1,500,000 Shares
TRIMEDYNE, INC.
Common Stock
UNDERWRITING AGREEMENT
January ___, 2001
_______________________
_______________________
_______________________
Attn: __________________
Dear Sirs:
The undersigned, Trimedyne, Inc. a Nevada corporation (the "Company"),
hereby confirms its agreement with you (the "Underwriter"), as follows:
1. The Offering
(a) The Underwriter agrees to sell a maximum of 1,500,000 shares of the
Company's common stock, $0.01 par value per share ("Common Stock") to the public
as agent for the Company on a "best efforts" only basis during the offering
period commencing as of the effective date ("Effective Date") of the Company's
Registration Statement on Form S-2, filed with the Securities and Exchange
Commission (the "Commission") on January ___, 2001 (Commission File No.
____________) (the "Initial Registration Statement"), and terminating on the
first to occur of (i) the sale of the 1,500,000 shares of Common Stock or (ii)
six (6) months from the Effective Date, unless such period is extended by mutual
agreement between us (the "Offering Period"), plus an additional three days to
permit funds collected during the Offering Period to clear (the "Offering").
(b) The public offering price of the Common Stock shall be mutually
determined by us from time to time, based upon the then market price of the
Common Stock on the NASDAQ market. The Underwriter may from time to time after
the aforesaid mutual determination of the public offering price increase, but
not decrease the public offering price, without the consent of the Company, by
reason of changes in general market conditions or otherwise.
(c) The number of shares of Common Stock which you shall offer to the
public from time to time during the Offering Period shall be mutually determined
by us from time to time after the Effective Date.
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(d) The Company shall pay you as Underwriter a sales commission of
seven percent (7%) of all sales of Common Stock sold by you during the Offering
Period, except on sales of Common Stock to officers, directors or employees of
the Company and their affiliates.
(e) The Company hereby agrees to sell to you, and you hereby agree to
purchase 100,000 five year warrants ("Warrants") at a price of $0.001 per
Warrant, for a total purchase price of $1,000. The Warrants shall be exercisable
in an amount equal to ten percent (10%) of the number of shares of Common Stock
sold by you hereunder to the public during the Offering Period. The Warrants
will each be exercisable for a period of four (4) years commencing one (1) year
following the Effective Date to purchase one (1) share of Common Stock at a
price equal to one hundred twenty percent (120%) of the average public offering
price of the Common Stock sold by you during the Offering Period.
2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with the
Underwriter that:
(i) The Company will deliver to you any amendment(s) to the
Registration Statement filed with the Commission (the initial Registration
Statement and all amendments thereto are hereinafter collectively referred to as
the "Registration Statement"). The prospectus, in the form filed with the
Commission pursuant to Rule 424(b) of the General Rules and Regulations (the
"Regulations") of the Commission under the Securities Act of 1933, as amended
(the "Act") is herein referred to as the "Prospectus."
(ii) When the Registration Statement becomes effective, and at all
times subsequent thereto and including the Closing Date (as defined in Section
1(d) and during such longer period as the Prospectus may be required to be
delivered in connection with sales by the Underwriter or a dealer, and during
such longer period until any post-effective amendment thereto shall become
effective, the Registration Statement (and any post-effective amendment thereto)
and the Prospectus (as amended or as supplemented if the Company shall have
filed with the Commission any amendment or supplement to the Registration
Statement or the Prospectus) will contain all statements which are required to
be stated therein in accordance with the Act and the Regulations, will comply
with the Act and the Regulations, and will not contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and no event will
have occurred which should have been set forth in an amendment or supplement to
the Registration Statement or the Prospectus which has not been set forth in
such an amendment or supplement; except that no representation or warranty is
made in this Section 2(a)(ii) with respect to statements or omissions made in
reliance upon and in conformity with written information furnished to the
Company with respect to the Underwriter by or on behalf of the Underwriter
expressly for inclusion in any Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement thereto.
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(iii) Neither the Commission nor the "blue sky" or securities authority
of any jurisdiction have issued an order ("Stop Order") suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any Preliminary Prospectus, the Prospectus, the Registration Statement refusing
to permit the effectiveness of the Registration Statement, or suspending the
registration or qualification of the Common Stock, nor has any of such
authorities instituted or threatened to institute any proceedings with respect
to a Stop Order.
(iv) The only subsidiaries (as defined in the Regulations) of the
Company is Cardiodyne, Inc., a Nevada corporation, (the "Subsidiary"). The
Company and the Subsidiary are corporations duly organized, validly existing,
and in good standing under the laws of their respective jurisdictions of
incorporation. The Company and the Subsidiary are each duly qualified to do
business and are in good standing in every jurisdiction in which their
ownership, leasing, licensing, or use of property and assets or the conduct of
their business makes such qualification necessary.
(v) The authorized capital stock of the Company consists of 1,000,000
shares of Preferred Stock, none of which have been issued or are outstanding,
and 30,000,000 shares of Common Stock, of which ________ shares were outstanding
on December 31, 2000. Each outstanding share of Common Stock and to the
knowledge of the Company each outstanding share of capital stock of the
Subsidiary is validly authorized, validly issued, fully paid, and nonassessable,
has not been issued and is not owned or held in violation of any preemptive
rights of stockholders, and to the knowledge of the Company in the case of the
Subsidiary are owned of record and beneficially by the Company or the other
shareholders as scheduled in the Prospectus free and clear of all liens,
security interests, pledges, charges, encumbrances, stockholders' agreements,
and voting trusts, except as otherwise disclosed in the Prospectus. There are
currently no outstanding options, warrants, or other rights calling for the
issuance of, any shares of capital stock of the Company or to the knowledge of
the Company of the Subsidiary or any security or other instrument which by their
terms are convertible into, exercisable for, or exchangeable for capital stock
of the Company, except as may be described in the Prospectus.
(vi) The consolidated financial statements of the Company as of and for
the period ended September 30, 2000 included in the Registration Statement and
the Prospectus fairly present with respect to the Company and the Subsidiary the
consolidated financial position, the consolidated results of operations, and the
other information purported to be shown therein at the respective dates and for
the respective periods to which they apply. Such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, are correct and complete,
and are in accordance with the books and records of the Company and the
Subsidiary. The accountants whose report on the audited financial statements is
filed with the Commission as a part of the Registration Statement are, and
during the periods covered by their report(s) included in the Registration
Statement and the Prospectus were independent certified public accountants with
respect to the Company and the Subsidiary within the meaning of the Act and the
Regulations. Except for the consolidated financial statements of the Company, no
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other financial statements are required by Form S-2 or otherwise to be included
in the Registration Statement or the Prospectus.
(vii) There is no litigation, arbitration or other governmental
proceeding (formal or informal), or investigation pending, threatened in
writing, with respect to the Company, the Subsidiary, or any of their respective
operations, businesses, properties, or assets, except as described in the
Prospectus. Neither the Company nor the Subsidiary is in violation of, or in
default with respect to, any law, rule, regulation, order, judgment, or decree
except as described in the Prospectus, nor is the Company or the Subsidiary
required to take any action in order to avoid any such violation or default.
(viii) Neither the Company nor the Subsidiary has received any notice
that the Company, the Subsidiary or any other party is in violation or breach
of, or in default with respect to, complying with any material provision of any
contract, agreement, instrument, lease, license, arrangement, or understanding
which is material to the Company and the Subsidiary taken as a whole, and each
such contract, agreement, instrument, lease, license, arrangement, and
understanding is in full force and is the legal, valid, and binding obligation
of the parties thereto and is enforceable as to them in accordance with its
terms. Neither the Company nor the Subsidiary is in violation or breach of, or
in default with respect to, any material term of its certificate of
incorporation (or other charter document) or by-laws.
(ix) Except as set forth in the Prospectus, all patents, patent
applications, trademarks, trademark applications, trade names, service marks,
copyrights, franchises, and other intangible properties and assets (all of the
foregoing herein referred to as "Intangibles") that the Company or the
Subsidiary owns or has pending, or under which it is licensed, are in good
standing and to the knowledge of the Company uncontested. Neither the Company
nor the Subsidiaries is aware that they have infringed, are infringing, or have
received notice of infringement with respect to asserted Intangibles of others.
To the knowledge of the Company or the Subsidiary there is no infringement by
others of Intangibles of the Company or of the Subsidiary.
(x) The Company has all requisite power and authority to execute,
deliver, and perform this underwriting agreement (the "Agreement"). All
necessary corporate proceedings of the Company have been duly taken to authorize
the execution, delivery, and performance of this Agreement by the Company. This
Agreement has been duly authorized, executed, and delivered by the Company, is
the legal, valid, and binding obligation of the Company, and is enforceable as
to the Company in accordance with its terms. No consent, authorization,
approval, order, license, certificate, or permit of or from, or declaration or
filing with, any federal, state, local, or other governmental authority or any
court or other tribunal is required by the Company for the execution, delivery,
or performance of this Agreement by the Company (except filings under the Act
which have been or will be made before the Closing Date and such consents
consisting only of consents under "blue sky" or securities laws which have been
obtained at or prior to the date of this Agreement). Except where the failure
would not have a material adverse effect on the Company taken as a whole: (a) no
consent of any party to any contract, agreement, instrument, lease, license,
arrangement to which the Company is a party, or to which any of its properties
or assets are subject, is required for the execution, delivery, or performance
of this Agreement and (b) the execution, delivery, and performance of this
Agreement will not violate, result in a breach of, conflict with any material
provision of or (with or without the giving of notice or the passage of time or
both), entitle any party to terminate or call a default under any contract,
agreement, instrument, lease, license, arrangement, or understanding, or violate
or result in a breach of any term of the certificate of incorporation (or other
charter document) or by-laws of the Company or violate, result in a breach of,
or conflict with any law, rule, regulation, order, judgment, or decree binding
on the Company or to which any of their respective operations, businesses,
properties, or assets are subject.
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(xi) The Common Stock to be offered hereunder and the Common Stock
underlying the Warrants are validly authorized and, when issued and delivered in
accordance with this Agreement, will be validly issued, fully paid, and
nonassessable and will not be issued in violation of any preemptive rights of
stockholders. The Common Stock conforms to all statements relating thereto
contained in the Registration Statement or the Prospectus.
(xii) Neither the Company nor any of its officers, directors, or
affiliates (as defined in the Regulations), has taken or will take, directly or
indirectly, any action designed to stabilize or manipulate the price of any
security of the Company, or which has caused or resulted in, or which might in
the future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of the Common Stock hereunder.
(xiii) The Company has obtained from each of its directors, officers
and 5% stockholders a written agreement that for a period terminating ninety
(90) days after the termination of the Offering Period, without your prior
written consent, offer, pledge, sell, contract to sell, grant any option for the
sale of, or otherwise dispose of, directly or indirectly, any shares of Common
Stock or any security or other instrument which by its terms is convertible
into, exercisable for, or exchangeable for shares of Common Stock, except (a) as
set forth in the Prospectus, (b) in a private transaction or (c) in a
transaction with a non U.S. national or resident, outside the U.S. or its
territories.
(xiv) On the Effective Date the Company shall have complied with the
requirements of the NASD with respect to the Offering.
3. Covenants of the Company.
The Company covenants that it will:
(i) Use its best efforts to cause the Registration Statement to become
effective as promptly as possible and notify you immediately, and confirm such
notice in writing, (A) when the Registration Statement and any post-effective
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amendment thereto become effective, (B) of the receipt of any comments from the
Commission or the "blue sky" or securities authority of any jurisdiction
regarding the Registration Statement, any post-effective amendment thereto, the
Prospectus, or any amendment or supplement thereto, and (C) of the receipt of
any notification with respect to a Stop Order or the initiation or threatening
of any proceeding with respect to a Stop Order. The Company will use its best
efforts to prevent the issuance of any Stop Order and, if any Stop Order is
issued, to obtain the lifting thereof as promptly as possible.
(ii) During the time when a prospectus relating to the Common Stock is
required to be delivered hereunder or under the Act or the Regulations, the
Company shall comply so far as it is able with all requirements imposed upon it
by the Act, as now existing and as hereafter amended, and by the Regulations, as
from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Common Stock in accordance with the provisions
hereof and the Prospectus. If, at any time when a prospectus relating to the
Common Stock is required to be delivered hereunder or under the Act or the
Regulations, any event shall have occurred as a result of which, in the
reasonable opinion of counsel for the Company, the Registration Statement or the
Prospectus as then amended or supplemented contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or if, in the
opinion of such counsel, it is necessary at any time to amend or supplement the
Registration Statement or the Prospectus to comply with the Act or the
Regulations, the Company will immediately notify the Underwriter and promptly
prepare and file with the Commission an appropriate amendment or supplement (in
form and substance satisfactory to the Representative) which will correct such
statement or omission or which will effect such compliance and will use its best
efforts to have any such amendment declared effective as soon as possible.
(iii) Deliver without charge to the Underwriter, as soon as the
Registration Statement, or any amendment thereto, becomes effective or a
supplement is filed, two copies of the executed Registration Statement,
including exhibits, and any amendment thereto, as the case may be, and two
copies of any supplement thereto, and such number of copies of the Prospectus,
the Registration Statement, and amendments and supplements thereto, if any,
without exhibits, as the Underwriter may request for the purposes contemplated
by the Act.
(iv) Endeavor in good faith, in cooperation with the Underwriter, at or
prior to the time the Registration Statement becomes effective, to qualify the
Common Stock for offering and sale under the "blue sky" or securities laws of
such jurisdictions as you may designate subject to the Company's prior approval;
provided, however, that no such qualification shall be required in any
jurisdiction where, as a result thereof, the Company would be subject to service
of general process or to taxation as a foreign corporation doing business in
such jurisdiction to which it is not then subject. In each jurisdiction where
such qualification shall be effected, the Company will, unless you agree in
writing that such action is not at the time necessary or advisable, file and
make such statements or reports at such times as are or may be required by the
laws of such jurisdiction.
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(v) File no amendment or supplement to the Registration Statement or
Prospectus at any time, whether before or after the effective date of the
Registration Statement, unless such filing shall comply with the Act and the
Regulations and unless the Underwriter shall previously have been advised of
such filing and furnished with a copy thereof.
(vi) Comply with all registration, filing, and reporting requirements
of the Exchange Act, which may from time to time be applicable to the Company.
(vii) Comply with all provisions of all undertakings contained in the
Registration Statement.
(viii) File timely and accurate reports on Form SR with the commission
in accordance with Rule 463 of the Regulations or any successor provision.
(ix) If the principal stockholders, officers, or directors of the
Company are required by the "blue sky" or securities authority of any
jurisdiction requested by the Underwriter pursuant to Section 3(a)(iv) to escrow
or agree to restrict the sale of any security of the Company owned by them for
the Company to qualify or register the Common Stock for sale under the "blue
sky" or securities laws of any such jurisdiction, cause each such person to
escrow or restrict the sale of such security on the terms and conditions and in
the form specified by the securities administrator of such jurisdiction.
4. Payment of Expenses. The Company agrees to pay all expenses in
connection with (a) the preparation, printing and filing of the Registration
Statement and the Prospectus, including the cost of all copies of the Prospectus
and any amendments or supplements thereto supplied to the Underwriter in
quantities as hereinabove stated, (b) the issuance, sale, transfer, and delivery
of the Common Stock, including any transfer or other taxes payable thereon, (c)
subject to the Company's prior approval, the qualification of the Common Stock
under state or foreign "blue sky" or securities laws, including the costs of
printing the preliminary and final "Blue Sky Survey, " (d) the filing fees
payable to the Commission, the National Association of Securities Dealers, Inc.
(the "NASD"), and the jurisdictions in which such qualification is sought, and
(e) the disbursements in connection therewith relating to all filings with the
NASD.
5. Conditions of the Underwriters' Obligations. The obligation of the
Underwriter to offer and sell the Common Stock as exclusive agent for the
Company on a best efforts basis, as provided herein, shall be subject, in their
discretion, to the continuing accuracy of the representations and warranties of
the Company contained herein and in each certificate and document contemplated
under this Agreement to be delivered to the Underwriter, as of the date hereof
and as of the Closing Date, to the performance by the Company of its obligations
hereunder, and to the following conditions:
(a) The Registration Statement shall have become effective not later
than 6:00 P.M., New York City Time, on or before the date of execution of this
Agreement or such other date and time as shall be consented to in writing by the
Underwriter.
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(b) At the time this Agreement is executed and at the Closing Date, you
shall have received the favorable opinion of Heller, Horowitz & Feit, P.C.,
counsel for the Company, dated the date of delivery, addressed to the
Underwriter, to the effect that:
(i) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada. The Company is duly
qualified to do business and are in good standing in every jurisdiction in which
its ownership, leasing, licensing, or use of property and assets or the conduct
of its business makes such qualification necessary;
(ii) The authorized capital stock of the Company consists of 1,000,000
shares of Preferred Stock, none of which are issued or outstanding, and
30,000,000 shares of Common Stock, of which _____________ shares were issued and
outstanding on December 31, 2000. Each outstanding share of Common Stock is
validly authorized, validly issued, fully paid, and nonassessable, free and
clear of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts, except as set forth in the
Prospectus. Except as disclosed in the Prospectus, to the knowledge of such
counsel, there is no commitment, plan, or arrangement to issue, and no
outstanding option, warrant, or other right calling for the issuance of, any
share of capital stock of the Company or any security or other instrument which
by its terms is convertible into, exercisable for, or exchangeable for capital
stock of the Company, except as may be properly described in the Prospectus;
(iii) To the knowledge of counsel, the Company is not in violation or
breach of, or in default with respect to, any material provision of its
certificates of incorporation (or other charter document) or by-laws;
(iv) The Company has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of the
Company have been taken to authorize the execution, delivery, and performance of
this Agreement by the Company. This Agreement has been duly authorized,
executed, and delivered by the Company, is the legal, valid, and binding
obligation of the Company, and (subject to applicable bankruptcy, insolvency,
and other laws affecting the enforceability of creditors' rights generally) is
enforceable as to the Company in accordance with its terms;
(v) The Common Stock sold by the Company in this Offering and the
Common Stock underlying the Warrants will be validly authorized and, when issued
and delivered in accordance with this Agreement, will be validly issued, fully
paid, and nonassessable and will not be issued in violation of any preemptive
rights of stockholders; and
(vi) The Registration Statement shall have become effective under the
Act. To the knowledge of such counsel, no Stop Order has been issued and no
proceedings for that purpose have been instituted or threatened in writing.
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Such opinions may contain such qualifications, exceptions, and
assumptions and may rely upon such matters or other opinions as may be agreed
upon by the Underwriters and the counsel rendering the opinion.
(c) At the Closing Date, you shall have received a certificate of the
Chief Executive Officer and of the Chief Financial Officer of the Company, dated
the Closing Date, to the effect that as of the date of this Agreement and as of
the Closing Date, the representations and warranties of the Company contained
herein were and are accurate, and that as of the Closing Date the obligations to
be performed by the Company hereunder on or prior thereto have been fully
performed.
(d) All proceedings taken in connection with the issuance, sale,
transfer and delivery of the Common Stock shall be satisfactory in form and
substance to the Underwriter.
(e) The NASD, upon review of the terms of the public offering of the
Common Stock, shall not have objected to the Underwriter's participation in such
offering.
Any certificate or other document signed by any officer of the Company
and delivered to the Underwriter or its counsel shall be deemed a representation
and warranty by the Company hereunder to the Underwriter as to the statements
made therein. If any condition to the Underwriters' obligations hereunder to be
fulfilled prior to or at the Closing Date is not so fulfilled, the Underwriter
may terminate this Agreement or, if the Underwriter so elects, in writing waive
any such conditions which have not been fulfilled or extend the time for their
fulfillment.
6. Indemnification and Contribution
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Underwriter and its officers, directors,
partners, employee's, agents, and counsel, and each person, if any, who controls
the Underwriters within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act, against any and all loss, liability, claim, damage, and
expense whatsoever (which shall include, for all purposes of this Section 6, but
not be limited to reasonable attorneys' fees and any and all reasonable expense
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation) as and when incurred arising out of,
based upon, or in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in the Registration Statement or the
Prospectus (as amended and supplemented from time to time), or any amendment or
supplement thereto or (B) in any application or other document or communication
(in this Section 6 collectively referred to as an "application") executed by or
on behalf of the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Common
Stock under the "blue sky" or securities laws thereof or filed with the
Commission or any securities exchange; or any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
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Company as stated in Section 6(b) with respect to you expressly for inclusion in
the Prospectus, or any amendment or supplement thereto, or in any application,
as the case may be, or (ii) any breach of any material representation, warranty,
covenant, or agreement of the Company contained in this Agreement. The foregoing
agreement to indemnify shall be in addition to any liability the Company may
otherwise have, including liabilities arising under this Agreement.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each director of the Company and each officer of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Underwriter in Section 6(a), but only with respect to statements or
omissions, if any, made in the Registration Statement, or the Prospectus (as
from time to time amended and supplemented), or any amendment or supplement
thereto, or in any application in reliance upon and in conformity with written
information furnished to the Company as stated in this Section 6(b) with respect
to the Underwriter expressly for inclusion in any Preliminary Prospectus, the
Registration Statement, or the Prospectus, or any amendment or supplement
thereto, or in any application, as the case may be; provided, however, that the
obligation of the Underwriter to provide indemnity under the provisions of this
Section 6(b) shall be limited to the amount which represents the product of the
number of shares of Common Stock sold by the Underwriters as agent for the
Company hereunder and the public offering price of the Common Stock sold by the
Underwriter to the public hereunder. For all purposes of this Agreement, the
amounts of the Underwriter's commission, any concession or re-allowance and the
information set forth under "Underwriting" set forth in the Prospectus
constitute the only information furnished in writing by or on behalf of the
Underwriter expressly for inclusion in the Registration Statement or the
Prospectus (as from time to time amended or supplemented), or any amendment or
supplement thereto, or in any application, as the case may be.
(c) If any action is brought against the Underwriter or the Company or
any of their officers, directors, partners, employees, agents, counsel, or
controlling persons (an "indemnified party") in respect of which indemnity may
be sought against any other party hereto pursuant to the foregoing paragraphs,
such indemnified party or parties shall promptly notify all the parties (the
"indemnifying parties") against whom indemnification is to be sought in writing
of the institution of such action (but the failure so to notify shall not
relieve the indemnifying parties from any liability they may have other than
pursuant to this Section 6(d)) and the indemnifying parties shall promptly
assume the defense of such action, including the employment of counsel
(satisfactory to such indemnified party or parties) and payment of expenses.
Such indemnified party or parties shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties unless the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action or the indemnifying parties shall
not have promptly employed counsel satisfactory to such indemnified party or
parties to have charge of the defense of such action or such indemnified party
or parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or to other indemnified parties which are
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different from or additional to those available to one or more of the
indemnifying parties, in any of which events such fees and expenses shall be
borne by the indemnifying parties and the indemnifying parties shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties. Anything in this paragraph to the contrary notwithstanding, no
indemnifying party shall be liable for any settlement of any such claim or
action effected without its written consent. In addition, the Company and the
Selling Stockholder agree promptly to notify the Underwriter of the commencement
of any litigation or proceedings against the Company or any of its officers or
directors in connection with the sale of the Common Stock, the Registration
Statement, or the Prospectus, or any amendment or supplement thereto, or any
application.
(d) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 6(a),
6(b), or 6(c) (subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such indemnification
may not be enforced in such case, even though this Agreement expressly provides
for indemnification in such case or (ii) any indemnified or indemnifying party
seeks contribution under the Act, the Exchange Act, or otherwise, then the
Company (including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed the Registration
Statement, any controlling person of the Company as one entity and the
Underwriter, in the aggregate (including for this purpose any contribution by or
on behalf of an indemnified party) as a second entity, shall contribute to the
losses, liabilities, claims, damages, and expenses whatsoever to which any of
them may be subject, so that the Underwriter is responsible for the proportion
thereof equal to the Underwriter's commission on the sale of shares of the
Common Stock hereunder, and the Company is responsible for the remaining portion
based upon the proceeds received or which may have been received as a result of
this Offering; provided, however, that if applicable law does not permit such
allocation, then other relevant equitable considerations such as the relative
fault of the Company and you in the aggregate in connection with the facts which
resulted in such losses, liabilities, claims, damages, and expenses shall also
be considered. The relative fault, in the case of an untrue statement, alleged
untrue statement, omission, or alleged omission, shall be determined by, among
other things, whether such statement, alleged statement, omission, or alleged
omission relates to information supplied by the Company, or by you, and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement, alleged statement, omission, or alleged
omission. The Company and you agree that it would be unjust and inequitable if
the respective obligations of the Company and you for contribution were
determined by pro rata or per capita allocation of the aggregate losses,
liabilities, claims, damages, and expenses (even if you and the other
indemnified parties were treated as one entity for such purpose) or by any other
method of allocation that does not reflect the equitable considerations referred
to in this Section 6(e). No person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 6(e), each person, if any, who
controls you within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act and each officer, director, partner, employee, agent, and your
counsel shall have the same rights to contribution as you, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement, and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
provisions of this Section 6(e). Anything in this Section 6(e) to the contrary
notwithstanding, no party shall be liable for contribution with respect to the
settlement of any claim or action effected without its written consent. This
Section 6(e) is intended to supersede any right to contribution under the Act,
the Exchange Act, or otherwise.
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7. Representations and Agreements to Survive Delivery. All
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Closing Date, and such representations, warranties. covenants,
and agreements of the Underwriter and the Company, including the indemnity and
contribution agreements contained in Section 6, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf
of the Underwriter or any indemnified person, or by or on behalf of the Company,
or any person or entity which is entitled to be indemnified under Section 6(b),
and shall survive termination of this Agreement or the delivery of the Common
Stock to the purchasers thereof.
8. Effective Date of This Agreement and Termination Thereof.
(a) This Agreement shall become effective at 10:00 A.M., New York City
Time, on the first full business day following the day on which the Registration
Statement becomes effective. The Underwriter or the Company may prevent this
Agreement from becoming effective without liability of any party to any other
party, except as noted below in this Section 8, by giving the notice indicated
in Section 8(d) before the time this Agreement becomes effective.
(b) The Underwriter shall have the right to terminate this Agreement at
any time prior to the Closing Date by giving notice to the Company if any
domestic or international event, act, or occurrence has materially in disrupted,
or in the opinion of the Underwriter will in the immediate future materially
disrupt, the securities markets; or if there shall have been a general
suspension of, or a general limitation on prices for, trading in securities on
NASDAQ; or if there shall have been an outbreak of major hostilities or other
national or international calamity; or if a banking moratorium has been declared
by a state or federal authority; or if a moratorium in foreign exchange trading
by major international banks or persons has been declared; or if there shall
have been a material interruption in the mail service or other means of
communication within the United States; or if the Company shall have sustained a
material or substantial loss by fire, flood, accident, hurricane, earthquake,
theft, sabotage, or other calamity or malicious act which, whether or not such
loss shall have been insured, will, in the opinion of the Underwriter, make it
inadvisable to proceed with the offering; or if there shall have been such
change in the market for the Company's securities or securities in general or in
political, financial, or economic conditions as in the judgment of the
Underwriter makes it inadvisable to proceed with the public offering on the
terms contemplated by the Prospectus.
(c) If the Underwriter elects to prevent this Agreement from becoming
effective, as provided in this Section 8, or to terminate this Agreement, the
Underwriter shall notify the Company promptly by telephone, telex, or telegram,
confirmed by letter. If, as so provided, the Company elects to prevent this
Agreement from becoming effective or to terminate this Agreement, the Company
shall notify the Underwriter promptly by telephone, telex, or telegram,
confirmed by letter.
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<PAGE>
9. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to you shall be
mailed, certified mail, return receipt requested, delivered personally or by
messenger, or via facsimile with fax confirmation of receipt or if by letter, to
you at _____________________________________________, Attention:
__________________; with a copy to Heller, Horowitz & Feit, P.C., 292 Madison
Avenue, New York, , New York 10017, Attention: Richard F. Horowitz, Esq.,
Facsimile No.: (212) 696-9459; with a copy to ________________________________,
________________________________, Attention: ______________________; or if sent
to the Company at 2801 Barranca Road, Irvine, CA 92606, Attention: Shane H.
Traveller, President. Either party hereto may change its address by written
notice to the other party.
10. Construction. This Agreement shall be construed in accordance with
the laws of the State of New York, without giving effect to conflict of laws.
Time is of the essence in this Agreement.
11. Acknowledgements. The parties hereto acknowledge, understand and
accept that Heller, Horowitz & Feit, P.C. have acted as counsel to the Company
in connection with all legal matters relating to the Offering described in
Section 1 of this Agreement.
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If the foregoing correctly sets forth the understanding between us,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement among us.
Very truly yours,
The "Company"
Trimedyne, Inc.
By ___________________________________
Shane H. Traveller
President and CEO
The "Underwriter"
Accepted as of the date first above written.
New York, New York
_____________________________________
By: __________________________________
Print Name:___________________________
Title:__________________________
Date:___________________________
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