<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 14, 1997
REGISTRATION NO. 333-35187
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ENAMELON, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 2834 13-3669775
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
15 KIMBALL AVENUE
YONKERS, NY 10704
(914) 237-1308
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
DR. STEVEN R. FOX,
CHAIRMAN OF THE BOARD
ENAMELON, INC.
15 KIMBALL AVENUE
YONKERS, NY 10704
(914) 237-1308
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
ERIC HONICK, ESQ. BARBARA L. BECKER, ESQ.
SNOW BECKER KRAUSS P.C. CHADBOURNE & PARKE LLP
605 THIRD AVENUE 30 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10158 NEW YORK, NEW YORK 10112
TEL: (212) 687-3860 TEL: (212) 408-5100
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the
Registrant in connection with the issuance and distribution of the securities
being registered hereunder.
All of the amounts shown are estimates (except for the SEC and NASD filing
fees).
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 10,040.55
NASD fee...................................................... 3,813.38
NASDAQ filing fee............................................. 17,500.00
Transfer agent's fee.......................................... 15,000.00
Printing and engraving expenses............................... 100,000.00
Legal fees and expenses....................................... 100,000.00
Blue sky filing fees and expenses (including counsel fees).... 2,500.00
Accounting fees and expenses.................................. 30,000.00
Miscellaneous expenses........................................ 21,146.07
-----------
Total....................................................... $300,000.00
===========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act"). The Registrant's Bylaws
provide that the Registrant will indemnify its directors, executive officers,
other officers, employees and agents to the fullest extent permitted by
Delaware law.
The Registrant's Certificate of Incorporation provides for the elimination
of liability for monetary damages for breach of the directors' fiduciary duty
of care to the Registrant and its stockholders. These provisions do not
eliminate the directors' duty of care and, in appropriate circumstances,
equitable remedies such as injunctive or other forms of non-monetary relief
will remain available under Delaware law. In addition, each director will
continue to be subject to liability for breach of the director's duty of
loyalty to the Registrant, for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of law, for any
transaction from which the director derived an improper personal benefit, and
for payment of dividends or approval of stock repurchases or redemptions that
are unlawful under Delaware law. The provision does not affect a director's
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Effective November 30, 1992, the Company effectuated a 100-for-one stock
split of its Common Stock. In July 1993, the Company effectuated a 1.19688-
for-one stock split of its Common Stock. In September 1994, the Company
effectuated a one-for-1.65068 stock split of its Common Stock. In June 1995,
the Company effectuated a three-for-one stock split of its Common Stock. All
of the following information regarding the issuance of shares of the Company's
Common Stock has been adjusted, where appropriate, to reflect such stock
splits. Since July 1994, the Registrant has sold the following securities
without registration under the Securities Act:
(1) In September 1994, the Registrant sold an aggregate of 118,125 shares
of its Common Stock and Warrants to purchase 59,064 shares of Common Stock
at an exercise price of $1.33 a share to six unaffiliated persons, for an
aggregate consideration of $157,500 ($1.33 per share ascribing no value to
the Warrants).
II-1
<PAGE>
(2) In May 1995, the Registrant sold an aggregate of 93,750 shares of its
Common Stock and Warrants to purchase 93,750 shares of Common Stock at an
exercise price of $1.33 a share to eight persons, for an aggregate
consideration of $125,000 ($1.33 per share ascribing no value to the
Warrants). Eric Horodas, a Director of the Registrant, acquired 9,375
shares of Common Stock and 9,375 Warrants.
(3) In June 1995 the Registrant sold an aggregate of 3,000 shares of its
Common Stock to an unrelated party in consideration for services rendered
to the Registrant, valued at $8,045 ($2.68 per share).
(4) In August through December 1995, the Registrant sold an aggregate of
648,723 shares of its Common Stock to an aggregate of 112 unaffiliated
persons, for an aggregate consideration of $2,594,892 ($4.00 per share).
(5) In connection with the sales in ITEM 15(4) above, the Registrant
authorized the issuance of warrants to purchase an aggregate of 26,276
shares of Common Stock at an exercise price of $4.00 per share, and 1,562
shares of Common Stock at an exercise price of $3.60 per share.
(6) In January 1996 the Registrant sold an aggregate of 6,706 shares of
its Common Stock to an unrelated party in consideration for services
rendered to the Registrant, valued at $26,824 ($4.00 per share).
(7) In January 1996, the Registrant sold an aggregate of 500,000 Units to
an aggregate of 19 unaffiliated persons, for an aggregate consideration of
$2,000,000 ($4.00 per Unit). Each Unit consisted of 1.103 shares of 5%
Convertible Preferred Stock and 1 Common Stock Purchase Warrant,
exercisable at $5.75 per share.
(8) In connection with the placement of the offering in ITEM 15(7) above,
the Registrant authorized the issuance of warrants to purchase an aggregate
of 100,000 shares of Common Stock at an exercise price of $4.80 per share,
and 23,750 shares of Common Stock at an exercise price of $3.60 per share.
(9) In April 1996, the Registrant sold an aggregate of 6,250 Units to an
unrelated party, for an aggregate consideration of $25,000 ($4.00 per
Unit). Each Unit consisted of 1.103 shares of 5% Convertible Preferred
Stock and 1 Common Stock Purchase Warrant, exercisable at $5.75 per share.
(10) In April and May of 1997, the Registrant sold an aggregate of 35,375
shares of its Common Stock to an aggregate of four unaffiliated persons for
an aggregate consideration of $100,373.
(11) In May of 1997 the Board of Directors of the Company authorized the
issuance of warrants to purchase 3,055 shares of Common Stock at $3.60 a
share in settlement of certain claims.
(12) In June 1997 the Registrant sold an aggregate of 1,080,000 shares of
Common Stock to 42 unaffiliated persons, for an aggregate consideration of
$14,040,000 ($13.00 per share).
The issuances described in ITEMS 15(1),(3), (5), (6),(8) and (11) above were
made in reliance upon the exemption from the registration requirements of the
Securities Act provided by Section 4(2) of the Securities Act for transactions
by an issuer not involving a public offering. The issuances described in ITEMS
15 (2), (4), (7), (9) and (12) above were made in reliance upon the exemption
from the registration requirements of the Securities Act for transactions by
an issuer not involving a public offering provided by Section 4(6) of the
Securities Act and Regulation D promulgated thereunder. The recipients of the
securities in each of the above transactions represented their intentions to
acquire the securities for investment only and not with a view to or a sale in
connection with any distribution thereof. Allen & Company Incorporated acted
as the placement agent for the issuances described in ITEM 15(7) above and
received a fee of 100,000 warrants described in 15(8). Claremont York Capital
acted as a finder in such transaction and received 23,750 warrants as
described in 15(8). No underwriter or underwriting discount or commission was
involved in any other issuance. The issuances described in ITEM 15(10) were
made in reliance upon Section 3(b) of the Securities Act and Rule 701
promulgated thereunder.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
The following Exhibits are filed herewith and made a part hereof.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of the Registrant, as amended.**
3.2 Amended and Restated By-Laws of the Registrant.**
4.1 Specimen Copy of Stock Certificate for shares of Common Stock.**
5.1 Opinion of Snow Becker Krauss P.C.*****
10.1 Restated Patent License Agreement by and between the Registrant and the
American Dental Association Health Foundation dated as of June 24,
1992.**
10.2 Amendment Agreement by and between the Registrant and the American
Dental Association Health Foundation dated as of June 12, 1995.**
10.3 Restated Foreign Patent License Agreement by and between the Registrant
and the American Dental Health Foundation dated as of November 18,
1992.**
10.4 Foreign License Amendment Agreement by and between the Registrant and
the American Dental Association Health Foundation dated as of June 14,
1995.**
10.5 The Registrant's 1993 Stock Option Plan.**
10.6 The Registrant's Incentive Compensation Plan.**
10.7 Employment Agreement between the Registrant and Dr. Steven R. Fox, as
amended as of June 15, 1996.**
10.8 Amended and Restated Employment Agreement between the Registrant and D.
Brooks Cole dated as of June 1, 1995.**
10.9 Employment Agreement between the Registrant and Norman Usen and Nu-
Products dated as of May 1, 1995.**
10.10 Employment Agreement between the Registrant and Anthony E. Winston dated
as of January 17, 1995.**
10.11 Employment Agreement between the Registrant and Edwin Diaz dated as of
July 29, 1996.**
10.12 Amendment, dated as of January 16, 1997, to Employment Agreement between
the Registrant and Anthony Winston.***
10.13 Amendment, dated as of July 1, 1997, to Employment Agreement between the
Registrant and Norman Usen.*****
10.14 Lease Agreement with Elaine Fox dated December 19, 1995.**
10.15 Lease Agreement with Unum Life Insurance Company of America dated
December 27, 1993.**
10.16 Lease Agreement with East Brunswick Woods Associates, L.P. dated
November 1995.**
10.17 Registrant's 1997 Stock Option Plan.****
23.1 Consent of Snow Becker Krauss P.C. (included in Exhibit 5.1).
23.2 Consent of BDO Seidman, LLP.****
24.1 Power of Attorney.*****
</TABLE>
- --------
** Incorporated by reference to the Company's Form S-1 Registration
Statement effective October 24, 1996.
*** Incorporated by reference to the Company's March 28, 1997 Form 10-KSB.
**** Incorporated by reference to the Company's Form S-1 Registration
Statement effective August 11, 1997.
***** Previously filed.
II-3
<PAGE>
(b) FINANCIAL STATEMENT SCHEDULES
All other schedules have been omitted because the information to be set
forth therein is not applicable or is shown in the financial statements or the
notes thereto.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and
(iii) include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Act, to treat each post-effective
amendment as a new registration statement of the securities offered, and
the offering of the securities at that time to be the initial bona fide
offering.
(3) To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(4) For determining liability under the Act, the information omitted from
the form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act shall
be deemed to be part of this registration statement as of the time it was
declared effective.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF YONKERS, STATE OF NEW YORK, ON THE 14TH DAY OF OCTOBER 1997.
ENAMELON, INC.
/s/ Dr. Steven R. Fox
By: _________________________________
(Dr. Steven R. Fox, Chairman of
the Board of Directors and Chief
Executive Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 2 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
AND BY DR. STEVEN FOX AS ATTORNEY-IN-FACT FOR THE SPECIFIC PERSONS IN THE
CAPACITIES WITH ENAMELON, INC. AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE
/s/ Dr. Steven R. Fox Chairman of the
- ------------------------------------- Board of Directors October 14,
DR. STEVEN R. FOX and Chief Executive 1997
Officer (Principal
Executive Officer)
* Treasurer, Vice
- ------------------------------------- President--Finance October 14,
EDWIN DIAZ and Chief Financial 1997
Officer (Principal
Financial Officer)
* Director
- ------------------------------------- October 14,
DR. BERT D. GASTER 1997
II-5
<PAGE>
SIGNATURE TITLE DATE
* Director
- ------------------------------------- October 14,
RICHARD A. GOTTERER 1997
* Director
- ------------------------------------- October 14,
ERIC D. HORODAS 1997
* Director
- ------------------------------------- October 14,
DR. S.N. BHASKAR 1997
/s/ Dr. Steven R. Fox
*By______________________________
DR. STEVEN R. FOX ATTORNEY-IN-FACT
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of the Registrant, as amended.**
3.2 Amended and Restated By-Laws of the Registrant.**
4.1 Specimen Copy of Stock Certificate for shares of Common Stock.**
5.1 Opinion of Snow Becker Krauss P.C.*****
10.1 Restated Patent License Agreement by and between the Registrant and
the American Dental Association Health Foundation dated as of June 24,
1992.**
10.2 Amendment Agreement by and between the Registrant and the American
Dental Association Health Foundation dated as of June 12, 1995.**
10.3 Restated Foreign Patent License Agreement by and between the
Registrant and the American Dental Health Foundation dated as of
November 18, 1992.**
10.4 Foreign License Amendment Agreement by and between the Registrant and
the American Dental Association Health Foundation dated as of June 14,
1995.**
10.5 The Registrant's 1993 Stock Option Plan.**
10.6 The Registrant's Incentive Compensation Plan.**
10.7 Employment Agreement between the Registrant and Dr. Steven R. Fox, as
amended as of June 15, 1996.**
10.8 Amended and Restated Employment Agreement between the Registrant and
D. Brooks Cole dated as of June 1, 1995.**
10.9 Employment Agreement between the Registrant and Norman Usen and Nu-
Products dated as of May 1, 1995.**
10.10 Employment Agreement between the Registrant and Anthony E. Winston
dated as of January 17, 1995.**
10.11 Employment Agreement between the Registrant and Edwin Diaz dated as of
July 29, 1996.**
10.12 Amendment, dated as of January 16, 1997, to Employment Agreement
between the Registrant and Anthony Winston.***
10.13 Amendment, dated as of July 1, 1997, to Employment Agreement between
the Registrant and Norman Usen.*****
10.14 Lease Agreement with Elaine Fox dated December 19, 1995.**
10.15 Lease Agreement with Unum Life Insurance Company of America dated
December 27, 1993.**
10.16 Lease Agreement with East Brunswick Woods Associates, L.P. dated
November 1995.**
10.17 The Registrant's 1997 Stock Option Plan.****
23.1 Consent of Snow Becker Krauss P.C. (included in Exhibit 5.1).
23.2 Consent of BDO Seidman, LLP.****
24.1 Power of Attorney.*****
</TABLE>
- --------
** Incorporated by reference to the Company's Form S-1 Registration
Statement effective October 24, 1996.
*** Incorporated by reference to the Company's March 28, 1997 Form 10-KSB.
**** Incorporated by reference to the Company's Form S-1 Registration
Statement effective August 11, 1997.
***** Previously filed.
<PAGE>
EXHIBIT 1.1
DRAFT
-------
10/6/97
2,000,000 Shares
Enamelon, Inc.
Common Stock
UNDERWRITING AGREEMENT
----------------------
October __, 1997
LEHMAN BROTHERS INC.
SBC WARBURG DILLON READ INC.
RODMAN & RENSHAW, INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
Enamelon, Inc., a Delaware corporation (the "Company"), proposes and certain
stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders") propose to sell an aggregate of 2,000,000 shares (the "Firm
Stock") of the Company's Common Stock, par value $0.001 per share (the "Common
Stock"). Of the 2,000,000 shares of the Firm Stock, 1,500,000 are being sold by
the Company and 500,000 by the Selling Stockholders. In addition, the Company
and certain Selling Stockholders propose to grant to the Underwriters named in
Schedule 1 hereto (the "Underwriters") an option to purchase up to an additional
300,000 shares of the Common Stock on the terms and for the purposes set forth
in Section 3 (the "Option Stock"). The Firm Stock and the Option Stock, if
purchased, are hereinafter collectively called the "Stock." This is to confirm
the agreement concerning the purchase of the Stock from the Company and the
Selling Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 and an amendment thereto with respect
to the Stock have (i) been prepared by the Company in conformity with the
requirements of the United States Securities Act of 1933, as amended
<PAGE>
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies
of such registration statement and the amendment thereto have been
delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means the date and the time as of which such registration
statement, or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "Effective Date" means the date of
the Effective Time; "Preliminary Prospectus" means each prospectus included
in such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement" means
such registration statement, as amended at the Effective Time, including
all information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with
Section 6(a) hereof and deemed to be a part of the registration statement
as of the Effective Time pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus
will, when they become effective or are filed with the Commission, as the
case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
concerning (i) such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein or (ii) such Selling Stockholder furnished to the Company
by or on behalf of any Selling Stockholder specifically for inclusion
therein.
2
<PAGE>
(c) The Company has registered the Common Stock with the Commission pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and all documents filed with the Commission under the
Exchange Act, when they were filed, conformed in all respects to the
requirements of the Exchange Act and the Rules and Regulations thereunder
and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification, and
has all power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged; and the Company has no
subsidiaries.
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the
Prospectus.
(f) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable and the Stock will
conform to the description thereof contained in the Prospectus; and the
issuance of the Stock is not subject to preemptive or other similar rights.
(g) This Agreement has been duly authorized, executed and delivered by the
Company.
(h) The execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such actions result
in any violation of the provisions of the certificate of incorporation or
by-laws of the Company or any statute or any
3
<PAGE>
order, rule or regulation of court or governmental agency or body having
jurisdiction over the Company or any of its properties or assets; and
except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may
be required under the Exchange Act, and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby.
(i) There are no contracts, agreements or understandings between the Company
and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person, except as
described in the Prospectus, or the right (other than rights which have
been waived or satisfied or are not yet exercisable) to require the Company
to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Securities
Act.
(j) Except as described in the Registration Statement, the Company has not sold
or issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock option or equity
plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants outstanding prior to the commencement of such
six-month period.
(k) The Company has not sustained, since the date of the latest audited
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since such date, there has not been
any change in the capital stock or long-term debt of the Company or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company, otherwise than as set forth or contemplated in the Prospectus.
4
<PAGE>
(l) The financial statements (including the related notes and supporting
schedules) filed as part of the Registration Statement or included in the
Prospectus present fairly the financial condition and results of operations
of the Company purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved.
(m) To the knowledge of the Company, BDO Seidman LLP, who have certified
certain financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in Section
9(i) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(n) The Company has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by
it, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not materially
affect the value of such property and do not materially interfere with the
use made and proposed to be made of such property by the Company; and all
real and personal property and buildings held under lease by the Company
are held by it under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company.
(o) The Company carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged in
similar businesses in similar industries.
(p) The Company owns or possesses adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights and licenses
necessary for the conduct of its business and, except as set forth on
Schedule 3 hereto, has no reason to believe that the conduct of its
business will conflict with, and, except as set forth on Schedule 3 hereto,
has not received any notice of any claim of conflict with, any such rights
of others.
(q) There are no legal or governmental proceedings pending to which the Company
is a party or of which any property or assets of the Company is the subject
which, if determined adversely to the Company, might have a material
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adverse effect on the financial position, stockholders' equity, results of
operations, business or prospects of the Company (herein, a "Material
Adverse Effect"); and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(r) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement.
(s) No relationship, direct or indirect, exists between or among the Company on
the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(t) No labor disturbance by the employees of the Company exists or, to the
knowledge of the Company, is imminent which might be expected to have a
Material Adverse Effect.
(u) The Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for which
the Company would have any liability; the Company has not incurred and does
not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section 412
or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(v) The Company has filed all federal, state and local income and franchise tax
returns required to be filed through the date hereof or, if requests for
extensions to file such returns have been made, such requests for extension
have been timely filed and any such extensions have been granted and have
not expired, and has paid all taxes due thereon, and no tax deficiency has
been determined adversely to the Company which has had nor does the Company
have
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any knowledge of any tax deficiency which, if determined adversely to the
Company, might have a Material Adverse Effect.
(w) Since the date as of which information is given in the Prospectus through
the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities other
than securities issued or granted pursuant to employee benefit plans, stock
or equity plans or other employee compensation plans, (ii) incurred any
liability or obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of business, (iii)
entered into any transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock.
(x) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability for
its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its
assets is compared with existing assets at reasonable intervals.
(y) The Company is not (i) in violation of its certificate of incorporation or
by-laws, (ii) in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties or assets is subject
or (iii) in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property
or assets may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of its
business.
(z) Neither the Company, nor any director, officer, agent, employee or other
person associated with or acting on behalf of the Company, has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision
of the Foreign
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Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(aa) There has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, medical wastes,
hazardous wastes or hazardous substances by the Company (or, to the
knowledge of the Company, any of its predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company
in violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have,
or could not be reasonably likely to have, singularly or in the aggregate
with all such violations and remedial actions, a material adverse effect on
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such property
of any toxic wastes, medical wastes, solid wastes, hazardous wastes or
hazardous substances due to or caused by the Company or with respect to
which the Company has knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not have
or would not be reasonably likely to have, singularly or in the aggregate
with all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall have the
meanings specified in any applicable local, state, federal and foreign laws
or regulations with respect to environmental protection.
(ab) The Company is not an "investment company" within the meaning of such term
under the Investment Company Act of 1940 and the rules and regulations of
the Commission thereunder.
2. Each Selling Stockholder severally represents, warrants and agrees
that:
(a) The Selling Stockholder has, and immediately prior to the Delivery Date (as
defined in Section 5 hereof) the Selling Stockholder will have good and
valid title to the shares of Stock to be sold by the Selling Stockholder
hereunder on such date, free and clear of all liens, encumbrances, equities
or claims; and
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upon delivery of such shares and payment therefor pursuant hereto, good and
valid title to such shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a custody agreement and
power of attorney (the "Custody Agreement and Power of Attorney" and,
together with all other similar agreements executed by the other Selling
Stockholders, the "Custody Agreements and Powers of Attorney") with [Snow
Becker Krauss P.C.], as custodian (the "Custodian"), for delivery under
this Agreement, certificates in negotiable form (with signature guaranteed
by a commercial bank or trust company having an office or correspondent in
the United States or a member firm of the New York or American Stock
Exchanges) representing the shares of Stock to be sold by the Selling
Stockholder hereunder, and the Selling Stockholder has duly and irrevocably
executed and delivered a power of attorney appointing the Custodian and one
or more other persons, as attorneys-in-fact, with full power of
substitution, and with full authority (exercisable by any one or more of
them) to execute and deliver this Agreement and to take such other action
as may be necessary or desirable to carry out the provisions hereof on
behalf of the Selling Stockholder.
(c) The Selling Stockholder has full right, power and authority to enter into
this Agreement and the Custody Agreement and Power of Attorney; the
execution, delivery and performance of this Agreement and the Custody
Agreement and Power of Attorney by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated
hereby and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder, if applicable, is
a party or by which the Selling Stockholder is bound or to which any of the
property or assets of the Selling Stockholder is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws
of the Selling Stockholder or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Selling Stockholder or the property or assets of the Selling Stockholder;
and, except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under the Exchange Act and applicable state securities
laws in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and
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<PAGE>
performance of this Agreement or the Custody Agreement and Power of
Attorney by the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and thereby.
(d) To the knowledge of such Selling Stockholder, the Registration Statement
and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus, when they become effective or are
filed with the Commission, as the case may be, do not and will not, as of
the applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(e) The Selling Stockholder has no reason to believe that the representations
and warranties of the Company contained in Section 1 hereof are not
materially true and correct, is familiar with the Registration Statement
and the Prospectus (as amended or supplemented) and has no knowledge of any
material fact, condition or information not disclosed in the Registration
Statement, as of the effective date, or the Prospectus (or any amendment or
supplement thereto), as of the applicable filing date, which has adversely
affected or may adversely affect the business of the Company and is not
prompted to sell shares of Common Stock by any information concerning the
Company which is not set forth in the Registration Statement and the
Prospectus.
(f) The Selling Stockholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 1,500,000 shares of
the Firm Stock and each Selling Stockholder hereby agrees to sell the number of
shares of the Firm Stock set
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<PAGE>
opposite the name of such Selling Stockholder in Schedule 2 hereto, severally
and not jointly, to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule l hereto. Each
Underwriter shall be obligated to purchase from the Company, and from each
Selling Stockholder, that number of shares of the Firm Stock which represents
the same proportion of the number of shares of the Firm Stock to be sold by the
Company, and by each Selling Stockholder, as the number of shares of the Firm
Stock set forth opposite the name of such Underwriter in Schedule l represents
of the total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase obligations of
the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Company and certain of the Selling Stockholders grant
to the Underwriters an option to purchase up to 300,000 shares of Option Stock.
Such option is granted solely for the purpose of covering overallotments in the
sale of Firm Stock and is exercisable as provided in Section 5 hereof. Shares of
Option Stock shall be purchased severally for the account of the Underwriters in
proportion to the number of shares of Firm Stock set opposite the name of such
Underwriters in Schedule l and Schedule 2 hereto. The respective purchase
obligations of each Underwriter with respect to the Option Stock shall be
adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Stock other than in 100 share amounts. The price of both the
Firm Stock and any Option Stock shall be ____ per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on the First Delivery Date or the
Second Delivery Date (as hereinafter defined), as the case may be, except upon
payment for all the Stock to be purchased on such Delivery Date as provided
herein.
4. Offering of Stock by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of Chadbourne & Parke LLP, 30
Rockefeller Plaza, New York, New York 10112, at 10:00 A.M., New York City time,
on the third full business day following the date of this Agreement or at such
other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the First Delivery Date. On the First Delivery Date, the Company and the Selling
Stockholders shall deliver or cause to be delivered
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<PAGE>
certificates representing the Firm Stock to the Representatives for the account
of each Underwriter against payment to or upon the order of the Company and the
Selling Stockholders of the purchase price by wire transfer of immediately
available funds to a bank account designated by the Company and one or more bank
accounts designated by the Selling Stockholders. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Stock shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company and the Selling Stockholders shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 3 may be exercised, in whole or in
part, at any time and from time to time, upon written notice being given to the
Company and the Selling Stockholders by the Representatives. Such notice shall
set forth the aggregate number of shares of Option Stock as to which the option
is being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as the "Second Delivery Date" and the First Delivery
Date and the Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the
Representatives, the Company and the Selling Stockholders) at 10:00 A.M., New
York City time, on the Second Delivery Date. On the Second Delivery Date, the
Company and the Selling Stockholders shall deliver or cause to be delivered the
certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Selling
Stockholders of the purchase price by wire transfer of immediately available
funds to a bank account designated by the Company and one or more bank accounts
designated by the Selling Stockholders. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition
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<PAGE>
of the obligation of each Underwriter hereunder. Upon delivery, the Option Stock
shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Company and the Selling Stockholders shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Representatives and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel for the
Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the following
documents as the Representatives shall reasonably request: (i) conformed
copies of the Registration Statement as originally filed with the
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<PAGE>
Commission and each amendment thereto and (ii) each Preliminary Prospectus,
the Prospectus and any amended or supplemented Prospectus; and, if the
delivery of a prospectus is required at any time after the Effective Time
in connection with the offering or sale of the Stock or any other
securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an 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 when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary to amend or supplement the Prospectus in order to
comply with the Securities Act, to notify the Representatives and, upon
their request, to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as the Representatives may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may,
in the reasonable judgment of the Company or the Representatives, be
required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the Registration
Statement or supplement to the Prospectus or any Prospectus pursuant to
Rule 424 of the Rules and Regulations, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing, which consent shall not be unreasonably
withheld;
(f) As soon as practicable after the Effective Date (but in no event later than
15 months after the Effective Date), to make generally available to the
Company's security holders and to deliver to the Representatives an
earnings statement of the Company (which need not be audited) complying
with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish to the
Representatives copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange upon which the Common Stock may be listed pursuant to requirements
of or
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<PAGE>
agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the Representatives may
reasonably request to qualify the Stock for offering and sale under the
securities laws of such jurisdictions as the Representatives may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock;
(i) Without the prior written consent of Lehman Brothers Inc. on behalf of the
Representatives, whether directly or indirectly, for a period of 120 days
subsequent to the date of the Prospectus, not to (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option or equity plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights), or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans
existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Common Stock or other securities, in cash or
otherwise; and to cause each officer and director of the Company to furnish
to the Representatives, prior to the First Delivery Date, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree that without
the prior written consent of Lehman Brothers Inc. on behalf of the
Representatives, whether directly or indirectly, for a period of 120 days
subsequent to the date of the Prospectus, not to (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option or equity plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights), or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans
existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the
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<PAGE>
economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise.
(j) Prior to the Effective Date, to apply for the inclusion of the Stock for
quotation on the Nasdaq National Market and to use its best efforts to
effect such quotation, subject only to official notice of issuance, prior
to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock being sold by the
Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that the Company shall
not become an "investment company" within the meaning of such term under
the Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
7. Further Agreements of the Selling Stockholders. Each Selling Stockholder
agrees:
(a) Without the prior written consent of Lehman Brothers Inc. on behalf of the
Representatives, whether directly or indirectly, for a period of 120 days
subsequent to the date of the Prospectus, not to (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2) enter
into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
(b) That the Stock to be sold by the Selling Stockholder hereunder, which is
represented by the certificates held in custody for the Selling
Stockholder, is subject to the interest of the Underwriters and the other
Selling Stockholders thereunder, that the arrangements made by the Selling
Stockholder for such custody are to that extent irrevocable, and that the
obligations of the Selling Stockholder hereunder shall not be terminated by
any act of the Selling Stockholder, by operation of law, by the death or
incapacity of any individual Selling Stockholder or, in the case of a
trust, by the death or incapacity of any
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<PAGE>
executor or trustee or the termination of such trust, or the occurrence of
any other event.
(c) To deliver to the Representatives prior to the First Delivery Date a
properly completed and executed United States Treasury Department Form W-8
(if the Selling Stockholder is a non-United States person) or Form W-9 (if
the Selling Stockholder is a United States person.)
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and
any other related documents in connection with the offering, purchase, sale and
delivery of the stock; (e) the costs of delivering and distributing the Custody
Agreements and Powers of Attorney; (f) the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Stock; (g) any applicable listing or other fees, including
the fees for quotation of the Common Stock on the Nasdaq National Market; (h)
the fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related reasonable fees and
expenses of counsel to the Underwriters not to exceed $2,500); and (i) all other
costs and expenses incident to the performance of the obligations of the Company
and the Selling Stockholders under this Agreement; provided that, except as
provided in this Section 8 and in Section 13 the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
9. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholders contained herein, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder, and to each of
the following additional terms and conditions:
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(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company on or
prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Chadbourne & Parke LLP,
counsel for the Underwriters, is material or omits to state a fact which,
in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Custody Agreements
and Powers of Attorney, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby, shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(d) Snow Becker Krauss P.C. shall have furnished to the Representatives its
written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification and has all power and authority necessary to own or hold
its properties and conduct the business in which it is engaged; and the
Company has no subsidiaries.
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(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the shares of Stock being delivered on such Delivery Date) have been
duly and validly authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus;
(iii) There are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any shares of the
Stock pursuant to the Company's certificate of incorporation or by-laws or, to
the best of such counsel's knowledge, any agreement or other instrument to which
the Company is a party or by which it may be bound;
(iv) To the best of such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending to which
the Company is a party or of which any property or assets of the Company is the
subject which, if determined adversely to the Company, might have a Material
Adverse Effect; and, to the best of such counsel's knowledge and other than as
set forth in the Prospectus, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(v) The Registration Statement was declared effective under the Securities
Act as of the date and time specified in such opinion, the Prospectus was filed
with the Commission pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified therein and no stop
order suspending the effectiveness of the Registration Statement has been issued
and, to the best of such counsel's knowledge, no proceeding for that purpose is
pending or threatened by the Commission;
(vi) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to such Delivery
Date (other than the financial statements and related schedules 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 the Rules and
Regulations;
(vii) To the best of such counsel's knowledge, there are no contracts
or other documents which are required to be described in the Prospectus or
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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 exhibits to the
Registration Statement or incorporated therein by reference as permitted by the
Rules and Regulations;
(viii) This Agreement has been duly authorized, executed and delivered
by the Company;
(ix) The issue and sale of the shares of Stock being delivered on such
Delivery Date by the Company and the compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is subject, nor will
such actions result in any violation of the provisions of the certificate of
incorporation or by-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its properties or assets; and,
except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, by the Company and the consummation
of the transactions contemplated hereby; and
(x) To the best of such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be
owned by such person, or the right (other than rights which have been waived or
satisfied or not yet exercised) to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any
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securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
In rendering such opinion, such counsel may state that its opinion is limited to
matters governed by the Federal laws of the United States of America, the laws
of the State of New York and the General Corporation Law of the State of
Delaware. Such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated such Delivery Date,
in form and substance satisfactory to the Representatives, to the effect that
(x) such counsel has acted as counsel to the Company on a regular basis
(although the Company is also represented by other outside counsel with respect
to intellectual property and Food and Drug Administration ("FDA") matters and
such counsel is not rendering an opinion with respect to matters relating
thereto), has acted as counsel to the Company in connection with previous
financing transactions and has acted as counsel to the Company in connection
with the preparation of the Registration Statement, and (y) based on the
foregoing, no facts have come to the attention of such counsel which lead it to
believe that the Registration Statement, as of 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 in order to make the statements therein not
misleading, or that the Prospectus contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing opinion and statement
may be qualified by a statement to the effect that such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus or express any view as
to the financial statements and schedules and other financial data contained
therein.
(e) Snow Becker Krauss P.C. shall have furnished to the Representatives its
written opinion, as special counsel to the Selling Stockholders, which
opinion shall be addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) Each Selling Stockholder that is not an individual has full
right, power and authority to enter into this Agreement and the Custody
Agreement and Power of Attorney; to the best of such counsel's knowledge,
no consent, approval, authorization or order of any court or governmental
agency or body is required for the execution and delivery
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and performance of this Agreement and the Custody Agreement and Power of
Attorney by each Selling Stockholder and for the consummation by the
Selling Stockholders of the transactions contemplated thereby, except such
as have been obtained or made and are in full force and effect and such as
may be required by the NASD or under the Exchange Act and applicable state
securities laws;
(ii) This Agreement has been duly authorized, executed and delivered by or
on behalf of each Selling Stockholder;
(iii) A Custody Agreement and Power of Attorney have been duly
authorized, executed and delivered by each Selling Stockholder and constitute
valid and binding agreements of each Selling Stockholder, enforceable in
accordance with their respective terms;
(iv) To the best of such counsel's knowledge, immediately prior to the
First Delivery Date, each Selling Stockholder has good, valid and marketable
title to the shares of Stock to be sold by such Selling Stockholder under this
Agreement free and clear of all liens, encumbrances, equities or claims, and had
full right, power and authority to sell, assign, transfer and deliver such
shares to be sold by such Selling Stockholder hereunder; and
(v) Good and valid title to the shares of Stock to be sold by each Selling
Stockholder under this Agreement, free and clear of all liens, encumbrances,
equities or claims, has been transferred to each of the several Underwriters,
assuming the Underwriters acquire the shares of Stock from each such Selling
Stockholder without notice of any adverse claim as such term is used in Section
8-302 of the Uniform Commercial Code in effect in the State of New York.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the Delaware General Corporate Law and
(ii) in rendering the opinion in Section 9(e)(iv) above, rely upon a certificate
of each Selling Stockholder in respect of matters of fact as to ownership of and
liens, encumbrances, equities or claims on the shares of Stock sold by such
Selling Stockholder, provided that such counsel shall furnish copies thereof to
the Representatives and state that it believes that both the Underwriters and it
are justified in relying upon such certificate.
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(f) DePaoli & Frenkel, P.C. shall have furnished to the Representatives
its written opinion, as special counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) To the best of such counsel's knowledge, the Company has clear title to
the issued patents and pending patent applications described in Exhibit A to
such opinion. To the best of such counsel's knowledge, the licenses the Company
holds from the American Dental Association Health Foundation (the "ADAHF") do
not adversely affect the Company's right to or title in the issued patents or
pending patent applications described on Exhibit A to such opinion which patents
or pending patent applications are directed to Enamelon Proprietary Technology
(as defined in the Prospectus). To the best of such counsel's knowledge, there
are no further agreements, collaboration or other transactions between any other
business entity, university, government agency, institute or research group and
the Company which adversely affect the Company's right to or title in the issued
patents or pending patent applications described on Exhibit A to such opinion;
(ii) Assignments from the inventors to the Company have been filed with
United States Patent and Trademark Office for each of the issued patents and
pending patent applications described on Exhibit A to such opinion;
(iii) The issued patents described on Exhibit A to such opinion are
entitled to the presumption of validity under 35 U.S.C. (S) 282;
(iv) None of the issued patents described on Exhibit A to such opinion have
been revoked;
(v) The pending patent applications described on Exhibit A to such opinion
were properly prepared and filed;
(vi) All of the pending patent applications described on Exhibit A to such
opinion are being diligently pursued by the Company;
(vii) To the best of such counsel's knowledge, no activities of the
Company or others prior to the filing dates of any of the pending patent
applications described on Exhibit A to such opinion would constitute a bar or
otherwise adversely affect the patentability of the subject matter of any
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of the pending patent applications described on Exhibit A to such opinion. All
prior art and other information which is material to the examination of each of
the pending patent applications which is known to us has been or will be
disclosed to the United States Patent and Trademark Office. It is such counsel's
opinion, based on the prior art of which such counsel has knowledge, that the
United States Patent and Trademark Office can reasonably be expected to allow
the pending patent applications described on Exhibit A to such opinion;
(viii) Such counsel is not aware of any pending or threatened action,
suit, proceeding, or claim by others that the Company is infringing any patents,
patent rights or rights thereto of others, the existence of which could
reasonably be expected to have a material adverse effect on the business or
financial condition of the Company;
(ix) To the best of such counsel's knowledge, the conduct of the Company's
business as contemplated by the Prospectus included as part of the Registration
Statement does not and will not conflict with patents, patent rights or licenses
of others;
(x) To the best of such counsel's knowledge, the Company has not granted
any person any license or other rights to use in any manner any of the issued
patents or pending patent applications described on Exhibit A to such opinion,
nor has the Company granted to any person any sub-license or other rights to use
in any manner the ADAHF Patented Technology (as defined in the Prospectus)
licensed to the Company and described in the ADAHF patents set forth on Exhibit
B to such opinion; and
(xi) To the extent they constitute a summary of legal matters, documents or
proceedings referred to therein, the statements in the Prospectus under the
captions "Summary--The Company;" Risk Factors--Dependence on Licensing
Agreements; Uncertain Ability to Protect Patents; Protection of Proprietary
Technology and Information; Evolving Product Formulations" and "Business--
Overview; ADAHF Patents and Licenses; and Patents, Trademarks and Other
Proprietary Information are accurate in all material respects and fairly
summarize in all material respects all matters referred to therein, and none of
the statements contained in the aforementioned portions of the Prospectus
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein, or necessary in order to make
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the statements therein, in light of the circumstances under which they
were made, not misleading.
(g) Covington & Burling shall have furnished to the Representatives, its
written opinion, as special counsel to the Company, addressed to the
Underwriters and dated such delivery date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) Based solely on the inquiry described in this opinion, such counsel is
of the opinion that the statements in "Risk Factors-- Compliance with the FDA
Monograph; Compliance with Other Government Regulation" and "Business--
Government Regulation" (the "Regulatory Portion") insofar as such statements
purport to summarize applicable provisions of the Federal Food Drug and Cosmetic
Act and the regulations promulgated thereunder, are accurate in all material
respects;
(ii) No information has come to such counsel's attention that causes such
counsel to believe (i) that the Regulatory Portion of the Registration
Statement, as of the date it was declared effective, 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
(ii) that the Regulatory Portion of the Prospectus, as of the date hereof,
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; and
(iii) There is no outstanding adverse judgment, injunction, decree or
order that has been issued by the FDA or brought on behalf of the FDA against
the Company, or any action, proceeding or investigation pending before the FDA
or, to the best of such counsel's knowledge, threatened by the FDA against the
Company, which, if subject to an unfavorable decision, ruling or finding, would
have a Material Adverse Effect on the Company.
(h) The Representatives shall have received from Chadbourne & Parke LLP,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such
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documents as they reasonably request for the purpose of enabling them to
pass upon such matters.
(i) At the time of execution of this Agreement, the Representatives shall have
received from BDO Seidman LLP a letter, in form and substance reasonably
satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, and (ii)
stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(j) With respect to the letter of BDO Seidman LLP referred to in the preceding
paragraph and delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letter"), the Company shall have
furnished to the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(k) The Company shall have furnished to the Representatives a certificate,
dated such Delivery Date, of its Chairman of the Board, its President or a
Vice President and its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the Company in
Section 1 are true and correct as of such Delivery Date; the
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Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 9(a) and 9(m) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion (A) as of the Effective Date, the Registration
Statement and Prospectus did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) since the
Effective Date no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the Prospectus.
(l) Each Selling Stockholder (or the Custodian or one or more attorneys-in-fact
on behalf of the Selling Stockholders) shall have furnished to the
Representatives on the Delivery Date a certificate, dated such Delivery
Date, signed by, or on behalf of, the Selling Stockholder (or the Custodian
or one or more attorneys-in-fact) stating that the representations,
warranties and agreements of the Selling Stockholder contained herein are
true and correct as of such Delivery Date and that the Selling Stockholder
has complied with all agreements contained herein to be performed by the
Selling Stockholder at or prior to such Delivery Date.
(m) (i) The Company shall not have sustained since the date of the latest
audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Company
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is, in the judgment of
the Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(n) Subsequent to the execution and delivery of this Agreement there shall not
have occurred any of the following: (i) trading in securities generally on
the New York Stock Exchange or the American Stock Exchange or in the over-
the-counter market, or trading in any securities of the Company on any
exchange or in the over-
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the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities, (iii) the United States shall have become
engaged in hostilities, or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) as to make it, in the
judgment of a majority in interest of the several Underwriters,
impracticable or inadvisable to proceed with the public offering or
delivery of the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(o) The Nasdaq National Market shall have approved the Stock for inclusion,
subject only to official notice of issuance.
(p) You shall have been furnished such additional documents and certificates as
you or counsel for the Underwriters may reasonably request related to this
Agreement and the transactions contemplated hereby.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained
(A) in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (B) in any blue sky
application or other document prepared or executed by the Company (or based
upon any written
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information furnished by the Company) specifically for the purpose of
qualifying any or all of the Stock under the securities laws of any state
or other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company
shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, or in any Blue Sky Application, in reliance upon
and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise
have to any Underwriter or to any officer, employee or controlling person
of that Underwriter.
(b) The Selling Stockholders, severally in proportion to the number of shares
of Stock to be sold by each of them hereunder, shall indemnify and hold
harmless each Underwriter, its officers and employees, and each person, if
any, who controls any Underwriter within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the
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Registration Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse each Underwriter, its officers and employees and each such
controlling person for any legal or other expenses reasonably incurred by
that Underwriter, its officers and employees or controlling person in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Selling Stockholders shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in
any such amendment or supplement in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of any Underwriter specifically
for inclusion therein. Notwithstanding the foregoing sentence, the
aggregate liability of any Selling Stockholder pursuant to the provisions
of this paragraph shall be limited to an amount equal to the aggregate
purchase price, less underwriting discounts and commissions, received by
such Selling Stockholder from the sale of such Selling Stockholder's Stock
hereunder. The foregoing indemnity agreement is in addition to any
liability which the Selling Stockholders may otherwise have to any
Underwriter or any officer, employee or controlling person of that
Underwriter.
(c) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, its officers and employees, each of its directors
(including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company), and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or
any such director, officer or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in
any Preliminary Prospectus, the Registration Statement or the Prospectus or
in any amendment or supplement thereto, or (B) in any Blue Sky Application
or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information
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concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person
in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses
are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any
such director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under this Section 10 of
notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 10 except to the extent
it has been materially prejudiced by such failure and, provided further,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 10. If any such claim or action shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 10 for any legal or other
expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than reasonable costs of investigation; provided,
however, that the Representatives shall have the right to employ one
counsel in addition to local counsel to represent jointly the
Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising
out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company or any Selling Stockholder under this
Section 10 if, in the reasonable judgment of the Representatives, it is
advisable for the Representatives and those Underwriters, officers,
employees and controlling persons to be jointly represented by separate
counsel and in that event the fees and expenses of such separate counsel
shall be paid by the Company or Selling Stockholders. No indemnifying
party shall (i) without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual
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or potential parties to such claim or action) unless, such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for any reason
be unavailable to or insufficient to hold harmless an indemnified party
under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party
as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on
the one hand and the Underwriters on the other from the offering of the
Stock 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 the Company and the Selling Stockholders on the
one hand and the Underwriters on the other with respect to the statements
or omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations; provided that no Selling Stockholder shall be required to
contribute in excess of the amount of the purchase price for the sale of
Stock of such Selling Stockholder less underwriting discounts and
commissions. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other with respect
to such offering shall be deemed to be in the same proportion as the total
net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the shares of the Stock under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied
by the Company, the Selling Stockholders or the Underwriters, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it
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would not be just and equitable if contributions pursuant to this Section
10(e) 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 herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be
deemed to include, for purposes of this Section 10(e), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10(e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. 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 to contribute as provided in this Section 10(e)
are several in proportion to their respective underwriting obligations and
not joint.
(f) The Underwriters severally confirm and the Company acknowledges that the
statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning over-
allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and
the Prospectus.
11. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set opposite the name of each remaining non-defaulting Underwriter in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining nondefaulting Underwriters in Schedule 1
hereto; provided, however, that the remaining nondefaulting Underwriters shall
not be obligated to purchase any of the Stock on such Delivery Date if the total
number of shares of the Stock which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such date exceeds 9.09% of the total number of
shares of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the
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number of shares of the Stock which it agreed to purchase on such Delivery Date
pursuant to the terms of Section 3. If the foregoing maximums are exceeded, the
remaining non-defaulting Underwriters, or those other underwriters satisfactory
to the Representatives who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them, all
the Stock to be purchased on such Delivery Date. If the remaining Underwriters
or other underwriters satisfactory to the Representatives do not elect to
purchase the shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such Delivery Date, this Agreement (or, with respect to
the Second Delivery Date, the obligation of the Underwriters to purchase, and of
the Company to sell, the Option Stock) shall terminate without liability on the
part of any non-defaulting Underwriter or the Company or the Selling
Stockholders, except that the Company will continue to be liable for the payment
of expenses to the extent set forth in Sections 8 and 13. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1 hereto
who, pursuant to this Section 11, purchases Firm Stock which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Firm Stock
if, prior to that time, any of the events described in Sections 9(m) or 9(n),
shall have occurred or if the Underwriters shall decline to purchase the Stock
for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company or any
Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or any Selling Stockholder(s) to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholder(s)
is not fulfilled, the Company and the Selling Stockholder(s) will severally, in
proportion to the number of shares of Stock to be sold,
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<PAGE>
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Stock, and upon demand the
Company and the Selling Stockholder(s) shall pay its proportionate share of the
full amount thereof to the Representative(s). If this Agreement is terminated
pursuant to Section 12 by reason of the default of one or more Underwriters,
neither the Company nor any Selling Stockholder shall be obligated to reimburse
any defaulting Underwriter on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Lehman Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax:
212-526-6588), with a copy, in the case of any notice pursuant to Section
10(d), to the Director of Litigation, Office of the General Counsel, Lehman
Brothers Inc., Three World Financial Center, 10th Floor, New York, NY
10285;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Dr. Steven R. Fox (Fax: 914-237-4024)
with a copy to Snow Becker Krauss P.C., 605 Third Avenue, New York, New
York 10158, Attention: Eric Honick, Esq.;
(c) if to any Selling Stockholders, shall be delivered or sent by mail,
telex or facsimile transmission to such Selling Stockholder at the address
set forth on Schedule 2 hereto with a copy to Snow Becker Krauss P.C., 605
Third Avenue, New York, New York 10158, Attention: Eric Honick, Esq.;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and
the Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Lehman Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by the
Custodian.
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15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 15, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York applicable to agreements made and to be
performed in the State of New York without regard to the conflict of law
provisions .
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
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20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement among the Company,
the Selling Stockholders and the Underwriters, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
ENAMELON, INC.
By:
----------------------
Name:
Title:
The Selling Stockholders named
in Schedule 2 to this Agreement
By:
--------------------------
Attorney-in-Fact
Accepted:
LEHMAN BROTHERS INC.
SBC WARBURG DILLON READ INC.
RODMAN & RENSHAW, INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: LEHMAN BROTHERS INC.
By:
-----------------------------
Authorized Representative
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SCHEDULE 1
Underwriters
- ------------
Number of Number of
Firm Shares Option Shares
----------- --------------
Lehman Brothers Inc.......................
SBC Warburg Dillon Read Inc...............
Rodman & Renshaw, Inc.....................
TOTAL
----------- -----------
<PAGE>
SCHEDULE 2
Number of Number of
Selling Stockholders Firm Shares Option Shares
-------------------- ------------ --------------
TOTAL
========== ===========
<PAGE>
SCHEDULE 3
