HOME DIAGNOSTICS, INC. [ ] Shares of Common Stock Underwriting Agreement
Exhibit 1.1
HOME DIAGNOSTICS, INC.
[ ] Shares of Common Stock
[ ], 2006
X.X. Xxxxxx Securities Inc.
Xxxxx Xxxxxxx & Co.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx & Co.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Home Diagnostics, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to
the several Underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom X.X. Xxxxxx
Securities Inc. (“JPMorgan”) and Xxxxx Xxxxxxx & Co. (“Piper”) are acting as representatives (each
a “Representative” and together, the
“Representatives”), an aggregate of
[ ] shares of
Common Stock, par value $0.01 per share, of the Company, and the stockholders of the Company named
in Schedule 2 hereto (the “Selling Stockholders”) propose to sell to the Underwriters an aggregate
of [ ] shares of Common Stock of the Company and, at the option of the Underwriters, up to
an additional [ ] shares of
Common Stock of the Company. The aggregate of
[ ] shares
to be sold by the Company and the Selling Stockholders is herein called the “Underwritten Shares”
and the aggregate of [ ] additional shares to be sold by the Selling Stockholders is herein
called the “Option Shares.” The Underwritten Shares and the Option Shares are herein referred to
as the “Shares.” The shares of Common Stock of the Company to be outstanding after giving effect
to the sale of the Shares are herein referred to as the “Stock.”
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Underwritten Shares to be sold by the Company and the Selling Stockholders
hereby confirm their agreement with the several Underwriters concerning the purchase and sale of
the Underwritten Shares to be sold by the Selling Stockholders and the Option Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the “Securities Act”), a
registration statement (File No. 333-133713) including a prospectus, relating to the Shares.
Such registration statement, as amended at the time it became or becomes effective, including the
information, if any, deemed pursuant to Rule 430A, 430 B or 430C under the Securities Act to be
part of the registration statement at the time of its effectiveness (“Rule 430 Information”), is
referred to herein as the “Registration Statement,” and as used herein, the term “Preliminary
Prospectus” means each prospectus included in such registration statement (and any amendments
thereto) before it becomes effective, any prospectus filed with the Commission pursuant to Rule
424(a) under the Securities Act and the prospectus included in the Registration Statement at the
time of its effectiveness that omits Rule 430 Information, and the term “Prospectus” means the
prospectus in the form first used (or made available upon request of purchasers pursuant to Rule
173 under the Securities Act) in connection with confirmation of sales of the Shares. If the
Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term
“Registration Statement” shall be deemed to include such Rule 462 Registration Statement.
Capitalized terms used but not defined herein shall have the meanings given to such terms in the
Registration Statement and the Prospectus.
At or prior to the time when sales of the Shares were first made (the “Time of Sale”), the
Company had prepared the following information (collectively with the pricing information set forth
on Annex A hereto, the “Time of Sale Information”): a Preliminary Prospectus dated [
], 2006 and each “free writing prospectus” (as defined pursuant to Rule 405 under the
Securities Act) listed on Annex B hereto.
2. Purchase of the Shares by the Underwriters.
(a) The Company and each Selling Stockholder agrees, severally and not jointly, to sell the
Underwritten Shares to the several Underwriters as provided in this Agreement, and each
Underwriter, on the basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the
Company and the Selling Stockholders at a price per share of $[ ] (the “Purchase Price”)
the number of Underwritten Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Underwritten Shares to be sold by the Company and
each of the Selling Stockholders as set forth opposite their respective names in Schedule 2 hereto
by a fraction, the numerator of which is the aggregate number of Underwritten Shares to be
purchased by such Underwriter as set forth opposite the name of such Underwriter in Schedule 1
hereto and the denominator of which is the aggregate number of Underwritten Shares to be purchased
by all the Underwriters from the Company and all the Selling Stockholders hereunder.
In addition, the Selling Stockholders, as and to the extent indicated in Schedule 2 hereto,
agree, severally and not jointly, to sell the Option Shares to the several Underwriters and the
Underwriters shall have the option to purchase at their election up
to [ ] Option Shares at the
Purchase Price. The Underwriters, on the basis of the representations and warranties and agreements
herein contained and subject to the conditions set forth herein, shall have the option to purchase,
severally and not jointly, from the Selling Stockholders at the Purchase Price that portion of the
number of Option Shares as to which such election shall have been exercised (to be adjusted by you
so as to eliminate fractional shares) determined by multiplying such number of
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Option Shares by a fraction the numerator of which is the maximum number of Option Shares
which such Underwriter is entitled to purchase and the denominator of which is the maximum number
of Option Shares which all of the Underwriters are entitled to purchase hereunder. Any such
election to purchase Option Shares shall be made in proportion to the maximum number of Option
Shares to be sold by each Selling Stockholder as set forth in Schedule 2 hereto.
The Underwriters may exercise the option to purchase the Option Shares at any time in whole,
or from time to time in part, on or before the thirtieth day following the date of this Agreement,
by written notice from the Representatives to the Company and the Attorneys-in Fact. Such notice
shall set forth the aggregate number of Option Shares as to which the option is being exercised and
the date and time when the Option Shares are to be delivered and paid for, which may be the same
date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the
Closing Date nor later than the tenth full business day (as hereinafter defined) after the date of
such notice (unless such time and date are postponed in accordance with the provisions of Section
12 hereof). Any such notice shall be given at least two business days prior to the date and time
of delivery specified therein.
(b) The Company and each Selling Stockholder understands that the Underwriters intend to make
a public offering of the Shares as soon after the effectiveness of this Agreement as in the
judgment of the Representatives is advisable, and initially to offer the Shares on the terms set
forth in the Prospectus. The Company and each Selling Stockholder acknowledges and agrees that the
Underwriters may offer and sell Shares to or through any affiliate of an Underwriter and that any
such affiliate may offer and sell Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately available funds to
the account specified by the Company to JPMorgan in the case of the Underwritten Shares to be
purchased from the Company and to the account specified by the Attorneys-in-Fact to JPMorgan in the
case of the Underwritten Shares to be sold by the Selling Stockholders, at the offices of Xxxxxx
Xxxxxx & Xxxxxxx llp, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M. New York City
time on [ ], 2006, or at such other time or place on the same or such other
date, not later than the fifth business day thereafter, as the Representatives, the Company and the
Attorneys-in-Fact may agree upon in writing in the case of the Underwritten Shares or, in the case
of the Option Shares, on the date and at the time and place specified by the Representatives in the
written notice of the Underwriters’ election to purchase such Option Shares. The time and date of
such payment for the Underwritten Shares is referred to herein as the “Closing Date” and the time
and date for such payment for the Option Shares, if other than the Closing Date, are herein
referred to as the “Additional Closing Date.”
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery through the facilities of The Depository Trust
Company (“DTC”) to the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such names and in such
denominations as the Representatives shall request in writing not later than two full business days
prior to the Closing Date or the Additional Closing Date, as the case may be, with any transfer
taxes payable in connection with the sale of the Shares duly paid by the Company or the Selling
Stockholders, as the case may be. Any certificates representing the Shares will be
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made available for inspection and packaging by the Representatives at the office of DTC or its
designated custodian not later than 1:00 P.M., New York City time, on the business day prior to the
Closing Date or the Additional Closing Date, as the case may be.
(d) The Company and each of the Selling Stockholders acknowledges and agrees that the
Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the
Company and the Selling Stockholders with respect to the offering of Shares contemplated hereby
(including in connection with determining the terms of the offering) and not as a financial advisor
or a fiduciary to, or an agent of, the Company, any Selling Stockholder or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising the Company, any
Selling Stockholder or any other person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company and the Selling Stockholders shall consult with their own
advisors concerning such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall
have no responsibility or liability to the Company or any Selling Stockholder with respect thereto.
Any review by the Underwriters of the Company, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit of the Underwriters
and shall not be on behalf of the Company or the Selling Stockholders.
3. Representations and Warranties of the Company. The Company represents and warrants
to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, complied in all material respects with the Securities Act and
did not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Representatives
expressly for use in any Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, at the Time of Sale, did
not, and, at the Closing Date and as of the Additional Closing Date, as the case may be,
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; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in reliance
upon and in conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use in such Time of
Sale Information. No statement of material fact included in the Prospectus has been omitted
from the Time of Sale Information and no statement of material fact included in the Time of
Sale Information that is required to be included in the Prospectus has been omitted
therefrom.
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(c) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the
Prospectus, the Company (including its agents and representatives, other than the
Underwriters in their capacity as such) has not prepared, made, used, authorized, approved
or referred to and will not prepare, make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer
to sell or solicitation of an offer to buy the Shares (each such communication by the
Company or its agents and representatives (other than a communication referred to in clause
(i) below), an “Issuer Free Writing Prospectus”) other than (i) any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134
under the Securities Act or (ii) the documents listed on Annex B hereto and other written
communications approved in writing in advance by the Representatives. Each such Issuer Free
Writing Prospectus complied in all material respects with the Securities Act, has been filed
in accordance with the Securities Act (to the extent required thereby) and, when taken
together with the Preliminary Prospectus accompanying, or delivered prior to delivery of,
such Issuer Free Writing Prospectus, did not, and at the Closing Date and as of the
Additional Closing Date, as the case may be, 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;
provided that the Company makes no representation and warranty with respect to any
statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon
and in conformity with information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use in any Issuer Free
Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement has been
declared effective by the Commission. No order suspending the effectiveness of the
Registration Statement has been issued by the Commission and no proceeding for that purpose
or pursuant to Section 8A of the Securities Act against the Company or related to the
offering of the Shares has been initiated or threatened by the Commission; as of the
applicable effective date of the Registration Statement and any amendment thereto, the
Registration Statement complied and will comply in all material respects with the Securities
Act, 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 in order to make the
statements therein not misleading; and as of the applicable filing date of the Prospectus
and any amendment or supplement thereto and as of the Closing Date and as of the Additional
Closing Date, as the case may be, the Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in the Registration Statement and
the Prospectus and any amendment or supplement thereto.
(e) Financial Statements. The financial statements and the related notes thereto of
the Company and its consolidated subsidiaries included in the Registration Statement, the
Time of Sale Information and the Prospectus comply in all material
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respects with the applicable requirements of the Securities Act and present fairly the
financial position of the Company and its subsidiaries as of the dates indicated and the
results of their operations and their cash flows for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby, and any supporting
schedule included in the Registration Statement presents fairly the information required to
be stated therein; and the other financial information included in the Registration
Statement, the Time of Sale Information and the Prospectus has been derived from the
accounting records of the Company and its subsidiaries and presents fairly the information
shown thereby; and the pro forma financial information and the related notes thereto
included in the Registration Statement, the Time of Sale Information and the Prospectus have
been prepared in accordance with the applicable requirements of the Securities Act and the
Exchange Act, as applicable, and the assumptions underlying such pro forma financial
information are reasonable and are set forth in the Registration Statement, the Time of Sale
Information and the Prospectus.
(f) No Material Adverse Change. Since the date of the most recent financial statements
of the Company included in the Registration Statement, the Time of Sale Information and the
Prospectus, (i) there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries, or any dividend or distribution of any kind declared,
set aside for payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective material adverse change,
in or affecting the business, properties, management, financial position, stockholders’
equity, results of operations or prospects of the Company and its subsidiaries taken as a
whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction
or agreement that is material to the Company and its subsidiaries taken as a whole or
incurred any liability or obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case as otherwise disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus.
(g) Organization and Good Standing. The Company and each of its subsidiaries have been
duly organized and are validly existing and in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have all power
and authority necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to be so qualified or have
such power or authority would not, individually or in the aggregate, have a material adverse
effect on the business, properties, management, financial position, stockholders’ equity,
results of operations or prospects of the Company and its subsidiaries taken as a whole (a
“Material Adverse Effect”). The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than the subsidiaries listed in Exhibit
21 to the Registration Statement.
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(h) Capitalization. Upon the filing with the Secretary of State of Delaware on the
Closing Date of the Amended and Restated Certificate of Incorporation of the Company in the
form attached as Exhibit 3.1 to the Registration Statement, the Company will have an
authorized capitalization as set forth in the Registration Statement, the Time of Sale
Information and the Prospectus under the heading “Capitalization;” all the outstanding
shares of capital stock of the Company (including the Shares to be sold by the Selling
Stockholders) have been duly and validly authorized and issued and are fully paid and
non-assessable and are not subject to any preemptive or similar rights; except as described
in or expressly contemplated by the Time of Sale Information and the Prospectus, there are
no outstanding rights (including, without limitation, preemptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options; the capital stock of the
Company conforms in all material respects to the description thereof contained in the
Registration Statement, the Time of Sale Information and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and non-assessable
(except, in the case of any foreign subsidiary, for directors’ qualifying shares and except
as otherwise described in the Registration Statement, the Time of Sale Information and the
Prospectus) and are owned directly or indirectly by the Company, free and clear of any lien,
charge, encumbrance, security interest, restriction on voting or transfer or any other claim
of any third party.
(i) Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The Underwritten Shares. The Underwritten Shares have been duly authorized by the
Company and, when issued, in the case of the Underwritten Shares to be sold by the Company,
and delivered and paid for as provided herein, will be duly and validly issued and will be
fully paid and non-assessable and will conform to the descriptions thereof in the Time of
Sale Information and the Prospectus; and the issuance of such Shares is not subject to any
preemptive or similar rights.
(k) No Violation or Default. Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or 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 or to which any of the property or assets of the Company or any of
its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material Adverse Effect.
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(l) No Conflicts. The execution, delivery and performance by the Company of this
Agreement, the issuance and sale of the Underwritten Shares to be sold by the Company
hereunder, the issuance by the Company of the Shares to be issued upon the exercise of the
Warrant (as hereinafter defined) and the consummation by the Company of the transactions
contemplated by this Agreement did not and will not (i) 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 any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or 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 or to
which any of the property or assets of the Company or any of its subsidiaries is subject,
(ii) result in any violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of its subsidiaries or (iii) result in the
violation of any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority.
(m) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company of this Agreement, the
issuance and sale of the Shares to be sold by the Company hereunder, the issuance by the
Company of the Shares to be issued upon the exercise of the Warrant and the consummation of
the transactions contemplated by this Agreement, except for the registration of the Shares
under the Securities Act and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable state securities laws in
connection with the purchase and distribution of the Shares by the Underwriters.
(n) Legal Proceedings. Except as described in the Registration Statement, the Time of
Sale Information and the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company or any of its
subsidiaries is or may be the subject that, individually or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; no such investigations, actions, suits or
proceedings are threatened or, to the Company’s knowledge, contemplated by any governmental
or regulatory authority or threatened by others; and (i) there are no current or pending
legal, governmental or regulatory actions, suits or proceedings that are required under the
Securities Act to be described in the Registration Statement that are not so described in
the Registration Statement, the Time of Sale Information and the Prospectus, and (ii) there
are no statutes, regulations or contracts or other documents that are required under the
Securities Act to be filed as exhibits to the Registration Statement or described in the
Registration Statement or the Prospectus that are not so filed or described.
(o) Independent Accountants. PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries are independent public accountants with respect to the Company and its subsidiaries as required by the
Securities Act.
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(p) Title to Real and Personal Property. The Company and its subsidiaries have good
and marketable title in fee simple (in the case of real property) to, or have valid rights
to lease or otherwise use, all items of real and personal property that are material to the
respective businesses of the Company and its subsidiaries, in each case free and clear of
all liens, encumbrances, claims and defects and imperfections of title except those that (i)
secure the Company’s obligations under its Third Amended and Restated Revolving Credit and
Security Agreement with Wachovia Bank N.A., dated Xxxxx 0, 0000, (xx) do not materially
interfere with the use made and proposed to be made of such property by the Company and its
subsidiaries or (iii) could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(q) Title to Intellectual Property. Except as described in the Registration Statement,
the Time of Sale Information and the Prospectus, the Company and its subsidiaries own or
possess adequate rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) necessary for the conduct of
their respective businesses; and the conduct of their respective businesses will not
conflict in any material respect with any such rights of others, and the Company and its
subsidiaries have not received any notice of any claim of infringement or conflict with any
such rights of others.
(r) No Undisclosed Relationships. No relationship, direct or indirect, exists between
or among the Company or any of its subsidiaries, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on
the other, that is required by the Securities Act to be described in the Registration
Statement and the Prospectus and that is not so described in such documents and in the Time
of Sale Information.
(s) Investment Company Act. The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as described in
the Registration Statement, the Time of Sale Information and the Prospectus, will not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules
and regulations of the Commission thereunder (collectively, the “Investment Company Act”).
(t) Taxes. The Company and its subsidiaries have paid all federal, state, local and
foreign taxes and filed all tax returns required to be paid or filed; and except as
otherwise disclosed in the Registration Statement, the Time of Sale Information and the
Prospectus, there is no tax deficiency that has been, or could reasonably be expected to be,
asserted against the Company or any of its subsidiaries or any of their respective
properties or assets, except for any such failure to file or pay or any such deficiency that
could not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
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(u) Licenses and Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective properties or
the conduct of their respective businesses as described in the Registration Statement, the
Time of Sale Information and the Prospectus, except where the failure to possess or make the
same would not, individually or in the aggregate, have a Material Adverse Effect; and except
as described in the Registration Statement, the Time of Sale Information and the Prospectus,
neither the Company nor any of its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has any reason to
believe that any such license, certificate, permit or authorization will not be renewed in
the ordinary course.
(v) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its subsidiaries exists or, to the Company’s knowledge, is contemplated or
threatened and the Company is not aware of any existing or imminent labor disturbance by, or
dispute with, the employees of any of its or its subsidiaries’ principal suppliers,
contractors or customers, except as would not have a Material Adverse Effect.
(w) Compliance with Environmental Laws. The Company and its subsidiaries (i) are in
compliance with any and all applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions and orders relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, “Environmental Laws”); (ii) have received and are in compliance
with all permits, licenses, certificates or other authorizations or approvals required of
them under applicable Environmental Laws to conduct their respective businesses; and (iii)
have not received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except in any such case for any such failure to comply, or
failure to receive required permits, licenses or approvals, or liability as would not,
individually or in the aggregate, have a Material Adverse Effect.
(x) Compliance with ERISA. Each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of its affiliates for
employees or former employees of the Company and its affiliates has been maintained in
compliance with its terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the “Code”); no prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code, has occurred with respect to any such plan, excluding
transactions effected pursuant to a statutory or administrative exemption; and for each such
plan that is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market
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value of the assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions.
(y) Disclosure Controls. Except as described in the Registration Statement, the
Time of Sale Information and the Prospectus, the Company and its subsidiaries maintain an
effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that is designed to
ensure that information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required disclosure.
The Company and its subsidiaries have carried out evaluations, with the participation of
their respective principal executive and principal financial officers, or persons performing
similar functions, of the effectiveness of their disclosure controls and procedures as
required by Rule 13a-15 of the Exchange Act.
(z) Accounting Controls. Except as described in the Registration Statement, the Time
of Sale Information and the Prospectus, the Company and its subsidiaries maintain systems of
“internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange
Act) that comply with the requirements of the Exchange Act and have been designed by, or
under the supervision of, their respective principal executive and principal financial
officers, or persons performing similar functions, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles, including,
but not limited to, internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (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 the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, there are no material weaknesses
in the Company’s internal controls.
(aa) Insurance. The Company and its subsidiaries have insurance covering their
respective properties, operations, personnel and businesses, including business interruption
insurance, which insurance is in amounts and insures against such losses and risks as are
adequate to protect the Company and its subsidiaries and their respective businesses; and
neither the Company nor any of its subsidiaries has (i) received notice from any insurer or
agent of such insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to believe that
it will not be able to renew its existing insurance coverage as and when such
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coverage expires or to obtain similar coverage at reasonable cost from similar insurers
as may be necessary to continue its business.
(bb) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the
Company’s knowledge, any director, officer, agent, employee or other person associated with
or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expense relating
to political activity; (ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(cc) Compliance with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and the Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the
Company’s knowledge, threatened.
(dd) Compliance with OFAC. None of the Company, any of its subsidiaries or, to the
Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company or
any of its subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the Shares
hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.
(ee) No Restrictions on Subsidiaries. No subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other instrument to which it is a
party or is subject, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such subsidiary’s
properties or assets to the Company or any other subsidiary of the Company.
(ff) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person (other than this Agreement) that
would give rise to a valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Shares.
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(gg) No Registration Rights. Except for the rights granted to Albion Mezzanine Fund
II, LP (the “Warrantholder”) pursuant to the Warrant Agreement (as defined below), no person
has the right to require the Company or any of its subsidiaries to register any securities
for sale under the Securities Act by reason of the filing of the Registration Statement with
the Commission or, to the Company’s knowledge, the sale of the Shares to be sold by the
Selling Stockholders hereunder.
(hh) No Stabilization. The Company has not taken, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Stock.
(ii) Margin Rules. Neither the issuance, sale and delivery of the Underwritten Shares
nor the application of the proceeds thereof by the Company as described in the Registration
Statement, the Time of Sale Information and the Prospectus will violate Regulation T, U or X
of the Board of Governors of the Federal Reserve System or any other regulation of such
Board of Governors.
(jj) Forward-Looking Statements. No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the
Registration Statement, the Time of Sale Information and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(kk) Statistical and Market Data. Nothing has come to the attention of the Company
that has caused the Company to believe that the statistical and market-related data included
in the Registration Statement, the Time of Sale Information and the Prospectus is not based
on or derived from sources that are reliable and accurate in all material respects.
(ll) The Warrant Agreement. The unissued Shares issuable upon the exercise of the
common stock purchase warrant (the “Warrant”) to be exercised by the Warrantholder have been
duly authorized by the Company and validly and reserved for issuance, and at the time of
delivery to the Underwriters with respect to such Shares, such Shares will be issued and
delivered in accordance with the provisions of the Warrant and the related Senior Secured
Subordinated Note and Warrant Purchase Agreement (the “Warrant Agreement”) between the
Company and such Warrantholder pursuant to which the Warrant was issued and will be validly
issued, fully paid and non-assessable and will conform to the description thereof in the
Time of Sale Information and the Prospectus.
(mm) The Warrant. The Warrant was duly authorized and issued pursuant to the Warrant
Agreement and constitutes the valid and binding obligation of the Company and the
Warrantholder is entitled to the benefits provided by the Warrant Agreement; the Warrant
Agreement was duly authorized, executed and delivered and constitutes valid and legally
binding agreement enforceable against the Company in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally or by equitable principles relating to
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enforceability; and the Warrant and the Warrant Agreement conform to the descriptions
thereof in the Time of Sale Information and the Prospectus.
(nn) Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part of the Company
or any of the Company’s directors or officers, in their capacities as such, to comply with
the provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated
in connection therewith (the “Xxxxxxxx-Xxxxx Act”) applicable to the Company or its
directors or officers, as applicable, including Sections 303, 304, 306, 401 and 402 of the
Xxxxxxxx-Xxxxx Act.
(oo) Status Under the Securities Act. The Company is not an ineligible issuer as
defined under the Securities Act at the times specified in the Securities Act in connection
with the offering of the Shares.
4. Representations and Warranties of the Designated Selling Stockholders.
(i) Each of the Selling Stockholders listed on Schedule 3 hereto (the “Designated Selling
Stockholders”), severally and not jointly, represents and warrants to each Underwriter and the
Company that:
(a) Required Consents; Authority. All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Designated Selling Stockholder of this
Agreement, the Power of Attorney (the “Power of Attorney”) hereinafter referred to and the
Custody Agreement (the “Custody Agreement”) hereinafter referred to, and for the sale and
delivery of the Shares to be sold by such Designated Selling Stockholder hereunder, have
been obtained; and such Designated Selling Stockholder has full right, power and authority
to enter into this Agreement, the Power of Attorney and the Custody Agreement and to sell,
assign, transfer and deliver the Shares to be sold by such Designated Selling Stockholder
hereunder; this Agreement, the Power of Attorney and the Custody Agreement have each been
duly authorized, executed and delivered by such Designated Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by such Designated Selling
Stockholder of this Agreement, the Power of Attorney and the Custody Agreement, the sale of
the Shares to be sold by such Designated Selling Stockholder and the consummation by such
Selling Stockholder of the transactions herein and therein contemplated will not (i)
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 such Designated Selling Stockholder pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Designated Selling Stockholder is a party or by which such Designated Selling
Stockholder is bound or to which any of the property or assets of such Designated Selling
Stockholder is subject or (ii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory
agency, except, in the case of clauses (i) and (ii) above, as could not reasonably be
expected to have a material adverse effect on such Designated Selling Stockholder.
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(c) Title to Shares. Such Designated Selling Stockholder has good and valid title to
the Shares to be sold at the Closing Date or the Additional Closing Date, as the case may
be, by such Designated Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or adverse claims; such Designated Selling Stockholder will have,
immediately prior to the Closing Date or the Additional Closing Date, as the case may be,
good and valid title to the Shares to be sold at the Closing Date or the Additional Closing
Date, as the case may be, by such Designated Selling Stockholder, free and clear of all
liens, encumbrances, equities or adverse claims; and, upon delivery of the certificates
representing such Shares and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or adverse claims, will pass to
the several Underwriters.
(d) No Stabilization. Such Designated Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or that could reasonably be expected to
cause or result in any stabilization or manipulation of the price of the Stock in violation
of Regulation M under the Exchange Act.
(e) Time of Sale Information. The Time of Sale Information, at the Time of Sale did
not, and at the Closing Date and as of the Additional Closing Date, as the case may be, 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; provided that such Designated Selling
Stockholder makes no representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Representative expressly
for use in such Time of Sale Information. No statement of material fact included in the
Prospectus has been omitted from the Time of Sale Information and no statement of material
fact included in the Time of Sale Information that is required to be included in the
Prospectus has been omitted therefrom.
(f) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the
Prospectus, such Designated Selling Stockholder (including its agents and representatives,
other than the Underwriters in their capacity as such) has not prepared, made, used,
authorized, approved or referred to and will not prepare, make, use, authorize, approve or
refer to any Issuer Free Writing Prospectus, other than (i) any document not constituting a
prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the
Securities Act or (ii) the documents listed on Annex B hereto and other written
communications approved in writing in advance by the Company and the Representatives.
(g) Registration Statement and Prospectus. As of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement complied and
will comply in all material respects with the Securities Act 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 in order to make the statements therein not misleading; and
as of the applicable filing date of the Prospectus and any amendment or supplement thereto
and as of the Closing Date and as of the Additional Closing Date, as
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the case may be, the Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided that such Designated Selling Stockholder makes no
representation and warranty with respect to any statements or omissions made in reliance
upon and in conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representative expressly for use in the
Registration Statement, the Time of Sale Information and the Prospectus and any amendment or
supplement thereto.
(h) Material Information. As of the date hereof, as of the Closing Date and as of the
Additional Closing Date, as the case may be, the sale of the Shares by such Designated
Selling Stockholder is not and will not be prompted by any material information concerning
the Company which is not set forth in the Registration Statement, the Time of Sale
Information or the Prospectus.
(ii) Each of the Selling Stockholders (other than the Designated Selling Stockholders),
severally and not jointly, represents and warrants to each Underwriter and the Company that:
(a) Required Consents; Authority. All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Stockholder of this Agreement, the
Power of Attorney and the Custody Agreement, and for the sale and delivery of the Shares to
be sold by such Selling Stockholder hereunder, have been obtained; and such Selling
Stockholder has full right, power and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement and to sell, assign, transfer and deliver the Shares to
be sold by such Selling Stockholder hereunder; this Agreement, the Power of Attorney and the
Custody Agreement have each been duly authorized, executed and delivered by such Selling
Stockholder.
(b) No Conflicts. The execution, delivery and performance by such Selling Stockholder
of this Agreement, the Power of Attorney and the Custody Agreement, the sale of the Shares
to be sold by such Selling Stockholder and the consummation by such Selling Stockholder of
the transactions herein and therein contemplated will not (i) 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 such Selling Stockholder pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of such Selling Stockholder or (iii)
result in the violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory agency, except, in the case of clauses
(i) and (iii) above, as could not reasonably be expected to have a material adverse effect
on such Selling Stockholder.
(c) Title to Shares. Such Selling Stockholder has good and valid title to the Shares
to be sold at the Closing Date or the Additional Closing Date, as the case may be,
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by such Selling Stockholder hereunder (other than the Shares to be issued upon exercise
of the Warrant), free and clear of all liens, encumbrances, equities or adverse claims; such
Selling Stockholder will have, immediately prior to the Closing Date or the Additional
Closing Date, as the case may be, assuming due issuance of any Shares to be issued upon
exercise of the Warrant, good and valid title to the Shares to be sold at the Closing Date
or the Additional Closing Date, as the case may be, by such Selling Stockholder, free and
clear of all liens, encumbrances, equities or adverse claims; and, upon delivery of the
certificates representing such Shares and payment therefor pursuant hereto, good and valid
title to such Shares, free and clear of all liens, encumbrances, equities or adverse claims,
will pass to the several Underwriters.
(d) No Stabilization. Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the Stock in violation of
Regulation M under the Exchange Act.
(e) Time of Sale Information. The Time of Sale Information, at the Time of Sale did
not, and at the Closing Date and as of the Additional Closing Date, as the case may be, 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; provided that such Selling Stockholder makes
such representation and warranty only with respect to any statements or omissions made in
reliance upon and in conformity with information relating to such Selling Stockholder
furnished to the Company by such Selling Stockholder expressly for use in such Time of Sale
Information.
(f) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the
Prospectus, such Selling Stockholder (including its agents and representatives, other than
the Underwriters in their capacity as such) has not prepared, made, used, authorized,
approved or referred to and will not prepare, make, use, authorize, approve or refer to any
Issuer Free Writing Prospectus, other than (i) any document not constituting a prospectus
pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act
or (ii) the documents listed on Annex B hereto and other written communications approved in
writing in advance by the Company and the Representatives.
(g) Registration Statement and Prospectus. As of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement complied and
will comply in all material respects with the Securities Act 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 in order to make the statements therein not misleading; and
as of the applicable filing date of the Prospectus and any amendment or supplement thereto
and as of the Closing Date and as of the Additional Closing Date, as the case may be, the
Prospectus will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
provided that such Selling Stockholder makes the representations and warranties in
this paragraph (g) only with respect to any statements or omissions made in
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reliance upon and in conformity with information relating to such Selling Stockholder
furnished to the Company by such Selling Stockholder expressly for use in the Registration
Statement, the Time of Sale Information and the Prospectus and any amendment or supplement
thereto.
(h) Material Information. As of the date hereof, as of the Closing Date and as of the
Additional Closing Date, as the case may be, the sale of the Shares by such Selling
Stockholder is not and will not be prompted by any material information concerning the
Company which is not set forth in the Registration Statement, the Time of Sale Information
or the Prospectus.
Each of the Selling Stockholders (including, for the avoidance of doubt, the Designated
Selling Stockholders) represents and warrants certificates in negotiable form representing the
maximum number of Shares which may be sold by such Selling Stockholder hereunder other than the
Shares to be issued upon the exercise of the Warrant, have been, and the Warrantholder represents
and warrants that a duly completed and executed irrevocable notice of subscription, in the form
specified by the Warrant (the “Subscription”, with respect to the Shares to be sold by the
Warrantholder hereunder, has been placed in custody under the Custody Agreement relating to such
Shares, in the form heretofore furnished to you, duly executed and delivered by such Selling
Stockholder to American Stock Transfer & Trust Co., as custodian (the “Custodian”) and that such
Selling Stockholder has duly executed and delivered Powers of Attorney, in the form heretofore
furnished to you, appointing the person or persons named therein, and each of them, as such Selling
Stockholder’s Attorneys-in-fact (the “Attorneys-in-Fact” or any one of them the “Attorney-in Fact”)
with authority to execute and deliver this Agreement on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the Underwriters to the Selling Stockholders as provided
herein, to authorize the delivery of the Shares to be sold by such Selling Stockholder hereunder,
to authorize (if applicable) the exercise of the Warrant pursuant to the Subscription with respect
to the Shares to be sold by such Selling Stockholder hereunder and otherwise to act on behalf of
such Selling Stockholder in connection with the transactions contemplated by this Agreement and the
Custody Agreement.
Each of the Selling Stockholders specifically agrees that the Shares represented by the
certificates (or the irrevocable Warrant exercise notice) held in custody for such Selling
Stockholder under the Custody Agreement are subject to the interests of the Underwriters hereunder,
and that the arrangements made by such Selling Stockholder for such custody, and the appointment by
such Selling Stockholder of the Attorneys-in-Fact by its Power of Attorney, are to that extent
irrevocable.
Each of the Selling Stockholders specifically agrees that the obligations of such Selling
Stockholder hereunder shall not be terminated by operation of law, whether, in the case of an
individual, by the death or incapacity of any Selling Stockholder, or, in the case of an estate or
trust, by the death or incapacity of any executor or trustee or the termination of such estate or
trust, or in the case of a partnership, corporation or similar organization, by the dissolution of
such partnership, corporation or organization, or by the occurrence of any other event. If any
individual Selling Stockholder or any such executor or trustee should die or become incapacitated,
or if any such estate or trust should be terminated, or if any such partnership, corporation or
similar organization should be dissolved, or if any other such event should occur, before the
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delivery of the Shares hereunder, certificates representing such Shares shall be delivered by
or on behalf of such Selling Stockholder in accordance with the terms and conditions of this
Agreement, the Custody Agreement and the Power of Attorney and actions taken by the
Attorneys-in-Fact pursuant to the Custody Agreement and the Power of Attorney shall be as valid as
if such death, incapacity, termination, dissolution or other event had not occurred, regardless of
whether or not, the Custodian, the Attorneys-in-Fact or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other event.
5. Further Agreements of the Company. The Company covenants and agrees with each
Underwriter that:
(a) Required Filings. The Company will file the final Prospectus with the Commission
within the time periods specified by Rule 424(b) and Rule 430A under the Securities Act and
will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the
Securities Act. The Company will furnish copies of the Prospectus and each Issuer Free
Writing Prospectus to the Underwriters in New York City prior to 10:00 A.M., New York City
time, on the business day next succeeding the date of this Agreement in such quantities as
the Representatives may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to the
Representatives, three signed copies of the Registration Statement as originally filed and
each amendment thereto, in each case including all exhibits and consents filed therewith;
and (ii) to each Underwriter (A) a conformed copy of the Registration Statement as
originally filed and each amendment thereto (without exhibits) and (B) during the Prospectus
Delivery Period (as defined below), as many copies of the Prospectus (including all
amendments and supplements thereto and each Issuer Free Writing Prospectus as the
Representatives may reasonably request. As used herein, the term “Prospectus Delivery
Period” means such period of time after the first date of the public offering of the Shares
as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is
required by law to be delivered (or required to be delivered but for Rule 172 under the
Securities Act) in connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements. Before preparing, using, authorizing, approving,
referring to or filing any Issuer Free Writing Prospectus, and before filing any amendment
or supplement to the Registration Statement or the Prospectus, the Company will furnish to
the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free
Writing Prospectus, amendment or supplement for review and will not prepare, use, authorize,
approve, refer to or file any such Issuer Free Writing Prospectus or file any such proposed
amendment or supplement to which the Representatives reasonably object.
(d) Notice to the Representative. The Company will advise the Representatives
promptly, and confirm such advice in writing, (i) when the Registration Statement has become
effective; (ii) when any amendment to the Registration Statement has been filed or becomes
effective; (iii) when any supplement to the Prospectus or any amendment to the Prospectus or
any Issuer Free Writing Prospectus has been filed; (iv) of any request by the Commission for
any amendment to the Registration Statement or any
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amendment or supplement to the Prospectus or the receipt of any comments from the
Commission relating to the Registration Statement or any other request by the Commission for
any additional information; (v) of the issuance by the Commission of any order suspending
the effectiveness of the Registration Statement or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding
for that purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence of
any event within the Prospectus Delivery Period as a result of which the Prospectus, the
Time of Sale Information or any Issuer Free Writing Prospectus as then amended or
supplemented would include 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 existing when the Prospectus, the Time of Sale Information or any such Issuer
Free Writing Prospectus is delivered to a purchaser, not misleading; and (vii) of the
receipt by the Company of any notice with respect to any suspension of the qualification of
the Shares for offer and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and the Company will use its best efforts to prevent the
issuance of any such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification of the Shares and, if any such order is issued, will
obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. (1) If during the Prospectus Delivery Period
(i) any event shall occur or condition shall exist as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the
Prospectus to comply with law, the Company will immediately notify the Underwriters thereof
and forthwith prepare and, subject to paragraph (c) above, file with the Commission, and
furnish to the Underwriters and to such dealers as the Representatives may designate, such
amendments or supplements to the Prospectus as may be necessary so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the circumstances
existing when the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law and (2) if at any time prior to the Closing Date (i) any
event shall occur or condition shall exist as a result of which the Time of Sale Information
as then amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements therein, in the
light of the circumstances, not misleading or (ii) it is necessary to amend or supplement
the Time of Sale Information to comply with law, the Company will immediately notify the
Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with
the Commission (to the extent required) and furnish to the Underwriters and to such dealers
as the Representatives may designate, such amendments or supplements to the Time of Sale
Information as may be necessary so that the statements in the Time of Sale Information as so
amended or supplemented will not, in the light of the circumstances, be misleading or so
that the Time of Sale Information will comply with law.
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(f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and will continue such qualifications in effect so long as required for
distribution of the Shares.
(g) Earning Statement. The Company will make generally available to its security
holders and the Representatives as soon as practicable an earning statement that satisfies
the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158)
of the Registration Statement.
(h) Clear Market. For a period of 180 days after the date of the final Prospectus (the
“Restricted Period”), the Company will not (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 Stock or any securities convertible into
or exercisable or exchangeable for 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 Stock,
whether any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Stock or such other securities, in cash or otherwise, without the prior written
consent of the Representative, other than the Shares to be sold hereunder and any grant of
stock options to employees or directors of the Company or the issuance of shares of Stock of
the Company upon the exercise of options granted or to be granted under existing employee
stock option plans. Notwithstanding the foregoing, if, (1) during the last 17 days of the
Restricted Period, the Company issues an earnings release or material news or a material
event relating to the Company occurs; or (2) prior to the expiration of the Restricted
Period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Restricted Period, the restrictions imposed by this
Agreement shall continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or material event.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the
Underwritten Shares to be sold by the Company as described in the Time of Sale Information
and the Prospectus under the heading “Use of proceeds.”
(j) No Stabilization. The Company will not take, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Stock.
(k) Exchange Listing. The Company will use its best efforts to list for quotation the
Stock on the Nasdaq National Market (the “Nasdaq National Market”).
(l) Reports. Until the fifth anniversary of the effective date of the Registration
Statement, the Company will furnish to the Representatives, as soon as they are available,
copies of all reports or other communications (financial or other) furnished to
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holders of the Shares, and copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange or automatic quotation
system, except to the extent that the same are publicly available.
(m) Record Retention. The Company will, pursuant to reasonable procedures developed in
good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the
Commission in accordance with Rule 433 under the Securities Act.
(n) Filings. The Company will file with the Commission such reports as may be required
by Rule 463 under the Securities Act.
6. Further Agreements of the Selling Stockholders. Each of the Selling Stockholders
covenants and agrees with each Underwriter that:
(a) Clear Market. For the duration of the Restricted Period, such Selling Stockholder
will not (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 Stock or any securities convertible into or exercisable or exchangeable for
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 Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Stock or such other
securities, in cash or otherwise, or (iii) make any demand for or exercise any right with
respect to the registration of any shares of Stock or any security convertible into or
exercisable or exchangeable for Stock without the prior written consent of the
Representatives, in each case other than the Shares to be sold by such Selling Stockholder
hereunder. Notwithstanding the foregoing, The Estate of Xxxxxx Xxxxx (the “Estate”) may
transfer shares of Stock owned by the Estate to The Xxxxxx Xxxxx Revocable Pour Over Trust,
which may in turn transfer shares of Stock to Xxxx Xxxxx; provided that in
connection therewith, each transferee executes a lock up agreement substantially in the form
of Exhibit D hereto. Notwithstanding the foregoing, if, (1) during the last 17 days of the
Restricted Period the Company issues an earnings release or material news or a material
event relating to the Company occurs or (2) prior to the expiration of the Restricted
Period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Restricted Period, then the restrictions imposed by this
Agreement shall continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or material event.
(b) Tax Form. Such Selling Stockholder will deliver to the Representatives prior to or
at the Closing Date a properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by the Treasury Department regulations
in lieu thereof) in order to facilitate the Underwriters’ documentation of their compliance
with the reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated.
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7. Certain Agreements of the Underwriters. Each Underwriter hereby represents and
agrees that:
(a) It has not and will not use, authorize use of, refer to, or participate in the
planning for use of, any “free writing prospectus,” as defined in Rule 405 under the
Securities Act (which term includes use of any written information furnished to the
Commission by the Company and not incorporated by reference into the Registration Statement
and any press release issued by the Company), other than (i) a free writing prospectus that
contains no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act)
that was not included (including through incorporation by reference) in the Preliminary
Prospectus or a previously filed Issuer Free Writing Prospectus, (ii) any Issuer Free
Writing Prospectus listed on Annex B or prepared pursuant to Section 5(c) above or (iii) any
free writing prospectus prepared by such Underwriter and approved by the Company in advance
in writing (each such free writing prospectus referred to in clause (i) or (iii), an
“Underwriter Free Writing Prospectus”).
(b) It will not distribute any Underwriter Free Writing Prospectus referred to in
clause (a)(i) in a manner reasonably designed to lead to its broad unrestricted
dissemination.
(c) It will not use, without the prior written consent of the Company, any free writing
prospectus that contains the final terms of the Shares unless such terms have previously
been included in a free writing prospectus filed with the Commission; provided that
Underwriters may use a term sheet substantially in the form of Annex C hereto without the
consent of the Company; provided further that any Underwriter using such
term sheet shall notify the Company, and provide a copy of such term sheet to the Company,
prior to, or substantially concurrently with, the first use of such term sheet.
(d) It will, pursuant to reasonable procedures developed in good faith, retain copies
of each free writing prospectus used or referred to by it, in accordance with Rule 433 under
the Securities Act.
(e) It is not subject to any pending proceeding under Section 8A of the Securities Act
with respect to the offering (and will promptly notify the Company if any such proceeding
against it is initiated during the Prospectus Delivery Period).
8. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to
purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing
Date, as the case may be, as provided herein is subject to the performance by the Company and each
of the Selling Stockholders of their respective covenants and other obligations hereunder and to
the following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration Statement (or if a
post-effective amendment thereto is required to be filed under the Securities Act, such
post-effective amendment) shall have become effective, and the Representatives shall have
received notice thereof, not later than 5:00 P.M., New York City time, on the date hereof;
no order suspending the effectiveness of the Registration Statement shall be
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in effect, and no proceeding for such purpose or pursuant to Section 8A under the
Securities Act shall be pending before or threatened by the Commission; the Prospectus and
each Issuer Free Writing Prospectus shall have been timely filed with the Commission under
the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required
by Rule 433 under the Securities Act) and in accordance with Section 5(a) hereof; and all
requests by the Commission for additional information shall have been complied with to the
reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The respective representations and warranties of
the Company and the Selling Stockholders contained herein shall be true and correct on the
date hereof and on and as of the Closing Date or the Additional Closing Date, as the case
may be; and the statements of the Company and its officers and of each of the Selling
Stockholders made in any certificates delivered pursuant to this Agreement shall be true and
correct on and as of the Closing Date or the Additional Closing Date, as the case may be.
(c) No Downgrade. Subsequent to the execution and delivery of this Agreement, (i) no
downgrading shall have occurred in the rating accorded any securities or preferred stock of
or guaranteed by the Company or any of its subsidiaries by any “nationally recognized
statistical rating organization,” as such 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, or has changed its outlook with respect
to, its rating of any securities or preferred stock of or guaranteed by the Company or any
of its subsidiaries (other than an announcement with positive implications of a possible
upgrading).
(d) No Material Adverse Change. No event or condition of a type described in Section
3(f) hereof shall have occurred or shall exist, which event or condition is not described in
the Time of Sale Information (excluding any amendment or supplement thereto) and the
Prospectus (excluding any amendment or supplement thereto) and the effect of which in the
judgment of the Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date,
as the case may be, on the terms and in the manner contemplated by this Agreement, the
Registration Statement, the Time of Sale Information and the Prospectus.
(e) Officer’s Certificate. The Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a certificate (i) of the
chief financial officer or chief accounting officer of the Company and one additional senior
executive officer of the Company who is satisfactory to the Representatives (A) confirming
that such officers have carefully reviewed the Registration Statement, the Time of Sale
Information and the Prospectus and, to the knowledge of such officers, the representation
set forth in Sections 3(b) and 3(d) hereof is true and correct, (B) confirming that the
other representations and warranties of the Company in this Agreement are true and correct
and that the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to such Closing Date and (C) to the
effect set forth in paragraphs (a), (c) and (d) above; (ii) of the Designated
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Selling Stockholders, in form and substance reasonably satisfactory to the
Representatives, confirming that the representations and warranties of the Designated
Selling Stockholders are true and correct and that such Designated Selling Stockholders have
complied with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the
case may be and (iii) of the Selling Stockholders (other than the Designated Selling
Stockholders), in form and substance reasonably satisfactory to the Representatives,
confirming that the representations and warranties of such Selling Stockholders are true and
correct and that such Selling Stockholders have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior to the Closing
Date or the Additional Closing Date, as the case may be.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date or the
Additional Closing Date, as the case may be, Pricewaterhouse Coopers LLP shall have
furnished to the Representatives, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information
contained in the Registration Statement, the Time of Sale Information and the Prospectus;
provided, that the letter delivered on the Closing Date or the Additional Closing
Date, as the case may be, shall use a “cut-off” date no more than three business days prior
to such Closing Date or such Additional Closing Date, as the case may be.
(g) Opinion of Counsel for the Company. Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP, counsel
for the Company, shall have furnished to the Representatives, at the request of the Company,
their written opinion, dated the Closing Date or the Additional Closing Date, as the case
may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to
the Representatives, to the effect set forth in Exhibit A hereto.
(h) Opinion of Intellectual Property Counsel for the Company. Xxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx & Dunner, LLP, intellectual property counsel for the Company, shall have
furnished to the Representatives, at the request of the Company, their written opinion,
dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to
the Underwriters, in form and substance reasonably satisfactory to the Representatives, to
the effect set forth in Exhibit B hereto.
(i) Opinions of Counsel for the Warrantholder, the Estate and the Selling Stockholders.
(a) Proskauer Rose LLP, counsel for the Warrantholder, shall have furnished to the
Representatives, at the request of the Warrantholder, their written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, and addressed to the
Underwriters, in form and substance reasonably satisfactory to the Representatives, to the
effect set forth in Exhibit C-1 hereto; (b) Xxxxxxx & Xxxxx, counsel for the Estate, shall
have furnished to the Representatives, at the request of the Estate, their written opinion,
dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to
the Underwriters, in form and substance reasonably satisfactory to the Representatives, to
the effect set forth in Exhibit C-2 hereto; and (c) Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP,
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counsel for the Selling Stockholders (other than the Warrantholder and the
Estate), shall have furnished to the Representatives, at the request of such Selling
Stockholders, their written opinion, dated the Closing Date or the Additional Closing Date,
as the case may be, and addressed to the Underwriters, in form and substance reasonably
satisfactory to the Representatives, to the effect set forth in Exhibit C-3 hereto.
(j) Opinion of Counsel for the Underwriters. The Representatives shall have received
on and as of the Closing Date or the Additional Closing Date, as the case may be, an opinion
of Xxxxxx Xxxxxx & Xxxxxxx llp, counsel for the Underwriters, with respect to such
matters as the Representatives may reasonably request, and such counsel shall have received
such documents and information as they may reasonably request to enable them to pass upon
such matters.
(k) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state
or foreign governmental or regulatory authority that would, as of the Closing Date or the
Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares; and
no injunction or order of any federal, state or foreign court shall have been issued that
would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent
the issuance or sale of the Shares.
(l) Good Standing. The Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, satisfactory evidence of the good
standing of the Company and its subsidiaries in their respective jurisdictions of
organization and their good standing as foreign entities in such other jurisdictions as the
Representatives may reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such jurisdictions.
(m) Exchange Listing. The Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on the Nasdaq
National Market, subject to official notice of issuance.
(n) Lock-up Agreements. The “lock-up” agreements, each substantially in the form of
Exhibit D hereto, between you and certain shareholders, officers and directors of the
Company relating to sales and certain other dispositions of shares of Stock or certain other
securities, delivered to you on or before the date hereof, shall be full force and effect on
the Closing Date or Additional Closing Date, as the case may be.
(o) Charter and Bylaws. The amended and restated certificate of incorporation and
bylaws of the Company (in substantially the form filed as an Exhibit 3.1 to the Registration
Statement and otherwise satisfactory to the Representatives) shall be effective and have
been filed with the Secretary of State of Delaware.
(p) Additional Documents. On or prior to the Closing Date or the Additional Closing
Date, as the case may be, the Company shall have furnished to the Representatives such
further certificates and documents as the Representatives may reasonably request.
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All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
9. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to indemnify and hold harmless
each Underwriter, its affiliates, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities (including, without
limitation, legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that
arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to make the statements
therein, not misleading, or (ii) any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing
Prospectus or any Time of Sale Information (including any Time of Sale Information that has been
subsequently amended), or caused by any omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading, in each case except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the Representative
expressly 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 subsection (c) below.
(b) Indemnification of the Underwriters by the Selling Stockholders. (i) Each of the
Designated Selling Stockholders severally in proportion to the number of Shares to be sold by such
Designated Selling Stockholder hereunder agrees to indemnify and hold harmless each Underwriter,
its affiliates, directors and officers and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the indemnity set forth in paragraph (a) above, in each case except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in conformity with any
information relating to any Underwriter furnished to the Company in writing by such Underwriter
through the Representative expressly for use in the Registration Statement, the Prospectus (or any
amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time of Sale
Information, it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (c) below. (ii) Each of the
Selling Stockholders (other than the Designated Selling Stockholders) severally in proportion to
the number of Shares to be sold by such Selling Stockholder hereunder agrees to indemnify and hold
harmless each Underwriter, its affiliates, directors and officers and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, in each case
but only insofar as such losses, claims, damages or liabilities arise out of,
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or are based upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to such Selling Stockholder
furnished to the Company in writing by such Selling Stockholder expressly for use in the
Registration Statement, the Prospectus (or any amendment or supplement thereto), any Issuer Free
Writing Prospectus or any Time of Sale Information.
(c) Indemnification of the Company and the Selling Stockholders. Each Underwriter agrees,
severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers
who signed the Registration Statement and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of the
Selling Stockholders to the same extent as the indemnity set forth in paragraph (a) above, but only
with respect to any losses, claims, damages or liabilities that arise out of, or are based upon,
any untrue statement or omission or alleged untrue statement or omission made in reliance upon and
in conformity with any information relating to such Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use in the Registration Statement,
the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus or any
Time of Sale Information, it being understood and agreed upon that the only such information
furnished by any Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the concession and reallowance figures appearing in the fourth
paragraph under the caption “Underwriting”, the information contained in the fourth, seventh,
eighth and thirteenth paragraphs under the caption “Underwriting”.
(d) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to the preceding paragraphs of this Section
9, such person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under this Section 9 except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this Section 9. If any
such proceeding shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in such
proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood and agreed that the
Indemnifying Person
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shall not, in connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or
reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates,
directors and officers and any control persons of such Underwriter shall be designated in writing
by JPMorgan and, such separate firm for the Company, its directors, its officers who signed the
Registration Statement and any control persons of the Company shall be designated in writing by the
Company and any such separate firm for the Selling Stockholders shall be designated in writing by
the Attorneys-in-Fact. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or judgment. No
Indemnifying Person shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or
could have been a party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in
form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims
that are the subject matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(e) Contribution. If the indemnification provided for in paragraphs (a), (b) and (c) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other from the offering of the
Shares or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company and the Selling Stockholders 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 and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same respective proportions as the net
proceeds (before deducting expenses) received by the Company and the Selling Stockholders from the
sale of the Shares and the total underwriting discounts and commissions received by the
Underwriters in connection therewith, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate offering price of the Shares. The relative fault of the Company
and the Selling Stockholders on the one hand and the Underwriters on the other 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 and the Selling Stockholders or by the Underwriters and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission.
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(f) Limitation on Liability. The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Selling Stockholders or the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (e) above. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (e) above shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Person in connection with any such action or
claim. Notwithstanding the provisions of this Section 9, in no event shall an Underwriter be
required to contribute any amount in excess of the amount by which the total underwriting discounts
and commissions received by such Underwriter with respect to the offering of the Shares 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations to contribute pursuant to this Section 6 are several in proportion to
their respective purchase obligations hereunder and not joint. Notwithstanding the provisions of
this Section 9, in no event shall the liability of a Selling Stockholder under this Section 9
exceed the amount by which the proceeds to such Selling Stockholder, after underwriting discounts
and commissions, exceeds the amount of any damages that such Selling Stockholder has otherwise been
required to pay pursuant to this Section 9.
(g) Non-Exclusive Remedies. The remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
10. Effectiveness of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties.
11. Termination. This Agreement may be terminated in the absolute discretion of the
Representatives, by notice to the Company and the Selling Stockholders, if after the execution and
delivery of this Agreement and prior to the Closing Date or, in the case of the Option Shares,
prior to the Additional Closing Date (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc. or the Chicago Board Options Exchange; (ii) trading of any
securities issued or guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the Representatives, is
material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale
or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be,
on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the
Prospectus.
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12. Defaulting Underwriter.
(a) If, on the Closing Date or the Additional Closing Date, as the case may be, any
Underwriter defaults on its obligation to purchase the Shares that it has agreed to purchase
hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the
purchase of such Shares by other persons satisfactory to the Company and the Selling Stockholders
on the terms contained in this Agreement. If, within 36 hours after any such default by any
Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Shares, then
the Company and the Selling Stockholders shall be entitled to a further period of 36 hours within
which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such
Shares on such terms. If other persons become obligated or agree to purchase the Shares of a
defaulting Underwriter, either the non defaulting Underwriters or the Company and the Selling
Stockholders may postpone the Closing Date or the Additional Closing Date, as the case may be, for
up to five full business days in order to effect any changes that in the opinion of counsel for the
Company, counsel for the Selling Stockholders or counsel for the Underwriters may be necessary in
the Registration Statement and the Prospectus or in any other document or arrangement, and the
Company agrees to promptly prepare any amendment or supplement to the Registration Statement and
the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter”
includes, for all purposes of this Agreement unless the context otherwise requires, any person not
listed in Schedule 1 hereto that, pursuant to this Section 12, purchases Shares that a defaulting
Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling
Stockholders as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be, does not exceed
one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company and
the Selling Stockholders shall have the right to require each non-defaulting Underwriter to
purchase the number of Shares that such Underwriter agreed to purchase hereunder on such date plus
such Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to
purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling
Stockholders as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds
one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company and
the Selling Stockholders shall not exercise the right described in paragraph (b) above, then this
Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to
purchase Shares on the Additional Closing Date, as the case may be, shall terminate without
liability on the part of the non-defaulting Underwriters. Any termination of this Agreement
pursuant to this Section 12 shall be without liability on the part of the Company and the Selling
Stockholders, except that the Company will continue to be liable for the payment of expenses as set
forth in Section 13 hereof and except that the provisions of Section 9 hereof shall not terminate
and shall remain in effect.
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(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company, the Selling Stockholders or any non-defaulting Underwriter for damages caused
by its default.
13. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated, the Company will pay or cause to be paid all costs and expenses incident
to the performance of its obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the Shares and any taxes
payable in that connection; (ii) the costs incident to the preparation, printing and filing under
the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free
Writing Prospectus, any Time of Sale Information and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof; (iii) the fees and expenses of
the Company’s counsel and independent accountants; (iv) the fees and expenses incurred in
connection with the registration or qualification and determination of eligibility for investment
of the Shares under the laws of such jurisdictions as the Representatives may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Underwriters); (v) the cost of preparing stock certificates; (vi) the
costs and charges of any transfer agent and any registrar; (vii) all expenses and application fees
incurred in connection with any filing with, and clearance of the offering by, the National
Association of Securities Dealers, Inc.; (viii) all expenses incurred by the Company in connection
with any “road show” presentation to potential investors; and (ix) all expenses and application
fees related to the listing of the Shares on the Nasdaq National Market. It is understood,
however, that except as provided in this Section, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may make. Further, all
expenses associated with chartering any aircraft in connection with the offering shall be borne 50%
by the Company and 50% by the Underwriters.
(b) If (i) the Company or the Selling Stockholders for any reason fail to tender the Shares
for delivery to the Underwriters or (ii) the Underwriters decline to purchase the Shares for any
reason permitted under this Agreement (other than as a result of the termination of this Agreement
pursuant to Section 11), the Company agrees to reimburse the Underwriters for all out-of-pocket
costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the
Underwriters in connection with this Agreement and the offering contemplated hereby.
14. 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 the officers
and directors and any controlling persons referred to in Section 9 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
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15. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company, the Selling Stockholders and the Underwriters contained
in this Agreement or made by or on behalf of the Company, the Selling Stockholders or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive
the delivery of and payment for the Shares and shall remain in full force and effect, regardless of
any termination of this Agreement or any investigation made by or on behalf of the Company, the
Selling Stockholders or the Underwriters.
16. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act.
17. Miscellaneous.
(a) Authority of the Representative. Any action by the Underwriters hereunder may be taken by
the Representatives on behalf of the Underwriters, and any such action taken by the Representatives
shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriters shall be given to the Representatives c/o X.X.
Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000); Attention:
Equity Syndicate Desk with a copy to Xxxxxx X. Xxxxxxxxx, Esq., Xxxxxx Xxxxxx & Xxxxxxx
llp, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax: (000) 000-0000). Notices to the
Company shall be given to it at Home Diagnostics, Inc., 0000 XX 00xx Xx., Xxxx Xxxxxxxxxx, Xxxxxxx
00000, (Fax: (000) 000-0000); Attention: Chief Financial Officer. Notices to the Selling
Stockholders shall be given to the Attorneys-in-Fact at J. Xxxxxxx Xxxxxx, Xx. and Xxxxxx X. Xxxxx,
c/o Home Diagnostics, Inc., 0000 XX 00xx Xx., Xxxx Xxxxxxxxxx, Xxxxxxx 00000, (Fax: (000)
000-0000).
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
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If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, HOME DIAGNOSTICS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| SELLING STOCKHOLDERS |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| As Attorneys-in-Fact acting on behalf of each of the Selling Stockholders named in Schedule 2 to this Agreement |
||||
Accepted: __________, 2006
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the several
Underwriters listed in Schedule 1 hereto.
Underwriters listed in Schedule 1 hereto.
| By: | ||||
| Authorized Signatory | ||||
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Schedule 1
| Underwriter | Number of Shares | |
X.X. Xxxxxx Securities Inc. |
||
Xxxxx Xxxxxxx & Co. |
||
Deutsche Bank Securities Inc. |
||
Xxxxxxx Xxxxx & Co., LLC |
||
Total |
||
Schedule 2
| Selling Stockholders: | Number of Underwritten Shares: |
Number of Option Shares: |
||
Schedule 3
Designated Selling Shareholders
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Exhibit A
Form of Opinion of Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
(a) The Registration Statement was declared effective under the Securities Act as of the date
and time specified in such opinion; the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Securities Act specified in such opinion on the date
specified therein; and no order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against
the Company or in connection with the offering is pending or, to the best knowledge of such
counsel, threatened by the Commission.
(b) The Registration Statement, the Preliminary Prospectus, each Issuer Free Writing
Prospectus included in the Time of Sale Information and the Prospectus (other than the financial
statements and related schedules therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Securities Act.
(c) The Company and each of its subsidiaries have been duly organized and are validly existing
and in good standing under the laws of their respective jurisdictions of organization, are duly
qualified to do business and are in good standing in [specify jurisdictions], and have all power
and authority necessary to own or hold their respective properties and to conduct the businesses in
which they are engaged, except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect.
(d) The Company has an authorized capitalization as set forth in the Registration Statement,
the Time of Sale Information and the Prospectus under the heading “Capitalization”; all the
outstanding shares of capital stock of the Company (including the Shares to be sold by the Selling
Stockholders) have been duly and validly authorized and issued and are fully paid and
non-assessable; the capital stock of the Company conforms in all material respects to the
description thereof contained in the Registration Statement, the Time of Sale Information and the
Prospectus, except as otherwise described in the Registration Statement, the Time of Sale
Information and the Prospectus).
(e) The Company has full right, power and authority to execute and deliver this Agreement and
to perform its obligations thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of this Agreement and the consummation of the transactions
contemplated thereby have been duly and validly taken.
(f) This Agreement has been duly authorized, executed and delivered by the Company.
(g) The Shares to be issued and sold by the Company hereunder have been duly authorized, and
when delivered to and paid for by the Underwriters in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and the issuance of the Shares is not subject
to any preemptive or similar rights.
(h) (i) The execution, delivery and performance by the Company of this Agreement, the issuance
and sale of the Shares to be sold by the Company and delivered on the Closing
Exhibit A-1
Date, the issuance by the Company of the Shares to be issued upon the exercise of the
Warrant and compliance by the Company with the terms of, and the consummation of the transactions
contemplated by, this Agreement will not (i) 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 any of
its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or 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 or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of
the charter or by-laws or similar organizational documents of the Company or (iii) result in the
violation of any law or statute or any judgment, order or regulation of any court or arbitrator or
governmental or regulatory authority except, in the case of clauses (i) and (iii) above, for such
conflict, breach or violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
(j) No consent, approval, authorization, order, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is required for the execution, delivery
and performance by the Company of this Agreement, the issuance and sale of the Shares to be sold by
the Company and delivered on the Closing Date, the issuance by the Company of the Shares to be
issued upon exercise of the Warrant and compliance by the Company with the terms thereof and the
consummation of the transactions contemplated by this Agreement, except for the registration of the
Shares under the Securities Act and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required by the National Association of Securities
Dealers, Inc. or under applicable state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(k) To the knowledge of such counsel, except as described in the Time of Sale Information and
Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its subsidiaries is or may be a party or to
which any property of the Company or any of its subsidiaries is or may be the subject which,
individually or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of such counsel, no such investigations, actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or threatened by others.
(l) The descriptions in the Time of Sale Information and the Prospectus of statutes, legal,
governmental and regulatory proceedings (other than in the Preliminary Prospectus and Prospectus
under the heading “Business-Government regulation and environmental matters” as to which such
counsel need not opine) and contracts and other documents are accurate in all material respects;
the statements in the Preliminary Prospectus and Prospectus under the heading “Description of
capital stock” and in the Registration Statement in items 14 and 15, to the extent that they
constitute summaries of the terms of stock, matters of law or regulation or legal conclusions,
fairly summarize the matters described therein in all material respects; and, to the knowledge of
such counsel, (A) there are no current or pending legal, governmental or regulatory actions, suits
or proceedings that are required under the Securities Act to be described in the Prospectus and
that are not so described in the Time of Sale Information and the Prospectus and (B) there are no
statutes, regulations or contracts and other documents that are required under the
Exhibit A-2
Securities Act to be filed as exhibits to the Registration Statement or described in the
Registration Statement and that have not been so filed as exhibits to the Registration Statement or
described in the Registration Statement, the Time of Sale Information and the Prospectus.
(m) The Company is not and, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Registration Statement, the Time of Sale
Information and the Prospectus, will not be required to register as an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the Investment Company Act.
Such counsel shall also state that they have participated in conferences with representatives
of the Company and with representatives of its independent accountants and counsel at which
conferences the contents of the Registration Statement, the Time of Sale Information and the
Prospectus and any amendment and supplement thereto and related matters were discussed and,
although such counsel assume no responsibility for the accuracy, completeness or fairness of the
Registration Statement, the Time of Sale Information, the Prospectus and any amendment or
supplement thereto (except as expressly provided above), nothing has come to the attention of such
counsel to cause such counsel to believe that the Registration Statement, at the time of its
effective date (including the information, if any, deemed pursuant to Rule 430A, 430B or 430C to be
part of the Registration Statement at the time of effectiveness), contained any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, that the Time of Sale Information, at the Time of Sale
(which such counsel may assume to be the date of this Agreement) contained any untrue statement of
a material fact or omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or that the Prospectus or
any amendment or supplement thereto as of its date and the Closing Date contains any untrue
statement of a material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading (other than
the financial statements and other financial information contained therein, as to which such
counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters of fact on certificates of
responsible officers of the Company and public officials that are furnished to the Underwriters.
The opinion of Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
Exhibit A-3
Exhibit B
Form of Opinion of Intellectual Property Counsel For
The Company
The Company
(a) To our knowledge, the statements specifically quoted in Schedule C and in the Registration
Statement and Prospectus under the headings “Our inability to adequately protect our intellectual
property could allow our competitors and others to manufacture and market products based on our
patented or proprietary technology and other intellectual property rights, which could
substantially impair our ability to compete” and “We may become subject to claims of infringement
or misappropriation of the intellectual property rights of others, which could prohibit us from
shipping applicable products or require us to obtain licenses from third parties, to develop
non-infringing alternatives, and could subject us to substantial monetary damages and injunctive
relief” are accurate statements or summaries of the matters therein set forth.
(b) To our knowledge, the statements specifically quoted in Schedule C and in the Registration
Statement and Prospectus under the heading “Intellectual Property,” are accurate statements or
summaries of the matters therein set forth.
(c) To our knowledge, the statements specifically quoted in Schedule C and in the Registration
Statement and Prospectus under the heading “17. Commitments and Contingencies, Litigation,” and
“17. Commitments and Contingencies, Legal Settlements,” are accurate statements or summaries of the
matters therein set forth.
(d) To our knowledge, the Patent and Trademark Sections of the Registration Statement, as of
the Time of Sale, did not and as of the Closing Date do not contain any untrue statements of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(e) To our knowledge, we are aware of only one current lawsuit against the Company involving
the Company’s intellectual property. In February 2004, Roche Diagnostics Corporation (“Roche”)
filed suit against the Company alleging that the Company’s TrueTrack Smart System meters and strips
infringed on two Roche patents. These patents are related to Roche’s electrochemical biosensors
and the method they use to measure glucose levels in a blood sample. In June 2005, the Court ruled
in the Company’s favor with respect to one of the asserted patents, holding that one of the
asserted Roche patents was procured by inequitable conduct before the U.S. Patent and Trademark
Office. As a result, that patent is unenforceable against the Company, but this ruling is subject
to appeal by Roche after the disposition of the entire case. In 2006, Roche amended the Complaint
to allege that the Company’s TrackEase Smart System meters and strips also infringes the asserted
patents. The parties are moving forward with respect to the remaining patent and a trial date is
scheduled for August 2007. Roche is seeking damages including its alleged lost profits and/or a
reasonable royalty and a permanent injunction against the manufacture, use, sale, offer to sell,
and importation of the accused products. Roche also alleges willful infringement which, if proven,
could result in enhanced damages, including up to three times the damages award. Litigation is
uncertain and we cannot predict the outcome. We make no representations and give no
opinion regarding the likely outcome of this case or whether such an outcome would or would
not materially affect the Company’s financial position, results of operations, or cash flows.
(f) To our knowledge, we are not aware of any claims by others that the Company is infringing
the patents of others or any claims by others asserting that a party other than the Company has
rights to use the Company’s intellectual property or make, use, sell, offer for sale, or import the
Company’s products, except as noted in paragraph (e) above, and with one additional possible
exception. We are aware that the Company received on November 20, 2003, an allegation of
infringement by another party, TheraSense, of specified patents. The Company received opinions of
counsel regarding non-infringement from another law firm. To our knowledge, TheraSense has not
filed a formal claim against the Company concerning said allegation of infringement. We make no
representations and give no opinion regarding the likely outcome of this allegation or whether such
an outcome would or would not materially affect the Company’s financial position, results of
operations, or cash flows.
(g) To our knowledge, (A) there are no legal or governmental proceedings pending relating to
U.S. patents owned by or licensed to the Company or to U.S. trademarks or service marks of the
Company, and (B) there are no oppositions, interferences, or public protests pending in connection
with any U.S. patent or trademark/service xxxx application of the Company currently on file.
(h) To our knowledge, we are not aware of material facts with respect to the pending U.S.
provisional and/or non-provisional patent application(s) of the Company set forth on Schedule A
that (i) would preclude the issuance of a patent claiming priority to the scheduled application, or
(ii) would lead us to conclude that such a U.S. patent, when issued, would not be valid and/or
enforceable in accordance with applicable regulations.
(i) To our knowledge, based solely on the U.S. Patent and Trademark Office records and
representations from the Company in the Officer’s certificate attached as Schedule D, (i) the
Company is the owner of record of the U.S. patents and U.S. trademarks or service marks that the
Company represents it owns or licenses. The U.S. patents and U.S. trademarks or service marks that
the Company represents it owns or licenses are set forth in Schedules A and B and (ii) the Company
has obtained an assignment of all right, title and interest from all named inventors of the U.S.
patents and U.S. trademarks or service marks that are set forth in Schedules A and B.
(j) To our knowledge, the Company has made no claims against third parties alleging
infringement of any U.S. patents, trademarks or service marks owned by or licensed to the Company
that the Company has informed us could affect materially the use thereof by the Company.
(k) We are unaware of any facts which would lead us to conclude that any claim of the
Company’s issued U.S. patents listed on Schedule A is not valid and/or enforceable.
Exhibit B-1
Exhibit C-1
Form of Opinion of Counsel For
The Warrantholder
The Warrantholder
(a) The Underwriting Agreement has been duly authorized, executed and delivered by or on
behalf of the Warrantholder.
(b) A Power of Attorney and a Custody Agreement have been duly authorized, executed and
delivered by the Warrantholder and constitute valid and binding agreements of the Warrantholder in
accordance with their terms.
(c) Upon exercise of the Warrant, assuming that each Underwriter acquires its interest in the
Shares it has purchased from the Warrantholder without notice of any adverse claim (within the
meaning of Section 8-105 of the UCC), each Underwriter that has purchased such Shares delivered on
the Closing Date to The Depository Trust Company or other securities intermediary by making payment
therefor as provided herein, and that has had such Shares credited to the securities account or
accounts of such Underwriters maintained with The Depository Trust Company or such other securities
intermediary will have acquired a security entitlement (within the meaning of Section 8-102(a)(17)
of the UCC) to such Shares purchased by such Underwriter, and no action based on an adverse claim
(within the meaning of Section 8-102 of the UCC) may be successfully asserted against such
Underwriter under the Uniform Commercial Code as in effect in the State of New York with respect to
such Shares.
(d) The sale of the Shares and the execution and delivery by the Warrantholder of, and the
performance by the Warrantholder of its obligations under, the Underwriting Agreement, and the
consummation of the transactions contemplated therein, (i) have been duly authorized on the part of
the Warrantholder, and (ii) will not result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Warrantholder or any applicable law or statute
or any order, rule or regulation of any court or governmental agency or body having jurisdiction
over the Warrantholder or any of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency or body is required
for the sale of the Shares or the consummation by the Warrantholder of the transactions
contemplated by the Underwriting Agreement, except such consents, approvals, authorizations,
registrations or qualifications as have been obtained under the Securities Act and as may be
required under state securities or Blue Sky laws in connection with the purchase and distribution
of the Shares by the Underwriters.
The opinion of counsel described above shall be rendered to the Underwriters at the request of
the Warrantholder and shall so state therein.
Exhibit C-1
Exhibit C-2
Form of Opinion of Counsel For
The Estate
The Estate
(a) The Underwriting Agreement has been duly authorized, executed and delivered by or on
behalf of the Estate.
(b) A Power of Attorney and a Custody Agreement have been duly authorized, executed and
delivered by the Estate and constitute valid and binding agreements of the Estate in accordance
with their terms.
(c) The Estate is the record, beneficial and lawful owner of all of the Shares to be sold by
the Estate and has valid and marketable title to such Shares, and upon delivery of and payment for
the Shares, the Underwriters will acquire valid and marketable title to the shares, free and clear
of any mortgage, pledge, security interest, lien, claim or other encumbrance or restriction on
transferability or any adverse claim.
(d) The sale of the Shares and the execution and delivery by the Estate of, and the
performance by the Estate of its obligations under, the Underwriting Agreement, and the
consummation of the transactions contemplated therein, (i) have been duly authorized on the part of
the Estate, and (ii) will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Estate is a party or by which the Estate is bound or
to which any of the property or assets of the Estate is subject, nor will any such action result in
any violation of the provisions of any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the Estate or any of its
properties; and no consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the sale of the Shares or the
consummation by the Estate of the transactions contemplated by the Underwriting Agreement, except
such consents, approvals, authorizations, registrations or qualifications as have been obtained
under the Securities Act and as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters.
The opinion of counsel described above shall be rendered to the Underwriters at the request of
the Estate and shall so state therein.
Exhibit C-2
Exhibit C-3
Form of Opinion of Counsel For
Certain Selling Stockholders
Certain Selling Stockholders
(a) Assuming that each Underwriter acquires its interest in the Shares it has purchased from
such Selling Stockholders without notice of any adverse claim (within the meaning of Section 8-105
of the UCC), each Underwriter that has purchased such Shares delivered on the Closing Date or the
Additional Closing Date, as the case may be, to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that has had such Shares credited
to the securities account or accounts of such Underwriters maintained with The Depository Trust
Company or such other securities intermediary will have acquired a security entitlement (within the
meaning of Section 8-102(a)(17) of the UCC) to such Shares purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of Section 8-102 of the UCC) may be
successfully asserted against such Underwriter under the Uniform Commercial Code as in effect in
the State of New York with respect to such Shares;
The opinion of counsel described above shall be rendered to the Underwriters at the request of
the Selling Stockholders and shall so state therein.
Exhibit C-3
Exhibit D
FORM OF LOCK-UP AGREEMENT
, 2006
—
—
X.X. XXXXXX SECURITIES INC.
XXXXX XXXXXXX & CO.
As Representatives of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
XXXXX XXXXXXX & CO.
As Representatives of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Home Diagnostics, Inc. — Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several Underwriters, propose
to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Home Diagnostics, Inc.,
a Delaware corporation (the “Company”), providing for the public offering (the “Public Offering”)
by the several Underwriters named in Schedule 1 to the Underwriting Agreement (the “Underwriters”),
of Common Stock, of the Company (the “Securities”). Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to purchase and make the Public Offering of
the Securities, and for other good and valuable consideration receipt of which is hereby
acknowledged, the undersigned hereby agrees that, without the prior written consent of X.X. Xxxxxx
Securities Inc. on behalf of the Underwriters, the undersigned will not, during the period ending
180 days after the date of the prospectus relating to the Public Offering (the “Prospectus”), (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, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock,
$0.01 per share par value, of the Company (the “Common Stock”) or any securities convertible into
or exercisable or exchangeable for 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) 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 Common
Exhibit D-1
Stock, 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. In addition, the
undersigned agrees that, without the prior written consent of X.X. Xxxxxx Securities Inc. on behalf
of the Underwriters, it will not, during the period ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or exchangeable for Common
Stock. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted
period, the Company issues an earnings release or material news or a material event relating to the
Company occurs; or (2) prior to the expiration of the 180-day restricted period, the Company
announces that it will release earnings results during the 16-day period beginning on the last day
of the 180-day period, the restrictions imposed by this Letter Agreement shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter 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, if the Underwriting Agreement does not become effective, or
if the Underwriting 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, the undersigned shall be released form all obligations under this Letter Agreement.
The undersigned understands that the Underwriters are entering into the Underwriting Agreement and
proceeding with the Public Offering in reliance upon this Letter Agreement.
This Letter Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, [NAME OF STOCKHOLDER] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Exhibit D-2
Annex A
Home Diagnostics, Inc.
Pricing Term Sheet
[TO COME]
Annex A-1
Annex B
a. Time of Sale Information
[list each free writing prospectus to be included in the Time of Sale Information]
Annex B-1
