EXHIBIT 1.1
Draft of November 21, 1997
4,000,000 SHARES
TRIAD MEDICAL INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED DECEMBER ___, 1997
UNDERWRITING AGREEMENT
December ___, 1997
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
XXXXX XXXXXX INC.
WEDBUSH XXXXXX SECURITIES
As Representatives of the several Underwriters
c/o NATIONSBANC XXXXXXXXXX SECURITIES, INC.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. TRIAD Medical Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in SCHEDULE A (the
"Underwriters") an aggregate of 4,000,000 shares (the "Firm Shares") of its
common stock, par value $.001 per share ("Common Stock"). In addition, the
Company has granted to the Underwriters an option to purchase up to an
additional 600,000 shares (the "Optional Shares") of Common Stock, as provided
in Section 2. The Firm Shares and, if and to the extent such option is
exercised, the Optional Shares are herein sometimes collectively called the
"Shares." NationsBanc Xxxxxxxxxx Securities, Inc., Xxxxx Xxxxxx Inc. and Wedbush
Xxxxxx Securities have agreed to act as representatives of the several
Underwriters (in such capacity, the "Representatives") in connection with the
offering and sale of the Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-35449), which contains a form of prospectus to be used in connection with
the public offering and sale of the Shares. Such registration statement, as
amended, including the financial statements, exhibits and schedules thereto, in
the form in which it was declared effective by the Commission under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the "Securities Act"), including any information
deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A
or Rule 434 under the Securities Act, is called the "Registration Statement."
Any registration statement filed by the Company pursuant to Rule 462(b) under
the Securities Act is called the "Rule 462(b) Registration Statement," and from
and after the date and time of filing of the Rule 462(b) Registration Statement
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters to
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confirm sales of the Shares, is called the "Prospectus." All references in this
Agreement to the Registration Statement, the Rule 462(b) Registration Statement,
a preliminary prospectus, the Prospectus, or any amendments or supplements to
any of the foregoing, shall include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX").
The Company hereby confirms its agreements with the Underwriters as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents, warrants and covenants to each Underwriter
as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Registration Statement
and any Rule 462(b) Registration Statement have been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission's satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement is in effect
and no proceedings for such purpose have been instituted or are pending or, to
the best knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed complied in all
material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX, was identical (except as permitted by Regulation
S-T under the Securities Act) to the copy thereof delivered to the Underwriters
for use in connection with the offer and sale of the Shares. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective, complied in
all material respects with the applicable requirements of the Securities Act 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. The Prospectus, as amended or supplemented, as of its
date and at all subsequent times, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties set forth in
the two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
the Representative expressly for use therein. There are no contracts,
instruments or other documents required to be described or referred to in the
Prospectus or to be filed as exhibits to the Registration Statement which have
not been described or referred to or filed as required.
(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company has
delivered to each of the Representatives one complete manually signed copy of
the Registration Statement and of each consent and certificate of experts filed
as a part thereof, and conformed copies of the Registration
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Statement (without exhibits) and preliminary prospectuses and the Prospectus, as
amended or supplemented, in such quantities and at such places as each of the
Representatives has requested for each of the Underwriters.
(c) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The Company has not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of the Underwriters' distribution of
the Shares, any offering material in connection with the offering and sale of
the Shares other than a preliminary prospectus, the Prospectus or the
Registration Statement.
(d) THE UNDERWRITING AGREEMENT. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as that enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by general
equitable principles.
(e) AUTHORIZATION OF THE SHARES. The Shares to be purchased by the
Underwriters from the Company have been duly authorized for issuance and sale
pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(f) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights as have been
duly waived. There is no holder of any securities of the Company or any other
person who has the right, contractual or otherwise, to cause the Company to sell
or otherwise issue to him or her, or permit him or her to underwrite the sale
of, any of the Shares.
(g) NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries (including each
of the entities identified as "Founding Companies" in SCHEDULE B, each of which
(together with any of its subsidiaries) will become a subsidiary of the Company
on the Closing Date pursuant to the acquisitions to be consummated on the First
Closing Date (as herein defined) as described in the Registration Statement (the
"Acquisitions")) (collectively, the "Subsidiaries"), considered as one entity
(any such change is called a "Material Adverse Change"); (ii) the Company and
the Subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not in
the ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or
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made by the Company or, except for dividends paid to the Company or any of the
other Subsidiaries, by any of the Subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of the Subsidiaries of any class
of capital stock.
(h) INDEPENDENT ACCOUNTANTS. Xxxxxx Xxxxxxxx LLP, who have expressed their
opinions with respect to the historical financial statements (which term as used
in this Agreement includes the related notes thereto) filed with the Commission
as a part of the Registration Statement and included in the Prospectus, are
independent public or certified public accountants as required by the Securities
Act.
(i) PREPARATION OF THE FINANCIAL STATEMENTS. The historical financial
statements filed with the Commission as a part of the Registration Statement and
included in the Prospectus present fairly in all material respects the financial
position of each of the Company, TRIAD Holdings, Inc. and its subsidiaries,
Healthcare Technology Delivery, Inc. and its subsidiaries, Sun Medical, Inc.,
Custom Medical Specialties, Inc., Kentec Medical, Inc., Products for Surgery,
Inc. and its subsidiaries, MegaTech Medical, Inc., Omni Medical, Inc. and PCI
Medical, Inc. as of and at the respective dates indicated and the results of
each such company's (and, in the case of each of TRIAD Holdings, Inc.,
Healthcare Technology Delivery, Inc. and Products for Surgery, Inc., their
respective subsidiaries) operations and cash flows for the periods specified and
on the basis described therein, respectively. Such financial statements have
been prepared in conformity with generally accepted accounting principles as
applied in the United States on a consistent basis throughout the periods
involved, except as may be expressly stated in the respective related notes
thereto. The pro forma combined financial statements of the Company and the
Founding Companies, together with the related notes, as set forth in the
Registration Statement, present fairly the information shown therein, have been
prepared in accordance with the applicable provisions of Article 11 of
Regulation S-X promulgated by the Commission with respect to pro forma financial
statements and have been properly compiled on the pro forma bases described
therein, and in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein. No other financial statements or supporting schedules, other than the
Financial Data Schedule required by Item 601(c) of Regulation S-K under the
Securities Act, are required to be included in the Registration Statement. The
financial data set forth in the Prospectus under the captions "Prospectus
Summary--Summary Unaudited Pro Forma Combined Financial Data," "Prospectus
Summary--Summary Historical Financial Data for Accounting Acquirer,"
"Capitalization" and "Selected Historical and Pro Forma Combined Financial Data"
fairly present the information set forth therein on a basis consistent with that
of the audited financial statements or the pro forma combined financial
statements, as the case may be, contained in the Registration Statement.
(j) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS SUBSIDIARIES.
Each of the Company and the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and (i) in the case of the Company, to enter into and perform
its obligations under this
4
Agreement and to issue, sell and deliver the Shares to the Underwriters
hereunder and (ii) in the case of the Company and each Subsidiary, as
applicable, to enter into and perform its obligations under each of the
agreements relating to the Acquisitions, which have been included as exhibits to
the Registration Statement (the "Acquisition Agreements") and to carry out the
provisions thereof. Each of the Company and each Subsidiary is duly qualified as
a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material Adverse Change. All
of the issued and outstanding capital stock of each Subsidiary (upon giving
effect to the Acquisitions) has been duly authorized and validly issued, is
fully paid and nonassessable and on the closing of the Acquisitions will be
owned by the Company, directly or through one of the other Subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, equity
or claim. Upon giving effect to the Acquisitions, the Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the Subsidiaries.
(k) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The authorized, issued
and outstanding capital stock of the Company is (after giving effect to the
closing of the Acquisitions and the issuance of the shares of Common Stock
contemplated by the Acquisition Agreements and the issuance of the Shares
pursuant to the terms of this Agreement) as set forth in the Prospectus under
the caption "Capitalization" (other than for subsequent issuances, if any,
pursuant to employee benefit plans described in the Prospectus or upon exercise
of outstanding options or warrants described in the Prospectus). The authorized,
issued and outstanding capital stock of the Company (including the Common Stock)
conform in all material respects to the descriptions thereof contained in the
Prospectus. All of the issued and outstanding shares of Common Stock (other than
the Shares) outstanding as of the First Closing Date (including, without
limitation, the shares of Common Stock to be issued in connection with the
Acquisitions) will have been, as of the First Closing Date, duly authorized and
validly issued, and will be, as of the First Closing Date, fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common Stock as of the First
Closing Date will have been issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company or any of the Subsidiaries other than those
described in the Prospectus. The description of the Company's stock option and
other stock plans or arrangements, and the options or other rights granted
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights. The form of certificate used to evidence the Common Stock is
in due and proper form and complies with all applicable requirements of the
charter and bylaws of the Company and the General Corporation Law of the State
of Delaware.
(l) ACQUISITION AGREEMENTS. The execution and delivery of, and the
performance by the Company, the Founding Companies and the shareholders of each
Founding Company of their
5
respective obligations under, the Acquisition Agreements to which they are
parties, respectively, have been duly and validly authorized by the Company, the
Founding Companies and the shareholders of each Founding Company and each
Acquisition Agreement has been duly executed and delivered by the Company and
each Founding Company and Founding Company shareholder which is a party to such
agreement, and constitutes the legal, valid and binding agreement of the Company
and each such Founding Company and Founding Company shareholder, enforceable in
accordance with its terms, except as that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles and except as the enforceability of the provisions contained therein
relating to restrictions on competition may be limited under applicable law.
(m) STOCK EXCHANGE LISTING AND EXCHANGE ACT REGISTRATION. The Shares and
the other shares of Common Stock that will be outstanding on the Closing Date
have been approved for inclusion on the Nasdaq National Market, and the Common
Stock has been duly registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(n) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER AUTHORIZATIONS
OR APPROVALS REQUIRED. Neither the Company nor any of the Subsidiaries is in
violation of its respective charter, by-laws or other organizational documents.
Except as disclosed in the Registration Statement and the Prospectus, neither
the Company nor any of the Subsidiaries is in violation of any law,
administrative regulation or administrative or court decree applicable to the
Company or any Subsidiary or is in default (or, with the giving of notice or
lapse of time, would be in default) ("Default") in the performance of any
obligation, agreement or condition contained in any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other instrument to which
the Company or any of the Subsidiaries is a party or by which it or any of them
may be bound (including, without limitation, the Company's Revolving Credit
Facility with First National Bank of Chicago, as agent, and the lenders named
therein (the "Revolving Credit Facility")), or to which any of the property or
assets of the Company or any of the Subsidiaries is subject (each, an "Existing
Instrument"), except for such violations or Defaults as would not, individually
or in the aggregate, result in a Material Adverse Change. The Company's
execution, delivery and performance of this Agreement and consummation of the
transactions contemplated hereby and by the Prospectus and the Company's and
each of the Subsidiaries' execution and delivery of the Acquisition Agreements
to which it is a party and consummation of the transactions contemplated thereby
(i) has been duly authorized by all necessary corporate action and have not and
will not result in any violation of the provisions of the charter, by-laws or
other organizational documents of the Company or any Subsidiary, (ii) will not
conflict with or constitute a breach of, or Default or a Debt Repayment
Triggering Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, or require the consent of any
other party to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any Subsidiary. No consent, approval,
authorization or other order of, or registration or filing with, any
6
court or other governmental or regulatory authority or agency, is required for
(i) the Company's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the Prospectus and
(ii) the Company's and each of the Subsidiaries' execution and delivery of the
Acquisition Agreements to which it is a party and consummation of the
transactions contemplated thereby; except such as have been obtained or made by
the Company or the Subsidiary, as applicable, and are in full force and effect
under the Securities Act, the Exchange Act, applicable state securities or blue
sky laws, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and the rules thereunder, and from the National Association of Securities
Dealers, Inc. (the "NASD"). As used herein, a "Debt Repayment Triggering Event"
means any event or condition which gives, or with the giving of notice or lapse
of time would give, the holder (or any person acting on such holder's behalf) of
any note, debenture or other evidence of indebtedness (other than indebtedness
to be repaid on the First Closing Date with proceeds from the sale of the Firm
Shares hereunder, as contemplated under the caption "Use of Proceeds" in the
Prospectus) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of the Subsidiaries.
(o) NO MATERIAL ACTIONS OR PROCEEDINGS. Except as otherwise disclosed in
the Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened (i) against or
affecting the Company or any of the Subsidiaries, (ii) which has as the subject
thereof any officer or director of, or property owned or leased by, the Company
or any of the Subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility that such
action, suit or proceeding might be determined adversely to the Company or such
Subsidiary and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions contemplated by this
Agreement. No labor dispute with the employees of the Company or any of the
Subsidiaries, or, to the best of the Company's knowledge, with the employees of
any principal supplier, contractor or customer of the Company or any Subsidiary,
exists or, to the best of the Company's knowledge, is threatened or imminent,
except for any such disputes as would not, individually or in the aggregate,
result in a Material Adverse Change.
(p) INTELLECTUAL PROPERTY RIGHTS. The Company and each of the Subsidiaries
own or possess enforceable rights to use all trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") described in the Prospectus or
the Acquisition Agreements as being owned by them or any of them or material to
the conduct of their businesses as now conducted; and the expected expiration of
any of such Intellectual Property Rights would not result in a Material Adverse
Change. Neither the Company nor any of the Subsidiaries (A) has received a
notice of, or knows of any basis for, any conflict with the asserted rights of
others with respect to any of the foregoing or (B) has knowledge of any
infringement by any other person or entity with respect to any of the foregoing.
(q) ALL NECESSARY PERMITS, ETC. The Company and each Subsidiary possess
such valid and current certificates, authorizations, licenses or permits
(collectively, "Permits") issued by the
7
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, except for any Permits as to which the
failure to possess the same would not, individually or in the aggregate, result
in a Material Adverse Change. Neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or modification
of, or non-compliance with, any such Permit, nor does the Company or any
Subsidiary have any reason to believe that any such Permit will not be renewed,
except for such revocations, modifications, failures to be in compliance, or
non-renewals as would not, individually or in the aggregate, result in a
Material Adverse Change. The Company and each of the Subsidiaries have fulfilled
and performed all their respective current material obligations with respect to
such Permits, and no event has occurred that allows, or after notice or lapse of
time, or both, would allow, revocation or termination thereof or result in any
other material impairment of the rights of the holder of any such Permit; and
such Permits contain no restrictions that are materially burdensome to the
Company and the Subsidiaries.
(r) TITLE TO PROPERTIES. The Company and each of the Subsidiaries have
good and marketable title to all the properties and assets reflected as owned in
the financial statements referred to in Section 1(i) above or in the Acquisition
Agreements, in each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except as described in
the Registration Statement and the Prospectus and except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by the
Company or such Subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or any Subsidiary are held
under valid and enforceable leases, with such exceptions as are not material and
do not materially interfere with the use made or proposed to be made of such
real property, improvements, equipment or personal property by the Company or
such Subsidiary.
(s) TAX LAW COMPLIANCE. Except as disclosed in the Registration Statement
and the Prospectus, the Company and each of the Subsidiaries (i) have filed in a
timely manner all federal, state and foreign income and franchise tax returns
required to be filed by them (or have properly requested extensions thereof),
which returns are complete and accurate, and (ii) have paid all taxes required
to be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them, except where the failure
to do so would not, individually or in the aggregate, result in a Material
Adverse Change. The Company and each Subsidiary have made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 1(i) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company or
any of the Subsidiaries, as applicable, has not been finally determined. Neither
the Company nor any of the Subsidiaries will incur any material federal or state
income tax liability by reason of any of the Acquisitions.
(t) COMPANY NOT AN "INVESTMENT COMPANY." The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Company is not, and after receipt of payment
for the Shares will not be, an
8
"investment company" within the meaning of Investment Company Act and will
conduct its business in a manner so that it will not become subject to the
Investment Company Act.
(u) INSURANCE. Each of the Company and the Subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and the Subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes, and all such policies are in full force and effect. The Company and
each of the Subsidiaries are in compliance with the terms of all such policies
and instruments in all material respects. The Company has no reason to believe
that it or any Subsidiary will not be able to (i) renew its existing insurance
coverage as and when such policies expire or (ii) obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a Material
Adverse Change. Neither of the Company nor any Subsidiary has been denied any
insurance coverage which it has sought or for which it has applied. There are no
material claims by the Company or any of the Subsidiaries under any insurance
policy or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause.
(v) NO PRICE STABILIZATION OR MANIPULATION. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Shares.
(w) RELATED PARTY TRANSACTIONS. There are no business relationships or
related-party transactions involving the Company or any Subsidiary or any other
person required to be described in the Prospectus which have not been described
as required.
(x) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither the Company nor
any of the Subsidiaries nor, to the best of the Company's knowledge, any
employee or agent of the Company or any Subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(y) ACCOUNTING CONTROLS. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i) its
transactions and those of the Subsidiaries are executed in accordance with
management's general or specific authorization; (ii) its transactions and those
of the Subsidiaries are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain accountability for assets; (iii)
access to its assets and those of the Subsidiaries is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for its assets and those of the Subsidiaries is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The
9
Company's and each of the Subsidiaries' accounting systems and other
computer-based information systems are currently fully functional and capable of
functioning in the year 2000 and beyond or the software codes utilized therein
are capable of being converted to provide full functionality in the year 2000
and beyond without material expense to the Company or any of the Subsidiaries
and without any significant interruption to or interference with the business
operations or administration of the Company or any of the Subsidiaries.
(z) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as would not, individually
or in the aggregate, result in a Material Adverse Change, (i) neither the
Company nor any of the Subsidiaries is in violation of any federal, state, local
or foreign law or regulation relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, "Materials of Environmental Concern"), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company or any of the Subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of the Subsidiaries received any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that the Company or any of the Subsidiaries is in
violation of any Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority with respect to which the
Company or any Subsidiary has received notice, no investigation with respect to
which the Company or any Subsidiary has received written notice, and no written
notice by any person or entity alleging potential liability for investigatory
costs, cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties arising out
of, based on or resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned, leased or operated
by the Company or any of the Subsidiaries, now or in the past (collectively,
"Environmental Claims"), pending or, to the best of the Company's knowledge,
threatened against the Company or any of the Subsidiaries or any person or
entity whose liability for any Environmental Claim the Company or any of the
Subsidiaries has retained or assumed either contractually or by operation of
law; and (iii) to the best of the Company's knowledge, there are no past or
present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could result
in a violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or any of the Subsidiaries or against
any person or entity whose liability for any Environmental Claim the Company or
any of the Subsidiaries has retained or assumed either contractually or by
operation of law.
(aa) ERISA COMPLIANCE. Except as disclosed in the Registration Statement
and the Prospectus, (i) the Company and the Subsidiaries and any "employee
benefit plan" (as defined under
10
the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, "ERISA"))
established or maintained by the Company, any of the Subsidiaries or their
"ERISA Affiliates" (as defined below), respectively, are in compliance in all
material respects with ERISA, (ii) no "reportable event" (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, the
Subsidiaries or any of their ERISA Affiliates, (iii) no "employee benefit plan"
established or maintained by the Company, any of the Subsidiaries or any of
their ERISA Affiliates, respectively, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as defined
under ERISA), (iv) neither the Company, any of the Subsidiaries nor any of their
ERISA Affiliates, respectively, has incurred or reasonably expects to incur any
liability under (A) Title IV of ERISA with respect to termination of, or
withdrawal from, any "employee benefit plan" or (B) Sections 412, 4971, 4975 or
4980B of the Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the "Code") and (v) each "employee benefit
plan" established or maintained by the Company, any of the Subsidiaries or any
of their ERISA Affiliates, respectively that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such qualification,
except for such failures to be in compliance, occurrences, unfunded benefit
liabilities, liabilities or failures to qualify as would not, individually or in
the aggregate, result in a Material Adverse Change. "ERISA Affiliate" means,
with respect to the Company or a Subsidiary, any member of any group of
organizations described in Section 414(b),(c),(m) or (o) of the Code of which
the Company or such Subsidiary is a member.
Any certificate signed by an officer of the Company and delivered to any
Representative or to counsel for the Underwriters on the First Closing Date or
the Second Closing Date in connection with this Agreement or any of the
transactions contemplated hereby shall be deemed to be a representation and
warranty by the Company to each Underwriter as to the matters set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
THE FIRM SHARES. The Company agrees to issue and sell to the several
Underwriters the Firm Shares upon the terms herein set forth. On the basis of
the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company the respective number of
Firm Shares set forth opposite their names on SCHEDULE A. The purchase price per
Firm Common Share to be paid by the several Underwriters to the Company shall be
$[___] per share.
THE FIRST CLOSING DATE. Delivery of certificates for the Firm Shares to be
purchased by the Underwriters and payment therefor shall be made at the offices
of NationsBanc Xxxxxxxxxx Securities, Inc., 0 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx (or such other place as may be agreed to by the Company and the
Representatives) at 9:00 a.m., New York time, on [______________], 1997, or such
other time and date not later than 1:30 p.m. New York time , on [_____________],
1997 as the Representatives shall designate by notice to the Company (the time
and date of such closing are called the "First Closing Date"). The Company
hereby acknowledges
11
that circumstances under which the Representatives may provide notice to
postpone the First Closing Date as originally scheduled include, but are in no
way limited to, any determination by the Company or the Representatives to
recirculate to the public copies of an amended or supplemented Prospectus or a
delay as contemplated by the provisions of Section 10.
THE OPTIONAL SHARES; THE SECOND CLOSING DATE. In addition, on the basis of
the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 600,000 Optional Shares from the Company at the purchase
price per share to be paid by the Underwriters for the Firm Shares. The option
granted hereunder is for use by the Underwriters solely in covering any
over-allotments in connection with the sale and distribution of the Firm Shares.
The option granted hereunder may be exercised at any time (but not more than
once) upon notice by the Representatives to the Company, which notice may be
given at any time within 30 days from the date of this Agreement. Such notice
shall set forth (i) the aggregate number of Optional Shares as to which the
Underwriters are exercising the option, (ii) the names and denominations in
which the certificates for the Optional Shares are to be registered and (iii)
the time, date and place at which such certificates will be delivered (which
time and date may be simultaneous with, but not earlier than, the First Closing
Date; and in such case the term "First Closing Date" shall refer to the time and
date of delivery of certificates for the Firm Shares and the Optional Shares).
Such time and date of delivery, if subsequent to the First Closing Date, is
called the "Second Closing Date" and shall be determined by the Representatives
and shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Optional Shares are to be purchased,
each Underwriter agrees, severally and not jointly, to purchase the number of
Optional Shares (subject to such adjustments to eliminate fractional shares as
the Representatives may determine) that bears the same proportion to the total
number of Optional Shares to be purchased as the number of Firm Shares set forth
on SCHEDULE A opposite the name of such Underwriter bears to the total number of
Firm Shares. The Representatives may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to the Company.
PUBLIC OFFERING OF THE SHARES. The Representatives hereby advise the
Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectus, their respective portions of the Shares as soon
after this Agreement has been executed and the Registration Statement has been
declared effective as the Representatives, in their judgment, have determined is
advisable and practicable.
PAYMENT FOR THE SHARES. Payment for the Shares shall be made at the First
Closing Date (and, if applicable, at the Second Closing Date) by wire transfer
of immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for their
respective own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Shares and any Optional Shares the Underwriters
12
have agreed to purchase. NationsBanc Xxxxxxxxxx Securities, Inc., individually
and not as the Representative of the Underwriters, may (but shall not be
obligated to) make payment for any Shares to be purchased by any Underwriter
whose funds shall not have been received by the Representatives by the First
Closing Date or the Second Closing Date, as the case may be, for the account of
such Underwriter, but any such payment shall not relieve such Underwriter from
any of its obligations under this Agreement.
DELIVERY OF THE SHARES. The Company shall deliver, or cause to be
delivered, to the Representative for the accounts of the several Underwriters
certificates for the Firm Shares at the First Closing Date, against payment by
wire transfer of immediately available funds of the aggregate purchase price
therefor. The Company shall also deliver, or cause to be delivered, to the
Representative for the accounts of the several Underwriters, certificates for
the Optional Shares the Underwriters have agreed to purchase at the First
Closing Date or the Second Closing Date, as the case may be, against payment by
wire transfer of immediately available funds of the aggregate purchase price
therefor. The certificates for the Shares shall be in definitive form and
registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than 12:01 p.m. on
the second business day following the date the Shares are released by the
Underwriters for sale to the public, the Company shall deliver or cause to be
delivered copies of the Prospectus in such quantities and at such places as the
Representatives shall reasonably request.
SECTION 3. ADDITIONAL COVENANTS.
The Company further covenants and agrees with each Underwriter as follows:
(a) REPRESENTATIVE'S REVIEW OF PROPOSED AMENDMENTS AND SUPPLEMENTS. During
such period beginning on the date hereof and ending on the later of the First
Closing Date or such date, as in the opinion of counsel for the Underwriters,
the Prospectus is no longer required by law to be delivered in connection with
sales by an Underwriter or dealer (the "Prospectus Delivery Period"), prior to
amending or supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the Prospectus,
the Company shall furnish to the Representatives for review a copy of each such
proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which any Representative reasonably objects.
(b) SECURITIES ACT COMPLIANCE. After the date of this Agreement, the
Company shall advise the Representatives promptly (and, if requested by the
Representatives, confirm such advice
13
in writing) of: (i) the receipt of any comments of, or requests for additional
or supplemental information from, the Commission; (ii) the time and date of any
filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to any preliminary prospectus or the Prospectus; (iii)
the time and date that any post-effective amendment to the Registration
Statement becomes effective; and (iv) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or suspending the
use of any preliminary prospectus or the Prospectus, or of any proceedings to
remove, suspend or terminate from listing or quotation the Common Stock from any
securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings
for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company will use its best efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b) and 430A, as applicable, under
the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under such Rule 424(b) were received in a timely
manner by the Commission.
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER SECURITIES ACT
MATTERS. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the opinion of the Representatives or counsel for the Underwriters it
is otherwise necessary to amend or supplement the Prospectus to comply with law,
the Company agrees to promptly prepare (subject to Section 3(a) hereof), file
with the Commission and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS. The
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representatives may reasonably request.
(e) BLUE SKY COMPLIANCE. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Shares for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or Canadian provincial securities laws (if
applicable) of those jurisdictions designated by the Representatives, shall
comply with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the Shares. The
Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Shares for offering, sale or trading in any
14
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(f) USE OF PROCEEDS. The Company shall apply the net proceeds from the
sale of the Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectus.
(g) TRANSFER AGENT. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Stock.
(h) EARNINGS STATEMENT. As soon as practicable, the Company will make
generally available to its security holders and to the Representative an
earnings statement (which need not be audited) covering the twelve-month period
ending [_____________], 1998 that satisfies the provisions of Section 11(a) of
the Securities Act.
(i) PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with the Commission and the Nasdaq
National Market all reports and documents required to be filed under the
Exchange Act.
(j) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. During the
period of two years following the date of the Prospectus (the "Lock-Up Period"),
the Company will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities, Inc. (which consent may be withheld at the sole
discretion of NationsBanc Xxxxxxxxxx Securities, Inc.), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer, distribute,
establish an open "put equivalent position" within the meaning of Rule 16a-1(h)
under the Exchange Act or otherwise dispose of, or announce the offering of, or
file any registration statement under the Securities Act in respect of, any
shares of Common Stock, options or warrants to acquire shares of the Common
Stock or securities exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this Agreement with respect to
the Shares); PROVIDED, HOWEVER, that the Company may (i) issue shares of Common
Stock in connection with the Acquisitions, (ii) issue shares of Common Stock or
options to purchase Common Stock, or Common Stock upon exercise of options,
pursuant to any warrants, stock option, stock bonus or other stock plan or
arrangement described in the Prospectus, so long as the recipients of those
shares, options or shares issued upon exercise of such options, agree in writing
not to sell, offer, dispose of or otherwise transfer any such shares or options
during the Lock-Up Period without the prior written consent of NationsBanc
Xxxxxxxxxx Securities, Inc. pursuant to an agreement in form and substance
substantially the same as the form set forth in EXHIBIT D hereto (PROVIDED,
HOWEVER, that, if any such recipient is an employee of the Company or any
Subsidiary but is not an executive officer or director of the Company or a
holder of five percent or more of the outstanding shares of Common Stock at any
time during the first 180 days of the Lock-Up Period, then the Lock-Up Period
shall be deemed to have expired as of the end of that 180-day period), and (iii)
issue shares of Common Stock in connection with future acquisitions (provided
that, during the first year of the Lock-Up Period, no more than 3,000,000 shares
in the aggregate are issued in connection with such acquisitions without the
prior written
15
consent of NationsBanc Xxxxxxxxxx Securities, Inc.), so long as the recipients
of those shares agree in writing not to sell, offer or dispose of or otherwise
transfer any such shares during the first year of the Lock-Up Period without the
prior written consent of NationsBanc Xxxxxxxxxx Securities, Inc. pursuant to an
agreement in form and substance substantially the same as the form set forth in
Exhibit D hereto.
(k) FUTURE REPORTS TO THE REPRESENTATIVES. During the period of five years
hereafter the Company will furnish to the Representatives, in care of
NationsBanc Xxxxxxxxxx Securities, Inc., at 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, XX 00000, Attention: ________________________: (i) as soon as
practicable after the end of each fiscal year, when made available to
stockholders of the Company generally, copies of the Annual Report of the
Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the Nasdaq National Market or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its capital stock.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Shares (including all printing and engraving costs), (ii) all fees and expenses
of the registrar and transfer agent of the Common Stock, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Shares to the Underwriters, (iv) all fees and expenses of the Company's
counsel, independent public or certified public accountants and other advisors,
(v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement
(including financial statements, exhibits, schedules, consents and certificates
of experts), each preliminary prospectus and the Prospectus, and all amendments
and supplements thereto, and this Agreement, (vi) all filing fees, attorneys'
fees and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Shares for offer and sale under the
state securities or blue sky laws or the provincial securities laws of Canada,
and, if requested by the Representative, preparing and printing a "Blue Sky
Survey" or memorandum, and any supplements thereto, advising the Underwriters of
such qualifications, registrations and exemptions, (vii) the filing fees
incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Shares,
(viii) the fees and expenses associated with including the Shares on the Nasdaq
National Market, and (ix) the transportation and other expenses incurred by or
on behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares, and (x) all other fees, costs and expenses
referred to in Item 13 of Part II of the Registration Statement. Except
16
as provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Underwriters shall pay their own expenses, including the fees and disbursements
of their counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Shares as
provided herein on the First Closing Date and, with respect to the Optional
Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 1
hereof as of the date hereof and as of the First Closing Date as though then
made and, with respect to the Optional Shares, as of the Second Closing Date as
though then made, to the timely performance by the Company of its covenants and
other obligations hereunder, and to each of the following additional conditions:
(a) ACCOUNTANTS' COMFORT LETTER. On the date hereof, the Representatives
shall have received from Xxxxxx Xxxxxxxx LLP, independent public accountants for
the Company, a letter dated the date hereof addressed to the Underwriters, in
form and substance satisfactory to the Representatives, containing statements
and information of the type ordinarily included in accountant's "comfort
letters" to underwriters, delivered according to Statement of Auditing Standards
No. 72 (or any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial information contained in the
Registration Statement and the Prospectus (and the Representatives shall have
received an additional [___] conformed copies of such accountants' letter for
each of the several Underwriters).
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER; NO OBJECTION
FROM NASD. For the period from and after effectiveness of this Agreement and
prior to the First Closing Date and, with respect to the Optional Shares, the
Second Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act)
in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment
to the Registration Statement containing the information required by such
Rule 430A, and such post-effective amendment shall have become effective;
(ii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment to the Registration Statement, shall be in effect and no
proceedings for such purpose shall have been instituted or threatened by
the Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
17
(c) NO MATERIAL ADVERSE CHANGE OR RATINGS AGENCY CHANGE. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Shares, the Second Closing Date:
(i) in the judgment of the Representatives there shall not have
occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of the Company or
any of its subsidiaries by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(d) OPINION OF COUNSEL FOR THE COMPANY. On each of the First Closing Date
and the Second Closing Date, the Representative shall have received the
favorable opinion of Xxxxxx & Xxxxxx, L.L.P., counsel for the Company, dated as
of such Closing Date, the form of which is attached as EXHIBIT A (and the
Representatives shall have received an additional [___] conformed copies of such
counsel's legal opinion for each of the several Underwriters).
(e) OPINION OF GROUP COUNSEL FOR THE FOUNDING COMPANIES. On the First
Closing Date, the Representatives shall have received the favorable opinion of
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the Founding Companies
(other than TRIAD Holdings, Inc.) and of Stradling, Yocca, Xxxxxxx & Xxxxx,
counsel for TRIAD Holdings, Inc., each dated as of such Closing Date, the form
of which is attached as EXHIBIT B (and the Representatives shall have received
an additional [___] conformed copies of each of such counsel's legal opinion for
each of the several Underwriters).
(f) OPINION OF LOCAL COUNSEL FOR THE FOUNDING COMPANIES. On the First
Closing Date, the Representatives shall have received the favorable opinion of
each of the local counsel for each of the Founding Companies, as specified on
SCHEDULE C hereto, dated as of such Closing Date, the form of which is attached
as EXHIBIT C (and the Representatives shall have received an additional [____]
conformed copies of such counsel's legal opinion for each of the several
Underwriters).
(g) OPINION OF COUNSEL FOR THE UNDERWRITERS. On each of the First Closing
Date and the Second Closing Date, the Representatives shall have received the
favorable opinion of Xxxxx & Xxxxx, L.L.P., counsel for the Underwriters, dated
as of such Closing Date, with respect to the matters set forth in paragraphs 1,
9, 10, 11 and 12 (with respect to the captions "Description of Capital Stock"
and "Underwriting" under subparagraph (a) only) and the next-to-last paragraph
of EXHIBIT A (and the Representatives shall have received an additional [___]
conformed copies of such counsel's legal opinion for each of the several
Underwriters).
18
(h) ACQUISITIONS. On the First Closing Date, the Acquisitions shall have
been consummated on the terms set forth in the Registration Statement and the
Acquisition Agreements, without waiver or modification of any material terms or
provisions of any Acquisition Agreement, except as may be approved by the
Representatives.
(i) OFFICERS' CERTIFICATE. On each of the First Closing Date and the
Second Closing Date, the Representatives shall have received a written
certificate executed by the Chief Executive Officer or President of the Company
and the Chief Financial Officer of the Company, dated as of such Closing Date,
to the effect set forth in subsections (b)(ii) and (c)(ii) of this Section 5,
and further to the effect that:
(i) for the period from and after the date of this Agreement and
prior to such Closing Date, there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the Company
set forth in Section 1 of this Agreement are true and correct with the
same force and effect as though expressly made on and as of such Closing
Date; and
(iii) the Company has complied with all the agreements herein and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(j) BRING-DOWN COMFORT LETTER. On each of the First Closing Date and the
Second Closing Date, the Representatives shall have received from Xxxxxx
Xxxxxxxx LLP, independent public accountants for the Company, a letter dated
such date, in form and substance satisfactory to the Representatives, to the
effect that they reaffirm the statements made in the letter furnished by them
pursuant to subsection (a) of this Section 5, except that the specified date
referred to therein for the carrying out of procedures shall be no more than
three business days prior to the First Closing Date or Second Closing Date (and,
in any event, shall not be prior to the date of this Agreement), as the case may
be (and the Representatives shall have received an additional [___] conformed
copies of such accountants' letter for each of the several Underwriters).
(k) LOCK-UP AGREEMENT FROM CERTAIN STOCKHOLDERS OF THE COMPANY. On or
prior to the date hereof, the Company shall have furnished or caused to be
furnished to the Representatives an agreement in substantially the form of
EXHIBIT D hereto (with such modifications thereto as have, in certain
circumstances, been approved by the Representatives) from (i) each of the
directors and officers of the Company, (ii) each stockholder of the Company
(without giving effect to the Acquisitions) and each holder of a warrant or
option to purchase Common Stock and (iii) each person receiving shares of Common
Stock in any Acquisition, and such agreement shall be in full force and effect
on each of the First Closing Date and the Second Closing Date.
(l) ADDITIONAL DOCUMENTS. On or before each of the First Closing Date and
the Second Closing Date, the Representatives and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling
19
them to pass upon the issuance and sale of the Shares as contemplated herein, or
in order to evidence the accuracy of any of the representations and warranties,
or the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Shares, at any time prior to the
Second Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated by the Representatives pursuant to Section 5, Section 7, Section 10
or Section 11(i), (iv) or (v), or if the sale to the Underwriters of the Shares
on the First Closing Date is not consummated because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the
Representatives and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of (i) the
execution and delivery of this Agreement by all the parties hereto and (ii)
notification by the Commission to the Company and the Representatives of the
effectiveness of the Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company to any Underwriter, except that
the Company shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to
the Company or (c) any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS. The Company agrees to 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 or
the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such
20
settlement is effected with the written consent of the Company), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, including any information deemed to be a
part thereof pursuant to Rule 430A under the Securities Act, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to reimburse each
Underwriter and each such controlling person for any and all expenses (including
the reasonable fees and disbursements of counsel chosen by NationsBanc
Xxxxxxxxxx Securities, Inc.) as such expenses are reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; PROVIDED, HOWEVER, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Representatives expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and PROVIDED, FURTHER, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state
21
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectus (or any amendment or supplement thereto), in reliance
upon and in conformity with written information furnished to the Company by the
Representatives expressly for use therein; and to reimburse the Company, or any
such director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The Company
hereby acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) are the statements set forth (A) as the last paragraph on the outside
front cover page of the Prospectus, (B) as the last paragraph on the inside
front cover page of the Prospectus concerning stabilization by the Underwriters
and (C) in the table in the first paragraph and in the second, sixth, eighth and
ninth paragraphs under the caption "Underwriting" in the Prospectus; and the
Underwriters confirm that such statements are correct. The indemnity agreement
set forth in this Section 8(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified
22
party shall have employed separate counsel in accordance with the proviso to the
next preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel
(together with local counsel), approved by the indemnifying party (NationsBanc
Xxxxxxxxxx Securities, Inc. in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the
reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) SETTLEMENTS. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
8(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 15 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement effected without its consent if such
indemnifying party (i) reimburses such indemnified party in accordance with such
request to the extent it in its good faith judgment considers such request to be
reasonable and (ii) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each such case prior to
the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been a
party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held to
be unavailable to or is otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is
23
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the offering of the Shares
pursuant to this Agreement 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, on the one hand, and the Underwriters,
on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on the
one hand, and the Underwriters, on the other hand, in connection with the
offering of the Shares pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Shares pursuant to this Agreement (before deducting expenses) received by the
Company, and the total underwriting discount received by the Underwriters, in
each case as set forth on the front cover page of the Prospectus bear to the
aggregate initial public offering price of the Shares as set forth on such
cover. The relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact or any such inaccurate or
alleged inaccurate representation or warranty relates to information supplied by
the Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; PROVIDED, HOWEVER, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Shares underwritten by it
and distributed to the public. 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 pursuant to this
Section 9 are several, and not joint, in proportion to their respective
underwriting commitments as set forth opposite their names in SCHEDULE A. For
purposes of this Section 9, each officer and employee of an Underwriter and each
person, if any, who controls an Underwriter within the meaning of the Securities
Act or the
24
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act shall have the same rights
to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Shares that it
or they have agreed to purchase hereunder on such date, and the aggregate number
of Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase does not exceed 10% of the aggregate number of the Shares to
be purchased on such date, the other Underwriters shall be obligated, severally,
in the proportions that the number of Firm Shares set forth opposite their
respective names on SCHEDULE A bears to the aggregate number of Firm Shares set
forth opposite the names of all such nondefaulting Underwriters, or in such
other proportions as may be specified by the Representatives with the consent of
the nondefaulting Underwriters, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Shares to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Shares are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, Section 6, Section 8, Section 9 and
this Section 10 shall at all times be effective and shall survive such
termination. In any such case either the Representatives or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing Date
this Agreement may be terminated by the Representatives by notice given to the
Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market, or trading in securities generally on the Nasdaq Stock
Market or the New York Stock Exchange shall have been suspended or limited, or
minimum or maximum prices shall have been generally established on any of such
stock exchanges by the Commission or the NASD; (ii) a general banking moratorium
shall have been declared by any of federal, New York, Delaware or California
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving
25
a prospective substantial change in United States' or international political,
financial or economic conditions, as in the judgment of the Representatives is
material and adverse and makes it impracticable to market the Shares in the
manner and on the terms described in the Prospectus or to enforce contracts for
the sale of securities; (iv) in the judgment of the Representatives there shall
have occurred any Material Adverse Change; or (v) the Company or any of the
Subsidiaries shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the business and
operations of the Company and the Subsidiaries, considered as one entity,
regardless of whether or not such loss shall have been insured. Any termination
pursuant to this Section 11 shall be without liability on the part of (a) the
Company to any Underwriter, except that the Company shall be obligated to
reimburse the expenses of the Representatives and the Underwriters pursuant to
Sections 4 and 6 hereof, (b) any Underwriter to the Company or (c) of any party
hereto to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Shares sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
c/o NationsBanc Xxxxxxxxxx Securities, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Child
with a copy to:
NationsBanc Xxxxxxxxxx Securities, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
26
If to the Company:
TRIAD Medical Inc.
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors and personal representatives, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares as such from any of the Underwriters
merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN
SUCH STATE.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party for whom the condition is meant to
benefit. The Table of Contents and the Section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
27
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
28
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
TRIAD MEDICAL INC.
By:____________________________
Xxxxxxx X. Xxxxxxxxxx, Xx.
Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in San Francisco, California as of the date first above
written.
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
XXXXX XXXXXX INC.
WEDBUSH XXXXXX SECURITIES
Acting as Representatives of the several Underwriters named in the attached
Schedule A.
By: NATIONSBANC XXXXXXXXXX SECURITIES, INC.
By:
Name:
29
SCHEDULE A
NUMBER OF
FIRM SHARES
UNDERWRITERS TO BE PURCHASED
NationsBanc Xxxxxxxxxx Securities, Inc................ __________
Xxxxx Xxxxxx Inc...................................... __________
Wedbush Xxxxxx Securities............................. __________
----------
Total 4,000,000
A-1
SCHEDULE B
FOUNDING COMPANIES
TRIAD Holdings, Inc., a Delaware corporation
Healthcare Technology Delivery, Inc., a Delaware corporation
Sun Medical, Inc., a Texas corporation
Custom Medical Specialties, Inc., an Indiana corporation
Kentec Medical, Inc., a California corporation
Products for Surgery, Inc., a Texas corporation
MegaTech Medical, Inc., a Maryland corporation
Omni Medical, Inc., a Washington corporation
New England Medical Specialties, Inc., a Connecticut corporation
Professional Equipment Co., Inc., a Connecticut corporation
Xxxxxx Medical Specialties, Inc., a Washington corporation
B-1
SCHEDULE C
LOCAL COUNSEL FOR FOUNDING COMPANIES
FOUNDING COMPANY LOCAL COUNSEL
TRIAD Holdings, Inc. Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx,
a Professional Corporation
Healthcare Technology Delivery, Inc. [To Come]
Sun Medical, Inc. [To Come]
Custom Medical Specialties, Inc. [To Come]
Kentec Medical, Inc. [To Come]
Products for Surgery, Inc. [To Come]
MegaTech Medical, Inc. [To Come]
Omni Medical, Inc. [To Come]
New England Medical Specialties, Inc. [To Come]
Professional Equipment Co., Inc. [To Come]
Xxxxxx Medical Specialties, Inc. [To Come]
C-1
EXHIBIT A
THE FINAL OPINION IN DRAFT FORM SHOULD BE ATTACHED AS EXHIBIT A AT THE TIME THIS
AGREEMENT IS EXECUTED.
Opinion of counsel for the Company to be delivered pursuant to Section
5(d) of the Underwriting Agreement. References to the Prospectus in this EXHIBIT
A include any supplements thereto at the Closing Date.
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has full corporate power and authority to own, lease and
operate its properties and to conduct its business as now being conducted and as
proposed to be conducted as described in the Prospectus and to (i) enter into
and perform its obligations under the Underwriting Agreement and to issue, sell
and deliver the Shares to the Underwriters as provided therein and (ii) enter
into and perform its obligations under each of the Acquisition Agreements and to
carry out the provisions thereof.
3. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in the State of California and in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions (other than the State of California) where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change.
4. Each Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own, lease and operate
its properties and to conduct its business as now being conducted and as
proposed to be conducted as described in the Prospectus and, to the knowledge of
such counsel, is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change.
5. All of the issued and outstanding capital stock of each Subsidiary
(upon giving effect to the Acquisitions) has been duly authorized and validly
issued, is fully paid and nonassessable and on the closing of the Acquisitions
will be owned by the Company, directly, or through one of the other
Subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, equity or, to the knowledge of such counsel, any pending or
threatened claim, except for the security interests therein in favor of the
lenders under the Revolving Credit Facility securing the obligations thereunder.
1
6. The authorized, issued and outstanding capital stock of the Company
(including the Common Stock) conforms in all material respects to the
descriptions thereof set forth in the Prospectus. After giving effect to the
closing of the Acquisitions and the issuance of the shares of Common Stock
contemplated by the Acquisition Agreements, but without giving effect to the
issuance of the Shares pursuant to the terms of the Underwriting Agreement, the
Company has issued and outstanding _________ shares of Common Stock and no
shares of preferred stock. All of those outstanding shares of Common Stock (a)
have been duly authorized and validly issued, (b) are fully paid and
nonassessable, (c) were not issued in violation of or subject to any preemptive
rights, rights of first refusal or similar rights under the Company's charter,
bylaws or other organizational documents, the laws of the State of Delaware or,
to such counsel's knowledge, otherwise and (d) to such counsel's knowledge, have
been issued in compliance with the registration and qualification requirements
of federal and state securities laws. The form of certificate used to evidence
the Common Stock is in due and proper form and complies with all applicable
requirements of the charter and bylaws of the Company and the General
Corporation Law of the State of Delaware. The description of the Company's stock
option and other stock plans or arrangements, and the options or other rights
granted thereunder, set forth in the Prospectus accurately and fairly presents
in all material respects the information required to be shown with respect to
such plans, arrangements, options and rights.
7. No stockholder of the Company or any other person has any preemptive
right, right of first refusal or other similar right to subscribe for or
purchase securities of the Company arising (a) by operation of the charter or
bylaws of the Company or the General Corporation Law of the State of Delaware or
(b) to the knowledge of such counsel, otherwise.
8. The Underwriting Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable
against the Company in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as that
enforceability may be limited by (i) any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (regardless of
whether that enforceability is considered in a proceeding in equity or at law)
and (iii) any implied covenant of good faith or fair dealing, and except as
rights to indemnity and contribution thereunder may be limited by applicable
Federal or state laws.
9. The Shares to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale pursuant to the Underwriting
Agreement and, when issued and delivered by the Company pursuant to the
Underwriting Agreement against payment of the consideration set forth therein,
will be validly issued, fully paid and nonassessable.
10. Each of the Registration Statement and the Rule 462(b) Registration
Statement, if any, has been declared effective by the Commission under the
Securities Act. To the knowledge of such counsel, no stop order suspending the
effectiveness of either of the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued under the Securities Act and no
2
proceedings for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required
by such Rule 424(b).
11. The Registration Statement, including any Rule 462(b) Registration
Statement, the Prospectus and each amendment or supplement to the Registration
Statement and the Prospectus, as of their respective effective or issue dates
(other than the financial statements and the notes thereto and the auditors'
reports thereon and the other financial data included therein, as to which no
opinion need be rendered) complied as to form in all material respects with the
applicable requirements of the Securities Act.
12. The statements (a) in the Prospectus under the captions "Risk
Factors--Government Regulation," "Risk Factors--Potential Effect of Shares
Eligible for Future Sale on Price of Common Stock," "Risk Factors--Preferred
Stock; Potential Anti-Takeover Effects," "The Company--Summary of Terms of the
Acquisitions," "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Pro Forma Combined--Liquidity and Capital Resources,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--THI--Liquidity and Capital Resources," "Business--Manufacturer
Relationships," "Business--Facilities," "Business--Government Regulation,"
"Business--Litigation and Insurance," "Management--Executive Compensation;
Employment Agreements," "Management--Incentive Plan," "Certain Transactions,"
"Shares Eligible for Future Sale," "Description of Capital Stock" and
"Underwriting" and (b) in Item 14 and Item 15 of Part II of the Registration
Statement, insofar as such statements constitute matters of law, summaries of
legal matters, the Company's charter or by-law provisions, documents or legal
proceedings, or legal conclusions, has been reviewed by such counsel and fairly
present and summarize, in all material respects, the matters referred to
therein.
13. To the knowledge of such counsel, there are no legal or governmental
actions, suits or proceedings pending or threatened which are required to be
disclosed in the Registration Statement, other than those disclosed therein.
14. To the knowledge of such counsel, there are no Existing Instruments
required to be described or referred to in the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or referred to
therein or filed as exhibits thereto, respectively; and the descriptions thereof
and references thereto are correct in all material respects.
15. No consent, approval, authorization or other order of, or registration
or filing with, any court or other governmental or regulatory authority or
agency is required for the Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except as required under the Securities Act, the Exchange
Act, applicable state securities or blue sky laws and from the NASD.
3
16. The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder: (a)
have been duly authorized by all necessary corporate action on the part of the
Company; (b) will not result in any violation of the provisions of the charter
or bylaws of the Company or any Subsidiary; (c) will not conflict with or
constitute a breach of, or Default or a Debt Repayment Triggering Event under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its Subsidiaries pursuant to, or
require the consent of any other party to, (i) the Revolving Credit Facility or
(ii) to the best knowledge of such counsel, any other Existing Instrument which
has been described in or filed as an exhibit to the Registration Statement,
except for such conflicts, breaches, defaults, Debt Repayment Triggering Events,
liens, charges and encumbrances as would not, and such consents the absence of
which would not, individually or in the aggregate, result in a Material Adverse
Change; and (d) to the knowledge of such counsel, will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any Subsidiary.
17. The Shares and the other shares of Common Stock that will be
outstanding on the Closing Date have been approved for inclusion on the Nasdaq
National Market.
18. The Company is not, and after receipt of payment for the Shares will
not be, an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act.
19. To the knowledge of such counsel, there are no persons with (a)
registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering
contemplated by the Underwriting Agreement or (b) any right, contractual or
otherwise, to cause the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, any of the Shares.
20. To the knowledge of such counsel, neither the Company nor any
Subsidiary is in violation of its charter, bylaws or other organizational
documents or any law, administrative regulation or administrative or court
decree applicable to the Company or any Subsidiary or is in Default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any Existing Instrument which has been described in or filed as an
exhibit to the Registration Statement, except in each such case for such
violations or Defaults as would not, individually or in the aggregate, result in
a Material Adverse Change.
21. The execution and delivery of each of the Acquisition Agreements by
the Company and the performance by the Company of its obligations thereunder,
respectively: (a) have been duly authorized by all necessary corporate action on
the part of the Company; (b) have not and will not result in any violation of
the provisions of the charter, bylaws or other organizational documents of the
Company or any Subsidiary; (c) will not conflict with or constitute a breach of,
or Default or a Debt Repayment Triggering Event under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its Subsidiaries pursuant to,
4
or require the consent of any other party to, (i) the Revolving Credit Facility
or (ii) to the knowledge of such counsel, any other Existing Instrument which
has been described in or filed as an exhibit to the Registration Statement,
except for such conflicts, breaches, defaults, Debt Repayment Triggering Events,
liens, charges and encumbrances as would not, and such consents the absence of
which would not, individually or in the aggregate, result in a Material Adverse
Change; and (d) to the knowledge of such counsel, will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any Subsidiary which has been described in
or filed as an exhibit to the Registration Statement, except for such conflicts,
breaches, defaults, Debt Repayment Triggering Events, liens, charges and
encumbrances as would not, and such consents the absence of which would not,
individually or in the aggregate, result in a Material Adverse Change.
22. Each of the Acquisition Agreements has been duly executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, except as that enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether that enforceability is considered in
a proceeding in equity or at law), and except as the enforceability of the
provisions contained in the Acquisition Agreements establishing restrictions on
competition may be limited by applicable Federal or state laws.
23. Each of the Acquisitions has been consummated pursuant to the terms of
the Acquisition Agreement related thereto.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company and with
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus, and any supplements or amendments thereto, and
related matters were discussed and, although such counsel has not undertaken to
determine independently, and is not passing upon and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (other than as
specified above), and any supplements or amendments thereto, on the basis of the
foregoing, nothing has come to their attention which would lead them to believe
that either the Registration Statement or any amendments thereto, at the time
the Registration Statement or such amendments became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus, as of its date or at the First Closing Date or the
Second Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief as to the financial statements or schedules or other financial or
statistical data derived therefrom, included in the Registration Statement or
the Prospectus or any amendments or supplements thereto).
5
In rendering such opinion, such counsel may rely (a) as to matters (i)
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the laws of the State of New York or
the State of Texas or the federal law of the United States or (ii) concerning
the Subsidiaries as set forth in paragraphs 4, 20 and 21 above, to the extent
they deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the Second Closing Date, as the case may be,
shall be satisfactory in form and substance to the Underwriters, shall expressly
state that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representative) of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters; PROVIDED, HOWEVER, that such counsel shall further state
that they believe that they and the Underwriters are justified in relying upon
such opinion of other counsel, and (b) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and public
officials.
6
Triad Healthcare Corporation, et al.-1- ______________ ___, 1997
EXHIBIT B
[Letterhead of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
or Stradling, Yocca, Xxxxxxx & Xxxxx, as applicable]
______________ ___, 1997
TRIAD Medical Inc.
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
NationsBanc Xxxxxxxxxx Securities, Inc.
Xxxxx Xxxxxx Inc.
Wedbush Xxxxxx Securities
as Representatives of the several Underwriters
c/o NationsBanc Xxxxxxxxxx Securities, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
We have acted as counsel to TRIAD Holdings, Inc., a Delaware corporation
("THI"), Custom Medical Specialties, Inc., an Indiana corporation ("Custom"),
Healthcare Technology Delivery, Inc., a Delaware corporation ("HTD"), Kentec
Medical, Inc., a California corporation ("Kentec"), MegaTech Medical, Inc., a
Maryland corporation ("MegaTech"), New England Medical Specialties, Inc., a
Connecticut corporation ("NEMS"), Omni Medical, Inc., a Washington corporation
("Omni Medical"), Products for Surgery, Inc., a Texas corporation ("PSI"),
Professional Equipment Co., Inc., a Connecticut corporation ("Professional
Equipment"), Sun Medical, Inc., a Texas corporation ("Sun"), and Xxxxxx Medical
Specialties, Inc., a Washington corporation ("Xxxxxx") (THI, Custom, HTD,
Kentec, MegaTech, NEMS, Omni Medical, PSI, Professional Equipment, Sun and
Xxxxxx each being a "Founding Company" and, collectively, the "Founding
Companies"), in connection with the following agreements, each dated as of
September 9, 1997 (each being an "Acquisition Agreement" and, collectively, the
"Acquisition Agreements"): (i) the Agreement and Plan of Reorganization among
TRIAD Medical Inc. ("TRIAD"), TRIAD Acquisition, Inc., a Delaware corporation,
THI and the stockholders of THI, (ii) the Agreement and Plan of Reorganization
among TRIAD, Custom Acquisition, Inc., an Indiana corporation, Custom and the
sole stockholder of Custom, (iii) the Agreement and Plan of Reorganization among
TRIAD, HTD Acquisition, Inc., a Delaware corporation, HTD and the stockholders
of HTD, (iv) the Agreement and Plan of Reorganization among TRIAD, Kentec
Acquisition, Inc., a California corporation, Kentec and the
Triad Healthcare Corporation, et al.-2- ______________ ___, 1997
sole stockholder of Kentec, (v) the Agreement and Plan of Reorganization among
TRIAD, MegaTech Acquisition, Inc., a Maryland corporation, MegaTech and the
stockholders of MegaTech, (vi) the Agreement and Plan of Reorganization among
TRIAD, NEMS Acquisition, Inc., a Connecticut corporation, NEMS and the
stockholders of NEMS, (vii) the Agreement and Plan of Reorganization among
TRIAD, Omni Acquisition, Inc., a Washington corporation, Omni Medical and the
stockholders of Omni Medical, (viii) the Agreement and Plan of Reorganization
among TRIAD, PFS Acquisition, Inc., a Texas corporation, PSI and the
stockholders of PSI, (ix) the Agreement and Plan of Reorganization among TRIAD,
Professional Acquisition, Inc., a Connecticut corporation, Professional
Equipment and the stockholders of Professional Equipment, (x) the Agreement and
Plan of Reorganization among TRIAD, Sun Acquisition, Inc., a Texas corporation,
Sun and the sole stockholder of Sun and (xi) the Agreement and Plan of
Reorganization among TRIAD, Xxxxxx Acquisition, Inc., a Washington corporation,
Xxxxxx and the stockholders of Xxxxxx. This opinion is delivered to you pursuant
to Section 7.04(a)(ii)(B)(2) of each of the Acquisition Agreements and Section
5(e) of the Underwriting Agreement dated __________ ___, 1997 (the "Underwriting
Agreement"), among TRIAD and NationsBanc Xxxxxxxxxx Securities, Inc., Xxxxx
Xxxxxx Inc. and Wedbush Xxxxxx Securities, individually and as representatives
of the several underwriters named in Schedule A thereto. Except where otherwise
indicated, capitalized terms used and not otherwise defined herein have the
meanings given to them in the Uniform Provisions for the Acquisition of Founding
Companies, which is incorporated by reference into and forms a part of each of
the Acquisition Agreements.
We have examined the originals, or copies certified or otherwise
identified to our satisfaction, of the Acquisition Agreements, the respective
Certificates of Merger referred to in (and as defined in) the Acquisition
Agreements, the Charter Documents, each as amended to date, of each of the
Founding Companies, corporate records of each of the Founding Companies,
including minute books as furnished to us by the Founding Companies,
certificates of public officials and of representatives of the Founding
Companies and such statutes and other instruments and documents as we have
deemed appropriate as a basis for the opinions hereinafter expressed.
In rendering the following opinions, we have relied on the respective
representations and warranties of the Founding Companies and their respective
stockholders contained in the Acquisition Agreements and in certificates of
officers of the Founding Companies with respect to the accuracy of the factual
matters that form the basis for any of the opinions contained herein. In making
our examination, we have assumed, without independent investigation, that all
signatures on documents examined by us are genuine, all documents submitted to
us as originals are authentic and all documents submitted to us as certified or
photostatic copies of original documents conform to those original documents and
all those original documents are authentic. In addition, we have assumed the due
authorization, execution and delivery of all documents referred to herein by the
parties thereto other than the Founding Companies and their respective
stockholders.
Triad Healthcare Corporation, et al.-3- ______________ ___, 1997
On the basis of the foregoing, and subject to the assumptions, limitations
and qualifications hereinafter set forth, we are of the opinion that:
1. Each Acquisition Agreement has been duly executed and delivered by the
Founding Company party thereto and constitutes the legal, valid and binding
obligation of that Founding Company, enforceable against that Founding Company
in accordance with its terms, except as that enforceability may be subject to
the effect of (a) any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally, (b) general principles of equity (regardless of whether that
enforceability is considered in a proceeding in equity or at law) and (c) any
implied covenant of good faith and fair dealing. Each Acquisition Agreement has
been duly executed and delivered by each of the stockholders of the Founding
Company party thereto and constitutes the legal, valid and binding obligation of
each of those stockholders, enforceable against each of those stockholders in
accordance with its terms, except as that enforceability may be subject to the
effect of (a) any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally, (b)
general principles of equity (regardless of whether that enforceability is
considered in a proceeding in equity or at law) and (c) any implied covenant of
good faith and fair dealing.
2. Neither the execution, delivery and performance of the Acquisition
Agreements nor the consummation of the transactions contemplated thereby will
(a) violate, breach or constitute a default under (i) any Governmental
Requirement known to us and applicable to any of the Founding Companies or (ii)
any Material Agreement of any of the Founding Companies known to us or (b) cause
or result in the imposition of, or afford any Person the right to obtain, any
Lien upon any property or assets of any of the Founding Companies (or upon any
revenues, income or profits of any of the Founding Companies therefrom) pursuant
to any such Material Agreement.
3. Except for the filings of the Certificates of Merger with the
applicable Governmental Authorities, no Governmental Approvals are required to
be obtained, and no reports or notices or filings with any Governmental
Authority are required to be made, by any Founding Company or any stockholder of
any Founding Company for the execution, delivery or performance by each Founding
Company of the Acquisition Agreement to which it is a party, the enforcement
against that Founding Company and its stockholders of their respective
obligations thereunder or the effectuation of the merger or the other
transactions contemplated thereby to be effected at or prior to the Closing.
4. To our knowledge, there is no pending or threatened litigation that (a)
questions the validity of any Acquisition Agreement or any action taken or to be
taken by any Founding Company or any stockholder of any Founding Company in
connection with the Acquisition Agreements, at law or in equity, before or by
any Governmental Authority or before any arbitrator or (b) if adversely
determined, would have a material adverse effect (i) on the condition (financial
or other), earnings, business, operations or prospects of any Founding Company,
(ii) on the ability of any Founding
Triad Healthcare Corporation, et al.-4- ______________ ___, 1997
Company to perform its obligations under the Acquisition Agreement to which it
is a party or (iii) on the ability of any stockholder of any Founding Company to
perform his, her or its obligations under the Acquisition Agreement to which he,
she or it is a party.
5. Each of the mergers contemplated by the Acquisition Agreements has been
consummated pursuant to the terms of the Acquisition Agreement related thereto.
In the opinions set forth above, phrases such as "to our knowledge,"
"known to us" and those with equivalent wording refer to the conscious awareness
of information by the lawyers of this Firm who have prepared this opinion,
signed this letter or been actively involved in assisting and advising the
Founding Companies and their stockholders in connection with the negotiation,
execution and delivery of the Acquisition Agreement and related matters, without
any independent investigation by any lawyer of this Firm.
The opinions expressed in paragraph 1 above are subject to the additional
qualification that we express no opinion as to the enforceability of (a) any
severability or reformation provisions contained in any Acquisition Agreement,
(b) any provisions in any Acquisition Agreement which purport to entitle a party
to indemnification in respect of any matter arising under any securities laws or
to the extent indemnification in respect of any matter would otherwise be
against public policy, (c) any provisions of any Acquisition Agreement
purporting to establish a right to enforce a covenant or restriction by
injunctions or restraining orders or (d) any provisions of any Acquisition
Agreement that have the effect of prohibiting oral amendments or waivers of any
provisions of those documents.
This opinion and the matters addressed herein are as of the date hereof,
and we undertake no, and hereby disclaim any, obligation to advise you of any
change in any matter set forth herein occurring after the date hereof. This
opinion is being furnished to you for use solely in connection with the
transactions being consummated pursuant to the Acquisition Agreements or the
Underwriting Agreement. No other use or distribution of this opinion may be made
without our prior written consent, except that this opinion may be provided to
and relied upon by ______________, as Agent, and the other [Lenders] parties to
the [Credit Agreement] dated __________ ___, 1997 with TRIAD.
Very truly yours,
TRIAD Medical Inc., et al. -1- ______________ ___, 1997
EXHIBIT C
[Letterhead of Local Counsel to Acquired Company]
___________ ___, 1997
TRIAD Medical Inc.
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
NationsBanc Xxxxxxxxxx Securities, Inc.
Xxxxx Xxxxxx Inc.
Wedbush Xxxxxx Securities
as Representatives of the several Underwriters
c/o NationsBanc Xxxxxxxxxx Securities, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
We have acted as counsel to _______________, a corporation
_________________, a _____________ corporation (the "Company"), ________________
and _______________ (together, the "Stockholders"), in connection with the
Agreement and Plan of Reorganization dated as of September 9, 1997 (the
"Acquisition Agreement"), by and among TRIAD Medical Inc., a Delaware
corporation ("TRIAD"), ___________ Acquisition, Inc., a _____________
corporation ("TRIAD Sub"), the Company and the Stockholders. This opinion is
delivered to you pursuant to Section 7.04(a)(ii)(B)(2) of the Acquisition
Agreement and Section 5(f) of the Underwriting Agreement dated _______________
___, 1997 (the "Underwriting Agreement") by and between TRIAD and NationsBanc
Xxxxxxxxxx Securities, Inc., Xxxxx Xxxxxx Inc. and Wedbush Xxxxxx Securities,
individually and as representatives of the several underwriters named in
Schedule A thereto. Capitalized terms used and not otherwise defined herein have
the meanings given to them in the Acquisition Agreement.
We have examined the originals, or copies certified or otherwise
identified to our satisfaction, of the Acquisition Agreement, the Certificate of
Merger dated ______________ ___, 1997 with respect to the Merger between TRIAD
Sub and the Company, [the Employment Agreement[s] dated as of September 9, 1997,
between the Company and [each of] _______________ (the "Employment
Agreement[s]"),] the Charter Documents, each as amended to date, of the Company,
corporate
TRIAD Medical Inc., et al. -2- ______________ ___, 1997
records of the Company, including minute books as furnished to us by the
Company, certificates of public officials and of representatives of the Company
and such statutes and other instruments and documents as we have deemed
appropriate as a basis for the opinions hereinafter expressed.
In rendering the following opinions, we have relied on the respective
representations and warranties of the Stockholders and the Company contained in
the Acquisition Agreement and in certificates of the Stockholders and of
officers of the Company with respect to the accuracy of the factual matters that
form the basis for any of the opinions contained herein. In making our
examination, we have assumed, without independent investigation, that all
signatures on documents examined by us are genuine, all documents submitted to
us as originals are authentic and all documents submitted to us as certified or
photostatic copies of original documents conform to those original documents and
all those original documents are authentic. In addition, we have assumed the due
authorization, execution and delivery of all documents referred to herein by the
parties thereto other than the Stockholders and the Company and the due
authority of all persons executing such documents except the Stockholders and
the persons executing those documents on behalf of the Company.
On the basis of the foregoing, and subject to the assumptions, limitations
and qualifications hereinafter set forth, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the [State][Commonwealth] of ____________ and
has all requisite corporate power and authority to own and operate its
properties, to lease the properties it operates under lease and to conduct its
business as currently conducted. [The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction outside
the [State][Commonwealth] of _________________ in which the failure to so
qualify would have a material adverse effect on its business.][The Company is
not required to be qualified as a foreign corporation to do business in any
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business.] To our knowledge, the Company is not in violation of
any provision of its Charter Documents.
2. The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Acquisition Agreement and to
effectuate the Merger and the other transactions contemplated thereby to be
effected at or prior to the Closing. The execution and delivery of the
Acquisition Agreement by the Company, and the performance by the Company of its
obligations under the Acquisition Agreement, have been duly authorized by all
necessary corporate action and proceedings required under its Charter Documents
and applicable Governmental Requirements. Each Stockholder has the legal
capacity to execute, deliver and perform such Stockholder's obligations under
the Acquisition Agreement [and the Employment Agreement to which such
Stockholder is a party, if any].
TRIAD Medical Inc., et al. -3- ______________ ___, 1997
3. [Each subsidiary of the Company is a corporation duly organized,
validly existing and in good standing under the laws of the
[State][Commonwealth] of __________________ and has all requisite corporate
power and authority to own and operate its properties, to lease the properties
it operates under lease and to conduct its business as currently conducted.
[Each subsidiary of the Company is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction outside the
[State][Commonwealth] of _________________ in which the failure to so qualify
would have a material adverse effect on its business.] [No such subsidiary is
required to be qualified as a foreign corporation to do business in any
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business.] To our knowledge, no such subsidiary is in violation of
any provision of its Charter Documents.]
[4. All the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Company directly or indirectly through wholly
owned subsidiaries, free and clear of any Lien or, to the best knowledge of such
counsel, any pending or threatened claim.]
5. The Acquisition Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as that
enforceability may be subject to the effect of (a) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally, (b) general principles of equity (regardless of
whether that enforceability is considered in a proceeding in equity or at law)
and (c) any implied covenant of good faith and fair dealing. The Acquisition
Agreement has been duly executed and delivered by the Stockholders and
constitutes the legal, valid and binding obligation of the Stockholders,
enforceable against the Stockholders in accordance with its terms, except as
that enforceability may be subject to the effect of (a) any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, (b) general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law) and (c) any implied covenant of good faith and fair dealing.
[The] Employment Agreement[s] to which [_____________ is a party] [__________,
_______________, and _________________, respectively, are parties] [has][have
each] been duly executed and delivered by the Stockholder party thereto and
constitutes the legal, valid and binding obligation of that Stockholder,
enforceable against that Stockholder in accordance with its terms, except as
that enforceability may be subject to the effect of (a) any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, (b) general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law) and (c) any implied covenant of good faith and fair dealing.]
6. Neither the execution, delivery and performance of the Acquisition
Agreement nor the consummation of the transactions contemplated thereby do or
will (a) violate, breach or
TRIAD Medical Inc., et al. -4- ______________ ___, 1997
constitute a default under (i) any Charter Document of the Company [or any of
its subsidiaries], (ii) any Governmental Requirement applicable to the Company
[or any of its subsidiaries] or (iii) any Material Agreement of the Company [or
any of its subsidiaries] known to us or (b) cause or result in the imposition
of, or afford any Person the right to obtain, any Lien upon any property or
assets of the Company [or any of its subsidiaries] (or upon any revenues, income
or profits of the Company [or any of its subsidiaries] therefrom) pursuant to
any such Material Agreement. The execution, delivery and performance in
accordance with its terms by any Stockholder of the Acquisition Agreement [and
the Employment Agreement[s]], and the consummation of the transactions
contemplated thereby do not and will not, (a) violate or conflict with any
Governmental Requirement applicable to any of the Stockholders, (b) breach or
constitute a default under any material agreement or instrument known to us to
which any Stockholder is a party or by which any Stockholder or any of the
shares of Company Capital Stock owned by any Stockholder are bound or subject or
(c) result in the creation or imposition of, or afford any Person the right to
obtain, any Lien upon any property or assets of any Stockholder (or upon any
revenues, income or profits of any Stockholder therefrom) or the Company [or any
of its subsidiaries] pursuant to any such agreement or instrument.
7. Except for the filing of the Certificate of Merger with the [Secretary
of State] of the [State][Commonwealth] of ________________ , no Governmental
Approvals are required to be obtained, and no reports or notices or filings with
any Governmental Authority are required to be made, by the Company or any
Stockholder for the execution, delivery or performance by the Company of the
Acquisition Agreement, the enforcement against the Company and the Stockholders
of their respective obligations thereunder or the effectuation of the Merger or
the other transactions contemplated thereby to be effected at or prior to the
Closing.
8. To our knowledge, except pursuant to the Acquisition Agreement, there
are no existing options, warrants, subscriptions or other rights to purchase or
securities convertible into or exchangeable for, the capital stock of the
Company [or any of its subsidiaries]. To our knowledge, except as disclosed
pursuant to the Acquisition Agreement, neither the Company nor any Stockholder
is a party to or bound by any agreement, instrument, contract, obligation,
commitment or understanding of any character, except for the Acquisition
Agreement, relating to the sale, assignment, conveyance, encumbrance, transfer
or delivery of any capital stock of the Company [or any of its subsidiaries] or
all or substantially all the assets of the Company.
9. [Each of] the Company [and its subsidiaries] has obtained all consents
of all third parties necessary under each lease (whether relating to real
property or personal property) to which it is a party for the consummation of
the transactions contemplated by the Acquisition Agreement.
10. To our knowledge, there is no pending or threatened Litigation that
(a) questions the validity of the Acquisition Agreement [or the Employment
Agreement[s]] or any action taken or to be taken by the Company or any
Stockholder in connection with the Acquisition Agreement [or the
TRIAD Medical Inc., et al. -5- ______________ ___, 1997
Employment Agreement[s]], at law or in equity, before or by any Governmental
Authority or before any arbitrator or (b) if adversely determined, would have a
material adverse effect (i) on the condition (financial or other), earnings,
business, operations or prospects of the Company [and its subsidiaries, taken as
a whole], (ii) on the ability of the Company to perform its obligations under
the Acquisition Agreement or (iii) on the ability of any Stockholder to perform
his [or her] obligations under the Acquisition Agreement [or the Employment
Agreement[s]].
11. Immediately prior to the Effective Time: (a) the authorized Capital
Stock of the Company consisted of _______ shares of common stock, par value $___
per share, of which _______ shares were issued and outstanding; (b) all such
outstanding shares of Capital Stock of the Company were (i) duly authorized and
validly issued in accordance with the applicable Governmental Requirements of
the [State] [Commonwealth] of ____________ and the Charter Documents of the
Company, (ii) fully paid and nonassessable, (iii) not issued in violation of any
preemptive rights, rights of first refusal or other similar rights and (iv) to
our knowledge, were issued in compliance with the applicable provisions of
federal and state securities laws; (c) except as disclosed pursuant to the
Acquisition Agreement, no shares of Capital Stock of the Company were held in
the treasury of the Company; and (d) the Stockholders owned all the issued and
outstanding shares of Capital Stock of the Company free and clear, to our
knowledge, of any Lien or adverse claim.
12. The Certificate of Merger complies with the applicable law of the
[State][Commonwealth] of ______________ and, following the filing thereof by the
Surviving Corporation with the [Secretary of State] of the [State][Commonwealth]
of ________________ and the payment of all applicable filing fees with respect
thereto, the Merger will be effective at the Effective Time.
In the opinions set forth above, phrases such as "to our knowledge,"
"known to us" and those with equivalent wording refer to the conscious awareness
of information by the lawyers of this Firm who have prepared this opinion,
signed this letter or been actively involved in assisting and advising the
Company and the Stockholders in connection with the negotiation, execution and
delivery of the Acquisition Agreement and related matters, without any
independent investigation by any lawyer of this Firm.
[The opinions expressed in paragraph 1 [and paragraph 3] as to the
qualification and good standing of [each of] the Company [and its subsidiaries]
as a foreign corporation are based solely on our review of certificates of
public officials of the relevant jurisdiction.] The Acquisition Agreement
provides, except where otherwise specifically provided, that it is to be
governed by and construed and enforced in accordance with the substantive laws
of the State of New York. For purposes of our opinions expressed in paragraph 5
above, we have assumed, with your approval, that the laws of the State of New
York are identical to the laws of the [State] [Commonwealth] of
TRIAD Medical Inc., et al. -6- ______________ ___, 1997
_____________, and no opinion is expressed herein as to any matter governed by
any law other than the laws of the [State] [Commonwealth] of _____________ and
the federal laws of the United States of America, each as in effect on the date
hereof.
The opinions expressed in paragraph 5 above are subject to the additional
qualification that we express no opinion as to the enforceability of (a) any
severability or reformation provisions contained in the Acquisition Agreement
[or the Employment Agreement[s]], (b) any provisions in the Acquisition
Agreement [or the Employment Agreement[s]] which purport to entitle a party to
indemnification in respect of any matter arising under any securities laws or to
the extent indemnification in respect of any matter would otherwise be against
public policy, (c) any provisions of the Acquisition Agreement [or the
Employment Agreement[s]] purporting to establish a right to enforce a covenant
or restriction by injunctions or restraining orders or (d) any provisions of the
Acquisition Agreement [or the Employment Agreement[s]] that have the effect of
prohibiting oral amendments or waivers of any provisions of those documents.
This opinion and the matters addressed herein are as of the date hereof,
and we undertake no, and hereby disclaim any, obligation to advise you of any
change in any matter set forth herein occurring after the date hereof This
opinion is being furnished to you for use solely in connection with the
transactions being consummated pursuant to the Acquisition Agreement and the
Underwriting Agreement. No other use or distribution of this opinion may be made
without our prior written consent, except that this opinion may be provided to
and relied upon by _______________, as Agent, and the other [Lenders] parties to
the [Credit Agreement] dated ______________ ___, 1997 with TRIAD.
Very truly yours,
NationsBanc Xxxxxxxxxx Securities, Inc.
Xxxxx Xxxxxx Inc.
Wedbush Xxxxxx Securities -1- November 1, 1997
EXHIBIT D
November 1, 1997
NationsBanc Xxxxxxxxxx Securities, Inc.
Xxxxx Xxxxxx Inc.
Wedbush Xxxxxx Securities
As Representatives of the Several Underwriters
c/o NationsBanc Xxxxxxxxxx Securities, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: TRIAD Medical Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is, or will be as of the closing of the Offering (as hereinafter
defined), an owner of record or beneficially of certain shares of common stock,
par value $.001 per share, of the Company ("Common Stock") or securities
convertible into or exchangeable or exercisable for Common Stock. The Company
proposes to carry out a public offering of Common Stock (the "Offering") for
which you will act as the representatives of the underwriters. The undersigned
recognizes that the Offering will be of benefit to the undersigned and will
benefit the Company by, among other things, raising additional capital for
certain acquisitions. The undersigned acknowledges that you and the other
underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities, Inc. ("Xxxxxxxxxx Securities") (which consent may be
withheld in its sole discretion), directly or indirectly, sell, offer, contract
or grant any option to sell (including without limitation any short sale),
pledge, transfer, distribute, establish an open "put equivalent position" within
the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, or
otherwise dispose of any shares of Common Stock, options or warrants to acquire
shares of Common Stock, or securities exchangeable or exercisable for or
convertible into shares of Common Stock (collectively, the "Securities")
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
undersigned, or publicly announce the undersigned's intention to do any of the
foregoing, for a period commencing on the date hereof and continuing through the
close of trading on the date two years after the date of the final prospectus
relating to the Offering; PROVIDED, HOWEVER, that the undersigned shall not be
restricted from any transfer of Securities to any Related Person (as hereinafter
defined) of the undersigned but only if such transfer is made in compliance with
all applicable federal and state securities laws and such Related Person agrees
to be bound by
General Form
NationsBanc Xxxxxxxxxx Securities, Inc.
Xxxxx Xxxxxx Inc.
Wedbush Xxxxxx Securities -2- November 1, 1997
the restrictions of this letter agreement pursuant to a written agreement
delivered to Xxxxxxxxxx Securities at the address set forth above. For purposes
hereof a "Related Person" shall have the meaning assigned to that term in the
Company's Uniform Provisions for the Acquisition of the Founding Companies, in
the form included as Exhibit 2.1 to the Registration Statement on Form S-1
relating to the Offering at the time that Registration Statement first becomes
effective under the Securities Act of 1933, as amended. The undersigned also
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of shares of Common
Stock or securities convertible into or exchangeable or exercisable for Common
Stock held by the undersigned except in compliance with the foregoing
restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives and assigns of the
undersigned and shall be for the benefit of the Company and the underwriters for
the Offering.
Printed Name of Holder
By:
Signature
Printed Name of Person Signing (AND INDICATE CAPACITY OF PERSON SIGNING IF
SIGNING AS CUSTODIAN, TRUSTEE, OR ON BEHALF OF AN ENTITY)
General Form
