2,000,000 Shares Plus an option to purchase up to 300,000 additional shares to cover over-allotments IntegraMed America, Inc. Common Stock PURCHASE AGREEMENT
2,000,000 Shares
Plus an option to purchase up to 300,000 additional shares to cover over-allotments
IntegraMed America, Inc.
Common Stock
[ ], 2010
XXXXX XXXXXXX & CO.
XXXXXXXXX & COMPANY LLC
c/o Xxxxx Xxxxxxx & Co.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
XXXXXXXXX & COMPANY LLC
c/o Xxxxx Xxxxxxx & Co.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
IntegraMed America, Inc., a Delaware corporation (the “Company”), proposes to sell to Xxxxx
Xxxxxxx & Co. and Xxxxxxxxx & Company LLC (the “Underwriters”) an aggregate of 2,000,000 shares
(the “Firm Shares”) of Common Stock, $0.01 par value per share (the “Common Stock”), of the
Company. The Firm Shares consist of 2,000,000 authorized but unissued shares of Common Stock to be
issued and sold by the Company. The Company has also granted to the several Underwriters an option
to purchase up to 300,000 additional shares of Common Stock on the terms and for the purposes set
forth in Section 3 hereof (the “Option Shares”). The Firm Shares and any Option Shares purchased
pursuant to this Purchase Agreement are herein collectively called the “Securities.”
The Company manages directly or indirectly the operations of fertility center physician
practices for which the Company is compensated in part based on a share of the income of the
physician practice and all of which are listed in Schedule II hereto (the “Partner FCs”). The
Company also manages indirectly the operations of vein clinic physician practices, the financial
condition and results of operations of which are consolidated with the Company for financial
reporting purposes and all of which are listed on Schedule III hereto (the “Vein Clinics”). The
Partner FCs and the Vein Clinics are individually referred to herein as a “Physician Practice” and
collectively as the “Physician Practices.” The Company contracts with the Physician Practices
directly and through its subsidiaries which are listed on Schedule IV hereto (which, together with
the Vein Clinics, are collectively referred to as the “Subsidiaries”).
The Company hereby confirms its agreement with respect to the sale of the Securities to the
several Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1,
including a preliminary form of prospectus, (File No. 333-162276) under the Securities Act of 1933,
as amended (the “Securities Act”) and the rules and regulations (the “Rules and Regulations”) of
the Commission thereunder, one or more amendments to such registration statement have also been so
prepared and have been, or will be, so filed; and, if the Company has elected to rely upon Rule
462(b) of the Rules and Regulations to increase the size of the offering registered under the
Securities Act, the Company will prepare and file with the Commission a registration statement with
respect to such increase pursuant to Rule 462(b) (the “additional registration statement”).
The Company will prepare and file a prospectus pursuant to Rule 424(b) of the Rules and
Regulations that discloses the information previously omitted from the prospectus in reliance upon
Rule 430A of the Rules and Regulations (“Rule 430A Information”). “Original Registration
Statement” as of any time means the initial registration statement, in the form then filed with the
Commission, including all amendments to the initial registration statement as of such time, the
exhibits and any schedules thereto at such time, the documents that are exhibits thereto at such
time and incorporated by reference therein pursuant to the Rules and Regulations, all information
contained in the additional registration statement (if any) and then deemed to be a part of the
initial registration statement pursuant to the General Instructions of Form S-1 and all information
(if any) included in a prospectus then deemed to be a part of the initial registration statement
pursuant to Rule 430A(b) or Rule 430C of the Rules and Regulations. “Rule 462(b) Registration
Statement” as of any time means the additional registration statement in the form then filed with
the Commission, including the contents of the Original Registration Statement incorporated by
reference therein and including all information (if any) included in a prospectus then deemed to be
a part of the additional registration statement pursuant to Rule 430A(b) or Rule 430C and the
documents incorporated by reference therein. “Registration Statement” as of any time means the
Original Registration Statement and any Rule 462(b) Registration Statement as of such time. For
purposes of the foregoing definitions, information contained in a form of prospectus that is deemed
retroactively to be a part of the Registration Statement pursuant to Rule 430A(b) or Rule 430C
shall be considered to be included in the Registration Statement as of the time specified in Rule
430A(b) or Rule 430C, as applicable.
For purposes of this Agreement, “Effective Time” with respect to the Original Registration
Statement or the Rule 462(b) Registration Statement means the date and time as of which such
Registration Statement was declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(b) of the Rules and Regulations. “Registration Statement” without reference
to a time means the Registration Statement as of its Effective Time. “Statutory Prospectus” as of
any time means the prospectus included in the Registration Statement immediately prior to that
time, including any information in a prospectus deemed to be a part thereof pursuant to Rule 430A
or 430C. For purposes of the preceding sentence, information contained in a form of prospectus
that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430A shall
be considered to be included in the Statutory Prospectus as of the actual time that form of
prospectus is filed with the Commission pursuant to Rule 424(b) and not retroactively.
“Prospectus” means the Statutory Prospectus that discloses the public offering price and other
final terms of the Securities and the offering and otherwise satisfies Section 10(a) of the
Securities Act. “Preliminary Prospectus” as of any time means
-2-
any Statutory Prospectus included in the Registration Statement prior to the time it becomes
or became effective under the Securities Act and any prospectus that omits Rule 430A Information.
All references in this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement to any of the
foregoing, shall be deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System (“XXXXX”).
All references in this Agreement to the Registration Statement, any Preliminary Prospectus or
the Prospectus shall be deemed as of any time to include the documents that are exhibits thereto
and incorporated therein by reference in accordance with the Rules and Regulations.
2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, the several Underwriters as
follows:
(i) The Registration Statement has been declared effective by the Commission, no stop
order suspending the effectiveness of the Registration Statement has been issued, and no
proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened
by the Commission.
(ii) Each part of the Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendment thereto, at the time such part became effective, at all
other subsequent times until the expiration of the Prospectus Delivery Period (as defined
below), and at the First Closing Date and Second Closing Date (as hereinafter defined), the
most recent Statutory Prospectus distributed to investors generally, and the Prospectus (or
any amendment or supplement to the Prospectus), in each case at the time of filing or the
time of first use within the meaning of the Rules and Regulations, at all subsequent times
until expiration of the Prospectus Delivery Period, and at the First Closing Date and
Second Closing Date complied and will comply in all material respects with the applicable
requirements and provisions of the Securities Act and the Rules and Regulations and did not
and will 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, or the time of
first use within the meaning of the Rules and Regulations, at all subsequent times until
the expiration of the Prospectus Delivery Period, and at the First Closing Date and Second
Closing Date, 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 written information relating to an
Underwriter furnished to the Company by you, specifically for use in the preparation
thereof; it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 6(f).
-3-
(iii) Neither (A) the Issuer General Free Writing Prospectus(es) issued at or prior to
the Time of Sale and set forth on Schedule V, the information set forth on Schedule VI, and
the most recent Statutory Prospectus distributed to investors generally, all considered
together (collectively, the “Time of Sale Disclosure Package”), nor (B) any individual
Issuer Limited-Use Free Writing Prospectus, when considered together with the Time of Sale
Disclosure Package, includes or included as of the Time of Sale any untrue statement of a
material fact or omits or omitted as of the Time of Sale to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to statements
in or omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus based
upon and in conformity with written information furnished to the Company by you
specifically for use therein; it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 6(f).
As used in this paragraph and elsewhere in this Agreement:
(1) “Time of Sale” means [ Ÿ ]:00 **[a/p]m (Eastern time) on the date
of this Agreement.
(2) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, relating to the
Securities that (A) is required to be filed with the Commission by the Company, or
(B) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities Act
because it contains a description of the Securities or of the offering that does not
reflect the final terms, or is a “bona fide electronic roadshow,” as defined in Rule
433 of the Rules and Regulations, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in
the Company’s records pursuant to Rule 433(g) under the Securities Act.
(3) “Issuer General Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors, as
evidenced by its being specified in Schedule V to this Agreement.
(4) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus.
(iv) (A) Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the Prospectus Delivery Period or until any earlier date that the
Company notified or notifies the Underwriters as described in Section 4(c)(ii), did not,
does not and will not include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement, any Statutory Prospectus or
the Prospectus. The foregoing sentence does not apply to statements in or omissions from
any Issuer Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by you specifically for use therein; it being understood and
agreed that the only such information furnished by any Underwriter consists of the
information described as such in Section 6(f).
-4-
(B) (1) At the time of filing of the Registration Statement, and (2) at the
date hereof, the Company was not and is not an “ineligible issuer,” as defined in
Rule 405 under the Securities Act, including the Company or any Subsidiary in the
preceding three years not having been convicted of a felony or misdemeanor or having
been made the subject of a judicial or administrative decree or order as described
in Rule 405 (without taking account of any determination by the Commission pursuant
to Rule 405 that it is not necessary that the Company be considered an ineligible
issuer), nor an “excluded issuer” as defined in Rule 164 under the Securities Act.
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at
all subsequent times through the Prospectus Delivery Period, all other conditions to
use thereof as set forth in Rules 164 and 433 under the Securities Act.
(v) The financial statements of the Company, together with the related notes, set
forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus
comply in all material respects with the requirements of the Securities Act and fairly
present the financial condition of the Company and its consolidated subsidiaries as of the
dates indicated and the results of operations and changes in cash flows for the periods
therein specified in conformity with generally accepted accounting principles in the United
States consistently applied throughout the periods involved; the supporting schedules
included in the Registration Statement present fairly the information required to be stated
therein; all non-GAAP financial information included in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus complies with the requirements of
Regulation G and Regulation S-K under the Securities Act; and, except as disclosed in the
Time of Sale Disclosure Package and the Prospectus, there are no relationships with
unconsolidated entities or other persons, that may have a material current or, to the
Company’s knowledge, material future effect on the Company’s financial condition, results
of operations, liquidity, capital expenditures, capital resources or significant components
of revenue or expenses. To the Company’s knowledge, Amper, Politziner & Xxxxxx, P.C.,
which has expressed its opinion with respect to the financial statements and schedules
filed as a part of the Registration Statement and included in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus, is (x) an independent public
accounting firm within the meaning of the Securities Act and the Rules and Regulations, (y)
a registered public accounting firm (as defined in Section 2(a)(12) of the Xxxxxxxx-Xxxxx
Act of 2002 (the “Xxxxxxxx-Xxxxx Act”)) and (z) not in violation of the auditor
independence requirements of the Xxxxxxxx-Xxxxx Act. The financial information for the
Partner FCs set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus is derived from financial statements which, to the knowledge of the
Company, present fairly the financial condition, results of operations and changes in cash
flows of the Partner FCs as of the date or for the period indicated in conformity with
generally accepted accounting principles in the United States consistently applied
throughout the periods involved. Patient data for the Physician Practices set forth in the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus is derived
from medical management
-5-
systems under the control and supervision of the Company and, to the knowledge of the
Company, is accurate and complete in all material respects.
(vi) Each of the Company and its Subsidiaries and, to the Company’s Knowledge, the
Partner FCs has been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of the Company and its
Subsidiaries and, to the Company’s Knowledge, the Partner FCs has full corporate power and
authority to own its properties and conduct its business as currently being carried on and
as described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, and is duly qualified to do business as a foreign corporation in good standing
in each jurisdiction in which it owns or leases real property or in which the conduct of
its business makes such qualification necessary and in which the failure to so qualify
would have a material adverse effect upon the business, prospects, operations, condition
(financial or otherwise) or results of operations of the Company and its consolidated
subsidiaries, taken as a whole (“Material Adverse Effect”). “Knowledge,” when capitalized
and used herein, means the actual knowledge of the principal executive officers of the
Company who are named as such in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus.
(vii) Except as contemplated in the Time of Sale Disclosure Package and in the
Prospectus, subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, neither the Company nor any of its Subsidiaries has incurred
any material liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; and there has not been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants, convertible securities
or other rights to purchase the capital stock, of the Company or any of its Subsidiaries,
or any material adverse change in the business, prospects, operations, condition (financial
or otherwise) or results of operations of the Company and its consolidated subsidiaries,
taken as a whole (“Material Adverse Change”) or any development which could reasonably be
expected to result in any Material Adverse Change. To the Company’s Knowledge, except as
disclosed in the Time of Sale Disclosure Package and in the Prospectus, subsequent to the
respective dates as of which information is given in the Time of Sale Disclosure Package,
there has not been any material adverse change in the business, prospects, operations,
condition (financial or otherwise) or results of operations of the Partner FCs, taken as a
whole, or any development which could reasonably be expected to result in any such material
adverse change.
(viii) Except as disclosed in the Time of Sale Disclosure Package and in the
Prospectus, there is not pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding (a) to which the Company or any of its
Subsidiaries is a party or (b) which has as the subject thereof any property or assets
owned or leased by the Company or its Subsidiaries before or by any court or Governmental
Authority (as defined below), or any arbitrator, which, individually or in the aggregate,
-6-
could reasonably be expected to result in any Material Adverse Change or could
reasonably be expected to materially and adversely affect the ability of the Company to
perform its obligations under this Agreement. Except as disclosed in the Time of Sale
Disclosure Package and in the Prospectus, to the Knowledge of the Company, there is not
pending, threatened or contemplated any action, suit or proceeding (x) to which any Partner
FC is a party or (y) which has as the subject thereof any officer or director of a Partner
FC, employee benefit plan sponsored by any Partner FC, or any property or assets owned or
leased by any Partner FC before or by any court or Governmental Authority, or any
arbitrator, which, individually or in the aggregate, could reasonably be expected to result
in any Material Adverse Change or could reasonably be expected to materially and adversely
affect the ability of the Company to perform its obligations under this Agreement. Except
as disclosed in the Time of Sale Disclosure Package and in the Prospectus, to the knowledge
of the Company, there is not pending, threatened or contemplated any action, suit or
proceeding to which has as the subject thereof any officer or director of the Company or
any employee benefit plan sponsored by the Company or its Subsidiaries before or by any
court or Governmental Authority, or any arbitrator, which, individually or in the
aggregate, could reasonably be expected to result in any Material Adverse Change or could
reasonably be expected to materially and adversely affect the ability of the Company to
perform its obligations under this Agreement. There are no current or, to the knowledge of
the Company, pending, legal, governmental or regulatory actions, suits or proceedings (I)
to which the Company or any of its Subsidiaries is subject or (II) which has as the subject
thereof any property or assets owned or leased by the Company or its Subsidiaries that are
required to be described in the Registration Statement, Time of Sale Disclosure Package and
Prospectus by the Securities Act or by the Rules and Regulations and that have not been so
described. To the knowledge of the Company, there are no current or pending legal,
governmental or regulatory actions, suits or proceedings which has as the subject thereof
any officer or director of the Company or any employee benefit plan sponsored by the
Company or its Subsidiaries that are required to be described in the Registration
Statement, Time of Sale Disclosure Package and Prospectus by the Securities Act or by the
Rules and Regulations and that have not been so described. To the Knowledge of the
Company, there are no current or pending legal, governmental or regulatory actions, suits
or proceedings (A) to which any Partner FC is subject or (B) which have as the subject
thereof any officer or director of a Partner FC, employee benefit plan sponsored by any
Partner FC, or any property or assets owned or leased by any Partner FC that are required
to be described in the Registration Statement, Time of Sale Disclosure Package and
Prospectus by the Securities Act or by the Rules and Regulations and that have not been so
described.
(ix) There are no statutes, regulations, contracts or documents that are required to
be described in the Registration Statement, in the Time of Sale Disclosure Package and in
the Prospectus or required to be filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations that have not been so described or filed.
(x) This Agreement has been duly authorized, executed and delivered by the Company,
and, assuming due authorization, execution and delivery by the Underwriters, constitutes a
valid, legal and binding obligation of the Company,
-7-
enforceable in accordance with its terms, except as rights to indemnity hereunder may
be limited by federal or state securities laws and except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The execution, delivery
and performance of this Agreement and the consummation of the transactions herein
contemplated will not (A) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company or
the Subsidiaries or, to the Knowledge of the Company, of any Partner FC, pursuant to any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or the Subsidiaries or a Partner FC is a party or by which the Company or
the Subsidiaries or a Partner FC is bound or to which any of the property or assets of the
Company or the Subsidiaries or a Partner FC is subject, except for any such conflict,
breach, violation, default or imposition of a lien, charge or encumbrance that could not
reasonably be expected to result in a Material Adverse Effect, (B) result in any violation
of the provisions of the Company’s charter or by-laws or (C) result in the violation of any
law or statute or any judgment, order, rule, regulation or decree of any court or
arbitrator or federal, state or local governmental agency or regulatory authority having
jurisdiction over the Company, its Subsidiaries or, to the Knowledge of the Company, a
Partner FC, or any of their properties or assets (each, a “Governmental Authority”), except
for any such violation that could not reasonably be expected to result in a Material
Adverse Effect. No consent, approval, authorization or order of, or registration or filing
with any Governmental Authority is required for the execution, delivery and performance of
this Agreement or for the consummation of the transactions contemplated hereby, including
the issuance or sale of the Securities by the Company, except such as may be required under
the Securities Act, the rules of the Financial Industry Regulatory Authority (“FINRA”) or
state securities or blue sky laws, except for any consent, approval, authorization, order
or filing, the failure of which to make or obtain could not reasonably be expected to
result in a Material Adverse Effect; and the Company has full power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby, including the
authorization, issuance and sale of the Securities as contemplated by this Agreement.
(xi) Neither the Company nor any Subsidiary nor, to the Knowledge of the Company, any
Partner FC, has, or ever has had, any foreign operations.
(xii) All of the issued and outstanding shares of capital stock of the Company,
including the outstanding shares of Common Stock, are duly authorized and validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities that have not been waived in writing
(a copy of which has been delivered to counsel to the Underwriters); the Securities which
may be sold hereunder by the Company have been duly authorized and, when issued, delivered
and paid for in accordance with the terms of this Agreement, will have been validly issued
and will be fully paid and nonassessable; and the capital stock of the Company, including
the Common Stock, conforms to the description thereof in the Registration Statement, in the
Time of Sale Disclosure
-8-
Package and in the Prospectus. Except as otherwise disclosed in the Time of Sale
Disclosure Package, in the Registration Statement and in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, or any restriction upon
the voting or transfer of, any shares of Common Stock pursuant to the Company’s charter,
by-laws or any agreement or other instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound.
Except as disclosed in the Time of Sale Disclosure Package, in the Registration Statement
and in the Prospectus, neither the filing of the Registration Statement nor the offering or
sale of the Securities as contemplated by this Agreement gives rise to any rights for or
relating to the registration of any shares of Common Stock or other securities of the
Company for which waivers have not been obtained (collectively “Registration Rights”), and
any person to whom the Company has granted Registration Rights has agreed not to exercise
such rights until after expiration of the Lock-Up Period (as defined below). All of the
issued and outstanding shares of capital stock of each of the Company’s Subsidiaries have
been duly and validly authorized and issued and are fully paid and nonassessable, and,
except as otherwise described in the Time of Sale Disclosure Package, in the Registration
Statement and in the Prospectus, the Company owns of record and beneficially, free and
clear of any security interests, claims, liens, proxies, equities or other encumbrances,
all of the issued and outstanding shares of such stock. Except as described in the Time of
Sale Disclosure Package, in the Registration Statement and in the Prospectus, there are no
options, warrants, agreements, contracts or other rights in existence to purchase or
acquire from the Company or any consolidated subsidiary of the Company any shares of the
capital stock of the Company or any consolidated subsidiary of the Company. The Company
has an authorized and outstanding capitalization as set forth in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus under the caption
“Capitalization.” The Common Stock (including the Securities) conforms in all material
respects to the description thereof contained in the Time of Sale Disclosure Package and
the Prospectus. The description of the Company’s stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted thereunder, set forth in the
Time of Sale Disclosure Package and the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements, options and
rights.
(xiii) Except as disclosed in the Time of Sale Disclosure Package, in the Registration
Statement and in the Prospectus, the Company, each of the Subsidiaries and, to the
Knowledge of the Company, each Partner FC and each physician affiliated with a Physician
Practice, holds and is operating in compliance in all material respects with, and, except
as could not reasonably be expected to result in a Material Adverse Effect, has held and
operated in compliance with, all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, accreditations and orders of any Governmental Authority
or self-regulatory body required for the conduct of its business and all such franchises,
grants, authorizations, licenses, permits, easements, consents, certifications,
accreditations and orders are valid and in full force and effect; and neither the Company,
any of its Subsidiaries nor, to the Knowledge of the Company, any Partner FC has received
notice of any revocation or modification of any such franchise, grant, authorization,
license, permit, easement, consent, certification or order or has
-9-
reason to believe that any such franchise, grant, authorization, license, permit,
easement, consent, certification, accreditations or order will not be renewed in the
ordinary course; and the Company, each of its Subsidiaries and, to the Knowledge of the
Company, each of the Partner FCs is and, except as could not reasonably be expected to
result in a Material Adverse Effect, has been, in compliance in all material respects with
all applicable federal, state and local laws, regulations, rules, orders and decrees.
(xiv) The Company, the Subsidiaries and, to the Knowledge of the Company, the Partner
FCs have good and marketable title to all property (whether real or personal) described in
the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus as
being owned by them, in each case free and clear of all liens, claims, security interests,
other encumbrances or defects except such as are described in the Registration Statement,
in the Time of Sale Disclosure Package and in the Prospectus and except for such liens,
claims, security interests, encumbrances or defects that could not reasonably be expected
to result in a Material Adverse Effect. The property held under lease by the Company and
its Subsidiaries is held by them under valid, subsisting and enforceable leases with only
such exceptions with respect to any particular lease as do not interfere in any material
respect with the conduct of the business of the Company, its Subsidiaries and, to the
Knowledge of the Company, the Partner FCs.
(xv) The Company and each of its Subsidiaries owns, possesses, or can acquire on
reasonable terms, all Intellectual Property necessary for the conduct of the Company’s and
its Subsidiaries’ and, to the Knowledge of the Company, the Partner FCs’ business as now
conducted or as described in the Time of Sale Disclosure Package, in the Registration
Statement and in the Prospectus to be conducted, except as such failure to own, possess, or
acquire such rights could not reasonably be expected to result in a Material Adverse
Effect. Furthermore, (A) to the knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any such Intellectual Property, except as
such infringement, misappropriation or violation could not reasonably be expected to result
in a Material Adverse Effect; (B) there is no pending or, to the knowledge of the Company,
threatened, action, suit, proceeding or claim by others challenging the Company’s or any of
its Subsidiaries’ rights in or to any such Intellectual Property, except as could not
reasonably be expected to result in a Material Adverse Effect; (C) the Intellectual
Property owned by the Company and its Subsidiaries, and to the knowledge of the Company,
the Intellectual Property licensed to the Company and its Subsidiaries, has not been
adjudged invalid or unenforceable, in whole or in part, and there is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim, except as
could not reasonably be expected to result in a Material Adverse Effect; (D) there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim
by others that the Company, any of its Subsidiaries or, to the Knowledge of the Company,
the Partner FCs infringes, misappropriates or otherwise violates any Intellectual Property
or other proprietary rights of others, except as could not reasonably be expected to result
in a Material Adverse Effect; and (E) to the Company’s knowledge, no employee of the
Company or
-10-
any of its Subsidiaries, and, to the Company’s Knowledge, no employee of any Physician
Practice, is in violation of any term of any employment contract, patent disclosure
agreement, invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a former employer
where the basis of such violation relates to such employee’s employment with the Company or
any of its Subsidiaries or any Partner FC or actions undertaken by the employee while
employed with the Company or any of its Subsidiaries or the Partner FCs, except as such
violation could not reasonably be expected to result in a Material Adverse Effect.
“Intellectual Property” shall mean all patents, patent applications, trade and service
marks, trade and service xxxx registrations, trade names, copyrights, licenses, inventions,
trade secrets, domain names, technology, know-how and other intellectual property.
(xvi) Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the
Company, any Partner FC is in violation of its respective charter or by-laws. Neither the
Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any Partner FC is
in breach of or otherwise in default, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note, indenture, loan agreement or
any other contract, lease or other instrument to which the Company, any of its Subsidiaries
or, to the Knowledge of the Company, any Partner FC is subject or by which the Company, any
of its Subsidiaries or, to the Knowledge of the Company, any Partner FC is bound, or to
which any of the property or assets of the Company or any of its Subsidiaries or, to the
Knowledge of the Company, any Partner FC is subject, except as could not reasonably be
expected to result in a Material Adverse Effect.
(xvii)
The Company and its Subsidiaries and, to the Knowledge of the Company, the
Partner FCs have timely filed all federal, state and local income and franchise tax returns
required to be filed and are not in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto, other than any which the
Company or any of its Subsidiaries or the Partner FCs is contesting in good faith or except
as could not reasonably be expected to result in a Material Adverse Effect. There is no
pending dispute with any taxing authority relating to any of such returns, and the Company
has no knowledge of any proposed liability for any tax to be imposed upon the properties or
assets of the Company and its Subsidiaries for which there is not an adequate reserve
reflected in the Company’s financial statements included in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus.
(xviii) The Company has not distributed and will not distribute any prospectus or
other offering material in connection with the offering and sale of the Securities other
than any Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus or
other materials permitted by the Securities Act to be distributed by the Company; provided,
however, that, except as set forth on Schedule V, the Company has not made and will not
make any offer relating to the Securities that would constitute
-11-
a “free writing prospectus” as defined in Rule 405 under the Securities Act, except in
accordance with the provisions of Section 4(n) of this Agreement.
(xix) The Common Stock is registered pursuant to Section 12(b) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and is included or approved for
listing on the Nasdaq Global Market and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the Nasdaq Global Market nor has the
Company received any notification that the Commission or the Nasdaq Global Market is
contemplating terminating such registration or listing. The Company has complied in all
material respects with the applicable requirements of the Nasdaq Global Market for
maintenance of inclusion of the Common Stock thereon. The Company has filed an application
to include the Securities on the Nasdaq Global Market. Except as previously disclosed to
counsel for the Underwriters or as set forth in the Time of Sale Disclosure Package and the
Prospectus, to the knowledge of the Company, no beneficial owners of the Company’s capital
stock or subordinated debt who, together with their associated persons and affiliates, hold
in the aggregate 10% or more of such capital stock or subordinated debt, have any direct or
indirect association or affiliate with a FINRA member.
(xx) Except as disclosed in the Time of Sale Disclosure Package, in the Registration
Statement and in the Prospectus, other than the Subsidiaries of the Company listed on
Schedule IV, the Company, directly or indirectly, owns or holds no capital stock or other
equity, ownership, profits or proprietary interest in any corporation, partnership,
association, trust or other entity.
(xxi) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted
accounting principles in the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any
differences. Except as disclosed in the Time of Sale Disclosure Package, in the
Registration Statement and in the Prospectus, the Company’s internal control over financial
reporting is effective and none of the Company, its board of directors and audit committee
is aware of any “significant deficiencies” or “material weaknesses” (each as defined by the
Public Company Accounting Oversight Board) in its internal control over financial
reporting, or any fraud, whether or not material, that involves management or other
employees of the Company who have a significant role in the Company’s internal controls;
and since the end of the latest audited fiscal year, there has been no change in the
Company’s internal control over financial reporting (whether or not remediated) that has
materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting. The Company’s board of directors has, subject to the
exceptions, cure periods and the phase in periods specified in the applicable stock
exchange rules (“Exchange Rules”), validly appointed
-12-
an audit committee to oversee internal accounting controls whose composition satisfies
the applicable requirements of the Exchange Rules and the Company’s board of directors
and/or the audit committee has adopted a charter that satisfies the requirements of the
Exchange Rules.
(xxii) Other than as contemplated by this Agreement, the Company has not incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xxiii) Except as disclosed in the Time of Sale Disclosure Package, in the
Registration Statement and in the Prospectus, each of the Company, its Subsidiaries and, to
the Company’s knowledge, the Physician Practices carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of its business; all
policies of insurance and any fidelity or surety bonds insuring the Company or any of its
Subsidiaries or the Physician Practices or the business, assets, employees, officers and
directors of the Company or its Subsidiaries or the Physician Practices are in full force
and effect; the Company, its Subsidiaries and, to the Knowledge of the Company, the Partner
FCs are in compliance with the terms of such policies and instruments in all material
respects; there are no claims by the Company or any of its Subsidiaries or, to the
Knowledge of the Company, the Partner FCs under any such policy or instrument as to which
any insurance company is denying coverage or defending under a reservation of rights
clause, except as could not reasonably be expected to have a Material Adverse Effect;
during the past 12 months, neither the Company nor any of its Subsidiaries has been refused
any insurance coverage sought or applied for; and neither the Company nor any of its
Subsidiaries nor, to the Knowledge of the Company, any Partner FC has reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(xxiv) [Intentionally omitted]
(xxv) The Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(xxvi) The Company is in compliance in all material respects with all applicable
provisions of the Xxxxxxxx-Xxxxx Act and the rules and regulations of the Commission
thereunder.
(xxvii) The Company has established and maintains disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and
procedures are effective in ensuring that material information relating to the Company and
its consolidated subsidiaries is made known to the principal executive officer and the
principal financial officer. The Company has utilized such controls and procedures in
preparing and evaluating the disclosures in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus.
-13-
(xxviii) Except as disclosed in the Time of Disclosure Package and the Prospectus,
neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any
Partner FC is in violation of any statute, any rule, regulation, decision or order of any
Governmental Authority or any court relating to the use, disposal or release of hazardous
or toxic substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), owns
or operates any real property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or is subject to any claim relating to any Environmental Laws, which
violation, contamination, liability or claim would individually or in the aggregate, have a
Material Adverse Effect; and the Company is not aware of any pending investigation which
might lead to such a claim.
(xxix) (i) To the knowledge of the Company, no “prohibited transaction” as defined
under Section 406 of ERISA or Section 4975 of the Code and not exempt under ERISA Section
408 and the regulations and published interpretations thereunder has occurred with respect
to any Employee Benefit Plan. At no time beginning on or after January 1, 2004 has the
Company or any ERISA Affiliate maintained, sponsored, participated in, contributed to or
had any liability or obligation in respect of any Employee Benefit Plan subject to Part 3
of Subtitle B of Title I of ERISA, Title IV of ERISA, or Section 412 of the Code or any
“multiemployer plan” as defined in Section 3(37) of ERISA or any multiple employer plan for
which the Company or any ERISA Affiliate has incurred or could incur liability under
Section 4063 or 4064 of ERISA. No Employee Benefit Plan provides or promises retiree
health, life insurance, or other retiree welfare benefits except as may be required by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar state law.
Each Employee Benefit Plan is and, except as could not reasonably be expected to result in
a Material Adverse Effect, has been, operated in material compliance with its terms and all
applicable laws, including but not limited to ERISA and the Code and, to the knowledge of
the Company, no event has occurred (including a “reportable event” as such term is defined
in Section 4043 of ERISA) and no condition exists that would subject the Company or any
ERISA Affiliate to any material tax, fine, lien, penalty or liability imposed by ERISA, the
Code or other applicable law. Each Employee Benefit Plan intended to be qualified under
Code Section 401(a) is so qualified and has a favorable determination or opinion letter
from the IRS upon which it can rely, and any such determination or opinion letter remains
in effect and has not been revoked; to the knowledge of the Company, nothing has occurred
since the date of any such determination or opinion letter that is reasonably likely to
adversely affect such qualification; and (ii) the Company does not have any obligations
under any collective bargaining agreement with any union and no organization efforts are
underway with respect to Company employees. The Company does not have, maintain or
contribute to any Foreign Benefit Plan. As used in this Agreement, “Code” means the
Internal Revenue Code of 1986, as amended; “Employee Benefit Plan” means any “employee
benefit plan” within the meaning of Section 3(3) of ERISA, including, without limitation,
all stock purchase, stock option, stock-based severance, employment, change-in-control,
medical, disability, fringe benefit, bonus, incentive, deferred compensation, employee loan
and all other employee benefit plans, agreements, programs, policies or other arrangements,
whether
-14-
or not subject to ERISA, under which (A) any current or former employee, director or
independent contractor of the Company or its consolidated subsidiaries has any present or
future right to benefits and which are contributed to, sponsored by or maintained by the
Company or any of its respective subsidiaries or (B) the Company or any of its consolidated
subsidiaries has had or has any present or future obligation or liability; “ERISA” means
the Employee Retirement Income Security Act of 1974, as amended; “ERISA Affiliate” means
any member of the company’s controlled group as defined in Code Section 414(b), (c), (m) or
(o); and “Foreign Benefit Plan” means any Employee Benefit Plan established, maintained or
contributed to outside of the United States of America or which covers any employee working
or residing outside of the United States.
(xxx) No labor problem or dispute with the employees of the Company or any of its
Subsidiaries or the Physician Practices exists or is threatened or imminent, and the
Company is not aware of any existing or imminent labor disturbance by the employees of any
of its, its Subsidiaries’ or the Physician Practices’ principal suppliers, contractors or
customers, that could reasonably be expected to result in a Material Adverse Effect.
(xxxi) No Subsidiary of the Company is currently prohibited from paying any dividends
to the Company or from making any other distribution on such Subsidiary’s capital stock,
except as described in or contemplated by the Time of Sale Disclosure Package and the
Prospectus. No Subsidiary or, to the Knowledge of the Company, Partner FC is prohibited
from repaying to the Company any loans or advances to such Subsidiary or Partner FC from
the Company or paying any amount due to the Company or its Subsidiaries pursuant to
agreements between such person and the Company or its Subsidiaries, except for any
prohibition that could not reasonably be expected to result in Material Adverse Effect.
(xxxii) The Company has no reason to believe that any third-party statistical and
market-related data included in the Time of Sale Disclosure Package, the Registration
Statement and the Prospectus are not based on or derived from sources that are reliable and
accurate in all material respects.
(xxxiii) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, the Company, its Subsidiaries, the Company’s Attain IVF Refund
Program and Attain IVF Multi-Cycle Program (collectively, the “Attain IVF Programs”) and, to
the Company’s Knowledge, the Partner FCs, have been and are in compliance in all material
respects with the corporate practice of medicine laws in each state in which the Physician
Practices provide medical services or in which any of the Attain IVF Programs is offered.
In states in which the corporate practice of medicine is prohibited, the Company performs
only non-medical administrative services, does not offer medical services and does not
exercise influence or control over the independent medical decisionmaking of the physicians
or their affiliated Physician Practice. Neither the Company, its Subsidiaries nor, to the
Knowledge of the Company, any Partner FC has received any notification from any state
regulatory authority asserting that such person is not compliance with corporate practice of
medicine laws.
-15-
(xxxiv) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, the Company, its Subsidiaries, the Company’s Attain IVF Programs
and, to the Company’s Knowledge, the Partner FCs, have been and are in compliance in all
material respects with state laws prohibiting providers from dividing with anyone, other
than providers who are part of the same group practice, any fee, commission, rebate or other
form of compensation for any services not actually and personally rendered. Neither the
Company, its Subsidiaries nor, to the Company’s Knowledge, any Partner FC, has received any
notification from any state regulatory or similar authority asserting that such person is
not compliant with such “fee-splitting” laws.
(xxxv) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, neither the Company, its Subsidiaries, nor, to the Company’s
Knowledge, any Partner FC, has made any knowing and willful offer or payment, or has
solicited or received any form of remuneration in return for, or with the purpose to induce,
the referral of patients, or in return for, or with the purpose to induce, the purchase,
lease or order of items or services, that are covered by Medicare, Medicaid or other federal
or private health care programs. The Company, its Subsidiaries and, to the Company’s
Knowledge, the Partner FCs, have been and are in compliance in all material respects with
state and federal physician self-referral “Xxxxx” laws and regulations prohibiting
physician’s referral of health services to any entity with which that physician has a
financial relationship. Neither the Company, its Subsidiaries, nor, to the Company’s
Knowledge, any Partner FC has received any notification from any state or federal regulatory
authority asserting that such person is not compliant any “anti-kickback” laws or laws
prohibiting self-referral.
(xxxvi) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, the Company, its Subsidiaries, and, to the Company’s Knowledge,
the Partner FCs, have been and are in compliance in all material respects with the Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”), the Health Information
Technology for Economic and Clinical Health Act (“HITECH”), the regulations promulgated
thereunder, any “business associate” agreements that the Company or its Subsidiaries have
executed pursuant to HIPAA, and state laws governing the privacy or security of protected
health information. Neither the Company, its Subsidiaries, nor, to the Company’s Knowledge,
any Partner FC has received any notification from any state or federal regulatory authority
asserting that such person is not compliant with HIPAA or HITECH.
(xxxvii) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, neither the Company, its Subsidiaries, nor, to the Company’s
Knowledge, the Partner FCs, have engaged or presently engage in the business of insurance in
violation of state laws governing the licensing and business of insurance and the Company’s
Attain IVF Programs are not insurance. Neither the Company, its Subsidiaries, nor, to the
Company’s Knowledge, any Partner FC has received any notification from any state regulatory
or similar authority asserting that such person is engaged in the business of insurance.
-16-
(xxxviii) Except as disclosed in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, the Company and its Subsidiaries have been and are in
compliance in all material respects with federal and state laws relating to franchises.
Neither the Company nor its Subsidiaries has received any notification from any federal or
state regulatory or similar authority asserting that such person is not compliant with such
franchise laws.
(b) Any certificate signed by any officer of the Company and delivered to you or to counsel
for the Underwriters shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Firm
Shares to the several Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Firm Shares set forth opposite the name of such Underwriter
in Schedule I hereto. The purchase price for each Firm Share shall be $[ Ÿ ] per share.
In making this Agreement, each Underwriter is contracting severally and not jointly; except as
provided in Section 8 hereof, the agreement of each Underwriter is to purchase only the respective
number of Firm Shares specified in Schedule I.
The Firm Shares will be delivered by the Company to you for the accounts of the several
Underwriters against payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 800
Nicollet Mall, Minneapolis, Minnesota, or such other location as may be mutually acceptable, at
9:00 a.m. Central time on the third (or if the Securities are priced, as contemplated by Rule
15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as you and the Company determine pursuant
to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery being herein referred to
as the “First Closing Date.” If the Underwriters so elect, delivery of the Firm Shares may be made
by credit through full fast transfer to the accounts at The Depository Trust Company designated by
the Underwriters. Certificates representing the Firm Shares, in definitive form and in such
denominations and registered in such names as you may request upon at least two business days’
prior notice to the Company, will be made available for checking at a reasonable time preceding the
First Closing Date at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 800 Nicollet Mall,
Minneapolis, Minnesota, or such other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company hereby grants to the several
Underwriters an option to purchase all or any portion of the Option Shares at the same purchase
price as the Firm Shares, for use solely in covering any over-allotments made by the Underwriters
in the sale and distribution of the Firm Shares. The option granted hereunder may be exercised in
whole or in part at any time (but not more than once) within 30 days after the effective date of
this Agreement upon notice (confirmed in writing) by the Underwriters to the Company setting forth
the aggregate number of Option Shares as to which the several
-17-
Underwriters are exercising the option, the names and denominations in which the certificates
for the Option Shares are to be registered and the date and time, as determined by you, when the
Option Shares are to be delivered, such time and date being herein referred to as the “Second
Closing” and “Second Closing Date”, respectively; provided, however, that the Second Closing Date
shall not be earlier than the First Closing Date nor earlier than the second business day after the
date on which the option shall have been exercised, unless the Underwriters have exercised their
option to purchase all or a portion of the Option Shares within one business day after the date of
this Agreement, in which case the Company may, at its option, close the Second Closing on the First
Closing Date. The number of Option Shares to be purchased by each Underwriter shall be the same
percentage of the total number of Option Shares to be purchased by the several Underwriters as the
number of Firm Shares to be purchased by such Underwriter is of the total number of Firm Shares to
be purchased by the several Underwriters, as adjusted by the Underwriters in such manner as the
Underwriters deem advisable to avoid fractional shares. No Option Shares shall be sold and
delivered unless the Firm Shares previously have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to you for the accounts of the several
Underwriters against payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 800
Nicollet Mall, Minneapolis, Minnesota, or such other location as may be mutually acceptable at 9:00
a.m., Central time, on the Second Closing Date. If the Underwriters so elect, delivery of the
Option Shares may be made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Underwriters. Certificates representing the Option Shares in
definitive form and in such denominations and registered in such names as you have set forth in
your notice of option exercise, or evidence of their issuance, will be made available for checking
at a reasonable time preceding the Second Closing Date at the office of Xxxxx Xxxxxxx & Co., U.S.
Bancorp Center, 800 Nicollet Mall, Minneapolis, Minnesota, or such other location as may be
mutually acceptable.
4. Covenants. The Company covenants and agrees with the several Underwriters as follows:
(a) The Company will prepare and file a Prospectus containing the information omitted
therefrom pursuant to Rule 430A of the Rules and Regulations with the Commission within the time
period required by, and otherwise in accordance with the provisions of, Rules 424(b) and 430A of
the Rules and Regulations; if the Company has elected to rely upon Rule 462(b) of the Rules and
Regulations to increase the size of the offering registered under the Securities Act and the Rule
462(b) Registration Statement has not yet been filed and become effective, the Company will prepare
and file the Rule 462(b) Registration Statement with the Commission within the time period required
by, and otherwise in accordance with the provisions of, Rule 462(b) and the Securities Act; prior
to the First Closing Date, the Company will prepare and file with the Commission, promptly upon
your reasonable request, any amendments or supplements to the Registration Statement or Prospectus
that, based on the advice of counsel, are necessary in connection with the distribution of the
Securities by the Underwriters; and the Company will furnish the Underwriters and counsel for the
Underwriters a copy of any proposed amendment or supplement to the Registration Statement or
Prospectus and will not file any amendment or supplement to the Registration Statement or
Prospectus to which you shall
-18-
reasonably object by notice to the Company after having been furnished a copy a reasonable
time prior to the filing.
(b) After the date of this Agreement, the Company shall promptly advise the Underwriters (A)
during the Prospectus Delivery Period, of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (B) of 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, the Time of Sale Disclosure Package or the Prospectus, (C) of the time and
date that any post-effective amendment to the Registration Statement becomes effective, (D) of 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 its use
or the use of any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or
any Issuer Free Writing Prospectus, or (E) during the Prospectus Delivery Period, of any
proceedings to remove, suspend or terminate from listing or quotation the Common Stock from the
Nasdaq Global Market, 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
reasonable best efforts to obtain the lifting of such order as soon as possible. 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 Rule 424(b), Rule 433 or Rule 462 were received in a timely manner by the
Commission (without reliance on Rule 424(b)(8) or Rule 164(b)).
(c) (i) During the period beginning on the date hereof and ending on the later of the Second
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 (assuming the absence of Rule 172 under the Securities Act),
in connection with sales by an Underwriter or dealer (the “Prospectus Delivery Period”), the
Company will use reasonable best efforts to comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to
time in force, and by the Exchange Act so far as necessary to permit the continuance of sales of or
dealings in the Securities as contemplated by the provisions hereof, the Time of Sale Disclosure
Package and the Prospectus. If during such period any event occurs as a result of which the
Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale
Disclosure Package) would include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary or appropriate in the opinion of
the Company or its counsel or counsel to the Underwriters to amend the Registration Statement or
supplement the Prospectus (or, if the Prospectus is not yet available to prospective purchasers,
the Time of Sale Disclosure Package) to comply with the Securities Act, the Company will promptly
notify you and will amend the Registration Statement or supplement the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) (at
the expense of the Company) so as to correct such statement or omission or effect such compliance.
(ii) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred, or through the Prospectus Delivery Period occurs, an event or development as a
result of which such Issuer Free Writing Prospectus conflicted or during such time would
conflict with the information contained in the Registration
-19-
Statement, the Statutory Prospectus or the Prospectus or included or during such time
would include an untrue statement of a material fact or omitted or during such time would
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances prevailing at that subsequent time, not misleading, the Company
has promptly notified or promptly will notify the Underwriters and has promptly amended or
will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus
to eliminate or correct such conflict, untrue statement or omission.
(d) The Company shall take or cause to be taken all necessary action to qualify the Securities
for sale under the securities laws of such jurisdictions as you reasonably designate and to
continue such qualifications in effect so long as required for the distribution of the Securities,
except that the Company shall not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in any state.
(e) The Company will furnish, at its own expense, to the Underwriters and counsel for the
Underwriters copies of the Registration Statement (which will include three complete manually
signed copies of the Registration Statement and all consents and exhibits filed therewith), and to
the Underwriters and any dealer the Time of Sale Disclosure Package, the Prospectus, any Issuer
Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as you may from time to time reasonably request.
(f) The Company will make generally available to its security holders as soon as practicable,
but in no event later than 15 months after the end of the Company’s current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month period that shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(g) The Company, whether or not the transactions contemplated hereunder are consummated or
this Agreement is terminated, will pay or cause to be paid (i) all expenses (including transfer
taxes allocated to the respective transferees) incurred in connection with the delivery to the
Underwriters of the Securities, (ii) all expenses and fees (including, without limitation, fees and
expenses of the Company’s accountants and counsel) in connection with the preparation, printing,
filing, delivery, and shipping of the Registration Statement (including the financial statements
therein and all amendments, schedules, and exhibits thereto), the Securities, each Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus
and any amendment thereof or supplement thereto, and the printing, delivery, and shipping of this
Agreement and other underwriting documents, including Blue Sky Memoranda (covering the states and
other applicable jurisdictions), (iii) all filing fees and fees and disbursements of the
Underwriters’ counsel incurred in connection with the qualification of the Securities for offering
and sale by the Underwriters or by dealers under the securities or blue sky laws of the states and
other jurisdictions which you shall designate, (iv) the fees and expenses of any transfer agent or
registrar, (v) the filing fees and fees and disbursements of Underwriters’ counsel incident to any
required review and approval by FINRA of the terms of the sale of the Securities, (vi) listing
fees, if any, (vii) the cost and expenses of the Company relating to investor presentations or any
“roadshow” undertaken in connection with marketing of the Securities, and (viii) all other
-20-
costs and expenses of the Company incident to the performance of its obligations hereunder
that are not otherwise specifically provided for herein. Notwithstanding the foregoing, if the
transactions contemplated hereunder are not consummated or this Agreement is terminated, the
Company shall only be obligated to pay to the Underwriters or any person associated with the
Underwriters those amounts set forth in clauses (i) through (viii) that represent out-of-pocket
accountable expenses actually incurred by the Underwriters or any person associated with the
Underwriters.
(h) The Company will apply the net proceeds from the sale of the Securities to be sold by it
hereunder for the purposes set forth in the Time of Sale Disclosure Package and in the Prospectus.
(i) The Company will not, without the prior written consent of the Underwriters, from the date
of execution of this Agreement and continuing to and including the date 90 days after the date of
the Prospectus (the “Lock-Up Period”), (i) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, except (x) to the Underwriters pursuant to this
Agreement, (y) the issuance of Common Stock pursuant to outstanding options under the Company’s
existing long-term compensation plans or (z) to IAT Reinsurance Company Ltd., a Bermuda limited
liability company (“IAT”) on the terms and subject to the conditions described in the Time of Sale
Disclosure Package, the Registration Statement and the Prospectus. The Company agrees not to
accelerate the vesting of any option or warrant or the lapse of any repurchase right prior to the
expiration of the Lock-Up Period.
If (1) during the last 17 days of the Lock-Up Period, (a) the Company issues an earnings
release, (b) the Company publicly announces material news or (c) a material event relating to the
Company occurs; or (2) prior to the expiration of the Lock-Up Period, the Company announces that it
will release earnings results during the 16-day period beginning on the last day of the Lock-Up
Period, then the restrictions in this Agreement, unless otherwise waived by the Underwriters in
writing, shall continue to apply until the expiration of the date that is 18 calendar days after
the date on which (x) the Company issues the earnings release, (y) the Company publicly announces
material news or (z) a material event relating to the Company occurs. The Company will provide the
Underwriters and each shareholder subject to the Lock-Up Agreement (as defined below) with prior
notice of any such announcement that gives rise to the extension of the Lock-Up Period.
(j) The Company has caused to be delivered to you prior to the date of this Agreement a
letter, substantially in the form of Exhibit A hereto (the “Lock-Up Agreement”), from each of the
Company’s directors and officers and IAT. The Company will issue stop-transfer instructions to the
transfer agent for the Common Stock with respect to any transaction or contemplated transaction
that would constitute a breach of or default under the applicable Lock-Up Agreement.
-21-
(k) The Company has not taken and will not take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in, or which has constituted, the
stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Securities.
(l) During the Prospectus Delivery Period, the Company will file on a timely basis with the
Commission such periodic and special reports as required by the Rules and Regulations.
(m) During the Prospectus Delivery Period, the Company and its consolidated subsidiaries will
comply with all applicable provisions of the Xxxxxxxx-Xxxxx Act.
(n) The Company represents and agrees that, unless it obtains the prior written consent of
Xxxxx Xxxxxxx & Co., and each Underwriter severally represents and agrees that, unless it obtains
the prior written consent of the Company and Xxxxx Xxxxxxx & Co., it has not made and will not make
any offer relating to the Securities that would constitute an “issuer free writing prospectus,” as
defined in Rule 433 under the Securities Act, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405 under the Securities Act, required to be filed with the
Commission; provided that the prior written consent of the parties hereto shall be deemed to have
been given in respect of the free writing prospectuses included in Schedule V. Any such free
writing prospectus consented to by the Company and Xxxxx Xxxxxxx & Co. is hereinafter referred to
as a “Permitted Free Writing Prospectus.” The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely Commission filing where
required, legending and record keeping.
5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy, as of the date hereof and at each of the First Closing Date
and the Second Closing Date (as if made at such Closing Date), of and compliance with all
representations, warranties and agreements of the Company contained herein, to the performance by
the Company of their respective obligations hereunder and to the following additional conditions:
(a) If not yet effective, the Registration Statement shall have become effective not later
than 5:00 p.m. Central time, on the date of this Agreement, or such later time and date as you
shall approve; if filing of the Prospectus, or any amendment or supplement thereto, or any Issuer
Free Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the
Company shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free
Writing Prospectus with the Commission in the manner and within the time period so required
(without reliance on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall remain
effective; no stop order suspending the effectiveness of the Registration Statement or any part
thereof, any Rule 462(b) Registration Statement, or any amendment thereof, nor suspending or
preventing the use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall
have been initiated or threatened; any request of the Commission for additional information (to be
included in the Registration Statement, the Time of Sale
-22-
Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that (i) the Registration Statement or any
amendment thereof or supplement thereto contains an untrue statement of a material fact which, in
your opinion taking into consideration the advice of your counsel, is material or omits to state a
material fact which, in your opinion taking into consideration the advice of your counsel, is
required to be stated therein or necessary to make the statements therein not misleading, or (ii)
the Time of Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement
thereto, or any Issuer Free Writing Prospectus contains an untrue statement of fact which, in your
opinion taking into consideration the advice of your counsel, is material, or omits to state a fact
which, in your opinion taking into consideration the advice of your counsel, is material and is
required to be stated therein, or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(c) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package, neither the Company nor any of its consolidated subsidiaries shall have incurred any
material liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any kind with respect
to its capital stock; and there shall not have been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in the short-term or long-term
debt, or any issuance of options, warrants, convertible securities or other rights to purchase the
capital stock of the Company or any of its consolidated subsidiaries, or any Material Adverse
Change or any development which could reasonably be expected to result in any Material Adverse
Change (whether or not arising in the ordinary course of business) the effect of which, in any such
case described above, in your judgment, makes it impractical or inadvisable to offer or deliver the
Securities on the terms and in the manner contemplated in the Time of Sale Disclosure Package and
in the Prospectus.
(d) On or after the Time of Sale (i) no downgrading shall have occurred in the rating accorded
any of the Company’s securities by any “nationally recognized statistical organization,” as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii)
no such organization shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company’s securities.
(e) On each Closing Date, there shall have been furnished to you, as the Underwriters, the
opinion of Xxxxxx & Xxxxxxx LLP, counsel for the Company, dated such Closing Date and addressed to
you in substantially the form attached hereto as Exhibit B.
(f) On each Closing Date, there shall have been furnished to you, as the Underwriters, the
opinion of Xxxxxx Xxxxx, Vice President and General Counsel of the Company, dated such Closing Date
and addressed to you in substantially the form attached hereto as Exhibit C.
-23-
(g) On each Closing Date, there shall have been furnished to you, as the Underwriters, such
opinion or opinions from Faegre & Xxxxxx LLP, counsel for the several Underwriters, dated such
Closing Date and addressed to you, with respect to the formation of the Company, the validity of
the Securities, the Registration Statement, the Time of Sale Disclosure Package, the Prospectus and
other related matters as you reasonably may request, and such counsel shall have received such
papers and information as they request to enable them to pass upon such matters.
(h) On each Closing Date you, as the Underwriters, shall have received a letter of Amper,
Politziner & Xxxxxx, P.C., dated such Closing Date and addressed to you, confirming that they are
independent public accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualifications of accountants under Rule 2-01 of
Regulation S-X of the Commission, and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of which specified
financial information is given in the Time of Sale Disclosure Package, as of a date not prior to
the date hereof or more than five days prior to the date of such letter), the conclusions and
findings of said firm with respect to the financial information and other matters covered by its
letter delivered to you concurrently with the execution of this Agreement, and the effect of the
letter so to be delivered on such Closing Date shall be to confirm the conclusions and findings set
forth in such prior letter.
(i) On each Closing Date, there shall have been furnished to you, as the Underwriter, a
certificate, dated such Closing Date and addressed to you, signed by the chief executive officer
and by the chief financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of such Closing Date, and the
Company has complied with all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to such Closing Date; and
(ii) No stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of the
Securities for offering or sale nor suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued,
and no proceeding for that purpose has been instituted or, to the best of their knowledge,
is contemplated by the Commission or any state or regulatory body.
(j) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) The Company shall have furnished to you and counsel for the Underwriters such additional
documents, certificates and evidence as you or they may have reasonably requested.
(l) The Company shall have received all of the Lock-Up Agreements referenced in Section 4.
-24-
(m) The Securities to be delivered on such Closing Date will have been approved for listing on
the Nasdaq Global Market, subject to official notice of issuance.
(n) Payment for 500,000 shares of Common Stock offered and sold by the Company to IAT shall
have been received by the Company, and such shares shall have been registered and sold on the terms
and subject to the conditions described in the Time of Sale Disclosure Package, the Registration
Statement and the Prospectus.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are satisfactory in form and substance to you and counsel for the
Underwriters. The Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter from and against any
losses, claims, damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Securities Act or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement,
including the 430A Information and any other information deemed to be a part of the Registration
Statement at the time of effectiveness and at any subsequent time pursuant to the Rules and
Regulations, if applicable, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or arise out
of or are based upon the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any
such amendment or supplement, or any Issuer Free Writing Prospectus, in reliance upon and in
conformity with written information furnished to the Company by you, or by any Underwriter through
you, specifically for use in the preparation thereof; it being understood and agreed that the only
information furnished by an Underwriter consists of the information described as such in Section
6(f).
(b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the Company
from and against any losses, claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus or
-25-
arise out of or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, 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 Time of Sale Disclosure Package, the Prospectus, or any such amendment or
supplement, or any Issuer Free Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by you, or by such Underwriter through you, specifically for
use in the preparation thereof (it being understood and agreed that the only information furnished
by an Underwriter consists of the information described as such in Section 6(f)), and will
reimburse the Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the indemnifying party shall not
relieve the indemnifying party from any liability that it may have to any indemnified party except
to the extent such indemnifying party has been materially prejudiced by such failure (through the
forfeiture of substantive rights or defenses). In case any such action shall be brought against
any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the indemnifying party to
such indemnified party of the indemnifying party’s election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such subsection for any
legal or other expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however, that if, in the
sole judgment of the Underwriters, it is advisable for the Underwriters to be represented as a
group by separate counsel, the Underwriters shall have the right to employ a single counsel (in
addition to local counsel) to represent the Underwriters and all Underwriters who may be subject to
liability arising from any claim in respect of which indemnity may be sought by the Underwriters
under subsection (a) of this Section 6, in which event the reasonable fees and expenses of such
separate counsel shall be borne by the indemnifying party or parties and reimbursed to the
Underwriters as incurred. An indemnifying party shall not be obligated under any settlement
agreement relating to any action under this Section 6 to which it has not agreed in writing. In
addition, no indemnifying party shall, without the prior written consent of the indemnified party
(which consent shall not be unreasonably withheld or delayed), effect any settlement of any pending
or threatened proceeding unless such settlement includes an unconditional release of such
indemnified party for all liability on claims that are the subject matter of such proceeding and
does not include a statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section 6 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
-26-
result of the losses, claims, damages or liabilities referred to in subsection (a) or (b)
above, (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of the Securities 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
in connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters and the parties’ relevant
intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in the
first sentence of this subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be in addition to any liability
which the Company may otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Securities Act; and the
obligations of the Underwriters under this Section 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to each officer of the
Company who has signed the Registration Statement and to each person, if any, who controls the
Company within the meaning of the Securities Act.
(f) The Underwriters severally confirm and the Company acknowledges that the statements with
respect to the public offering of the Securities by the Underwriters set forth in the second and
tenth through twenty-seventh paragraphs under the caption “Underwriting” in
-27-
the Time of Sale Disclosure Package and in the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement, any Preliminary Prospectus,
the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus.
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company herein or in certificates delivered pursuant hereto, including but not
limited to the agreements of the several Underwriters, the Company contained in Section 6 hereof,
shall remain operative and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling person thereof, or the Company or any of its officers,
directors, or controlling persons, and shall survive delivery of, and payment for, the Securities
to and by the Underwriters hereunder.
8. Substitution of Underwriters.
If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm Shares
agreed by such Underwriter or Underwriters to be purchased hereunder and the aggregate number of
Firm Shares that such defaulting Underwriter or Underwriter agreed but failed to purchase does not
exceed 10% of the total number of Firm Shares that the Underwriters are obligated to purchase, the
non-defaulting Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Firm Shares that such defaulting Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall fail to take up and pay for the
amount of Firm Shares agreed by such Underwriter or Underwriters to be purchased hereunder and the
aggregate number of Firm Shares that such defaulting Underwriter or Underwriters agreed but failed
to purchase exceeds 10% of the total number of Firm Shares that the Underwriters are obligated to
purchase, upon tender of such Firm Shares in accordance with the terms hereof, and arrangements
satisfactory to you for the purchase of such Firm Shares by other persons are not made within 36
hours thereafter, this Agreement shall terminate. In the event of any such termination, the
Company shall not be under any liability to any Underwriter (except to the extent provided in
Section 6 hereof) nor shall any Underwriter (other than an Underwriter who shall have failed,
otherwise than for some reason permitted under this Agreement, to purchase the amount of Firm
Shares agreed by such Underwriter to be purchased hereunder) be under any liability to the Company
(except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the non-defaulting
Underwriters or by any other party or parties, the Underwriters or the Company shall have the right
to postpone the First Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, in the Time of Sale Disclosure Package, in the
Prospectus or in any other documents, as well as any other arrangements, may be effected. As used
herein, the term “Underwriter” includes any person substituted for an Underwriter under this
Section 8.
9. Termination of this Agreement.
(a) You, as Underwriters, shall have the right to terminate this Agreement by giving notice to
the Company as hereinafter specified at any time at or prior to the First Closing Date, and the
option referred to in Section 3(b), if exercised, may be cancelled at any time prior to
-28-
the Second Closing Date, if (i) the Company shall have failed, refused or been unable, at or
prior to such Closing Date, to perform any agreement on its or their part to be performed
hereunder, (ii) any condition of the Underwriters’ obligations hereunder is not fulfilled,
(iii)trading in the Company’s Common Stock shall have been suspended by the Commission or The
Nasdaq Stock Market or trading in securities generally on the NASDAQ Stock Market, New York Stock
Exchange or the American Stock Exchange shall have been suspended, (iv) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities shall have been
required, on the NASDAQ Stock Market, New York Stock Exchange or the American Stock Exchange, by
such Exchange or by order of the Commission or any other Governmental Authority having
jurisdiction, (v) a banking moratorium shall have been declared by federal or state authorities, or
(vi) there shall have occurred any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration by the United States of a national emergency
or war, any material adverse change in financial markets, any substantial adverse change or
development involving a prospective substantial adverse change in United States or international
political, financial or economic conditions, or any other calamity or crisis that, in your
judgment, is material and adverse and makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination shall be without
liability of any party to any other party except that the provisions of Section 4(g) and Section 6
hereof shall at all times be effective and shall survive such termination.
(b) If you elect to terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone, confirmed by letter.
10. Default by the Company. If the Company shall fail at the First Closing Date to sell and
deliver the number of Securities which it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any Underwriter. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such default.
11. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed or delivered c/o Xxxxx Xxxxxxx & Co., U.S.
Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: General Counsel; if to
the Company, shall be mailed or delivered to it at Two Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx
00000, Attention: Xxx Xxxxxx, Chief Executive Officer; or in each case to such other address as the
person to be notified may have requested in writing. Any party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice of a new address for
such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision herein contained.
The term “successors and assigns” as herein used shall not include any purchaser, as such
purchaser, of any of the Securities from any of the several Underwriters.
-29-
13. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the
Underwriters have been retained solely to act as an underwriter in connection with the sale of the
Securities and that no fiduciary, advisory or agency relationship between the Company and the
Underwriters have been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Underwriters have advised or are advising the Company on
other matters; (b) the price and other terms of the Securities set forth in this Agreement were
established by the Company following discussions and arms-length negotiations with the Underwriters
and the Company is capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised
that the Underwriters and their affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that the Underwriters have no
obligation to disclose such interest and transactions to the Company by virtue of any fiduciary,
advisory or agency relationship; (d) it has been advised that the Underwriters are acting, in
respect of the transactions contemplated by this Agreement, solely for the benefit of the
Underwriters and the other Underwriters, and not on behalf of the Company; (e) it waives to the
fullest extent permitted by law, any claims it may have against the Underwriters for breach of
fiduciary duty or alleged breach of fiduciary duty in respect of any of the transactions
contemplated by this Agreement and agrees that the Underwriters shall have no liability (whether
direct or indirect) to the Company in respect of such a fiduciary duty claim on behalf of or in
right of the Company, including stockholders, employees or creditors of the Company.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
15. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument.
16. 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 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 whom the condition is
meant to benefit. The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
[Signature Page Follows]
-30-
Please sign and return to the Company the enclosed duplicates of this letter whereupon this
letter will become a binding agreement between the Company and the several Underwriters in
accordance with its terms.
| Very truly yours, | ||||||||
| IntegraMed America, Inc. | ||||||||
| By | ||||||||
| Chief Executive Officer |
||||||||
| Confirmed as of the date first above mentioned. |
||||||||
| Xxxxx Xxxxxxx & Co. | ||||||||
By |
||||||||
| Managing Director | ||||||||
| Xxxxxxxxx & Company LLC | ||||||||
By |
||||||||
| Managing Director | ||||||||
EXHIBIT A
Form of Lock-Up Agreement
[ • ], 2010
Xxxxx Xxxxxxx & Co.
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
As an inducement to Xxxxx Xxxxxxx & Co. (the “Underwriter”) to execute a purchase agreement
(the “Purchase Agreement”) providing for a public offering (the “Offering”) of common stock (the
“Common Stock”), of IntegraMed America, Inc. and any successor (by merger or otherwise) thereto
(the “Company”), the undersigned hereby agrees that without, in each case, the prior written
consent of Xxxxx Xxxxxxx & Co. during the period specified in the second succeeding paragraph (the
“Lock-Up Period”), the undersigned will not (1) offer, pledge, announce the intention to sell,
sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into,
exercisable or exchangeable for or that represent the right to receive Common Stock (including
without limitation, Common Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange Commission and securities
which may be issued upon exercise of a stock option or warrant) whether now owned or hereafter
acquired (the “Undersigned’s Securities”) or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of the Undersigned’s
Securities, whether any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The foregoing restriction
is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction
which is designed to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned’s Securities even if such Securities would be disposed of by someone
other than the undersigned. Such prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any right (including without limitation
any put or call option) with respect to any of the Undersigned’s Securities or with respect to any
security that includes, relates to, or derives any significant part of its value from such
Securities.
In addition, the undersigned agrees that, without the prior written consent of the
Underwriter, it will not, during the Lock-Up Period, make any demand for or exercise any right with
respect to, the registration of any Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
A-1
The initial Lock-Up Period will commence on the date of this Agreement and continue and
include the date 90 days after the date of the final prospectus used to sell Common Stock in the
Offering pursuant to the Purchase Agreement; provided, however, that if (1) during the last 17 days
of the initial Lock-Up Period, the Company releases earnings results or material news or a material
event relating to the Company occurs or (2) prior to the expiration of the initial Lock-Up Period,
the Company announces that it will release earnings results during the 16-day period beginning on
the last day of the initial Lock-Up Period, then in each case the Lock-Up Period will be extended
until the expiration of the 18-day period beginning on the date of release of the earnings results
or the occurrence of the material news or material event, as applicable, unless the Underwriter,
waives, in writing, such extension.
The undersigned hereby acknowledges that the Company will be requested to agree in the
Purchase Agreement to provide written notice to the undersigned of any event that would result in
an extension of the Lock-Up Period pursuant to the previous paragraph and agrees that any such
notice properly delivered will be deemed to have been given to, and received by, the undersigned.
The undersigned further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Agreement during the period from the date of this
Agreement to and including the 34th day following the expiration of the initial Lock-Up
Period, it will give notice thereof to the Company and will not consummate such transaction or take
any such action unless it has received written confirmation from the Company that the Lock-Up
Period (as may have been extended pursuant to the previous paragraph) has expired.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Securities (i)
as a bona fide gift or gifts and (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned; provided, in each case, that (x) such
transfer shall not involve a disposition for value, (y) the transferee agrees in writing with the
Underwriter to be bound by the terms of this Lock-Up Agreement, and (z) no filing by any party
under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall
be required or shall be made voluntarily in connection with such transfer. For purposes of this
Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, nor more
remote than first cousin.
In addition, the foregoing restrictions shall not apply to (i) the exercise of stock options
granted pursuant to the Company’s equity incentive plans; provided that it shall apply to any of
the Undersigned’s Securities issued upon such exercise, or (ii) the establishment of any contract,
instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B)
under the Exchange Act; provided that no sales of the Undersigned’s Securities shall be made
pursuant to such a Plan prior to the expiration of the Lock-Up Period (as such may have been
extended pursuant to the provisions hereof), and such a Plan may only be established if no public
announcement of the establishment or existence thereof and no filing with the Securities and
Exchange Commission or other regulatory authority in respect thereof or transactions thereunder or
contemplated thereby, by the undersigned, the Company or any other person, shall be required, and
no such announcement or filing is made voluntarily, by the undersigned, the Company or any other
person, prior to the expiration of the Lock-Up Period (as such may have been extended pursuant to
the provisions hereof).
A-2
In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby
authorized to decline to make any transfer of shares of Common Stock if such transfer would
constitute a violation or breach of this Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Agreement. All authority herein conferred or agreed to be conferred
and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or
personal representatives of the undersigned.
The undersigned understands that the undersigned shall be released from all obligations under
this Agreement if (i) the Company notifies the Underwriter that it does not intend to proceed with
the Offering, (ii) the Purchase Agreement does not become effective, or if the Purchase Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Common Stock to be sold thereunder, or (iii) the Offering
is not completed by [ • ].
The undersigned understands that the Underwriter is entering into the Purchase Agreement and
proceeding with the Offering in reliance upon this Agreement.
This Agreement shall be governed by, and construed in accordance with, the laws of the State
of New York.
| Very truly yours, | ||||||
| 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) | ||||||
A-3
EXHIBIT B
Form of Xxxxxx & Xxxxxxx LLP Opinion
(i) The Company is a corporation validly existing as a corporation in good standing under the
laws of the State of Delaware, and is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction listed in a schedule to such counsel’s opinion.
(ii) The capital stock of the Company conforms as to legal matters to the description thereof
contained in the Time of Sale Disclosure Package and in the Prospectus under the caption
“Description of Capital Stock.”
(iii) The Securities to be issued and sold by the Company hereunder have been duly authorized
and, when issued, delivered and paid for in accordance with the terms of the Agreement, will have
been validly issued and will be fully paid and nonassessable.
(iv) The Registration Statement has become effective under the Securities Act and, to such
counsel’s knowledge, no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been instituted or, to the knowledge of such
counsel, threatened by the Commission.
(v) The descriptions in the Time of Sale Disclosure Package, in the Registration Statement and
in the Prospectus of legal matters, statutes, regulations, legal and governmental proceedings,
contracts and other documents are accurate and fairly present such information;
(vi) The Company has the corporate power and authority to enter into this Agreement, and the
Agreement has been duly authorized, executed and delivered by the Company.
(vii) The execution, delivery and performance of the Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule or regulation, the Company’s
charter or bylaws, or any order or decree known to such counsel of any court or governmental agency
having jurisdiction over the Company or any of its respective properties.
(viii) No consent, approval, authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance of the Agreement or for the
consummation of the transactions contemplated hereby, including the issuance or sale of the
Securities by the Company, except such as have been obtained or as may be required under the
Securities Act or state securities laws.
(ix) The Registration Statement, the Statutory Prospectus included in the Time of Sale
Disclosure Package and the Prospectus, and any amendment thereof or supplement thereto, comply, and
as of their respective effective or issue dates (including without limitation each deemed effective
date with respect to the Underwriters pursuant to the Rules and Regulations) complied, as to form
in all material respects with the requirements of the Securities Act and the Rules and Regulations.
B-1
In addition, such counsel shall include a statement to the effect that on the basis of
conferences with officers and other representatives of the Company, representatives of the
Underwriters and representatives of the independent accountants for the Company, examination of
documents referred to in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus and such other procedures as such counsel deemed appropriate, but without independent
review or verification and without assuming responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus (except as set forth in paragraphs (ii) and (v) above), nothing has come
to the attention of such counsel that causes such counsel to believe that (a) the Registration
Statement at the time it became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, or (b) that the Time of Sale Disclosure Package as of the Time
of Sale and as of such Closing Date, included or includes any untrue statement of material fact or
omitted or omits to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or (c) that the Prospectus (as of its
issue date and as of such Closing Date) included or includes any untrue statement of material fact
or omitted or omits to state a material fact necessary to make the statements therein, in 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 and schedules or other financial data
included in any of the documents mentioned in this paragraph.
B-2
EXHIBIT C
Form of Xxxxxx Xxxxx Opinion
(i) Each of the Subsidiaries and Vein Clinics is a corporation validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation, and is duly
qualified to do business as a foreign corporation and is in good standing in each jurisdiction
listed in a schedule to such counsel’s opinion. Each of the Company and its Subsidiaries and Vein
Clinics has the corporate power and authority to own its properties and conduct its business as
currently being conducted and as described in the Time of Sale Disclosure Package, in the
Registration Statement and in the Prospectus.
(ii) All of the issued and outstanding shares of the capital stock of the Company has been
duly authorized and validly issued and is fully paid and nonassessable.
(iii) Except as otherwise stated in the Time of Sale Disclosure Package, in the Registration
Statement and in the Prospectus, there are no preemptive rights or other rights to subscribe for or
to purchase, or any restriction upon the voting or transfer of, any shares of Common Stock pursuant
to the Company’s charter, by-laws or any agreement or other instrument known to such counsel to
which the Company is a party or by which the Company is bound. To such counsel’s knowledge,
neither the filing of the Registration Statement nor the offering or sale of the Securities as
contemplated by the Agreement gives rise to any rights for or relating to the registration of any
shares of Common Stock or other securities of the Company for which waivers have not obtained.
(iv) Such counsel does not know of any legal matters, statutes, regulations, legal or
governmental proceedings or contracts or other documents required to be described in the Time of
Sale Disclosure Package or included as exhibits to the Registration Statement that are not
described or included as required.
(v) The statements in the Registration Statement, Time of Sale Disclosure Package and
Prospectus under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Business,” insofar as such statements constitute
descriptions of provisions of agreements to which the Company or its Subsidiaries is a party, legal
proceedings or legal conclusions have been reviewed by such counsel and fairly present and
summarize in all material respects the matters referred to therein.
(vi) All of the issued and outstanding shares of capital stock of each of the Company’s
consolidated subsidiaries has been duly and validly authorized and issued and is fully paid and
nonassessable, and, to such counsel’s knowledge, except as otherwise described in the Time of Sale
Disclosure Package, in the Registration Statement and in the Prospectus, the Company owns of record
and beneficially, free and clear of any security interests, claims, liens, proxies, equities or
other encumbrances, all of the issued and outstanding shares of such stock. To such counsel’s
knowledge, except as described in the Time of Sale Disclosure Package, in the Registration
Statement and in the Prospectus, there are no options, warrants, agreements, contracts or other
rights in existence to purchase or acquire from the Company or any consolidated subsidiary
C-1
of the Company any shares of the capital stock of the Company or any consolidated subsidiary
of the Company.
(vii) The execution, delivery and performance of the Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule or regulation, any agreement or
instrument known to such counsel to which the Company is a party.
In addition, such counsel shall include a statement to the effect that on the basis of
conferences with officers and other representatives of the Company, representatives of the
Underwriters and representatives of the independent accountants for the Company, examination of
documents referred to in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus and such other procedures as such counsel deemed appropriate, but without independent
review or verification and without assuming responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement (except as set forth in
paragraph (v)), the Time of Sale Disclosure Package and the Prospectus, nothing has come to the
attention of such counsel that causes such counsel to believe that (a) the Registration Statement
at the time it became effective, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the statements therein
not misleading, or (b) that the Time of Sale Disclosure Package as of the Time of Sale and as of
such Closing Date, included or includes any untrue statement of material fact or omitted or omits
to state a material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; or (c) that the Prospectus (as of its issue date and as
of such Closing Date) included or includes any untrue statement of material fact or omitted or
omits to state a material fact necessary to make the statements therein, in 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 and schedules or other financial data
included in any of the documents mentioned in this paragraph.
C-2
