifying party shall not have the right
to assume the defense of such action on behalf of the Indemnified Party or
parties, it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys for the Indemnified Party or parties.
No settlement of any action against an Indemnified Party shall be made without
the consent of the Indemnified Party, which shall not be unreasonably withheld
in light of all factors of importance to the Indemnified Party.
6. Contribution.
To provide for just and equitable contribution, if (i) an
Indemnified Party makes a claim for indemnification pursuant to Section (5) but
it is found in a final judicial determination, not subject to further appeal,
that such indemnification may not be enforced in such case, even though this
Agreement expressly provides for indemnification in such case, or (ii) any
indemnified or indemnifying party seeks contribution under the Securities Act,
the Exchange Act, or otherwise, then the Company (including for this purpose any
contribution made by or on behalf of any officer, director, employee or agent
for the Company, or any controlling person of the Company), on the one hand, and
the Placement Agent and any Selected Dealers (including for this purpose any
contribution by or on behalf of an Indemnified Party), on the other hand, shall
contribute to the losses, liabilities, claims, damages, and expenses whatsoever
to which any of them may be subject, in such proportions as are appropriate to
reflect the relative
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benefits received by the Company, on the one hand, and the Placement Agent and
the Selected Dealers, on the other hand; provided, however, that if applicable
law does not permit such allocation, then other relevant equitable
considerations such as the relative fault of the Company and the Placement Agent
and the Selected Dealers in connection with the facts which resulted in such
losses, liabilities, claims, damages, and expenses shall also be considered. In
no case shall the Placement Agent or a Selected Dealer be responsible for a
portion of the contribution obligation in excess of the compensation received by
it pursuant to Section 3 hereof or the Selected Dealer Agreement, as the case
may be. No person guilty of a fraudulent misrepresentation shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person, if any, who
controls the Placement Agent within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and each officer, director,
stockholder, employee and agent of the Placement Agent, shall have the same
rights to contribution as the Placement Agent, and each person, if any who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act and each officer, director, employee and agent
of the Company, shall have the same rights to contribution as the Company,
subject in each case to the provisions of this Section 6. Anything in this
Section 6 to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 6 is intended to supersede any right
to contribution under the Securities Act, the Exchange Act, or otherwise.
7. Miscellaneous.
(a) Survival. Any termination of the Exchange Offer
without consummation thereof shall be without obligation on the part of any
party except that the indemnification provided in Section 5 hereof and the
contribution provided in Section 6 hereof shall survive any termination and
shall survive the Expiration Date for a period of five years.
(b) Representations, Warranties and Covenants to Survive
Delivery. The respective representations, warranties, indemnities, agreements,
covenants and other statements of the Company as of the date hereof shall
survive execution of this Agreement and the exchange of the Notes and the
termination of this Agreement.
(c) No Other Beneficiaries. This Agreement is intended for
the sole and exclusive benefit of the parties hereto and their respective
successors and controlling persons, and no other person, firm or corporation
shall have any third-party beneficiary or other rights hereunder.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York without regard to
conflict of law provisions.
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(e) Counterparts. This Agreement may be signed in
counterparts with the same effect as if both parties had signed one and the same
instrument.
(f) Notices. Any communications specifically required
hereunder to be in writing, if sent to the Placement Agent, will be telecopied,
mailed, delivered and confirmed to it at Commonwealth Associates, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Att: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq., telecopy number
(▇▇▇) ▇▇▇-▇▇▇▇, with a copy to Bachner, Tally, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Att: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at AccuMed
International, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Att: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to AccuMed
International, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇,
General Counsel, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇.
(g) Entire Agreement. This Agreement constitutes the
entire agreement of the parties with respect to the matters herein referred and
supersedes all prior agreements and understandings, written and oral, between
the parties with respect to the subject matter hereof. Neither this Agreement
nor any term hereof may be changed, waived or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver or termination is sought.
If you find the foregoing is in accordance with our
understanding, kindly sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
us.
Very truly yours,
ACCUMED INTERNATIONAL, INC.
By: \s\ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman,
Chief Executive Officer and President
Agreed:
COMMONWEALTH ASSOCIATES
By: \s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Chief Financial Officer
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AMENDMENT
TO THE
AGENCY AGREEMENT
Amendment No. 1 to the Agency Agreement (the "Agency Agreement") dated
February 13, 1998 between AccuMed International, Inc., a Delaware corporation
(the "Company"), and Commonwealth Associates (the "Placement Agent").
Capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Agency Agreement.
The parties hereto agree to the following amendments to the terms of the
Exchange Offer and the Agency Agreement:
Section 3(d) of the Agency Agreement is hereby deleted, and the
following is inserted in lieu thereof:
"(d) Placement Fee and Expenses. Simultaneously with the exchange of the
Notes at the Expiration Date as provided in paragraph 3(a) above, the Company
shall at the Expiration Date pay to the Placement Agent reimbursement for
accountable expenses. Within 60 days following the Expiration Date, the Company
shall pay the Placement Agent a cash fee of $175,000. In addition, the Placement
Agent shall receive a copy of written documentation from the Company to the
registrar and transfer agent for the Common Stock instructing it to issue to the
Placement Agent a certificate representing 50,000 shares of Common Stock in lieu
of a cash retainer. The Company shall also pay all expenses in connection with
the qualification of the Shares and Warrants under the securities or Blue Sky
laws of the states which the Placement Agent shall designate. The Company will,
at the Expiration Date, issue to you or your designees (which may include any
Selected Dealer or any officer of the Placement Agent or a Selected Dealer) the
Agent's Warrants in the form annexed hereto as Exhibit 1 to purchase 350,000
shares of Common Stock. The Agent's Warrants will be exercisable for a period of
seven years from the Expiration Date. Moreover, an aggregate of 200,000 warrants
previously issued to the Placement Agent or its designees in connection with the
private placement of the Notes, exercisable at an exercise price of $3.125 per
share, will be exchanged for Warrants having identical terms except that the
Warrants will have an exercise price of $1.125 per share. The Placement Agent
will be entitled to receive the Transaction Fee whether or not the exchange is
solicited by the Placement Agent, the Company or any third party."
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Except as expressly provided herein, the terms of the Agency Agreement
shall remain in full force and effect without modification or amendment.
In Witness Whereof, the parties have caused this Amendment No. 1 to be
executed as of February 23, 1998.
ACCUMED INTERNATIONAL, INC.
By: \s\ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman, Chief Executive Officer
and President
COMMONWEALTH ASSOCIATES,
a New York limited partnership
By: COMMONWEALTH MANAGEMENT CO., INC.,
a New York corporation, its general partner
By: \s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
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