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1,900,000 Shares(1)
MERGE TECHNOLOGIES, INCORPORATED
Common Stock
UNDERWRITING AGREEMENT
[ ], 1998
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc.
As Representative of the several Underwriters
c/o ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Merge Technologies Incorporated, a Wisconsin corporation (the "Company"),
proposes to issue and sell 1,900,000 shares (the "Firm Shares") of its
authorized but unissued Common Stock. The Company also proposes to grant to the
Underwriters (as defined below) an option to purchase up to 285,000 additional
shares of Common Stock (the "Optional Shares" and, with the Firm Shares,
collectively, the "Shares"). The Common Stock is more fully described in the
Registration Statement and the Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Shares by the several underwriters, for whom you are acting,
named in Schedule I hereto (collectively, the "Underwriters," which term shall
also include any underwriter purchasing Shares pursuant to Section 2(b)
hereof). You represent and warrant that you have been authorized by each of
the other Underwriters to enter into this Underwriting Agreement (the
"Agreement") on its behalf and to act for it in the manner herein provided.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the several Underwriters as of the date
hereof and as of each Closing Date (as defined below) that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form SB-2 (No. 333-39111),
including
__________________________
(1) Plus an option to purchase from the Company up to 285,000 additional shares
to cover over-allotments.
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the related preliminary prospectus, for the registration under the Securities
Act of 1933, as amended (the "Securities Act") of the Shares. Copies of such
registration statement and of each amendment thereto, if any, including the
related preliminary prospectus (meeting the requirements of Rule 430A of the
rules and regulations of the Commission) heretofore filed by the Company with
the Commission have been delivered to you.
The term Registration Statement as used in this Agreement shall mean such
registration statement, including all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Shares (a "Rule 462(b)
registration statement"), and, in the event of any amendment thereto after the
effective date of such registration statement (the "Effective Date"), shall
also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Shares first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration Statement) and, in the event of any supplement or amendment to
such prospectus after the Effective Date, shall also mean (from and after the
filing with the Commission of such supplement or the effectiveness of such
amendment) such prospectus as so supplemented or amended. The term Preliminary
Prospectus as used in this Agreement shall mean each preliminary prospectus
included in such registration statement prior to the time it becomes effective.
(b) The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
(c) Each of the Company and its subsidiaries has been duly incorporated
and each is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has full corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement and the Prospectus and as being conducted, and is
duly qualified as a foreign corporation and in good standing in all
jurisdictions in which the character of the property owned or leased or the
nature of the business transacted by it makes qualification necessary (except
where the failure to be so qualified would not have a material adverse effect
on the business, properties, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole).
(d) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21.1 to the Registration Statement. Except as otherwise described in
the Prospectus, the Company owns all of the outstanding capital stock of its
subsidiaries free and clear of all
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claims, liens, charges and encumbrances. The Company and each of its
subsidiaries are in possession of, and operating in compliance with, all
material authorizations, licenses, permits, consents, certificates and orders
material to the conduct of their respective businesses as described in the
Prospectus, all of which are valid and in full force and effect.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change in the business, properties, condition (financial or otherwise)
or results of operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
other than as set forth in the Registration Statement and the Prospectus, and
since such dates, except in the ordinary course of business, neither the
Company nor any of its subsidiaries has entered into any material transaction
not referred to in the Registration Statement and the Prospectus.
(f) The Registration Statement and the Prospectus comply and on the
Closing Date (as hereinafter defined) and any later date on which Optional
Shares are to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder; on the Effective Date, the
Registration Statement did not contain any 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 not misleading; and, on the
Effective Date the Prospectus did not and, on the Closing Date and any later
date on which Optional Shares are to be purchased, will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that none of the
representations and warranties in this paragraph shall apply to statements in,
or omissions from, the Registration Statement or the Prospectus made in
reliance upon and in conformity with information herein or otherwise furnished
in writing to the Company by or on behalf of the Underwriters specifically for
use in the Registration Statement or the Prospectus.
(g) The Company has authorized and outstanding capital stock as set
forth under the heading "Capitalization" in the Prospectus. The issued and
outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, and were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities. All issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable. Except as disclosed in or contemplated by the
Prospectus and the financial statements of the Company and the related notes
thereto included in the Prospectus, neither the Company nor any subsidiary has
any outstanding options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its capital
stock or any such options, rights, convertible securities or obligations.
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The description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly
presents the information required by the Securities Act and the rules and
regulations promulgated thereunder ("Rules and Regulations") to be shown with
respect to such plans, arrangements, options and rights.
(h) The Shares will be, when issued and sold to the Underwriters as
provided herein, validly issued, fully paid and nonassessable and conform to
the description thereof in the Prospectus. No further approval or authority of
the stockholders or the Board of Directors of the Company will be required for
the issuance and sale of the Shares to be sold by the Company as contemplated
herein.
(i) The Warrants (as defined in Section 5(p) below) will conform to the
description thereof in the Prospectus and, when sold to and paid for by the
Representative in accordance with the Warrant Agreement (as defined in Section
5(p) below), will be duly authorized and validly issued and will be valid and
binding obligations of the Company entitled to all the benefits of the Warrant
Agreement. The Warrant Shares (as defined in Section 5(p) below) will be duly
authorized and reserved for issuance upon exercise of the Warrants and, when
issued upon such exercise in accordance with the terms of the Warrants and the
Warrant Agreement, will be duly and validly issued, fully paid and
nonassessable, free of preemptive rights and will conform to the description
thereof in the Prospectus.
(j) Prior to the Closing Date, (i) the Shares to be issued and sold by the
Company and (ii) the Warrant Shares, will be authorized for quotation on the
Nasdaq SmallCap Market upon official notice of issuance.
(k) The Shares to be sold by the Company will be sold free and clear of
any pledge, lien, security interest, encumbrance, claim or equitable interest,
and will conform to the description thereof contained in the Prospectus.
Except as described in the Prospectus, no preemptive right, co-sale right,
registration right, right of first refusal or other similar right to subscribe
for or purchase securities of the Company exists with respect to the issuance
and sale of the Shares by the Company pursuant to this Agreement. No
stockholder of the Company has any right which has not been waived, or complied
with, to require the Company to register the sale of any shares owned by such
stockholder under the Securities Act in the public offering contemplated by
this Agreement.
(l) The Company has all requisite corporate power and authority to
enter into this Agreement and Warrant Agreement and perform the transactions
contemplated hereby and thereby. This Agreement and the Warrant Agreement have
been duly authorized, executed and delivered by the Company and constitute
valid and binding obligations of the Company enforceable in accordance with
their terms, except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium laws affecting
creditors' rights generally and except as to
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those provisions relating to rights to indemnity or contribution for
liabilities arising under federal and state securities laws. The making and
performance of this Agreement and the Warrant Agreement by the Company and the
consummation of the transactions contemplated hereby and thereby (i) will not
violate any provisions of the Certificate of Incorporation, Bylaws or other
organizational documents of the Company or any of its subsidiaries, and (ii)
will not conflict with, result in a material breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
material default under (A) any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties may be bound or affected, or
(B) any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company and its subsidiaries, taken as a
whole, or to which any of their respective properties are subject. No consent,
approval, authorization or other order of any court regulatory body,
administrative agency or other governmental body that has not already been
obtained is required for the execution and delivery of this Agreement and the
Warrant Agreement or the consummation of the transactions contemplated by this
Agreement and the Warrant Agreement, except for the clearance of such offering
with the National Association of Securities Dealers, Inc. (the "NASD") and the
approval of the quotation of the Shares on the Nasdaq SmallCap Market.
(m) The consolidated financial statements and schedules of the Company and
the related notes thereto included in the Registration Statement and the
Prospectus present fairly on a consolidated basis the financial position of the
Company and its subsidiaries as of the respective dates of such financial
statements and schedules, and the results of operations and cash flows of the
Company and its subsidiaries for the respective periods covered thereby. Such
statements, schedules and related notes have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods specified, as certified by the independent accountants
named in subsection 10(f). No other financial statements or schedules are
required to be included in the Registration Statement. The financial data set
forth in the Prospectus under the captions "Capitalization" and "Selected
Consolidated Financial Data" fairly present the information set forth therein
on the basis stated in the Registration Statement.
(n) The Company maintains a system of internal accounting 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 generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The representations and warranties given by the Company and its
officers to
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its independent public accountants for the purpose of supporting the letters
referred to in Sections 9(f) and (g) are true and correct.
(o) Neither the Company nor any of its subsidiaries is (i) in violation or
default of any provision of its Certificate of Incorporation, Bylaws or other
organizational documents, or (ii) in material breach of, or default with
respect to, any provision of any agreement, judgment, decree, order, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
to which it is a party or by which it or any of its properties are bound; and
there does not exist any state of facts which, with notice or lapse of time or
both, would constitute such a breach or default on the part of the Company and
its subsidiaries, taken as a whole.
(p) There are no contracts or other documents required to be described in
the Registration Statement or to be filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have not
been described or filed as an exhibit to the Registration Statement as
required. The contracts so described in the Prospectus are in full force and
effect on the date hereof.
(q) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits, investigations or other proceedings (formal or
informal) pending or, to the best knowledge of the Company, threatened to which
the Company or any of its subsidiaries is or is threatened to be made a party
or a subject or of which property owned or leased by the Company or any of its
subsidiaries is or has been threatened to be made the subject, which actions,
suits, investigations or other proceedings could, individually or in the
aggregate, prevent or materially adversely affect the transactions contemplated
by this Agreement or the Warrant Agreement or result in a material adverse
change in the business, properties, condition (financial or otherwise), or
results of operations of the Company and its subsidiaries, taken as a whole;
there are no outstanding claims, asserted or otherwise, against the Company,
any of its subsidiaries, or any of their respective officers or directors, for
violations of any federal or state securities laws, or any other applicable
laws, relating to any purchase, sale, or redemption of, or other transaction
with respect to, the Common Stock or shares of capital stock of any of the
Company's subsidiaries; and no labor disturbance by the employees of the
Company or any of its subsidiaries exists or is imminent which could materially
adversely affect the business, properties, condition (financial or otherwise),
or results of operations of the Company or its subsidiaries, taken as a whole.
Neither the Company nor any of its subsidiaries is a party or subject to the
provisions of any material injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other governmental body. Except as
disclosed in the Prospectus, there are no material legal or governmental
actions, suits, investigations or proceedings pending or, to the Company's best
knowledge, threatened against any executive officers or directors of the
Company.
(r) The Company or the applicable subsidiary has good title to all the
properties and assets reflected as owned in the financial statements
hereinabove described (or elsewhere in the Prospectus), subject to no lien,
mortgage, pledge, charge or
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encumbrance of any kind except (i) those, if any, reflected in such financial
statements (or elsewhere in the Prospectus), or (ii) those which are not
material in amount to the Company and its subsidiaries, taken as a whole, and
do not adversely affect the use made and proposed to be made of such property
by the Company or its subsidiaries. The Company or the applicable subsidiary
holds its leased properties under valid and binding leases. Except as
described in the Prospectus, the Company owns or leases all such properties as
are necessary to its operations as now conducted or as proposed to be conducted.
(s) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not (A) incurred any material liabilities or obligations,
indirect, direct or contingent, or (B) entered into any oral or written
agreement or other transaction, which in the case of (A) or (B) is not in the
ordinary course of business; (ii) the Company and its subsidiaries have not
sustained any material loss or interference with their respective businesses or
properties from fire, flood, windstorm, accident or other calamity, whether or
not covered by insurance; (iii) the Company and its subsidiaries have not paid
or declared any dividends or other distributions with respect to their
respective capital stock and the Company and its subsidiaries are not in
default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock of the
Company or its subsidiaries (other than upon the sale of the Shares hereunder
or upon the exercise of any options or warrants disclosed in the Prospectus);
(v) there has not been any material increase in the short- or long-term debt of
the Company and its subsidiaries; and (vi) there has not been any material
adverse change or any development involving or which may reasonably be expected
to involve a prospective material adverse change, in the business, condition
(financial or otherwise), properties, or results of operations of the Company
and its subsidiaries, taken as a whole.
(t) The Company and its subsidiaries are conducting business in compliance
with all applicable laws, rules and regulations of the jurisdictions in which
they are conducting business, except where the failure to be so in compliance
would not have a material adverse effect on the business, properties, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole.
(u) The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns, and all such tax returns
are complete and correct in all material respects, and the Company and its
subsidiaries have not failed to pay any taxes which were payable pursuant to
said returns or any assessments with respect thereto. The Company has no
knowledge of any tax deficiency which has been or is likely to be threatened or
asserted against the Company or its subsidiaries.
(v) The Company has not distributed, and will not distribute prior to
the later to occur of (i) completion of the distribution of the Shares, or (ii)
the expiration of any time period within which a dealer is required under the
Securities Act to deliver a
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prospectus relating to the Shares, any offering material in connection
with the offering and sale of the Shares other than the Prospectus, the
Registration Statement and any other materials permitted by the Securities Act
and consented to by the Underwriters.
(w) Each of the Company and its subsidiaries maintains insurance of the
types and in the amounts generally deemed adequate for their business,
including, but not limited to, directors' and officers' insurance, insurance
covering real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full
force and effect. The Company has not been refused any insurance coverage
sought or applied for, and the Company has no reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not materially adversely affect
the business, properties, condition (financial or otherwise) or results of
operations of the Company or its subsidiaries, taken as a whole.
(x) Neither the Company nor any of its subsidiaries nor, to the best of
the Company's knowledge, any of their 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 foreign, 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 or any jurisdiction thereof.
(y) The Company has not taken and will not take, directly or indirectly,
any action designed to or that might be reasonably expected to cause or result
in stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
(z) The Company has caused the holders of no less than ninety-five
percent (95%) of the outstanding shares of Common Stock (including shares
issuable upon the exercise or conversion of any option, warrant or other
security that vests or is exercisable prior to the 455th day following the date
the Registration Statement became effective) to furnish to the Underwriters an
agreement in form and substance satisfactory to ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc.
stating that without the prior written consent of ▇. ▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc.,
such person or entity will not: (i) until the 275th day following the date the
Registration Statement became effective, directly or indirectly, offer, sell,
pledge, contract to sell, grant any option to purchase or otherwise dispose of
any shares of Common Stock beneficially owned or otherwise held by such person
or entity (including, without limitation, shares of Common Stock which may be
deemed to be beneficially owned by such person or entity in accordance with the
rules and regulations of the Securities and Exchange Commission and shares of
Common Stock which may be issued upon exercise of a stock option or warrant),
or any securities convertible into, derivative of or exercisable or
exchangeable for such Common Stock, as of the date the Registration
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Statement became effective; and (ii) until the 455th day following the
date the Registration Statement became effective, directly or indirectly,
offer, sell, pledge, contract to sell, grant any option to purchase or
otherwise dispose of more than one-half of the aggregate number of shares of
Common Stock beneficially owned or otherwise held by such person or entity
(including, without limitation, shares of Common Stock which may be deemed to
be beneficially owned by such person or entity in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common
Stock which may be issued upon exercise of a stock option or warrant), or any
securities convertible into, derivative of or exercisable or exchangeable for
such Common Stock, as of the date the Registration Statement became effective;
provided, however, that if such party is an individual, he or she may transfer
any or all of the Common Stock held by such party either during his or her
lifetime or on death, by gift, will or intestacy, to his or her immediate
family or to a trust the beneficiaries of which are exclusively such party
and/or a member or members of his or her immediate family (any of such
transferees are hereinafter referred to as a "Permitted Transferee"); provided
further, that in any such case the Permitted Transferee executes a lock-up
agreement in substantially the same form covering the remainder of the lock-up
period.
(aa) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba.
(bb) Except as specifically disclosed in the Prospectus: the Company and
its subsidiaries have sufficient trademarks, trade names, patent rights,
copyrights, trade secret protections, licenses, approvals and governmental
authorizations to conduct their businesses as now conducted; the expiration or
absence of any trademarks, trade names, patent rights, copyrights, trade secret
protections, licenses, approvals or governmental authorizations would not have
a material adverse effect on the business, properties, condition (financial or
otherwise) or results of operations of the Company or its subsidiaries; the
Company has no knowledge of any infringement or of facts that suggest any
infringement by the Company or its subsidiaries of any trademark, trade name,
patent, copyright, license, trade secret or other similar rights of others; and
no claims have been made or are threatened against the Company or its
subsidiaries regarding infringement by the Company of any trademark, trade
name, patent, copyright, license, trade secret or other similar rights of
others.
(cc) Except as disclosed in the Prospectus, (i) the Company and its
subsidiaries are in compliance in all material respects with all material
rules, laws and regulations relating to the use, treatment, storage and
disposal of toxic substances and protection of health or the environment
("Environmental Laws") which are applicable to their business, (ii) neither the
Company nor any of its subsidiaries has received any notice from any
governmental authority or third party of an asserted claim under Environmental
Laws, (iii) no facts currently exist that will require the Company or any of
its subsidiaries to make future material capital expenditures to comply with
Environmental Laws, and (iv) to the knowledge of the Company, no property which
is or has been owned, leased or occupied by the Company or any of its
subsidiaries has been designated as a Superfund
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site pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), or
otherwise designated as a contaminated site under applicable state or local
law.
(dd) The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(ee) Except as disclosed in the Prospectus, neither the Company nor any of
its subsidiaries is in violation or in default in the performance of any
obligation under any permits or authorizations granted by the U.S. Food and
Drug Administration, or any comparable state, local or foreign governmental
agency, to the Company. The Company is in compliance in all material respects
with the Food Drug and Cosmetic Act ("FDCA"), all applicable regulations
thereunder, including, without limitation, all applicable requirements under
the FDCA pertaining to the export of medical devices, and any comparable state,
local or foreign laws or regulations.
SECTION 2. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell the
Firm Shares to the several Underwriters, and each of the Underwriters
agrees to purchase from the Company the respective aggregate number of Firm
Shares set forth opposite its name in Schedule I. The price at which such Firm
Shares shall be sold by the Company and purchased by the several Underwriters
shall be $[ ] per share. The obligation of each Underwriter to the Company
shall be to purchase from the Company that number of Firm Shares which
represents the same proportion of the total number of Firm Shares to be sold by
the Company pursuant to this Agreement as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto represents of the
total number of Firm Shares to be purchased by all Underwriters pursuant to
this Agreement, as adjusted by you in such manner as you deem advisable to
avoid fractional shares. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b) and
(c) of this Section 2, the agreement of each Underwriter is to purchase only
the respective number of the Firm Shares specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of Shares agreed to be purchased by such Underwriter or
Underwriters, the Company shall immediately give notice thereof to you, and the
non-defaulting Underwriters shall have the right within 24 hours after the
receipt by you of such notice to purchase, or procure one or more other
Underwriters to purchase, in such proportions as may be agreed upon between you
and such purchasing Underwriter or Underwriters and upon the terms herein set
forth, all or any part of Shares which such defaulting Underwriter or
Underwriters agreed to purchase. If the non-defaulting Underwriters fail so to
make such arrangements
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with respect to all such shares and portion, the number of Shares which
each non-defaulting Underwriter is otherwise obligated to purchase under this
Agreement shall be automatically increased on a pro rata basis to absorb the
remaining shares and portion which the defaulting Underwriter or Underwriters
agreed to purchase; provided, however, that the non-defaulting Underwriters
shall not be obligated to purchase the portion which the defaulting Underwriter
or Underwriters agreed to purchase if the aggregate number of such Shares
exceeds 10% of the total number of Shares which all Underwriters agreed to
purchase hereunder. If the total number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase shall not be purchased or
absorbed in accordance with the two preceding sentences, the Company shall have
the right, within 24 hours next succeeding the 24-hour period above referred
to, to make arrangements with other underwriters or purchasers satisfactory to
you for purchase of such Shares and portion on the terms herein set forth. In
any such case, either you or the Company shall have the right to postpone the
Closing Date determined as provided in Section 4 hereof for not more than seven
business days after the date originally fixed as the Closing Date pursuant to
Section 4 in order that any necessary changes in the Registration Statement,
the Prospectus or any other documents or arrangements may be made. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 2(b) as if such party had originally been a party to this
Agreement and had been allocated the number of Shares actually purchased by it
as a result of its original commitment (if applicable) to purchase Shares and
its purchase of Shares pursuant to this Section 2(b). If neither the
non-defaulting Underwriters nor the Company shall make arrangements within the
24-hour periods stated above for the purchase of all of the Shares which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph (b), and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly up to 285,000 Optional Shares from the Company at the
same price per share as the Underwriters shall pay for the Firm Shares. Said
option may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters and may be exercised in whole or in part at any time
on or before the thirtieth day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate number of
Optional Shares as to which the several Underwriters are exercising the option.
Delivery of certificates for the Optional Shares, and payment therefor, shall
be made as provided in Section 4 hereof. The number of Optional Shares to be
purchased by each Underwriter shall be the same percentage of the total number
of Optional Shares to be purchased by the several Underwriters as such
Underwriter is purchasing of the Firm Shares, as adjusted by you in such manner
as you deem advisable to avoid fractional shares.
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(d) If the Firm Shares are purchased and sold on the Closing Date (as
defined in Section 4(a)), then the Company shall pay to the Representative on
the Closing Date an amount equal to 3% of the aggregate price to the public of
all the Firm Shares sold in the offering, which amount shall represent a
non-accountable allowance for the expenses incurred by the Representative in
connection with its duties and activities under this Agreement. If any
Optional Shares are purchased and sold on the Closing Date, then the Company
shall pay to the Representative on the Closing Date an amount equal to 3% of
the aggregate price to the public of all the Optional Shares sold in the
offering, which amount shall represent an additional non-accountable allowance
for the expenses incurred by the Representative as aforesaid. If any Optional
Shares are purchased and sold on the Option Closing Date (as defined in Section
4(b)), then the Company shall pay to the Representative on the Option Closing
Date an amount equal to 3% of the aggregate price to the public of all the
Optional Shares sold in the offering, which amount shall represent an
additional non-accountable allowance for the expenses incurred by the
Representative as aforesaid. The non-accountable expense allowance pertaining
to the Firm Shares and the non-accountable expense allowance pertaining to the
Optional Shares, if any, are collectively referred to herein as the
"Non-Accountable Expense Allowance."
SECTION 3. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the
Shares to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information (insofar as such information relates to the
Underwriters) set forth in the last paragraph on the front cover page and under
"Underwriting" in the Registration Statement, any Preliminary Prospectus and
the Prospectus relating to the Shares constitutes the only information
furnished by the Underwriters to the Company for inclusion in the Registration
Statement, any Preliminary Prospectus, and the Prospectus, and you on behalf of
the respective Underwriters represent and warrant to the Company that the
statements made therein are correct.
SECTION 4. DELIVERY OF AND PAYMENT FOR THE SHARES AND WARRANTS.
(a) Delivery of certificates for the Firm Shares, the Optional Shares
(if the option granted by Section 2(c) hereof shall have been exercised
not later than 10:00 a.m., Boston time, on the date two business days preceding
the Closing Date), and the Warrants (as defined in Section 5(p) below) Shares,
and payment therefor, shall be made at the offices of ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co.,
Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as
the Representative shall determine, at 10:00 a.m., Boston time, on the fourth
business day after the date of this Agreement, or at such time on such other
day, not later than seven full business days after such fourth business day, as
shall be agreed upon in writing by the
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Company and you. The date and hour of such delivery and payment (which
may be postponed as provided in Section 2(b) hereof) are herein called the
"Closing Date."
(b) If the option granted by Section 2(c) hereof shall be exercised after
10:00 a.m., Boston time, on the date two business days preceding the Closing
Date, delivery of certificates for the shares of Optional Shares, and payment
therefor, shall be made at the offices of ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc., ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as the
Representative shall determine, at 10:00 a.m., Boston time, on the third
business day after the exercise of such option. The date and hour of such
delivery and payment are herein called the "Option Closing Date."
(c) Payment for the Firm Shares, the Optional Shares and the Warrants
purchased from the Company shall be made to the Company or its order by (i) one
or more certified or official bank check or checks in same day funds (and the
Company agrees not to deposit any such check in the bank on which drawn until
the day following the date of its delivery to the Company) or (ii) federal
funds same day wire transfer to an account designated by the Company. Such
payment shall be made upon delivery of certificates for the Shares and the
Warrants to you for your account and the respective accounts of the several
Underwriters (including without limitation by "full-fast" electronic transfer
by the Depository Trust Company) against receipt therefor signed by you and the
payment of the Non-Accountable Expense Allowance to you. Payment for the
Non-Accountable Expense Allowance shall be made to the Representative or to
their order by (i) one or more certified or official bank check or checks in
same day funds, (ii) federal funds same day wire transfer to an account
designated by the Representative or (iii) at the option of the Representative,
may be deducted from the amount transferred to the Company pursuant to this
Section 4(c). Certificates for the Shares and the Warrants to be delivered to
you shall be registered in such name or names and shall be in such
denominations as you may request at least one business day before the Closing
Date, in the case of Firm Shares and the Warrants, and at least one business
day prior to the purchase thereof, in the case of the Optional Shares.
Certificates for the Firm Shares and Optional Shares will be made available to
the Underwriters for inspection, checking and packaging at such office or such
other place as the Representative may designate not later than 9:30 a.m. Boston
time on the business day prior to the Closing Date or, in the case of the
Optional Shares, by 9:30 a.m., Boston time, on the business day preceding the
date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Optional Shares
are purchased for the account of such Underwriter. Any such payment by you
shall not relieve such Underwriter from any of its obligations hereunder.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and agrees as
follows:
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(a) The Company will (i) prepare and timely file with the Commission under
Rule 424(b) a Prospectus containing information previously omitted at the time
of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) the Company will not file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have been
advised and furnished with a copy or to which you shall have reasonably
objected in writing or which is not in compliance with the Securities Act or
the rules and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the event of (i)
the request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, (iii) the institution or notice of intended
institution of any action or proceeding for that purpose, (iv) 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 (v) the receipt by
the Company of notice of the initiation or threatening of any proceeding for
such purpose. The Company will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be
issued, to obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you a
signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement becomes
effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus
as you may reasonably request, and (iii) thereafter from time to time during
the period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement or
amend the Prospectus in order to make the Prospectus not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser
of the Shares, the Company will forthwith prepare and file with the
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Commission a supplement to the Prospectus or an amended prospectus so
that the Prospectus as so supplemented or amended will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time such Prospectus is delivered to such purchaser, not
misleading. If, after the initial public offering of the Shares by the
Underwriters and during such period, the Underwriters shall propose to vary the
terms of offering thereof by reason of changes in general market conditions or
otherwise, you will advise the Company in writing of the proposed variation,
and, if in the opinion either of counsel for the Company or of counsel for the
Underwriters such proposed variation requires that the Prospectus be
supplemented or amended, the Company will forthwith prepare and file with the
Commission a supplement to the Prospectus or an amended prospectus setting
forth such variation. The Company authorizes the Underwriters and all dealers
to whom any of the Shares may be sold by the several Underwriters to use the
Prospectus, as from time to time amended or supplemented, in connection with
the sale of the Shares in accordance with the applicable provisions of the
Securities Act and the rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate when and as requested by you, in the
qualification of the Shares for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time
to time, prepare and file such statements, reports, and other documents as are
or may be required to continue such qualifications in effect for so long a
period as you may reasonably request for distribution of the Shares.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders
of the Company and of all information, documents and reports filed with the
Commission (including the Report on Form SR required by Rule 463 of the
Commission under the Securities Act).
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective Date, the
Company will make generally available to its security holders an earnings
statement which need not be certified by independent certified public
accountants unless required by the Securities Act or the rules and regulations
thereunder, but which shall satisfy the provisions of Section
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11(a) of the Securities Act and Rule 158 thereunder, covering a period
of at least twelve months beginning with the day immediately succeeding the
Effective Date.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including but not limited
to all costs and expenses incident to (i) the preparation, printing, delivering
and filing with the Commission and the NASD of the Registration Statement, any
Preliminary Prospectus and the Prospectus, (ii) the preparation, printing and
delivering to the Underwriters and, if applicable, the persons designated by
them of copies of any Preliminary Prospectus and of the several documents
required by paragraph (c) of this Section 5 to be so furnished, (iii) the
printing of this Agreement and related documents delivered to the Underwriters,
(iv) the preparation, printing and filing of all supplements and amendments to
the Prospectus referred to in paragraph (d) of this Section 5, (v) the
furnishing to you and the Underwriters of the reports and information referred
to in paragraph (g) of this Section 5, (vi) the fees, costs, expenses and taxes
(if any) relating to the delivery of stock to the Underwriters, (vii) costs of
preparing, printing and delivering share certificates, (viii) fees and expenses
of the transfer agent and registrar and (viii) fees and expenses associated
with listing the Shares on any exchange or other market.
(j) The Company agrees to reimburse you for the account of the several
Underwriters, for blue sky fees and related disbursements (including reasonable
counsel fees and reasonable disbursements and cost of printing memoranda for
the Underwriters) paid by or for the account of the Underwriters or their
counsel in qualifying the shares under state securities or blue sky laws and in
the review of the offering by the NASD.
(k) The Company acknowledges that the provisions of paragraphs (i) and (j)
of this Section 5 are intended to relieve the Underwriters from the payment of
the expenses and costs which the Company hereby agrees to pay and shall not
affect any agreement which the Company may make, or may have made, for the
sharing of any such expenses and costs.
(l) The Company hereby agrees that, without the prior written consent
of ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc., the Company will not, prior to the 455th day
following the date the Registration Statement becomes effective, directly or
indirectly, sell, offer to sell, pledge, contract to sell, grant any option to
purchase or otherwise dispose of any shares of Common Stock owned beneficially
or otherwise (including, without limitation, shares of Common Stock which may
be deemed to be beneficially owned in accordance with the rules and regulations
of the Securities and Exchange Commission and shares of Common Stock which may
be issued upon exercise of a stock option or warrant) or any securities
convertible into, derivative of or exercisable or exchangeable for such Common
Stock, or file any registration statement or offering circular with respect to
any of the foregoing except for (i) the issuance of shares of Common Stock upon
the exercise of options to purchase Common Stock which are outstanding on the
date hereof and (ii) the granting of options pursuant to the Company's existing
stock option plan as in effect on the date of this agreement without amendment
or other modification; provided however, that any
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shares issuable in respect of the options described in clause (i) or
(ii) shall not be sold, offered for sale or otherwise transferred until the
455th day following the date the Registration Statement becomes effective.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the shares has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding
to or commenting on such rumor, publication or event.
(n) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(o) The Company agrees to maintain directors' and officers' insurance in
an amount not less than $2,000,000 for a period of two years from the date of
this Agreement.
(p) At the Closing Date, the Company will issue and sell to the
Representative or, at its direction, to its bona fide officers or partners, as
described below, for a total purchase price of $1.00, warrants (the "Warrants")
entitling the holders thereof to purchase an aggregate of 190,000 shares
of Common Stock (subject to adjustment) (the "Warrant Shares") for a period of
four (4) years, such period to commence one year after the effective date of
the Registration Statement (except as otherwise set forth in the Warrant
Agreement referred to below). Said Warrants shall contain terms and provisions
set forth in the Warrant Agreement of even date among the Company and the
Representative (the "Warrant Agreement"). As provided in the Warrant
Agreement, the Representative may designate that some or all of the Warrants be
issued in varying amounts directly to its bona fide officers or partners and
not to the Representative. Such designation will be made by the Representative
only if it determines that such issuances would not violate the rules and
interpretations of the Board of Governors of the NASD relating to the review of
corporate financing arrangements and subject to applicable federal and state
securities laws. As further provided, no transfer, assignment or hypothecation
of the Warrants shall be made by the Representative for a period of 12
months from the issuance of the Warrants, except to its bona fide officers or
partners and subject to applicable federal and state securities laws.
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(q) ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc. shall have the right to nominate one
member of the Company's Board of Directors which individual shall be a member
of the Compensation and Audit Committees.
SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person (including each partner or officer thereof) who controls any
Underwriter within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages or liabilities, joint or several,
to which such indemnified parties or any of them may become subject under the
Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or the common law or otherwise, and the Company agrees to reimburse each
such Underwriter and controlling person for any legal or other expenses
(including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any Rule 462(b)
registration statement), or 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, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that (1) the indemnity agreement of
the Company contained in this paragraph (a) shall not apply to any such losses,
claims, damages, liabilities or expenses if such statement or omission was made
in reliance upon and in conformity with information furnished as herein stated
in writing to the Company by or on behalf of any Underwriter specifically for
use in any Preliminary Prospectus or the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto, and (2) the
indemnity agreement contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Shares which is the subject thereof (or to the benefit
of any person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with subparagraphs (ii) and (iii) of paragraph (c) of Section 5
hereof. The indemnity agreement of the Company contained in this paragraph
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(a) and the representations and warranties of the Company contained in
Section 1 hereof shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any indemnified party and shall
survive the delivery of and payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its officers who signs the Registration Statement on his own
behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of
Section 15 of the Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Exchange Act, or
the common law or otherwise and to reimburse each of them for any legal or
other expenses (including, except as otherwise hereinafter provided, reasonable
fees and disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims, damages
or liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any Rule 462(b)
registration statement) or 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 or (ii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus (as amended or as supplemented
if the Company shall have filed with the Commission any amendment thereof or
supplement thereto) or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, if such
statement or omission was made in reliance upon and in conformity with
information furnished as herein stated in writing to the Company by or on
behalf of such indemnifying Underwriter specifically for use in the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto. The indemnity agreement of each Underwriter contained in
this paragraph (b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the delivery of and payment for the Shares.
(c) Each party indemnified under the provisions of paragraphs (a) and
(b) of this Section 6 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (the "Notice") of such service
or notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be
available to any party who shall fail so to give the Notice if the party to
whom such Notice was not given
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was unaware of the action, suit, investigation, inquiry or proceeding
to which the Notice would have related and was prejudiced by the failure to
give the Notice, but the omission so to notify such indemnifying party or
parties of any such service or notification shall not relieve such indemnifying
party or parties from any liability which it or they may have to the
indemnified party for contribution or otherwise than on account of such
indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding
against, or investigation or inquiry of, an indemnified party. Any
indemnifying party shall be entitled, if it so elects within a reasonable time
after receipt of the Notice by giving written notice (the "Notice of Defense")
to the indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or
parties shall be entitled to conduct the defense to the extent reasonably
determined by such counsel to be necessary to protect the interests of the
indemnified party or parties; and (ii) in any event, the indemnified party or
parties shall be entitled to have counsel chosen by such indemnified party or
parties participate in, but not conduct, the defense. If, within a reasonable
time after receipt of the Notice, an indemnifying party gives a Notice of
Defense and the counsel chosen by the indemnifying party or parties is
reasonably satisfactory to the indemnified party or parties, the indemnifying
party or parties will not be liable under paragraphs (a) through (c) of this
Section 6 for any legal or other expenses subsequently incurred by the
indemnified party or parties in connection with the defense of the action,
suit, investigation, inquiry or proceeding, except that (A) the indemnifying
party or parties shall bear the legal expenses of one counsel for the
indemnified party or parties and other expenses incurred in connection with the
conduct of the defense as referred to in clause (i) of the proviso to the
preceding sentence and (B) the indemnifying party or parties shall bear other
expenses as it or they have authorized to be incurred by the indemnified party
or parties. If, within a reasonable time after receipt of the Notice, no
Notice of Defense has been given, the indemnifying party or parties shall be
responsible for any legal or other expenses incurred by the indemnified party
or parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 6, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 6(i) in such
proportion as is appropriate to reflect the relative benefits received by each
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indemnifying party from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the shares received by the Company and the total underwriting discount
received by the Underwriters, as set forth in the table on the cover page of
the Prospectus, bear to the aggregate public offering price of the shares.
Relative fault 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
each indemnifying party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be 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 into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount
in excess of the underwriting discount applicable to the Shares purchased by
such Underwriter. 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. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give
written notice of such service to the party or parties from whom contribution
may be sought, but the omission so to notify such party or parties of any such
service shall not relieve the party from whom contribution may be sought from
any obligation it may have hereunder or otherwise (except as specifically
provided in paragraph (c) of this Section 6).
(e) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be
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sought hereunder (whether or not such Underwriter or any person who controls
such Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of such Underwriter and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
SECTION 7. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 6 of this Agreement, the Company hereby agrees to
reimburse on a monthly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in paragraph (a) of Section 6 of this Agreement, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 7 and the possibility that such payments
might later be held to be improper, provided, however, that (i) to the extent
any such payment is ultimately held to be improper, the persons receiving such
payments shall promptly refund them; (ii) such persons shall provide to the
Company, upon request, reasonable assurances of their ability to effect any
refund, when and if due; and (iii) such reimbursements will be limited to
out-of-pocket costs and will not cover the overhead costs of the Underwriters.
SECTION 8. TERMINATION. This Agreement may be terminated by you at any
time prior to the Closing Date by giving written notice to the Company in
accordance with Section 9, or if after the date of this Agreement trading in
the Common Stock shall have been suspended, or if there shall have occurred (i)
the engagement in hostilities or an escalation of major hostilities by the
United States or the declaration of war or a national emergency by the United
States on or after the date hereof, (ii) any outbreak of hostilities or other
national or international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, calamity, crisis or change in
economic or political conditions in the financial markets of the United States
or the Company's industry sector would, in the Underwriters' reasonable
judgment, make the offering or delivery of the shares impracticable, (iii)
suspension of trading in securities generally or a material adverse decline in
value of securities generally on the New York Stock Exchange, the American
Stock Exchange, or The Nasdaq Stock Market, or limitations on prices (other
than limitations on hours or numbers of days of trading) for securities on
either such exchange or system, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order
of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York
State authorities, (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the
securities markets in the United States, (vii) a
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material adverse change in the Company's business , financial condition,
results of operations, or prospects or (viii) the discovery by the Underwriters
of material facts or circumstances that render the offering of the Shares
impracticable. If this Agreement shall be terminated pursuant to this Section
8, there shall be no liability of the Company to the Underwriters and no
liability of the Underwriters to the Company; provided, however, that in the
event of any such termination, the Company agrees to indemnify and hold
harmless the Underwriters from all costs or expenses incident to the
performance of the obligations of the Company under this Agreement, including
all costs and expenses referred to in paragraphs (i) and (j) of Section 5
hereof and to reimburse the Representative for its out-of-pocket expenses
incurred in connection with the performance of its obligations hereunder,
including fees and disbursements of counsel to the Underwriters.
SECTION 9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Shares shall be subject to
the performance by the Company of all its obligations to be performed hereunder
at or prior to the Closing Date or any later date on which Optional Shares are
to be purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Shares hereunder and
the validity and form of the certificates representing the Shares, all
corporate proceedings and other legal matters incident to the foregoing, and
the form of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been approved at or prior
to the Closing Date by ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, LLP, counsel for the
Underwriters.
(c) You shall have received from ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Ltd., counsel for the
Company, or other counsel acceptable to the Underwriters, an opinion, addressed
to the Underwriters and dated the Closing Date, covering the matters set forth
in Annex A hereto, and if Optional Shares are purchased at any date after the
Closing Date, additional opinions from such counsel, addressed to the
Underwriters and dated such later date, confirming that the statements
expressed as of the Closing Date in such opinion remain valid as of such later
date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct, and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading; (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such
a supplement or amendment; (iii) since the respective dates as of which
information
-23-
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is given in the Registration Statement in the form in which it originally
became effective and the Prospectus contained therein, there has not been any
material adverse change or any development involving a prospective material
adverse change in or affecting the business, properties, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
and, since such dates, except in the ordinary course of business, neither the
Company nor any of its subsidiaries has entered into any material transaction
not referred to in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein; (iv) the
Commission has not issued any order preventing or suspending the use of the
Prospectus or any Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending the effectiveness
of the Registration Statement has been issued; and to the best knowledge of the
respective signers, no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act; (v) neither the Company nor
any of its subsidiaries has any material contingent obligations which are not
disclosed in the Registration Statement and the Prospectus; (vi) there are not
any pending or known threatened legal proceedings to which the Company or any
of its subsidiaries is a party or of which property of the Company or any of
its subsidiaries is the subject which are material and which are not disclosed
in the Registration Statement and the Prospectus; (vii) there are not any
franchises, contracts, leases or other documents which are required to be filed
as exhibits to the Registration Statement which have not been filed as
required; and (viii) the representations and warranties of the Company herein
are true and correct in all material respects as of the Closing Date or any
later date on which Optional Shares are to be purchased, as the case may be.
(e) You shall have received on the Closing Date and on any later date on
which Optional Shares are purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, stating that the respective signers of said
certificate have carefully examined the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein and
any supplements or amendments thereto, and that the statements included in
clauses (i) through (viii) of paragraph (d) of this Section 9 are true and
correct.
(f) You shall have received from KPMG Peat Marwick LLP, a letter or
letters, addressed to the Underwriters and dated the Closing Date and any
later date on which Optional Shares are purchased, confirming that they are
independent public accountants with respect to the Company within the meaning
of the Securities Act and the applicable published rules and regulations
thereunder and based upon the procedures described in their letter delivered to
you concurrently with the execution of this Agreement (the "Original Letter"),
but carried out to a date not more than three business days prior to the
Closing Date or such later date on which Optional Shares are purchased (i)
confirming, to the extent true, that the statements and conclusions set forth
in the Original Letter are accurate as of the Closing Date or such later date,
as the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set
-24-
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forth in the Original Letter which are necessary to reflect any changes in the
facts described in the Original Letter since the date of the Original Letter or
to reflect the availability of more recent financial statements, data or
information. The letters shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties of
the Company or any of its subsidiaries which, in your sole judgment, makes it
impractical or inadvisable to proceed with the public offering of the Shares or
the purchase of the Optional Shares as contemplated by the Prospectus.
(g) You shall have received from KPMG Peat Marwick LLP, a letter stating
that their review of the Company's system of internal accounting controls, to
the extent they deemed necessary in establishing the scope of their examination
of the Company's financial statements as at December 31, 1996, did not disclose
any weakness in internal controls that they considered to be material
weaknesses.
(h) You shall have been furnished evidence in usual written or telegraphic
form from the appropriate authorities of the several jurisdictions, or other
evidence satisfactory to you, of the qualification referred to in paragraph (f)
of Section 5 hereof.
(i) Prior to the Closing Date, the Shares and the Warrant Shares shall
have been duly authorized for quotation by the Nasdaq SmallCap Market upon
official notice of issuance.
(j) The Warrant Agreement and the Warrants shall have been executed and
delivered to the Representative on behalf of the Company.
(k) On or prior to the Closing Date, you shall have received agreements
from the holders of no less than ninety-five percent (95%) of the outstanding
shares of Common Stock (including shares issuable upon the exercise or
conversion of any option, warrant or other security that vests or is
exercisable prior to the 455th day following the date the Registration
Statement became effective), in form reasonably satisfactory to ▇.▇. ▇▇▇▇▇▇▇▇▇▇
& Co., Inc., stating that without the prior written consent of ▇. ▇. ▇▇▇▇▇▇▇▇▇▇
& Co., Inc., such person or entity will not: (i) until the 275th day following
the date the Registration Statement became effective, directly or indirectly,
offer, sell, pledge, contract to sell, grant any option to purchase or
otherwise dispose of any shares of Common Stock beneficially owned or otherwise
held by such person or entity (including, without limitation, shares of Common
Stock which may be deemed to be beneficially owned by such person or entity in
accordance with the rules and regulations of the Securities and Exchange
Commission and shares of Common Stock which may be issued upon exercise of a
stock option or warrant), or any securities convertible into, derivative of or
exercisable or exchangeable for such Common Stock, as of the date the
Registration Statement became effective; and (ii) until the 455th day following
the date the Registration Statement became effective, directly or indirectly,
offer, sell, pledge, contract to sell, grant any option to purchase or
otherwise dispose of more than one-half of the aggregate number of shares of
Common Stock beneficially owned or otherwise held by such person or entity
(including, without limitation, shares of Common Stock
-25-
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which may be deemed to be beneficially owned by such person or entity in
accordance with the rules and regulations of the Securities and Exchange
Commission and shares of Common Stock which may be issued upon exercise of a
stock option or warrant), or any securities convertible into, derivative of or
exercisable or exchangeable for such Common Stock, as of the date the
Registration Statement became effective provided, however, that if such party
is an individual, he or she may transfer any or all of the Common Stock held by
such party either during his or her lifetime or on death, by gift, will or
intestacy, to a Permitted Transferee; provided further, that in any such case
the Permitted Transferee executes a lock-up agreement in substantially the same
form covering the remainder of the lock-up period.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, LLP, counsel for the
Underwriters, shall agree that they comply in form and scope, which agreement
shall not be unreasonably withheld.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company;
provided, however, that (i) in the event of such termination, the Company
agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses referred to in paragraphs (i)
and (j) of Section 5 hereof, and (ii) if this Agreement is terminated by you
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein, to fulfill any of the conditions herein, or to
comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the transactions contemplated hereby.
SECTION 10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation
of the Company to deliver the Shares shall be subject to the conditions that
(a) the Registration Statement shall have become effective and (b) no stop
order suspending the effectiveness thereof shall be in effect and no
proceedings therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by the Company by giving notice to
you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company;
provided, however, that in the event of any such termination the Company agrees
to indemnify and hold harmless the Underwriters from all costs or expenses
incident to the performance of the obligations of the Company
-26-
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under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 5 hereof.
SECTION 11. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of the Company and the several Underwriters and,
with respect to the provisions of Section 6 hereof, the several parties (in
addition to the Company and the several Underwriters) indemnified under the
provisions of said Section 6, and their respective personal representatives,
successors and assigns. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the shares from
any of the several Underwriters.
SECTION 12. NOTICES. Except as otherwise provided herein, all
communications hereunder shall be in writing or by telegraph and, if to the
Underwriters, shall be mailed, telexed, telegraphed, transmitted by facsimile
transmission or delivered to ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ if to the Company,
shall be mailed, telexed, telegraphed, transmitted by facsimile transmission or
delivered to it at its office, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇. All notices given by
telex, telegraph or facsimile transmission shall be promptly confirmed by
letter.
SECTION 13. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and
effect regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of any Underwriter or controlling person
thereof, or by or on behalf of the Company or its directors or officers, and
(c) delivery and payment for the Shares under this Agreement; provided,
however, that if this Agreement is terminated prior to the Closing Date, the
provisions of paragraph (2) of Section 1 and paragraphs (l), (m) and (n) of
Section 5 hereof shall be of no further force or effect.
SECTION 14. PARTIAL UNENFORCEABILITY. 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.
SECTION 15. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of The Commonwealth of Massachusetts.
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SECTION 16. GENERAL. This Agreement and the Warrant Agreement constitute
the entire agreement of the parties to this Agreement and the Warrant Agreement
and supersede all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof and thereof. This Agreement may be executed in several counterparts,
each one of which shall be an original, and all of which together shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and you.
[Remainder of page intentionally left blank.]
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon
it will become a binding agreement among the Company and the several
Underwriters, including you, all in accordance with its terms.
Very truly yours,
MERGE TECHNOLOGIES INCORPORATED
By:
--------------------------
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted
by us in Boston, Massachusetts as of
the date first above written.
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & CO., INC.
----------------------------------------------
Acting for ourselves and as the Representative
of the several Underwriters named in the
attached Schedule A
BY: ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & CO., INC.
By:
------------------------------------
Name:
Principal
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SCHEDULE I
UNDERWRITERS
NUMBER OF FIRM
UNDERWRITERS SHARES TO BE PURCHASED
--------------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc................................................ [ ]
Total............................................................... [ ]
I-1
31
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LTD.
COUNSEL FOR THE COMPANY
In connection with the preparation of this opinion, we have examined,
and have relied as to matters of fact upon, originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records,
agreements, documents and other instruments and such certificates or comparable
documents of public officials, and have made such other and further
investigations as we have deemed relevant and necessary as a basis of the
opinions hereinafter set forth. We have relied upon, without independent
investigation, the representations and warranties of the Company contained in
the___________ and upon statements and representations of officers and other
representatives of the Company. In such examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. In
addition, we have, with your permission, assumed that each of the____________
has been duly authorized, executed and delivered on behalf of the parties
thereto (other than the Company). We have also assumed that all of the parties
to the_____________ will perform their respective obligations thereunder in
accordance with their respective terms and conditions.
In connection with the opinions expressed herein as being made "to our
knowledge," our examination has been limited to (i) a review of documents in
our firm's files as to which we have represented the Company, (ii)
conversations with certain of the executive officers of the Company, and (iii)
reasonable inquiry by this firm into applicable laws. We have made no
independent investigation as to the accuracy or completeness of any
representations, warranties, data or other information, written or oral, made
or furnished by the Company to us or to you.
(i) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign corporation
and in good standing in each state of the United States of America in which the
nature of its business or its ownership or leasing of property requires such
qualification (except where the failure to be so qualified would not have a
material adverse effect on the business, properties, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole)
and has full corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement; all the issued
and outstanding capital stock of each of the subsidiaries of the Company has
been duly authorized and validly issued and is fully paid and nonassessable,
and is owned by the Company free and clear of all liens, encumbrances and
security interests, and to the best of such counsel's knowledge, other than as
described in the Prospectus, no options, warrants or other rights
A-1
32
to purchase, agreements or other obligations to issue or other rights to
convert any obligations into shares of capital stock or ownership interests in
such subsidiaries are outstanding;
(ii) the authorized capital stock of the Company consists of 5,000,000
shares of Preferred Stock, $0.01 par value, none of which are outstanding, and
10,000,000 shares of Common Stock, $0.01 par value, of which there are [ ]
outstanding shares; all of the outstanding shares of such capital
stock (including the Firm Shares and the Optional Shares issued, if any) have
been duly authorized and validly issued and are fully paid and nonassessable;
any Optional Shares purchased after the Closing Date have been duly authorized
and, when issued and delivered to, and paid for by, the Underwriters as
provided in the Underwriting Agreement will be validly issued and fully paid
and nonassessable; and no preemptive rights of, or rights of refusal in favor
of, stockholders exist with respect to the Shares, or the issue and sale
thereof, pursuant to the Certificate of Incorporation or Bylaws of the Company
or any other instrument and, to the knowledge of such counsel, there are no
contractual preemptive rights that have not been waived, rights of first
refusal or rights of co-sale which exist with respect to the issue and sale of
the Shares by the Company;
(iii) the Registration Statement has become effective under the Securities
Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act, and with the
rules and regulations of the Commission thereunder;
(v) such counsel have no reason to believe that the Registration
Statement (except as to the financial statements and schedules and other
financial and statistical data contained therein, as to which such counsel need
not express any opinion or belief) at the Effective Date contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus (except as to the financial statements and schedules and
other financial and statistical data contained therein, as to which such
counsel need not express any opinion or belief) as of its date or at the
Closing Date (or any later date on which Optional Shares are purchased),
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
A-2
33
(vi) the information set forth in the Registration Statement in answer to
Items 9 (Legal Proceedings), 10 (Interests of Named Experts and Counsel)
(insofar as it relates to such counsel), 12 (Description of Securities) and 19
(Certain Relationships and Related Transactions) of Form SB-2 and under the
captions "Business--Government Regulation" and "Risk Factors--Government
Regulation" and all summaries of contracts and other documents in the
Prospectus are, to such counsel's knowledge, accurately and adequately set
forth therein in all material respects or, with respect to Items 9, 10, 12, and
19 above, if no information is provided, no response is required with respect
to such Items, and the description of the Company's stock option plan and the
options granted and which may be granted thereunder in the Prospectus
accurately and fairly presents the information required to be shown with
respect to said plan and options to the extent required by the Securities Act
and the rules and regulations of the Commission thereunder;
(vii) such counsel do not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(viii) all issuances and repurchases or redemptions by the Company and any
of its subsidiaries of any of their respective securities have been effected in
compliance with all federal and state securities laws;
(ix) the Underwriting Agreement and the Warrant Agreement have been duly
authorized, executed and delivered by the Company;
(x) the Company has the requisite corporate power and authority to enter
into the Underwriting Agreement and the Warrant Agreement and to sell and
deliver the Shares and the Warrants to be sold by it to the several
Underwriters;
(xi) the issue and sale by the Company of the Shares and the Warrants sold
by the Company as contemplated by the Underwriting Agreement and the Warrant
Agreement will not conflict with, or result in a breach of, or constitute a
default under the Certificate of Incorporation or Bylaws of the Company or any
of its subsidiaries or any agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which any of its
properties may be bound or any applicable law or regulation, or so far as is
known to such counsel, any order, writ, injunction or decree, of any
jurisdiction, court or governmental instrumentality;
(xii) all holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, because of the
filing of the Registration Statement by the Company have waived such rights or
such rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement;
A-3
34
(xiii) good title to the Shares under the Underwriting Agreement, free and
clear of all liens, encumbrances, equities, security interests and claims, has
been transferred to the Underwriters who have severally purchased such Shares
under the Underwriting Agreement, assuming for the purpose of this opinion that
the Underwriters purchased the same in good faith without notice of any adverse
claims;
(xiv) good title to the Warrants under the Warrant Agreement, free and
clear of all liens, encumbrances, equities, security interests and claims, has
been transferred to the Representative who has purchased such Warrants under
the Warrant Agreement, assuming for the purpose of this opinion that the
Representative purchased the same in good faith without notice of any adverse
claims;
(xv) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated in the Underwriting Agreement, except such as have
been obtained under the Securities Act and 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 and the clearance of the offering with the NASD
and the Nasdaq SmallCap Market;
(xvi) the Shares issued and sold by the Company and the Warrant Shares
will be duly authorized for quotation by the Nasdaq SmallCap Market upon
official notice of issuance;
(xvii) the Warrants conform to the description thereof in the Prospectus
(it being understood that with respect to the fair presentation of such
description and whether it is an accurate summary such counsel's opinion is
limited to that set forth in clause (vi) above) and have been duly authorized
and validly issued and are valid and binding obligations of the Company
entitled to all the benefits of the Warrant Agreement and are enforceable
against the Company (except (1) as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance, or other similar laws now or hereinafter in effect relating to or
affecting creditors', debtors' and shareholders' rights generally and by
general principles of equity, (2) that the remedies of specific performance and
injunctive and other forms of relief are subject to general equitable
principles, whether such enforcement is sought at law or in equity, and such
enforcement may be subject to the discretion of the court before which any
proceedings therefor may be brought and (3) as rights to indemnity and
contribution may be limited by state or federal laws or by policies underlying
such laws). The Warrant Shares have been duly authorized and reserved for
issuance upon exercise of the Warrants and, when issued upon such exercise in
accordance with the terms of Warrants and the Warrant Agreement, will be duly
and validly issued, fully paid and nonassessable, free of preemptive rights and
will conform to the description thereof in the Prospectus;
(xviii) Except as specifically disclosed in the Prospectus: the Company
and its subsidiaries have sufficient trademarks, trade names, patent rights,
copyrights, trade secret protections, licenses, approvals and governmental
authorizations to conduct their
A-4
35
businesses as now conducted; such counsel has no knowledge of any infringement
or of facts that suggest any infringement by the Company or its subsidiaries of
any trademark, trade name, patent, copyright, license, trade secret or other
similar rights of others; and such counsel has no knowledge of any claims that
have been made or are threatened regarding infringement by the Company or its
subsidiaries of any trademark, trade name, patent, copyright, license, trade
secret or other similar rights of others.
(xix) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits, investigations or other proceedings (formal or
informal) pending or, to our knowledge, threatened to which the Company or any
of its subsidiaries is or is threatened to be made a party or a subject or of
which property owned or leased by the Company or any of its subsidiaries is or
has been threatened to be made the subject, which actions, suits,
investigations or other proceedings could, individually or in the aggregate,
prevent or materially adversely affect the transactions contemplated by the
Underwriting Agreement or the Warrant Agreement or result in a material adverse
change in the business, properties, condition (financial or otherwise), or
results of operations of the Company and its subsidiaries, taken as a whole;
there are no outstanding claims, asserted or otherwise, against the Company,
any of its subsidiaries, or to our knowledge, any of their respective officers
or directors, for violations of any federal or state securities laws, or any
other applicable laws, relating to any purchase, sale, or redemption of, or
other transaction with respect to, the Common Stock or shares of capital stock
of any of the Company's subsidiaries; and to our knowledge, no labor
disturbance by the employees of the Company or any of its subsidiaries exists
or is imminent which could materially adversely affect the business,
properties, condition (financial or otherwise), or results of operations of the
Company or its subsidiaries, taken as a whole. Neither the Company nor any of
its subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body. To our knowledge, except as
disclosed in the Prospectus, there are no material legal or governmental
actions, suits, investigations or proceedings pending or threatened against any
executive officers or directors of the Company.
(xx) Except as disclosed in the Prospectus, neither the Company nor any of
its subsidiaries is in violation or in default in the performance of any
obligation under any permits or authorizations granted by the U.S. Food and
Drug Administration, or any comparable state, local or foreign governmental
agency, to the Company. The Company is in compliance in all material respects
with the Food Drug and Cosmetic Act ("FDCA"), all applicable regulations
thereunder, including, without limitation, all applicable requirements under
the FDCA pertaining to the export of medical devices, and any comparable state,
local or foreign laws or regulations.
We express no opinion as to the laws of any state or other jurisdiction
other than as to the substantive laws of the State of Wisconsin, the General
Corporation Law of the State of Wisconsin and the federal law of the United
States, and foreign laws with respect
A-5
36
to the manufacture and sale of medical devices without giving effect to
principles relating to conflicts of law.
This opinion is rendered to you in connection with the above-described
transactions and is for your exclusive benefit. This opinion may not be relied
upon by you for any other purpose, or relied upon or furnished to any other
person, firm or corporation without our prior written consent.
-------------------------
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States upon opinions of local counsel
satisfactory in form and scope to counsel for the Underwriters. Copies of any
opinions so relied upon shall be delivered to the Representative and to counsel
for the Underwriters and the foregoing opinion shall also state that counsel
knows of no reason the Underwriters are not entitled to rely upon the opinions
of such local counsel.
A-6
37
EXHIBIT 1
MERGE TECHNOLOGIES INCORPORATED
Officers' Certificate Pursuant to Section 9(e)
of the Underwriting Agreement
Pursuant to Section 9(e) of the Underwriting Agreement, dated [ ], 1998
(the "Underwriting Agreement"), by and between Merge Technologies Incorporated
(the "Company") and ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc. (the "Underwriter"), and
pursuant to the resolutions adopted by the Board of Directors of the Company
(the "Board of Directors") as of [ ], 1997 (the "Resolutions"), the undersigned
do hereby certify the following:
1. As of the Effective Date, the statements made in the Registration
Statement and the Prospectus were true and correct, and neither the
Registration Statement nor the Prospectus omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, respectively, not misleading;
2. Since the Effective Date, no event has occurred which should have been
set forth in a supplement or amendment to the Prospectus which has not been set
forth in such a supplement or amendment;
3. Since the respective dates as of which information is given in the
Registration Statement in the form in which it originally became effective and
the Prospectus contained therein, there has not been any material adverse
change or any development involving a prospective material adverse change in or
affecting the business, properties, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, and, since
such dates, except in the ordinary course of business, neither the Company nor
any of its subsidiaries has entered into any material transaction not referred
to in the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein;
4. The Commission has not issued any order preventing or suspending the
use of the Prospectus or any Preliminary Prospectus filed as a part of the
Registration Statement or any amendment thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued; and to the best
knowledge of the respective signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act;
5. Neither the Company nor any of its subsidiaries has any material
contingent obligations which are not disclosed in the Registration Statement
and the Prospectus;
38
6. There are not any pending or known threatened legal proceedings
to which the Company or any of its subsidiaries is a party or of which property
of the Company or any of its subsidiaries is the subject which are material and
which are not disclosed in the Registration Statement and the Prospectus;
7. There are not any franchises, contracts, leases or other documents
which are required to be filed as exhibits to the Registration Statement which
have not been filed as required;
8. The representations and warranties of the Company in the Underwriting
Agreement are true and correct in all material respects.
References to the Registration Statement and the Prospectus in this
Certificate are to such documents as amended and supplemented at the date of
this Certificate. All terms that are not defined in this Certificate, but
which are defined in the Underwriting Agreement, shall have the meanings
assigned to them in the Underwriting Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Certificate as the
[ ] day of [ ] 1998.
__________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
__________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer
2
39
EXHIBIT 2
MERGE TECHNOLOGIES INCORPORATED
Secretary's Certificate
The undersigned, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, does hereby certify that:
1. She is the duly elected, qualified and acting Secretary of Merge
Technologies Incorporated, a Wisconsin corporation (the "Company"), is familiar
with the facts herein certified and is duly authorized to certify the same, and
to make the statements as certified by her herein in connection with the
issuance, delivery and sale of 1,900,000 shares of common stock of the Company,
$0.01 par value per share (the "Common Stock");
2. Attached hereto as Annex A is a true, correct and complete copy
of the Articles of Incorporation of the Company, as amended to the date hereof
(the "Articles"). There have been no amendments to the Articles since the
filing of an amendment thereto on [ ], no meeting of directors or shareholders
has been called for such purpose and the Articles remain in full force and
effect on the date hereof. Since [ ], 1998, the date upon which the Secretary
of the Department of Financial Institutions of the State of Wisconsin issued
the certificate as to the due incorporation, good standing and the
qualification to do business in the state of Wisconsin of the Company, a
listing of all charter documents of the Company and the payment of all fees and
filing of annual reports, by the Company, a copy of which is attached hereto as
Annex B, no act, omission or event has occurred which would make such
certificate untrue, incorrect or incomplete on the date hereof. There are no
proceedings pending or contemplated for the liquidation or dissolution of the
Company or threatening its existence as a corporation, nor has a meeting of
shareholders or directors been called for such purpose;
3. Attached hereto as Annex C are true and correct copies of the
resolutions duly adopted by the board of directors of the Company and any
committee of the board of directors (the "Board of Directors") in connection
with the organization of the Company;
4. Attached hereto as Annex D is a true, correct and complete copy
of the By-Laws of the Company (the "By-Laws") in effect on the date hereof.
There have been no amendments to the By-Laws since [ ] and no meeting of
directors or shareholders has been called for such purpose;
5. Attached hereto as Annex E are true and complete copies of the
resolutions duly adopted by the Board of Directors as of [ ], which:
authorize the issuance and sale of the Common Stock in the proposed initial
public offering; approve the form of stock certificate for the Common Stock in
the form attached hereto as Annex F; approve and authorize the execution of the
underwriting agreement, dated [ ], 1998, executed by the Company and ▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., Inc. ("HCW"), as representative
40
of the several underwriters (the "Underwriting Agreement"); approve and
authorize the execution of the warrant agreement proposed to be executed by the
Company and HCW in the form attached hereto as Annex G, (the "Warrant
Agreement"); authorize the issuance of the warrants pursuant to the Warrant
Agreement (the "Warrants"); reserve shares of Common Stock for issuance
pursuant to the Warrant Agreement and the Warrants; and related matters, and
such resolutions are in full force and effect as of the date hereof, such
resolutions have not been amended, modified or rescinded and no other
resolutions governing the same or related subject matters that are currently in
effect have been adopted by the Board of Directors;
6. The Board of Directors has duly authorized the execution and
delivery of the Underwriting Agreement, the Warrant Agreement and the Warrants.
7. Attached hereto as Annex H are true and complete copies of all
written communications (including all available transcripts of oral
communications) with the Securities and Exchange Commission relating to the
Registration Statement and the Prospectus;
8. All persons who, as officers or directors of the Company,
executed on behalf of the Company the Registration Statement, the Underwriting
Agreement, and any other document delivered by the Company in connection with
the offering and sale of the Common Stock, were duly elected or appointed to
the offices they purported to hold at the time of such execution, delivery and
issuance, and the signatures of such persons appearing on such documents are
their genuine signatures.
2
41
9. The persons named below have been duly elected or appointed,
have been qualified and are, were, and at all times since the filing of the
Registration Statement have been, officers of the Company holding the
respective office or offices set opposite their names below and the signatures
set opposite their names below are their genuine signatures:
Name Office Signature
---- ------ ---------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ President and Chief
Executive Officer ----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Chairman of the
Board of Directors ----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Chief Financial
Officer, Treasurer
and Secretary ----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Vice President and
Assistant Secretary ----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Vice President ----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President ----------------------
All terms that are not defined in this Certificate but which are
defined in the Underwriting Agreement shall have the meanings assigned to them
in the Underwriting Agreement.
IN WITNESS WHEREOF, the undersigned has signed this Certificate as of
the [ ] day of [ ] 1998.
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
3
42
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President of the Company, hereby certify, as of
the [ ] day of [ ] 1998, that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ is the Secretary of the Company
and has held such office since [ ], 199[ ] and that the signature set forth
opposite her name is her genuine signature.
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
4
43
EXHIBIT 3
SIGNAL STREAM, INCORPORATED
Secretary's Certificate
The undersigned, [ ], does hereby certify that:
1. [S]he is the duly elected, qualified and acting Secretary of Signal
Stream, Incorporated, a Wisconsin corporation (the "Company"), is familiar with
the facts herein certified and is duly authorized to certify the same, and to
make the statements as certified by her herein in connection with the issuance,
delivery and sale of 1,900,000 shares of common stock of the Company's parent
Merge Technologies Incorporated, $0.01 par value per share;
2. Attached hereto as Annex A is a true, correct and complete copy of the
Articles of Incorporation of the Company, as amended to the date hereof (the
"Articles"). There have been no amendments to the Articles since the filing of
an amendment thereto on [ ], no meeting of directors or shareholders has been
called for such purpose and the Articles remain in full force and effect on the
date hereof. Since [ ], 1998, the date upon which the Secretary of
the Department of Financial Institutions of the state of Wisconsin issued the
certificate as to the due incorporation, good standing and the qualification to
do business in the state of Wisconsin of the Company, a listing of all charter
documents of the Company and the payment of all fees and filing of annual
reports, by the Company, a copy of which is attached hereto as Annex B, no act,
omission or event has occurred which would make such certificate untrue,
incorrect or incomplete on the date hereof. There are no proceedings pending
or contemplated for the liquidation or dissolution of the Company or
threatening its existence as a corporation, nor has a meeting of shareholders
or directors been called for such purpose;
3. Attached hereto as Annex C are true and correct copies of the
resolutions duly adopted by the Board of Directors of the Company in connection
with the organization of the Company;
4. Attached hereto as Annex D is a true, correct and complete copy of the
By-Laws of the Company (the "By-Laws") in effect on the date hereof. There
have been no amendments to the By-Laws since [ ] and no meeting of directors
or shareholders has been called for such purpose;
44
5. The persons named below have been duly elected or appointed, have been
qualified and are, were, and at all times since the filing of the Registration
Statement have been, officers of the Company holding the respective office or
offices set opposite their names below and the signatures set opposite their
names below are their genuine signatures:
Name Office Signature
---- ------ ---------
[ ] President and Chief Executive Officer
----------------------
[ ] Chief Financial Officer, Treasurer and Secretary
----------------------
All terms that are not defined in this Certificate but which are defined
in the Underwriting Agreement shall have the meanings assigned to them in the
Underwriting Agreement.
IN WITNESS WHEREOF, the undersigned has signed this Certificate as of the
[ ] day of [ ] 1998.
------------------------------
[ ]
I, [ ], President of the Company, hereby certify, as of the [ ] day of [
] 1998, that [ ] is the Secretary of the Company and has held such office
since [ ], and that the signature set forth opposite [her/his] name is
[her/his] genuine signature.
------------------------------
[ ]
2
45
EXHIBIT 4
MERGE TECHNOLOGIES INCORPORATED
Company Certificate
Merge Technologies Incorporated, a Wisconsin corporation (the
"Company"), hereby certifies pursuant to the Underwriting Agreement, dated [ ],
1998 (the "Underwriting Agreement"), by and between Merge Technologies
Incorporated (the "Company") and ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc., as representative
of the several underwriters, that the representations and warranties of the
Company in the Underwriting Agreement are true and correct in all material
respects as of the date hereof.
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed by its President and Chief Executive Officer and its corporate seal to
be affixed and attested as of the [ ] day of [ ] 1998.
MERGE TECHNOLOGIES INCORPORATED
By:
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
ATTEST:
(SEAL)
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary
46
EXHIBIT 5
Certificate of Transfer Agent and Registrar
Firstar Trust Company (the "Agent"), hereby certifies that:
1. The Agent has been duly appointed and authorized to act as Transfer
Agent and Registrar for the common stock, $0.01 par value per share (the
"Common Stock") of Merge Technologies Incorporated, a Wisconsin corporation
(the "Company").
2. The Agent, as Transfer Agent and Registrar, has duly issued,
countersigned and registered certificates for an aggregate of 1,900,000 shares
of Common Stock of the Company upon instructions from the Company. Such
certificates so issued were duly registered in the names and denominations
requested by ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc., as representative of the several
underwriters (the "Representative") pursuant to the Underwriting Agreement,
dated [ ], 1998 executed by the Company and the
Representative.
3. The persons who registered and countersigned the certificates referred
to in paragraph 2 hereof on behalf of the Agent in its capacity as Transfer
Agent and Registrar were duly appointed, qualified and authorized to sign at
the time of such signing and the signatures of each such person appearing on
such certificates were genuine.
4. The Company is authorized to issue [ ] shares of Common Stock
and the total number of such shares issued and outstanding at the close of
business on [ ], 1998 was [ ].
5. There are no stop orders or other instructions restricting the issuance
of the shares of Common Stock on file with the Company or the Agent.
6. The Agent is duly registered as transfer agent in accordance with Rule
17A(c)2-1 under the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, Firstar Trust Company has caused this Certificate to
be executed and its seal duly affixed this [ ] day of [ ],
1998.
FIRSTAR TRUST COMPANY
By:____________________________
Name:
Title:
ATTEST:
___________________________ (SEAL)
Name:
Title:
47
EXHIBIT 6
MERGE TECHNOLOGIES INCORPORATED
CROSS RECEIPT
[ ], 1998
Merge Technologies Incorporated, a Wisconsin corporation (the "Company")
hereby acknowledges receipt on the above date from ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc.,
as representative of the several underwriters (the "Representative"), of a wire
transfer of immediately available funds in the amount of $[ ]
representing payment in full for 1,900,000 shares of the common stock, $0.01
par value per share, of the Company (the "Common Stock") at a price of $[
] per share in accordance with the terms of the Underwriting Agreement by and
between the Company and the Representative dated [ ], 1998.
MERGE TECHNOLOGIES INCORPORATED
By:________________________________
Name:
Title:
The Representative hereby acknowledges receipt on the above date of
1,900,000 shares of the Common Stock of the Company pursuant to the
instructions previously delivered.
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & CO., INC.
By:________________________________
Name:
Title:
48
EXHIBIT 7
[ ], 1998
Merge Technologies Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: 1,900,000 Shares of Common Stock
of Merge Technologies Incorporated
Prospectus dated [ ], 1998
Ladies and Gentlemen:
This letter is delivered to you in connection with the above-mentioned
prospectus dated [ ], 1998 (the "Prospectus") of Merge
Technologies Incorporated (the "Company") relating to the offer and sale of
1,900,000 shares of common stock, par value $0.01 per share of the Company.
As Representative of the several underwriters, we have furnished to you
the following information for use in the prospectus:
(a) The first two sentences of the last paragraph of text on the cover
page of the Prospectus concerning the terms of offering by the Underwriter;
(b) The legend appearing below the graphic information on page 2 (inside
cover page) of the Prospectus concerning stabilization and other matters by
certain persons participating in the offering; and
(c) The second, fifth, [eleventh] and [thirteenth] paragraphs under the
caption "Underwriting" on pages [53, 54 and 55] of the Prospectus, also
concerning the terms of offering by the Underwriter.
Very truly yours,
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & CO., INC.
as Representative of the Several Underwriters
By:______________________________________________
Authorized Representative
49
The undersigned hereby acknowledges receipt of the foregoing letter.
MERGE TECHNOLOGIES INCORPORATED
By:______________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President