MASTER AGREEMENT AMONG UNDERWRITERS
May 13, 1988
XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
1. General. We understand that from time to time you may act as
Representative or as one of the Representatives of the several underwriters of
offerings of securities of various issuers. This Agreement shall apply to any
such offering of securities in which we elect to act as an underwriter after
receipt of an invitation from your Syndicate Department which shall identify the
issuer, contain information regarding certain terms of the securities to be
offered and specify the amount of our proposed participation (subject to
increase as provided in the applicable Underwriting Agreement), and the names of
the other Representatives, if any. At or prior to the time of an offering, you
will advise us, to the extent applicable, as to the expected offering date, the
expected closing date, the initial public offering price, the interest or
dividend rate (or the method by which such rate is to be determined), the
conversion price, the underwriting discount, the management fee, the selling
concession and the reallowance, except that if the public offering price of the
securities is to be determined by a formula based upon the market price of
certain securities (such procedure being hereinafter referred to as "Formula
Pricing"), you shall so advise us and shall specify the maximum underwriting
discount, management fee and selling concession. Such information may be
conveyed by you in one or more communications in the form of letters, wires,
telexes or other written communications or by telephone calls (provided any such
telephone calls are promptly confirmed in writing) (such communications received
by us with respect to an offering are hereinafter collectively referred to as
the "Invitation"). If the Underwriting Agreement (as hereinafter defined)
provides for the granting of an option to purchase additional securities to
cover over-allotments, you will notify us, in the Invitation, of such option.
This Agreement, as amended or supplemented by the Invitation, shall become
effective with respect to our participation in an offering of securities if you
have received our oral or written acceptance and you do not subsequently receive
a written communication revoking our acceptance prior to the time and date
specified in the Invitation (our unrevoked acceptance after expiration of such
time and date being hereinafter referred to as our "Acceptance") Our Acceptance
will constitute our confirmation that, except as otherwise stated in such
Acceptance, each statement included in the Master Underwriters' Questionnaire
set forth as Exhibit A hereto (or otherwise furnished to us) is correct.
The issuer of the securities in any offering of securities made pursuant to
this Agreement is hereinafter referred to as the "Company." If the Underwriting
Agreement does not provide for an over-allotment option, the securities to be
purchased are hereinafter referred to as the "Securities"; if the Underwriting
Agreement provides for an over-allotment option, the securities the Underwriters
are hereinafter called the "Firm Securities" and any additional securities which
may be purchased upon exercise of the over-allotment option are hereinafter
called the "Additional Securities," with the Firm Securities and all or any part
of the Additional Securities being hereinafter collectively referred to as the
"Securities." Any underwriters of Securities under this Agreement, including the
Representatives (as hereinafter defined), are hereinafter collectively referred
to as the "Underwriters." The term "underwriting obligation," as used in this
Agreement with respect to any Underwriter, shall refer to the amount of
Securities, including any Additional Securities (plus such additional Securities
as may be required by the Underwriting Agreement in the event of a default by
one or more of the Underwriters) which such Underwriter is obligated to purchase
pursuant to the provisions of the Underwriting Agreement. All references herein
to "you" or to the "Representatives" shall mean Xxxxxxxxxx Securities and the
other firm or firms, if any, which are named as Representatives in the
Invitation. The Securities to be offered may, but need not, be registered for a
delayed or continuous offering pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act").
The following provisions of this Agreement shall apply separately to each
individual offering of Securities. This Agreement may be supplemented or amended
by you by written notice to us and, except for supplements or amendments set
forth in an Invitation relating only to a particular offering of Securities, any
such supplement or amendment to this Agreement shall be effective with respect
to any offering of Securities to which this Agreement applies after this
Agreement is so amended or supplemented.
2. Underwriting Agreement; Authority of Representatives. We authorize you to
execute and deliver an underwriting or purchase agreement and any amendment or
supplement thereto and any associated pricing agreement or other similar
agreement (collectively, the "Underwriting Agreement") on our behalf with the
Company and/or any selling securityholder(s) with respect to Securities in such
form as you determine. We will be bound by all terms of the Underwriting
Agreement as executed. We understand that changes may be made in those who are
to be Underwriters and in the amount of Securities to be purchased by them, but
the amount of Securities to be purchased by us in accordance with the terms of
this Agreement and the Underwriting Agreement, including the amount of
Additional Securities, if any, which we may become obligated to purchase by
reason of the exercise of any over-allotment option provided in the Underwriting
Agreement, shall not be changed without our consent. Without limiting the
foregoing, we authorize you to (a) determine all matters relating to advertising
and communications with dealers or others, (b) extend the time within which the
Registration Statement (as hereinafter defined) may become effective, (c)
postpone the closing date or dates for any offering, and (d) exercise any right
of cancellation or termination.
As Representatives of the Underwriters, you are authorized to take such
action as you deem necessary or advisable to carry out this Agreement, the
Underwriting Agreement, and the purchase, sale and distribution of the
Securities, and to agree to any waiver or modification of any provision of the
Underwriting Agreement. To the extent applicable, you are also authorized to
determine (i) the amount of Additional Securities, if any, to be purchased by
the Underwriters pursuant to any overallotment option, and (ii) with respect to
offerings using Formula Pricing, the initial public offering price and the price
at which the Securities are to be purchased by the Underwriters in accordance
with the Underwriting Agreement. Authority with respect to matters to be
determined by you, or by you and the Company pursuant to the Underwriting
Agreement, shall survive the termination of this Agreement. Your authority
hereunder and under the Underwriting Agreement may be exercised by the
Representatives jointly or by Xxxxxxxxxx Securities acting alone.
3. Registration Statement and Prospectus. You will furnish to us, to the
extent made available to you by the Company, copies of the registration
statement, the related prospectus and the amendment(s) thereto (excluding
exhibits but including any documents incorporated by reference therein) on (the
"Commission") in respect of the Securities, and our Acceptance of the Invitation
with respect to an offering of Securities will serve to confirm that we are
willing to accept the responsibility of an Underwriter thereunder and to proceed
as therein contemplated. Such Acceptance will further confirm that the
statements made under the heading "Underwriting" in the proposed final form of
prospectus, insofar as they relate to us, do not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. As hereinafter
mentioned, the "Registration Statement" and the "Prospectus" refer to the
Registration Statement and Prospectus included as a part thereof, in the form in
which the Registration Statement becomes effective (including all information
deemed to be a part thereof pursuant to Rule 430A promulgated under the
Securities Act) and the form in which the Prospectus is filed pursuant to Rule
424 (b) under the Securities Act or, if no such filing is required, the form in
which the Prospectus is in at the time the Registration Statement in which it is
contained becomes effective, with respect to the Securities. Each preliminary
prospectus with respect to the Securities is herein referred to as a
"Preliminary Prospectus." The use of our name in the Prospectus and any
Preliminary Prospectus, as one of the Underwriters, has our consent. You are
authorized, with the approval of counsel for the Underwriters, to approve on our
behalf any further amendments or supplements to the Registration Statement or
the Prospectus which may be necessary or appropriate.
4. Compensation. As our share of the compensation to be paid for your
services, we will pay you, and we authorize you to charge our account therefor,
a management fee as specified in the Invitation for the offering. If there is
more than one Representative, such compensation will be divided among the
Representatives in such proportion as you may determine.
5. Public Offering. In connection with the public offering of the Securities,
we authorize you, in your discretion:
(a) to determine the time of the initial public offering, the initial public
offering price, the purchase price of the Securities to the Underwriters, and
the concessions and discounts to Selected Dealers (as defined below), to change
the public offering price and such concessions and discounts (and we agree to be
bound by any such change), to furnish the Company with the information to be
included in the Registration Statement and any amendment or supplement thereto
with respect to the terms of the offering, and to determine all matters relating
to advertising and communications with Selected Dealers and others;
(b) to reserve for sale to dealers selected by you, among whom any of the
Underwriters may be included ("Selected Dealers"), who shall be either (i)
members of the National Association of Securities Dealers, Inc. (the
"Association") who agree in writing to comply with Rule 2740 of the
Association's Conduct Rules or (ii) foreign dealers not eligible for membership
in the Association who agree in writing not to make sales within the United
States, its territories or possessions or to persons who are citizens or
residents therein, to comply with the Association's Interpretation with Respect
to Free-Riding and Withholding, and to comply with Rules 2730, 2740, 2420 (as
such Rules apply to foreign non-members of the Association) and 2750 of the
Association's Conduct Rules, and to others, all or any part of the Securities to
be purchased by us, such reservations for sales to Selected Dealers to be in
such proportions as you may determine and such reservations for sales to others
to be as nearly as practicable in proportion to the respective underwriting
obligations of the Underwriters unless you agree to a smaller proportion at the
request of any Underwriter, and from time to time to add to the reserved
Securities any Securities retained by us remaining unsold and to release to us
any of our Securities reserved but not sold;
(c) to sell reserved Securities as nearly as practicable in proportion to the
respective reservations, (i) to Selected Dealers, under Selected Dealers
Agreements in substantially the form attached hereto as Exhibit B or otherwise,
at the public offering price less the applicable Selected Dealers' concession,
and (ii) to others at the public offering price; and
(d) to buy Securities for our account from Selected Dealers at the initial
public offering price amount not in excess of the applicable Selected Dealers'
concession as you determine.
After, and only after, advice from you that the Securities are released for
public offering, we will offer to the public in conformity with the terms of the
offering as set forth in the Prospectus or any amendment or supplement thereto
such of the Securities to be purchased by us as you advise us are not reserved.
We will comply with any and all restrictions which may be set forth in the
Invitation. The initial public advertisement with respect to the Securities
shall appear on such date, and shall include the names of such of the
Underwriters, as you may determine.
6. Additional Provisions Regarding Sales. Any Securities sold by us
(otherwise than through you) which you purchase in the open market or otherwise
prior to the termination of this Agreement as provided in Section 12, shall be
repurchased by us on demand at the cost to you of such purchase plus commissions
and taxes on redelivery. Securities delivered on such repurchase need not be the
identical Securities so purchased. In lieu of such action, you may, in your
discretion, sell for our account the Securities so purchased and debit or credit
our account for the loss or profit resulting from such sale, or charge our
account with an amount not in excess of the Selected Dealers' concession with
respect to such Securities.
Sales of Securities among the Underwriters may be made with your prior
consent or as you deem advisable for Blue Sky law purposes.
In connection with offers to sell and sales of the Securities, we will comply
with all applicable laws and all applicable rules, regulations and
interpretations of all governmental and self-regulatory agencies.
7. Payment and Delivery. At or before such time, on such dates as you may
specify in the Invitation and at your offices unless you otherwise specify in
the Invitation, we will deliver to you a certified or bank cashier's check in
such
funds as are specified in the Invitation, payable to the order of Xxxxxxxxxx
Securities (unless otherwise specified in the Invitation) in an amount equal to,
as you direct, either (i) the public offering price or prices plus accrued
interest, amortization of original issue discount or dividends, if any, set
forth in the Prospectus less the concession to Selected Dealers in respect of
the amount of Securities to be purchased by us in accordance with the terms of
this Agreement, or (ii) the amount set forth in the Invitation with respect to
the Securities to be purchased by us. We authorize you to make payment for our
account of the purchase price for the Securities to be purchased by us against
delivery to you of such Securities (which, in the case of Securities which are
debt obligations, may be in temporary form), and the difference between such
purchase price of the Securities and the amount of our funds delivered to you
therefor shall be credited to our account.
You may, in your discretion, make payment of such purchase price on our
behalf as provided in Section 8 hereof, but any such payment shall not relieve
us of any of our obligations under the Underwriting Agreement or under this
Agreement and we agree to pay you on demand the amount so advanced for our
account. We authorize you, as our custodian, to take delivery of our Securities
and to hold the same for our account, in your name or otherwise subject to the
provisions of this Agreement, and to deliver our reserved Securities against
sales. Delivery to us of Securities retained by us for direct sale shall be made
by you as soon as practicable after your receipt of the Securities. Upon
termination of the provisions of this Agreement as provided in Section 12, you
shall deliver to us any Securities reserved for our account for sale to Selected
Dealers and others which remain unsold at that time, except that if, upon such
termination, the aggregate of all reserved and unsold Securities of all
Underwriters does not exceed 10% of the total amount of Securities underwritten,
you are authorized in your discretion to sell such Securities for the accounts
of the several Underwriters at such price or prices as you may determine. After
you receive payment for reserved Securities sold for our account, you shall
remit to us the purchase price paid by us for such Securities and debit or
credit our account with the difference (if any) between the sale price and such
purchase price.
If we are a member of The Depository Trust Company or any other depository or
similar facility, you are authorized to make appropriate arrangements for
payment for and/or delivery through its facilities of the Securities to be
purchased by us, or, if we are not a member, settlement may be made through a
correspondent that is a member pursuant to our timely instructions to you.
In the event that the Underwriting Agreement for an offering provides for the
payment of a commission or other compensation to the Underwriters, we authorize
you to receive such commission or other compensation for our account.
8. Authority to Borrow. In connection with the purchase or carrying for our
account of any of the Securities to be purchased by us under this Agreement or
the Underwriting Agreement or any other securities purchased for our account
pursuant to Section 9 hereof, we authorize you, in your discretion, to advance
your funds for our account, charging current interest rates (but not in excess
of the amount permitted by law), to arrange loans for our account, and in
connection therewith to execute and deliver any notes or other instruments and
hold or pledge as security any of our Securities or other securities purchased
for our account. Any lender may rely upon your instructions in all matters
relating to any such loan.
Any Securities held by you for our account may be delivered to us for
carrying purposes, and if so delivered will be redelivered to you upon demand.
9. Stabilization and Over-Allotment. We authorize you, in your discretion, to
make purchases and sales of the Securities, any other securities of the Company
of the same class and series, any securities of the Company into which.-' the
Securities are convertible or exchangeable and any other securities of the
Company which you may designate, in the open market or otherwise, for long or
short account, on such terms and for such prices as you deem advisable, and to
over-allot in arranging sales. Such purchases and sales and over-allotments will
be made for the accounts of the Underwriters as nearly as practicable in
proportion to their respective underwriting obligations. It is understood that
you may have made purchases of securities of the Company for stabilizing
purposes prior to the time when we become one of the Underwriters, and we agree
that any securities so purchased shall be treated as having been purchased for
the respective accounts of the Underwriters pursuant to the foregoing
authorization. We authorize
you, in your discretion, to cover any short position or liquidate any long
position incurred pursuant to this Section 9 by purchasing or selling Securities
on such terms and at such times and prices during the term of this Agreement or
after its termination as you deem advisable. At no time will the amount of our
net commitment either for long or short account under this Section 9 exceed 15%
of our underwriting obligation. Solely for the purposes of the immediately
preceding sentence, our "underwriting obligation" shall be deemed to exclude any
Securities which we are obligated to purchase solely by virtue of the exercise
of an over-allotment option. We will on demand take up and pay at cost
Securities so purchased and deliver any Securities so sold or overallotted for
our account, and, if any Underwriter defaults in any such obligation, each
non-defaulting Underwriter will assume its proportionate share of such
obligation without relieving the defaulting Underwriter from liability. The
provisions of this Section 9 do not constitute an assurance that the price of
the Securities will be stabilized or that stabilization, if commenced, may not
be discontinued at any time.
Upon request, we will advise you of the Securities retained by us and unsold
and will sell to you for the account of one or more of the Underwriters such of
the unsold Securities retained by us and at such price, not less than the
applicable net price to Selected Dealers nor more than the public offering
price, as you may determine.
We and each other Underwriter authorize you, as our Representative, to file
with the Securities and Exchange Commission (the "Commission") any notices and
reports which may be required as a result of any transactions made by you for
the accounts of the Underwriters pursuant to this Section 9. We understand that,
in the event that you effect stabilization pursuant to this Section, you will
notify us promptly of the date and time when the first stabilizing purchase is
effected and the date and time when stabilization terminated. We agree that by
us may be effected only with your consent, and we will furnish you with such
information and reports relating to such stabilization as are required by the
rules and regulations of the Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
10. Open Market Transactions. Until termination of this Agreement, unless
this restriction is sooner terminated by you, we agree not to bid for, purchase,
sell or attempt to induce others to purchase or sell, directly or indirectly,
any of the Securities or securities exchangeable for, or convertible into, or
exercisable against the Securities, any security of the same class and series as
the Securities and any right to purchase the Securities or any such security,
including trading in any put or call option on any such security other than (a)
as provided for in this Agreement or in the Underwriting Agreement or (b) as a
broker in executing unsolicited orders.
We represent that we have not participated in any transaction prohibited by
the preceding paragraph and that we have at all times complied with the
provisions of Rule l0b-6 of the Commission applicable to the offering of the
Securities.
11. Expenses and Settlement. You may charge our account with all transfer
taxes on sales or purchases made of Securities purchased for our account and
with our proportionate share (based upon our underwriting obligation or upon
sales for our accounts, as you shall determine in your sole discretion) of all
other expenses incurred by you under this Agreement or in connection with the
purchase, carrying, sale or distribution of the Securities. With respect to each
offering of Securities to which this Agreement applies, the respective accounts
of the Underwriters shall be settled as promptly as practicable after the
termination of this Agreement as provided in Section 12, but you may reserve
such amount as you deem advisable for additional expenses. Your determination of
the amount to be paid to or by us will be conclusive. You may at any time make
partial distributions of credit balances or call for payment of debit balances.
Any of our funds in your hands may be held with your general funds without
segregation and without accountability for interest. Notwithstanding any
settlement, we will remain liable for taxes on transfers for our account and for
our proportionate share (based upon our underwriting obligation) of all expenses
and liabilities which may be incurred by or for the accounts of the Underwriters
with respect to each offering of Securities to which this Agreement applies.
12. Termination. With respect to each offering of Securities to which this
Agreement applies, all limitations in this Agreement on the price at which the
Securities may be sold, the periods of time referred to in Sections 6, 7, 11 and
18, the authority granted by the first sentence of Section 9, and the
restrictions contained in Section 10, shall terminate at the close of business
on the 30th day after the commencement of the offering of such Securities. You
may terminate any or all of such provisions at any time prior thereto by notice
to the Underwriters. All other provisions
of this Agreement shall survive the termination of such provisions and shall
remain operative and in full force and effect with respect to such offering.
13. Default by Underwriters. Default by one or more Underwriters hereunder or
under the Underwriting Agreement shall not release the other Underwriters from
their obligations or affect the liability of any defaulting Underwriter to the
other Underwriters for damages resulting from such default. If one or more
Underwriters default under the Underwriting Agreement, you may (but shall not be
obligated to) arrange for the purchase by others, including you or other
non-defaulting Underwriters, of the Securities not taken up by the defaulting
Underwriter or Underwriters.
In the event that such arrangements are made, the respective underwriting
obligations of the nondefaulting Underwriters and the amounts of the Securities
to be purchased by others, if any, shall be taken as the basis for all rights
and obligations hereunder; but this shall not in any way affect the liability of
any defaulting Underwriter to the other Underwriters for damages resulting from
its default, nor shall any such default relieve any other Underwriter of any of
its obligations hereunder or under the Underwriting Agreement except as herein
or therein provided. In addition, in the event of default by one or more
Underwriters in respect of their obligations under the Underwriting Agreement to
purchase the Securities agreed to be purchased by them thereunder and, to the
extent that arrangements shall not have been made by you for any person to
assume the obligations of such defaulting Underwriter or Underwriters, we agree,
if provided in the Underwriting Agreement, to assume our proportionate share,
based upon our underwriting obligation, of the obligations of each such
defaulting Underwriter (subject to the limitations contained in the Underwriting
Agreement) without relieving such defaulting Underwriter of its liability
therefor.
In the event of default by one or more Underwriters in respect of their
obligations under this Agreement to take up and pay for any shares of Securities
purchased by you for their respective accounts pursuant to Section 9 hereof, or
to deliver any such shares of Securities sold or over-allotted by you for their
respective accounts pursuant to any provision of this Agreement, and to the
extent that arrangements shall not have been made by you for other persons to
assume the obligations of such defaulting Underwriter or Underwriters, each
non-defaulting Underwriter shall assume its proportionate share of the aforesaid
obligations of each such defaulting Underwriter without relieving any such
defaulting Underwriter of its liability therefor.
14. Position of Representatives; No Liability for Certain Matters. You shall
be under no liability to us for any act or omission except for your lack of good
faith in the performance of the obligations expressly assumed by you in this
Agreement, but no obligations on your part shall be implied or inferred
herefrom. Without limitation, you shall be under no liability for or in respect
of the validity or value of, or title to, the Securities; the form of, or the
statements contained in, or the validity of, the Registration Statement as
initially filed, any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement to any of them, or any other letters
or instruments executed by or on behalf of the Company or others; the form or
validity of the Underwriting Agreement, the Selected Dealers Agreement or this
Agreement; the delivery of the Securities; the performance by the Company or
others of any agreement on its or their part to be performed; the qualification
of the Securities for sale under the laws of any jurisdiction; or any matter in
connection with any of the foregoing. The rights and liabilities of the
Underwriters are several and not joint and nothing shall constitute the
Underwriters a partnership, association or separate entity.
If the Underwriters are deemed to constitute a partnership for federal income
tax purposes, we elect to be excluded from the application of Subchapter K,
Chapter 1, Subtitle A, of the Internal Revenue Code of 1986, as amended, and
agree not to take any position inconsistent with such election, and you are
authorized, in your discretion, to execute on behalf of the Underwriters such
evidence of such election as may be required by the Internal Revenue Service.
15. Indemnification We will indemnify and hold harmless each other
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act, to the extent and upon the terms
upon which each Underwriter agrees to indemnify the Company and other specified
persons as set forth in the Underwriting Agreement.
If at any time claim or claims (whether alone or together with another
claim or claims) shall be asserted against you, individually or as
Representative of the Underwriters, or against any other Underwriter, or against
any person who controls either you or such other Underwriter within the meaning
of Section 15 of the Securities Act, which claim or claims arise out of or are
based in whole or in part upon (i) any actual or alleged untrue or misleading
statement in or omission from any version of the Registration Statement or
Prospectus, or any amendment or supplement to any of them, (ii) any actual or
alleged action or omission to act by you or any other Underwriter or any other
person in connection with the preparation for and management or other
effectuation of any of the transactions contemplated by this Agreement, the
Selected Dealers Agreement or the Underwriting Agreement or (iii) any other
actual or alleged action or omission in connection with or related to the offer
or sale of the Securities, we authorize you to make such investigation, to
retain or arrange for or approve the retaining of such attorneys (including, in
your discretion, separate attorneys for any single Underwriter or group of
Underwriters) and to take such other action as you shall deem necessary or
desirable under the circumstances, including settlement of any such claim or
claims. We will pay you, on request, our proportionate share (based upon the
underwriting obligation of all Underwriters participating in such
indemnification) of all expenses incurred by you to the date of each such
request (including, without limitation, cost of investigation and the fees and
disbursements of your attorneys and any other attorneys retained by you or whose
retaining you arrange for or approve) in investigating, defending against and
negotiating with respect to such claim or Claims, and our similar proportionate
share of any liability incurred to the date of each such request by you, by any
such other Underwriter or by any such controlling person in respect of such
claim or claims, whether such liability shall be the result of a judgment or the
result of any such settlement. In determining the amount of our obligation under
this paragraph, appropriate adjustment may be made by you to reflect any amounts
received by any one or more Underwriters in respect of such claim from the
Company pursuant to the Underwriting Agreement or otherwise. If any Underwriter
or Underwriters default in their obligation to make any payments under this
second paragraph of Section 15, each non-defaulting Underwriter shall be
obligated to pay its proportionate share of all defaulted payments, based upon
such Underwriter's underwriting obligation as related to the underwriting
obligations of all nondefaulting Underwriters. Nothing herein shall relieve a
defaulting Underwriter from liability for its default. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11 (f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
In addition and without limitation, we will indemnify and hold harmless you,
each other Underwriter and each person, if any, who controls you and each
Underwriter within the meaning of Section 15 of the Securities Act, against any
claim or claims, liabilities and expenses (including, without limitation, costs
of investigation, attorneys' fees and disbursements and amounts paid upon
judgment or settlement) to which you, any such other Underwriters and any such
controlling persons may become subject or incur, in whole or in part, as a
result of our actual or alleged failure to timely perform our obligations under
this Agreement, the Underwriting Agreement or under applicable law or the
inaccuracy of any of our representations in this Agreement or the Master
Underwriters' Questionnaire (as attached hereto as Exhibit A), and we will, upon
such request as may be made from time to time, pay to you, each such other
Underwriter and each such controlling person (i) such expenses as have been
incurred by you, such other Underwriters and such controlling persons to the
date of each such request (including, without limitation, costs of investigation
and attorneys' fees and disbursements) in whole or in part in investigating,
defending against and negotiating with respect to such claim or claims, and (ii)
any liabilities incurred by you, such other Underwriters or such controlling
persons to the date of each such request, in whole or in part, as a result of
such claim or claims, whether such liability shall be the result of a judgment
or the result of any settlement made by you, such other Underwriter or such
controlling person.
You shall give us reasonably prompt notice of the assertion of any such claim
or claims referred to in this Section 15, as well as such reports from time to
time as you shall deem reasonable as to the status thereof and as to the actions
taken by you in respect thereof pursuant to the foregoing authorizations and
indemnifications, although your failure to do so shall not affect our
obligations hereunder. In addition, we will cooperate with you and attorneys
retained by you (or which you arranged for or approved the retaining of) in
investigating and defending against any such claim or claims referred to in this
Section 15 and will make available all relevant records and documents and
appropriate personnel. We understand that the discharge of any obligations that
we may have under the provisions of the preceding two paragraphs of this Section
15 shall not relieve us of any obligation that we may have under the first
paragraph of this Section 15. The foregoing indemnifications will be in addition
to, and will not supersede, any other indemnification to which you, any such
other Underwriter and any such controlling person shall be entitled from us
by virtue of this Agreement, by operation of law or otherwise.
The provisions of Section 14 hereof and our agreements contained in this
Section 15 shall remain in full force and effect regardless of any investigation
made by or on behalf of you, any other Underwriter or any controlling person and
shall survive the delivery of the Securities and the termination of this
Agreement and the similar agreements entered into with the other Underwriters.
16. Reports and Blue Sky Matters. We authorize you to file with the
Commission and any other governmental agency any reports required in connection
with any transactions effected by you for our account pursuant to this Agreement
and the Underwriting Agreement, and we will furnish any information needed for
such reports. As provided in Section 9 hereof, we agree to notify you in writing
of the information specified in Rule 17a-2 (d) of the Commission promulgated
under the Exchange Act. You shall not have any responsibility with respect to
the right of any Underwriter or other person to sell the Securities in any
jurisdiction, notwithstanding any information you may furnish in that
connection.
We are familiar with Rule 15c2-8 promulgated under the Exchange Act relating
to the distribution of preliminary and final prospectuses for securities of an
issuer (whether or not the issuer is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act) and confirm that we will comply
therewith in connection with any sale of Securities.
17. NASD Membership. We understand that you are a member in good standing of
the Association. We confirm that we are actually engaged in the investment
banking or securities business and are either a member in good standing of the
Association or foreign dealer not eligible for membership in the Association who
has agreed not to make sales within the United States, its territories or
possessions or to persons who are citizens thereof or residents therein, to
comply with the requirements of the Association's Interpretation with Respect to
Free-Riding and Withholding in making sales of the Securities and not to use any
means of interstate commerce to effect such sales unless we are registered under
the Exchange Act. In connection with our sale of the Securities, and without
limiting the foregoing, we specifically agree to comply with Rule 2740 of the
Conduct Rules of the Association or, if we are a foreign dealer not a member of
the Association, we agree to comply as though we were a member with Rule 2730,
2740 and 2750 of said Conduct Rules and with Rule 2420 of said Conduct Rules as
that Rule applies to non-member brokers or dealers in a foreign country.
We authorize you to file on our behalf with the Association such documents
and information, if any, which are available or have been furnished to you for
filing pursuant to applicable rules, statements and interpretations of the
Association.
18. Representations and Agreements. (a) We understand that it is our
responsibility to examine the Registration Statement, the Prospectus, any
amendment or supplement thereto relating to the offering of the Securities, any
preliminary prospectus and the material, if any, incorporated by reference
therein and we will familiarize ourselves with the terms of the Securities and
the other terms of the offering thereof which are to be reflected in the
Prospectus and the Invitation with respect thereto. You are authorized, with the
approval of counsel for the Underwriters, to approve on our behalf any
amendments or supplements to the Registration Statement or the Prospectus.
(b) We confirm that the information that we have given or are deemed to have
been given in response to the Master Underwriters' Questionnaire attached as
Exhibit A hereto (which information has been furnished to the Company for use in
the Registration Statement or the Prospectus) is correct. We will notify you
immediately if any development occurs before the termination of this Agreement
under Section 12 as to the offering of Securities which makes untrue or
incomplete any information that we have given or are deemed to have been given
in response to the Master Underwriters' Questionnaire.
(c) Unless we have promptly notified you in writing otherwise, our name as it
should appear in the Prospectus and our address are as set forth on the
signature page hereof.
(d) We agree that if we are advised by you that the Company was not,
immediately prior to the filing of the Registration Statement, subject to the
requirements of Section 13(a) or 15(d) of the Exchange Act, we will not without
your consent, sell any of the Securities to an account over which we exercise
discretionary authority.
19. Capital Requirements. We confirm that our net capital and the ratio of
our aggregate indebtedness to our net capital is such that we may, in accordance
with and pursuant to Rule 15c3-1 promulgated by the Commission under the
Exchange Act, and other applicable laws, rules and regulations relating to us,
agree to purchase the Securities that we are obligated to purchase hereunder and
under the Underwriting Agreement.
20. Notices. All notices to us will be considered duly given if mailed or
telegraphed to our address as set forth on the signature page hereof (as such
address may be changed by written notice to you). All notices to you will be
considered duly given if mailed or telegraphed to Xxxxxxxxxx Securities at the
address set forth above, directed to the attention of the Syndicate Department,
or to such other address as you may specify to us in writing from time to time.
21. General Provisions. Subject to the provisions of Section 1 hereof, this
Agreement may be amended or modified by notification in writing by you to us.
This Agreement will be governed by and construed in accordance with the laws of
the State of California. The invalidity or unenforceability of any provision or
portion of this Agreement shall not affect the validity or enforceability of the
other provisions hereof. If any provision or portion of this Agreement shall be
invalid or unenforceable for any reason, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
Neither this Agreement nor any rights hereunder may be directly or indirectly
assigned (whether by merger, reverse merger, sale of stock or assets, operation
of law or, without limitation, otherwise) by us. This Agreement shall inure to
the benefit of and be binding upon the permissible successors and assigns and
the heirs, executors and administrators of the parties hereto. No such
assignment will relieve us of our obligations hereunder.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be executed
in several counterparts, each one of which shall be an original and all of which
shall constitute one and the same document.
Very truly yours,
---------------------------------
Name of Firm
By: _______________________________
Name: _____________________________
Title: ____________________________
Confirmed, as of the date first above written.
XXXXXXXXXX SECURITIES
By: ___________________________________
Partner
EXHIBIT A
MASTER UNDERWRITERS' QUESTIONNAIRE
In connection with each offering of Securities to which the foregoing Master
Agreement Among Underwriters dated May 13, 1988 between Xxxxxxxxxx Securities
and the Underwriter executing the same relates, except as otherwise disclosed to
the Representatives in writing, such Underwriter advises the Representatives as
follows and authorizes the Representatives to use the information furnished in
response to this Master Underwriters' Questionnaire in the Registration
Statement relating to the Securities:
(a) Neither such Underwriter nor any of its directors, officers or
partners, individually or as a part of a "group" (as that term is used in
Section 13(d)(3) of the Exchange Act), (i) has a "material" relationship
(as defined in Rule 405 under the Act) with the Company or any other seller
of Securities in the offering or (ii) is a director, officer or holder (of
record or beneficially) of 5% or more of any class of voting securities of
the Company or any other seller of Securities in the offering;
(b) With reference to the Interpretation of the Board of Governors of
the Association with respect to the Review of Corporate Financing, neither
such Underwriter nor any of its "related persons" (as defined by the
Association) (i)has purchased or otherwise acquired from the Company any
warrants, options or other securities of the Company within 18 months prior
to the date that the Registration Statement was initially filed or
subsequent to that date, and there are no existing arrangements for any
such purchase or (ii) has had any dealings with the Company (except those
with respect to the Underwriting Agreement) or any "affiliate" of the
Company (as defined in Rule 405 under the Act) as to which documents other
information are required to be furnished to the Association pursuant to
such Interpretation;
(c) Other than as may be stated in the Registration Statement, any
Prospectus, the Master Agreement Among Underwriters, the Underwriting
Agreement or any selling agreements, such Underwriter does not know of any
discounts or commissions, including any cash, securities, contract or other
consideration to be received by any dealer in connection with the sale of
the Securities, or of any intention to over-allot the Securities or to
stabilize the price of any security to facilitate the offering of the
Securities;
(d) If the Securities are to be issued pursuant to a trust indenture,
such Underwriter is not in control of, controlled by, or under common
control with the Trustee, any other trustee under a trust indenture
relating to securities of the Company and qualified under the Trust
Indenture Act of 1939 (an "Other Trustee") or any of their respective
affiliates, and none of said companies or affiliates, or any of their
respective directors or executive officers, is a director, officer,
partner, employee, appointee or representative of such Underwriter;
(e) If the Securities are to be issued pursuant to a trust indenture,
such Underwriter and its directors, executive officers and partners, taken
as a group, did not, on the date of the Trustee's Statement of Eligibility
and Qualification on Form T-l, own beneficially more than 1% of the
outstanding voting securities of the Trustee, the Trustee's parent, any
Other Trustee or the parent of any Other Trustee;
(f) If the Registration Statement is on Form S-l, such Underwriter has
not prepared or had prepared for it within the past 12 months any
engineering, management or similar report or memorandum relating to the
broad aspects of the business, operations or products of the Company,
except for reports solely comprising recommendations to buy, sell or hold
the Company's securities, unless such recommendations have changed within
the past six months;
(g) If the Registration Statement is on either Form S-2 or Form S-3,
such Underwriter has not prepared any report or memorandum for external use
by it or by the Company in connection with the proposed offering of the
Securities;
(h) Such Underwriter's proposed commitment to purchase Securities will
not result in a violation by it of the
financial responsibility requirements of Rule 15c3-1 under the Exchange
Act;
(i) Such Underwriter is familiar with the rules, regulations and
releases of the Commission dealing with the dissemination of information
prior to and during registration and has not distributed nor will it
distribute any written information outside of its organization relating to
the Company or its securities other than in accordance with such rules,
regulations and releases; and
(j) If the Company is a "public utility," such Underwriter is not a
"holding company" or a "subsidiary company" or an "affiliate" of a "holding
company" or of a "public utility," each as defined in the Public Utility
Holding Company Act of 1935.
All capitalized terms in this Questionnaire not otherwise defined herein are
used as defined in the foregoing Master Agreement Among Underwriters.
May 13, 1988
Very truly yours,
_________________________________
Name of Firm
By: _______________________________
Name: _____________________________
Title: ____________________________
EXHIBIT B
SELECTED DEALERS AGREEMENT
May 13, 1988
XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
1. General. We understand that Xxxxxxxxxx Securities is entering into this
Agreement with us and other firms who may be offered the right to purchase as
principal a portion of securities being distributed to the public. The terms and
conditions of this Agreement shall be applicable to any public offering of
securities ("Securities") pursuant to a registration statement filed under the
Securities Act of 1933 (the "Securities Act") wherein Xxxxxxxxxx Securities
(acting for its own account or for the account of any underwriting or similar
group or syndicate) is responsible for managing or otherwise implementing the
sale of the Securities to selected dealers ("Selected Dealers") and has
expressly informed us that such terms and conditions shall be applicable. Any
such offering of Securities to us as a Selected Dealer is hereinafter called an
"Offering." In the case of any Offering in which you are acting for the account
of any underwriting or similar group or syndicate ("Underwriters"), the terms
and conditions of this Agreement shall be for the benefit of, and binding upon,
such Underwriters, including, in the case of any Offering in which you are
acting with others as representatives of Underwriters, such other
representatives. The term "preliminary prospectus" means any preliminary
prospectus relating to an Offering of Securities or any preliminary prospectus
supplement together with a prospectus relating to an Offering of Securities; the
term "Prospectus" means the prospectus, together with the final prospectus
supplement, if any, relating to an Offering of Securities, either filed pursuant
to Rule 424(b) or Rule 424(c) under the Securities Act or, if no such filing is
required, the form of final prospectus contained in the related registration
statement at the time that it first becomes effective.
2. Conditions of Offering; Acceptance and Purchase. Any Offering will be
subject to delivery of the Securities and their acceptance by you and any other
Underwriters, may be subject to the approval of certain legal matters by counsel
and the satisfaction of other conditions, and may be made on the basis of
reservation of Securities or an allotment against subscription. You will advise
us by telegram, telex, or other form of written communication ("Written
Communication") of the particular method and supplementary terms and conditions
(including, without limitation, the information as to prices and offering date
referred to in Section 3(b)) of any Offering in which we are invited to
participate. To the extent such supplementary terms and conditions are
inconsistent with any provision herein, such terms and conditions shall
supersede any such provision. Unless otherwise indicated in any such Written
Communication, acceptances and other communications by us with respect to any
Offering should be sent to Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000. You reserve the right to reject any acceptance in
whole or in part. Payment for Securities purchased by us is to be made at such
office as you may designate, at the public offering price, or, if you shall so
advise us, at such price less the concession to dealers or at the price set
forth or indicated in a Written Communication, on such date as you shall
determine, on one days' prior notice to us, by certified or official bank check
payable in next day funds to the order of Xxxxxxxxxx Securities, against
delivery of certificates evidencing such Securities. If payment is made for
Securities purchased by us at the public offering price, the concession to which
we shall be entitled will be paid to us upon termination of the provisions of
Section 3(b) hereof with respect to such Securities.
Unless we promptly give you written instructions otherwise, if transactions
in the Securities may be settled through the facilities of The Depository Trust
Company, payment for and delivery of Securities purchased by us will be made
through such facilities if we are a member, or if we are not a member,
settlement may be made through our ordinary correspondent who is a member.
3. Representations, Warranties, and Agreement.
(a) Prospectuses. You shall provide us with such number of copies of each
preliminary prospectus, the Prospectus and any supplement thereto relating to
each Offering as we may reasonably request for the purposes contemplated by the
Securities Act and the Securities Exchange Act of 1934 (the "Exchange Act") and
the applicable rules and regulations of the Securities and Exchange Commission
thereunder. We represent that we are familiar with Rule 15c2-8 under the
Exchange Act relating to the distribution of preliminary and final prospectuses
and agree that we will comply therewith. We agree to keep an accurate record of
our distribution (including dates, number of copies, and persons to whom sent)
of copies of the Prospectus or any preliminary prospectus (or any amendment or
supplement to any thereof), and promptly upon request by you, to bring all
subsequent changes to the attention of anyone to whom such material shall have
been furnished. We agree to furnish to persons who receive a confirmation of
sale a copy of the Prospectus. We agree that in purchasing Securities in an
Offering we will rely upon no statements in the Prospectus delivered to us by
you. We will not be authorized by the issuer or other seller of Securities
offered pursuant to a Prospectus or by any Underwriters to give any information
or to make any representation not contained in the Prospectus in connection with
the sale of such Securities.
(b) Offer and Sale to the Public. With respect to any Offering of Securities,
you will inform us by a Written Communication of the public offering price, the
selling concession, the reallowance (if any) to dealers, and the time when we
may commence selling Securities to the public. After such public offering has
commenced, you may change the public offering price, the selling concession, and
the reallowance to dealers. With respect to each Offering of Securities, until
the provisions of this Section 3(b) shall be terminated pursuant to Section 4,
we agree to offer Securities to the public only at the public offering price,
except that if a reallowance is in effect, a reallowance from the public
offering price not in excess of such reallowance may be allowed as consideration
for services rendered in distribution to dealers who are actually engaged in the
investment banking or securities business, who execute the written agreement
prescribed by Section 24(c) of Article III of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. (the "NASD") and who are either
members in good standing of the NASD or foreign brokers or dealers not eligible
for membership in the NASD who represent to us that they will promptly reoffer
such Securities at the public offering price and will abide by the conditions
with respect to foreign brokers and dealers set forth in Section 3(e) hereof.
(c) Stabilization and Overallotment. You may, with respect to any Offering,
be authorized to overallot in arranging sales to Selected Dealers, to purchase
and sell Securities, any other securities of the issuer of the Securities of the
same class and series and any other securities of such issuer that you may
designate for long or short account, and to stabilize or maintain the market
price of the Securities. We agree to advise you from time to time upon request,
prior to the termination of the provisions of Section 3(b) with respect to any
Offering, of the amount of n your request, sell to you, for the accounts of the
Underwriters, such amount of Securities as you may designate, at the public
offering price thereof less an amount to be determined by you not in excess of
the concession to dealers. In the event that prior to the later of (i) the
termination of the provisions of Section 3 (b) with respect to any Offering, or
(ii) the covering by you of any short position created by you in connection with
such Offering for your account or the account of one or more Underwriters, you
purchase or contract to purchase for the account of any of the Underwriters, in
the open market or otherwise, any Securities theretofore delivered to us, you
reserve the right to withhold the above-mentioned concession to dealers on such
Securities if sold to us at the public offering price, or if such concession has
been allowed to us through our purchase at a net price, we agree to repay such
concession upon your demand, plus in each case any taxes on redelivery,
commissions, accrued interest, and dividends paid in connection with such
purchase or contract to purchase.
(d) Open Market Transactions. We agree not to bid for, purchase, attempt to
purchase, or sell, directly or indirectly, any Securities, any other securities
of the issuer of the Securities of the same class and series, or any other
securities of such issuer as you may designate, except as brokers pursuant to
unsolicited orders and as
otherwise provided in this Agreement. If the Securities are common stock or
securities convertible into common stock, we agree not to effect, or attempt to
induce others to effect, directly or indirectly, any transactions in or relating
to put or call options on any stock of such issuer, except to the extent
permitted by Rule lob-6 under the Exchange Act as interpreted by the Securities
and Exchange Commission.
(e) NASD. We represent that we are actually engaged in the investment banking
or securities business and we are either a member in good standing of the NASD,
or, if not such a member, a foreign dealer not eligible for membership. If we
are such a member, we agree that in making sales of the Securities we will
comply with all applicable rules of the NASD, including, without limitation, the
NASD's Interpretation with Respect to Free-Riding and Withholding and Rule 2740
of the NASD's Conduct Rules. If we are such a foreign dealer, we agree not to
offer or sell any Securities in the United States of America except through you
and in making sales of Securities outside the United States of America we agree
to comply as though we were a member with such Interpretation and Rules 2730,
2740 and 2750 of the NASD's Conduct Rules and to comply with Rule 2420 of such
Rules as it applies to a non-member broker or dealer in a foreign country.
(f) Relationship among Underwriters and Selected Dealers. You may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
with your consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the public
offering price less all or any part of the concession. We are not authorized to
act as agent for you or any Underwriter or the issuer or other seller of any
Securities in offering Securities to the public or otherwise. Nothing contained
herein or in any Written Communication from you shall constitute the Selected
Dealers partners with you or any Underwriter or with one another. Neither you
nor any Underwriter shall be under any obligation to us except for obligations
assumed hereby or in any Written Communication from you in connection with any
Offering. In connection with any Offering, we agree to pay our proportionate
share of any claim, demand, or liability asserted against us, and the other
Selected Dealers or any of them, or against you or the Underwriters, if any,
based on any claim that such Selected Dealers or any of them constitute an
association, unincorporated business, or other separate entity, including in
each case our proportionate share of any expense incurred in defending against
any such claim, demand, or liability.
(g) Blue Sky Laws. Upon application to you, you will inform us as to the
jurisdictions in which you believe the Securities have been qualified for sale
under the respective securities or "blue sky" laws of such jurisdictions. We
understand and agree that compliance with the securities or "blue sky" laws in
each jurisdiction in which we shall offer or sell any of the Securities shall be
our sole responsibility and that you assume no responsibility or obligations as
to the eligibility of the Securities for sale or our right to sell the
Securities in any jurisdiction.
(h) Compliance with Law. We agree that in selling Securities pursuant to any
Offering (which agreement shall also be for the benefit of the issuer or other
seller of such Securities), we will comply with the applicable provisions of the
Securities Act and the Exchange Act, the applicable rules and regulations of the
Securities and Exchange Commission thereunder and the applicable rules and
regulations of any securities exchange having jurisdiction over the Offering.
You shall have full authority to take such action as you may deem advisable in
respect of all matters pertaining to any Offering. Neither you nor any
Underwriter shall be under any liability to us, except for lack of good faith
and for obligations expressly assumed by you in this Agreement; provided,
however, that nothing in this sentence shall be deemed to relieve you from any
liability imposed by the Securities Act.
4. Termination; Supplements and Amendments. This Agreement may be terminated
by either party hereto upon five business days' written notice to the other
party; provided that with respect to any Offering for which Written
Communication was sent and accepted prior to such notice, this Agreement as it
applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence of
this Section. This Agreement may be supplemented or amended by you by written
notice thereof to us, and any such supplement or amendment to this Agreement
shall be effective with respect to any Offering to which this Agreement applies
after the date of such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(b) and (d) hereof
with regard to any Offering will terminate at the close of business on the
thirtieth day after the date of the initial public offering of the Securities to
which such Offering related, but such terms and conditions, upon notice to us,
may be terminated by you at any time.
5. Successor and Assigns. This Agreement shall be binding on, and inure to
the benefit of, the parties hereto and other persons specified or indicated in
Section 1 hereof, and the respective successors and assigns of each of them;
provided, however, that we may not assign our rights or delegate any of our
duties under this Agreement without your prior written consent.
6. Governing Law. This Agreement and the terms and condition set forth herein
with respect to any Offering together with such supplementary terms and
conditions with respect to such Offering as may be contained in any Written
Communication from you to us in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of California.
By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering shall
constitute (i) acceptance of and agreement to the terms and conditions of this
Agreement (as supplemented and amended pursuant to Section 4) together with and
subject to any supplementary terms and conditions contained in any Written
Communication from you in connection with such Offering, all of such shall
constitute a binding agreement between us and you, individually, or as
representative of any Underwriters, (ii) in confirmation that our
representations and warranties set forth in Section 3 hereof are true and
correct at that time and (iii) confirmation that our agreements set forth in
Sections 2 and 3 hereof have been and will be fully performed by us to the
extent and at the times required thereby.
Very truly yours,
_________________________________
Name of Firm
By: _______________________________
Name: _____________________________
Title: ____________________________
Confirmed, as of the date first above written.
XXXXXXXXXX SECURITIES
By: ___________________________________
Partner
_______________ Shares
PREMIER RESEARCH WORLDWIDE, LTD.
Common Stock
UNDERWRITING AGREEMENT
__________, 1997
XXXXXXXXXX SECURITIES
XXXXXX XXXX LLC
GENESIS MERCHANT GROUP SECURITIES
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
SECTION 1. Introductory. Premier Research Worldwide, Ltd., a
Delaware corporation (the "Company"), proposes to issue and sell 2,000,000
shares of its authorized but unissued Common Stock (the "Common Stock") and the
stockholder of the Company named in Schedule B annexed hereto (the "Selling
Stockholder") propose to sell 750,000 shares of the Company's issued and
outstanding Common Stock to the several underwriters named in Schedule A annexed
hereto (the "Underwriters"), for whom you are acting as Representatives. Said
aggregate of 2,750,000 shares are herein called the "Firm Common Shares." In
addition, the Company and the Selling Stockholder propose to grant to the
Underwriters an option to purchase up to 412,500 additional shares of Common
Stock (the "Optional Common Shares"), as provided in Section 5 hereof. The Firm
Common Shares and, to the extent such option is exercised, the Optional Common
Shares are hereinafter collectively referred to as the "Common Shares."
You have advised the Company and the Selling Stockholder that
the Underwriters propose to make a public offering of their respective portions
of the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company, the Selling Stockholder and UM Holdings, Ltd.,
the parent of the Company and the Selling Stockholder (the "Parent"), hereby
confirm their respective agreements with respect to the purchase of the Common
Shares by the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company, the
Selling Stockholder and the Parent. The Company, the Selling Stockholder and the
Parent, jointly and severally, represent and warrant to the several Underwriters
that:
(a) A registration statement on Form S-1 (File
No. 333-17001) with respect to the Common Shares has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. The Company has prepared and has filed or
proposes to file prior to the effective date of such registration statement an
amendment or amendments to such registration statement, which amendment or
amendments have been or will be similarly prepared. There have been delivered to
you three signed copies of such registration statement and amendments, together
with three copies of each exhibit filed therewith. Conformed copies of such
registration statement and amendments (but without exhibits) and of the related
preliminary prospectus have been delivered to you in such reasonable quantities
as you have requested for each of the Underwriters. The Company will next file
with the Commission one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the form of final
prospectus, (ii) a final prospectus in accordance with Rules 430A and 424(b) of
the Rules and Regulations or (iii) a term sheet (the "Term Sheet") as described
in and in accordance with Rules 434 and 424(b) of the Rules and Regulations. As
filed, the final prospectus, if one is used, or the Term Sheet and Preliminary
Prospectus, if a final prospectus is not used, shall include all Rule 430A
Information and, except to the extent that you shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the date and time that this Agreement was executed and delivered by the
parties hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company shall have
previously advised you in writing would be included or made therein. To the
extent applicable, the copies of the
2
registration statement and amendments, of each related prospectus subject to
completion, including all documents incorporated by reference therein and of any
abbreviated registration statement pursuant to Rule 462(b) of the Rules and
Regulations furnished to you were identical to the electronically transmitted
copies thereof filed with the Commission pursuant to the Commission's
Electronic Data Gathering, Analysis and Retrieval System ("XXXXX"), except to
the extent permitted by Regulation S-T.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration statement
becomes effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended; provided, however, that such
term shall also include (i) all Rule 430A Information deemed to be included in
such registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the Rules and Regulations and (ii) any
registration statement filed pursuant to 462(b) of the Rules and Regulations
relating to the Common Shares. The term "Preliminary Prospectus" shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean either (i) the prospectus relating to the
Common Shares in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, (ii) if a Term Sheet is
not used and no filing pursuant to Rule 424(b) of the Rules and Regulations is
required, shall mean the form of final prospectus included in the Registration
Statement at the time such registration statement becomes effective or (iii) if
a Term Sheet is used, the Term Sheet in the form in which it is first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations, together
with the Preliminary Prospectus included in the Registration Statement at the
time it becomes effective. The term "Rule 430A Information" means information
with respect to the Common Shares and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective pursuant to
Rule 430A of the Rules and Regulations. For purposes of this Agreement, all
references to the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendments or supplements to any of the foregoing shall be
deemed to include the respective copies thereof filed with the Commission
pursuant to XXXXX.
3
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements of the Act
and the Rules and Regulations and, as of its date, has not included 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; and at the time the Registration Statement becomes
effective, and at all times subsequent thereto up to and including each Closing
Date hereinafter mentioned, the Registration Statement and the Prospectus, and
any amendments or supplements thereto, will contain all material statements and
information required to be included therein by the Act and the Rules and
Regulations and will in all material respects conform to the requirements of the
Act and the Rules and Regulations, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, will include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from any
Preliminary Prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter,
directly or through the Representatives, specifically for use in the preparation
thereof.
(c) The Company does not own or control, directly
or indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 22 to the Registration Statement. The Company and
each of its subsidiaries have been duly incorporated and are validly existing as
corporations or limited liability companies in good standing under the laws of
their respective jurisdictions of incorporation or formation, with full power
and authority (corporate and other) to own and lease their properties and
conduct their respective businesses as described in the Prospectus; except as
described in the Prospectus, the Company owns all of the outstanding capital
stock of its subsidiaries free and clear of all claims, liens, charges and
encumbrances; the Company and each of its subsidiaries are in possession of and
operating in compliance with all authorizations, licenses, permits, consents,
certificates and orders material to the conduct of their respective businesses,
all of which are valid and in full force and effect; the Company and each of its
subsidiaries are duly qualified to do business
4
and in good standing as foreign corporations in each jurisdiction in which the
ownership or leasing of properties or the conduct of their respective businesses
requires such qualification, except for jurisdictions in which the failure to so
qualify would not have a material adverse effect upon the Company or the
subsidiary; and no proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(d) The Company has an authorized and outstanding
capital stock as set forth under the heading "Capitalization" in the Prospectus
(it being understood that the shares of Common Stock to be issued to Premier,
Inc. upon conversion of its membership interest in Premier Research, LLC. will
not be outstanding until the First Closing Date); the issued and outstanding
shares of Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable, are duly listed on the Nasdaq National Market, have been
issued in compliance with all federal and state securities laws, were not issued
in violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities, and conform to the description thereof contained in
the Prospectus. All issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable. Except as disclosed in or contemplated by the
Prospectus and the financial statements of the Company, and the related notes
thereto, included in the Prospectus, neither the Company nor any subsidiary has
outstanding any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. The description
of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(e) The Common Shares to be sold by the Company
have been duly authorized and, when issued, delivered and paid for in the manner
set forth in this Agreement, will be duly authorized, validly issued, fully paid
and nonassessable, and will conform to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of
5
the Common Shares by the Company pursuant to this Agreement. No stockholder of
the Company has any right which has not been waived to require the Company to
register the sale of any shares owned by such stockholder under the Act in the
public offering contemplated by this Agreement. No further approval or authority
of the stockholders or the Board of Directors of the Company will be required
for the transfer and sale of the Common Shares to be sold by the Selling
Stockholder or the issuance and sale of the Common Shares to be sold by the
Company as contemplated herein.
(f) The Company and the Parent each has full legal
right, power and authority to enter into this Agreement and perform the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company and the Parent and constitutes a valid and
binding obligation of the Company and the Parent in accordance with its terms.
The making and performance of this Agreement by the Company and the consummation
of the transactions herein contemplated will not violate any provisions of the
certificate of incorporation or bylaws, or other organizational documents, of
the Company or any of its subsidiaries, and will not conflict with, result in
the breach or violation of, or constitute, either by itself or upon notice or
the passage of time or both, a default under any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to which
the Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries or any of its respective properties may be bound or
affected, any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of its subsidiaries or any of
its respective properties. No consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the consummation of
the transactions contemplated by this Agreement, except for compliance with the
Act, the Blue Sky laws applicable to the public offering of the Common Shares by
the several Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD").
(g) Xxxxxx Xxxxxxxx LLP, who have expressed their
opinion with respect to the financial statements and schedules filed with the
Commission as a part of the Registration Statement and included in the
Prospectus and in the Registration Statement, are independent accountants as
required by the Act and the Rules and Regulations.
6
(h) The financial statements and schedules of the
Company, and the related notes thereto, included in the Registration Statement
and the Prospectus present fairly the financial position of the Company as of
the respective dates of such financial statements and schedules, and the results
of operations and changes in financial position of the Company for the
respective periods covered thereby. Such statements, schedules and related notes
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis as certified by the independent accountants named
in subsection 2(g). No other financial statements or schedules are required to
be included in the Registration Statement. The selected financial data set forth
in the Prospectus under the captions "Capitalization" and "Selected Financial
Data" fairly present the information set forth therein on the basis stated in
the Registration Statement.
(i) Except as disclosed in the Prospectus, and except
as to defaults which individually or in the aggregate would not be material to
the Company, neither the Company nor any of its subsidiaries is in violation or
default of any provision of its certificate of incorporation or bylaws, or other
organizational documents, or is in breach of or default with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which it is
a party or by which it or any of its properties are bound; and there does not
exist any state of facts which constitutes an event of default on the part of
the Company or any such subsidiary as defined in such documents or which, with
notice or lapse of time or both, would constitute such an event of default.
(j) There are no contracts or other documents
required to be described in the Registration Statement or to be filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations which have not been described or filed as required. The contracts so
described in the Prospectus are accurate and complete; all such contracts are in
full force and effect on the date hereof; and neither the Company nor any of its
subsidiaries, nor to the best of the Company's knowledge, any other party is in
breach of or default under any of such contracts.
(k) There are no legal or governmental actions, suits
or proceedings pending or, to the best of the Company's knowledge, threatened to
which the Company or any of its subsidiaries is or may be a party or of which
property owned or
7
leased by the Company or any of its subsidiaries is or may be the subject, or
related to environmental or discrimination matters, which actions, suits or
proceedings might, individually or in the aggregate, prevent or adversely affect
the transactions contemplated by this Agreement or result in a material adverse
change in the condition (financial or otherwise), properties, business, results
of operations or prospects of the Company and its subsidiaries; and no labor
disturbance by the employees of the Company or any of its subsidiaries exists or
is imminent which might be expected to affect adversely such condition,
properties, business, results of operations or prospects. Neither the Company
nor any of its subsidiaries is a party or subject to the provisions of any
material injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(l) The Company or the applicable subsidiary has good
and marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the Prospectus),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
(i) those, if any, reflected in such financial statements (or elsewhere in the
Prospectus), or (ii) those which are not material in amount and do not adversely
affect the use made and proposed to be made of such property by the Company and
its subsidiaries. The Company or the applicable subsidiary holds its leased
properties under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company. Except as
disclosed in the Prospectus, the Company owns or leases all such properties as
are necessary to its operations as now conducted or as proposed to be conducted.
(m) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, and except as
described in or specifically contemplated by the Prospectus: (i) the Company and
its subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or written
agreement or other transaction which is not in the ordinary course of business
or which could result in a material reduction in the future earnings of the
Company and its subsidiaries; (ii) the Company and its subsidiaries have not
sustained any material loss or interference with their respective businesses or
properties from fire, flood, windstorm, accident or other calamity, whether or
not covered by insurance; (iii) the Company has not paid or declared any
dividends or other
8
distributions with respect to its capital stock and the Company and its
subsidiaries are not in default in the payment of principal or interest on any
outstanding debt obligations; (iv) there has not been any change in the capital
stock (other than upon the sale of the Common Shares hereunder or indebtedness
material to the Company and its subsidiaries (other than in the ordinary course
of business); and (v) there has not been any material adverse change in the
condition (financial or otherwise), business, properties, results of operations
or prospects of the Company and its subsidiaries.
(n) Except as disclosed in or specifically
contemplated by the Prospectus, the Company and its subsidiaries have sufficient
trademarks, trade names, patent rights, mask works, copyrights, licenses,
approvals and governmental authorizations to conduct their businesses as now
conducted; the expiration of any trademarks, trade names, patent rights, mask
works, copyrights, licenses, approvals or governmental authorizations would not
have a material adverse effect on the condition (financial or otherwise),
business, results of operations or prospects of the Company or its subsidiaries;
and the Company has no knowledge of any material infringement by it or its
subsidiaries of trademark, trade name rights, patent rights, mask works,
copyrights, licenses, trade secret or other similar rights of others, and there
is no claim being made against the Company or its subsidiaries regarding
trademark, trade name, patent, mask work, copyright, license, trade secret or
other infringement which could have a material adverse effect on the condition
(financial or otherwise), business, results of operations or prospects of the
Company and its subsidiaries.
(o) The Company has not been advised, and has no
reason to believe, that either it or any of its subsidiaries is not conducting
business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without limitation,
all applicable local, state and federal environmental laws and regulations;
except where failure to be so in compliance would not materially adversely
affect the condition (financial or otherwise), business, results of operations
or prospects of the Company and its subsidiaries.
(p) The Company and its subsidiaries have filed on a
timely basis all necessary federal, state and foreign income and franchise tax
returns and have paid all taxes shown as due thereon; and the Company has no
knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company or its subsidiaries which could materially and
adversely
9
affect the business, operations or properties of the Company and its
subsidiaries.
(q) The Company is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(r) The Company has not distributed and will not
distribute prior to the First Closing Date any offering material in connection
with the offering and sale of the Common Shares other than the Prospectus, the
Registration Statement and the other materials permitted by the Act.
(s) Each of the Company and its subsidiaries maintain
insurance of the types and in the amounts generally deemed adequate for its
business, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and its subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect.
(t) Neither the Company nor any of its subsidiaries
has at any time during the last five years (i) made any unlawful contribution to
any candidate for foreign office, or failed to disclose fully any contribution
in violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof.
(u) The Parent and the Company have not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Common Shares.
SECTION 3. Representations, Warranties and Covenants
of the Selling Stockholder.
(a) The Parent and the Selling Stockholder, jointly
and severally, represent and warrant to, and agree with, the several
Underwriters that:
(i) Such Selling Stockholder has, and on the
First Closing Date hereinafter mentioned will have, good and marketable title to
the Common Shares proposed to be sold by such
10
Selling Stockholder hereunder on such Closing Date and full right, power and
authority to enter into this Agreement and to sell, assign, transfer and deliver
such Common Shares hereunder, free and clear of all voting trust arrangements,
liens, encumbrances, equities, security interests, restrictions and claims
whatsoever; and upon delivery of and payment for such Common Shares hereunder,
the Underwriters will acquire good and marketable title thereto, free and clear
of all liens, encumbrances, equities, claims, restrictions, security interests,
voting trusts or other defects of title whatsoever.
(ii) Such Selling Stockholder has executed
and delivered a Power of Attorney and caused to be executed and delivered on its
behalf a Custody Agreement (hereinafter collectively referred to as the
"Stockholders Agreement") and in connection herewith such Selling Stockholder
further represents, warrants and agrees that such Selling Stockholder has
deposited in custody, under the Stockholders Agreement, with the agent named
therein (the "Agent") as custodian, certificates in negotiable form for the
Common Shares to be sold hereunder by such Selling Stockholder, for the purpose
of further delivery pursuant to this Agreement. Such Selling Stockholder agrees
that the Common Shares to be sold by such Selling Stockholder on deposit with
the Agent are subject to the interests of the Company and the Underwriters, that
the arrangements made for such custody are to that extent irrevocable, and that
the obligations of such Selling Stockholder hereunder shall not be terminated,
except as provided in this Agreement or in the Stockholders Agreement, by any
act of such Selling Stockholder, by operation of law, by the merger, dissolution
or liquidation of such Selling Stockholder or by the occurrence of any other
event. If the Selling Stockholder should be merged, dissolved or liquidated, or
if any other event should occur, before the delivery of the Common Shares
hereunder, the documents evidencing Common Shares then on deposit with the Agent
shall be delivered by the Agent in accordance with the terms and conditions of
this Agreement as if such merger, dissolution or liquidation or other event had
not occurred, regardless of whether or not the Agent shall have received notice
thereof. This Agreement and the Stockholders Agreement have been duly executed
and delivered by or on behalf of such Selling Stockholder and the form of such
Stockholders Agreement has been delivered to you.
(iii) The performance of this Agreement and
the Stockholders Agreement and the consummation of the transactions contemplated
hereby and by the Stockholders Agreement will not result in a breach or
violation by such
11
Selling Stockholder of any of the terms or provisions of, or constitute a
default by such Selling Stockholder under, any indenture, mortgage, deed of
trust, trust (constructive or other), loan agreement, lease, franchise, license
or other agreement or instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder or any of its properties is bound, any
statute, or any judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to such Selling Stockholder or any of its
properties.
(iv) Such Selling Stockholder has not taken
and will not take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Common Shares.
(v) Each Preliminary Prospectus and the
Prospectus, insofar as it has related to such Selling Stockholder has conformed
in all material respects to the requirements of the Act and the Rules and
Regulations and has not included any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made; and neither
the Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, as it relates to such Selling Stockholder, will include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
(b) The Selling Stockholder agrees with the Company
and the Underwriters not to offer to sell, sell or contract to sell or otherwise
dispose of any shares of Common Stock or securities convertible into or
exchangeable for any shares of Common Stock, for a period of 180 days after the
first date that any of the Common Shares are released by you for sale to the
public, without the prior written consent of Xxxxxxxxxx Securities, which
consent may be withheld at the sole discretion of Xxxxxxxxxx Securities.
SECTION 4. Representations and Warranties of the Underwriters.
The Representatives, on behalf of the several Underwriters, represent and
warrant to the Company and to the Selling Stockholder that the information set
forth (i) on the cover page of the Prospectus with respect to price,
underwriting discounts and commissions and terms of offering and (ii) under
"Underwriting" in the Prospectus was furnished to the Company by
12
and on behalf of the Underwriters for use in connection with the preparation of
the Registration Statement and the Prospectus and is correct in all material
respects. The Representatives represent and warrant that they have been
authorized by each of the other Underwriters as the Representatives to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
SECTION 5. Purchase, Sale and Delivery of Common Shares. On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, (i) the Company agrees
to issue and sell to the Underwriters 2,000,000 of the Firm Common Shares, and
(ii) the Selling Stockholder agree to sell to the Underwriters 750,000 of the
Firm Common Shares. The Underwriters agree, severally and not jointly, to
purchase from the Company and the Selling Stockholder the number of Firm Common
Shares described below. The purchase price per share to be paid by the several
Underwriters to the Company and to the Selling Stockholder shall be $___ per
share.
The obligation of each Underwriter to the Company shall be to
purchase from the Company that number of full shares which (as nearly as
practicable, as determined by you) bears to 2,000,000 the same proportion as the
number of shares set forth opposite the name of such Underwriter in Schedule A
hereto bears to the total number of Firm Common Shares. The obligation of each
Underwriter to the Selling Stockholder shall be to purchase from the Selling
Stockholder that number of full shares which (as nearly as practicable, as
determined by you) bears to 750,000 the same proportion as the number of shares
set forth opposite the name of such Underwriter in Schedule A hereto bears to
the total number of Firm Common Shares.
Delivery of certificates for the Firm Common Shares to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or
such other place as may be agreed upon by the Company and the Representatives)
at such time and date, not later than the third (or, if the Firm Common Shares
are priced, as contemplated by Rule 15c6-1(c) under the Securities Exchange Act
of 1934, after 4:30 P.M. Washington D.C. time, the fourth) full business day
following the first date that any of the Common Shares are released by you for
sale to the public, as you shall designate by at least 48 hours prior notice to
the Company (or at such other time and date, not later than one week after such
third or fourth, as the case may be, full
13
business day as may be agreed upon by the Company and the Representatives) (the
"First Closing Date"); provided, however, that if the Prospectus is at any time
prior to the First Closing Date recirculated to the public, the First Closing
Date shall occur upon the later of the third or fourth, as the case may be, full
business day following the first date that any of the Common Shares are released
by you for sale to the public or the date that is 48 hours after the date that
the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be
made by or on behalf of the Company and the Selling Stockholder to you, for the
respective accounts of the Underwriters with respect to the Firm Common Shares
to be sold by the Company and by the Selling Stockholder against payment by you,
for the accounts of the several Underwriters, of the purchase price therefor by
a wire transfer of immediately available funds to accounts designated by the
Company and by the Selling Stockholder, respectively, in proportion to the
number of Firm Common Shares to be sold by the Company and the Selling
Stockholder. The certificates for the Firm Common Shares shall be registered in
such names and denominations as you shall have requested at least two full
business days prior to the First Closing Date, and shall be made available for
checking and packaging on the business day preceding the First Closing Date at a
location in New York, New York, as may be designated by you. Time shall be of
the essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
In addition, on the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions herein
set forth, each of the Company and the Selling Stockholder hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
206,250 Optional Common Shares at the purchase price per share to be paid for
the Firm Common Shares, for use solely in covering any over-allotments made by
you for the account of the Underwriters in the sale and distribution of the Firm
Common Shares. The options granted hereunder may be exercised at any time (but
not more than once) within 30 days after the first date that any of the Common
Shares are released by you for sale to the public, upon notice by you to the
Company and the Selling Stockholder setting forth the aggregate number of
Optional Common Shares as to which the Underwriters are exercising the option,
the names and denominations in which the certificates for such shares are to be
registered and the time and place at which such
14
certificates will be delivered. Such time of delivery (which may not be earlier
than the First Closing Date), being herein referred to as the "Second Closing
Date," shall be determined by you, but if at any time other than the First
Closing Date shall not be earlier than three nor later than five full business
days after delivery of such notice of exercise. The number of Optional Common
Shares to be purchased by each Underwriter shall be determined by multiplying
the number of Optional Common Shares to be sold by the Company and the Selling
Stockholder pursuant to such notice of exercise by a fraction, the numerator of
which is the number of Firm Common Shares to be purchased by such Underwriter as
set forth opposite its name in Schedule A and the denominator of which is
2,750,000 (subject to such adjustments to eliminate any fractional share
purchases as you in your discretion may make). Certificates for the Optional
Common Shares will be made available for checking and packaging on the business
day preceding the Second Closing Date at a location in New York, New York, as
may be designated by you. The manner of payment for and delivery of the Optional
Common Shares shall be the same as for the Firm Common Shares purchased from the
Company and the Selling Stockholder as specified in the two preceding
paragraphs. At any time before lapse of the option, you may cancel such option
by giving written notice of such cancellation to the Company. If the option is
cancelled or expires unexercised in whole or in part, the Company will
deregister under the Act the number of Option Shares as to which the option has
not been exercised.
You have advised the Company and the Selling Stockholder that
each Underwriter has authorized you to accept delivery of its Common Shares, to
make payment and to receipt therefor. You, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Subject to the terms and conditions hereof, the Underwriters
propose to make a public offering of their respective portions of the Common
Shares as soon after the effective date of the Registration Statement as in the
judgment of the Representatives is advisable and at the public offering price
set forth on the cover page of and on the terms set
15
forth in the final prospectus, if one is used, or on the first page of the Term
Sheet, if one is used.
SECTION 6. Covenants of the Company. The Company covenants and
agrees that:
(a) The Company will use its best efforts to cause
the Registration Statement and any amendment thereof, if not effective at the
time and date that this Agreement is executed and delivered by the parties
hereto, to become effective. If the Registration Statement has become or becomes
effective pursuant to Rule 430A of the Rules and Regulations, or the filing of
the Prospectus is otherwise required under Rule 424(b) of the Rules and
Regulations, the Company will file the Prospectus, properly completed, pursuant
to the applicable paragraph of Rule 424(b) of the Rules and Regulations within
the time period prescribed and will provide evidence satisfactory to you of such
timely filing. The Company will promptly advise you in writing (i) of the
receipt of any comments of the Commission, (ii) of any request of the Commission
for amendment of or supplement to the Registration Statement (either before or
after it becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information, (iii) when the Registration Statement shall have become
effective, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the institution
of any proceedings for that purpose. If the Commission shall enter any such stop
order at any time, the Company will use its best efforts to obtain the lifting
of such order at the earliest possible moment. The Company will not file any
amendment or supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus of which you
have not been furnished with a copy a reasonable time prior to such filing or to
which you reasonably object or which is not in compliance with the Act and the
Rules and Regulations.
(b) The Company will prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statement or the Prospectus which in your judgment may be necessary
or advisable to enable the several Underwriters to continue the distribution of
the Common Shares and will use its best efforts to cause the same to become
effective as promptly as possible. The Company will fully and completely comply
with the provisions of Rule 430A of the Rules and Regulations with respect to
information omitted from the Registration Statement in reliance upon such Rule.
16
(c) If at any time within the nine-month period
referred to in Section 10(a)(3) of the Act during which a prospectus relating to
the Common Shares is required to be delivered under the Act any event occurs, as
a result of which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, or if it is necessary at any time to amend the Prospectus,
including any amendments or supplements, to comply with the Act or the Rules and
Regulations, the Company will promptly advise you thereof and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance and will use its best efforts to
cause the same to become effective as soon as possible; and, in case any
Underwriter is required to deliver a prospectus after such nine-month period,
the Company upon request, but at the expense of such Underwriter, will promptly
prepare such amendment or amendments to the Registration Statement and such
Prospectus or Prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45
days after the end of the first quarter ending after one year following the
"effective date of the Registration Statement" (as defined in Rule 158(c) of the
Rules and Regulations), the Company will make generally available to its
security holders an earnings statement (which need not be audited) covering a
period of 12 consecutive months beginning after the effective date of the
Registration Statement which will satisfy the provisions of the last paragraph
of Section 11(a) of the Act. To the extent applicable, such documents shall be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(e) During such period as a prospectus is required by
law to be delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, but only for the nine-month period referred to in
Section 10(a)(3) of the Act, will furnish to you and the Selling Stockholder or
mail to your order copies of the Registration Statement, the Prospectus, the
Preliminary Prospectus and all amendments and supplements to any such documents
in each case as soon as available and in such quantities as you and the Selling
Stockholder may request, for the purposes contemplated by the Act. To the extent
applicable,
17
such documents shall be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(f) The Company shall cooperate with you and your
counsel in order to qualify or register the Common Shares for sale under (or
obtain exemptions from the application of) the Blue Sky laws of such
jurisdictions as you designate, will comply with such laws and will continue
such qualifications, registrations and exemptions in effect so long as
reasonably required for the distribution of the Common Shares. The Company shall
not be required to qualify as a foreign corporation or to file a general consent
to service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The
Company will advise you promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company, with your
cooperation, will use its best efforts to obtain the withdrawal thereof.
(g) During the period of five years hereafter, the
Company will furnish to the Representatives and, upon request of the
Representatives, to each of the other Underwriters: (i) as soon as practicable
after the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on
Form 8-K or other report filed by the Company with the Commission, the NASD or
any securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Common Stock.
(h) During the period of 180 days after the first
date that any of the Common Shares are released by you for sale to the public,
without the prior written consent of Xxxxxxxxxx Securities (which consent may be
withheld at the sole discretion of Xxxxxxxxxx Securities), the Company will not
(other than pursuant to outstanding stock options disclosed in the Prospectus)
issue, offer, sell, grant options to purchase or
18
otherwise dispose of any of the Company's equity securities or any other
securities convertible into or exchangeable with its Common Stock or other
equity security; provided, that the Company may grant options to purchase its
Common Stock to directors or employees under stock option plans described in the
Prospectus as long as such options do not become exercisable prior to the end of
said 180-day period.
(i) The Company will apply the net proceeds of the
sale of the Common Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify
or register its Common Stock for sale in non-issuer transactions under (or
obtain exemptions from the application of) the Blue Sky laws of the State of
California (and thereby permit market making transactions and secondary trading
in the Company's Common Stock in California), will comply with such Blue Sky
laws and will continue such qualifications, registrations and exemptions in
effect for a period of five years after the date hereof.
(k) The Company will use its best efforts to list,
subject to official notice of issuance, on the Nasdaq National Market, the Stock
to be issued and sold by the Company.
(l) The Company will file Form SR in conformity with
the requirements of the Act and the Rules and Regulations.
You, on behalf of the Underwriters, may, in your sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants or extend the time for their performance.
SECTION 7. Payment of Expenses. Whether or not the
transactions contemplated hereunder are consummated or this Agreement becomes
effective or is terminated, the Company and, unless otherwise paid by the
Company, the Selling Stockholder agree to pay in such proportions as they may
agree upon among themselves all costs, fees and expenses incurred in connection
with the performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the
19
Common Stock, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Common Shares to the Underwriters,
(iv) all fees and expenses of the Company's counsel and the Company's
independent accountants, (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the Registration
Statement, each Preliminary Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, this Agreement, the Agreement Among Underwriters, the Selected
Dealers Agreement, the Underwriters' Questionnaire, the Underwriters' Power of
Attorney and the Blue Sky memorandum, (vi) all filing fees, attorneys' fees and
expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the Blue Sky laws, (vii) the filing fee of the National Association of
Securities Dealers, Inc., and (viii) all other fees, costs and expenses referred
to in Item 13 of the Registration Statement. The Underwriters may deem the
Company to be the primary obligor with respect to all costs, fees and expenses
to be paid by the Company and by the Selling Stockholder. Except as provided in
this Section 7, Section 9 and Section 11 hereof, the Underwriters shall pay all
of their own expenses, including the fees and disbursements of their counsel
(excluding those relating to qualification, registration or exemption under the
Blue Sky laws and the Blue Sky memorandum referred to above). This Section 7
shall not affect any agreements relating to the payment of expenses between the
Company and the Selling Stockholder.
The Selling Stockholder will pay (directly or by
reimbursement) all fees and expenses incident to the performance of its
obligations under this Agreement which are not otherwise specifically provided
for herein, including but not limited to (i) any fees and expenses of counsel
for such Selling Stockholder; (ii) any fees and expenses of the Agent; and (iii)
all expenses and taxes incident to the sale and delivery of the Common Shares to
be sold by such Selling Stockholder to the Underwriters hereunder.
SECTION 8. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for the Firm
Common Shares on the First Closing Date and the Optional Common Shares on the
Second Closing Date shall be subject to the accuracy of the representations and
warranties on the part of the Company, the Parent and the Selling Stockholder
herein set forth as of the date hereof and as of the
20
First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of officers of the Company, the Parent and the
Selling Stockholder made pursuant to the provisions hereof, to the performance
by the Company and the Selling Stockholder of their respective obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:00 P.M. (or, in the case of a registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations relating to the
Common Shares, not later than 10 P.M.), Washington, D.C. Time, on the date of
this Agreement, or at such later time as shall have been consented to by you; if
the filing of the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b) of the Rules and Regulations, the Prospectus shall have been filed
in the manner and within the time period required by Rule 424(b) of the Rules
and Regulations; and prior to such Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or,
to the knowledge of the Company, the Selling Stockholder or you, shall be
contemplated by the Commission; and any request of the Commission for inclusion
of additional information in the Registration Statement, or otherwise, shall
have been complied with to your satisfaction.
(b) You shall be satisfied that since the respective
dates as of which information is given in the Registration Statement and
Prospectus, (i) there shall not have been any change in the capital stock of the
Company or any of its subsidiaries or any material change in the indebtedness
(other than in the ordinary course of business) of the Company or any of its
subsidiaries, (ii) except as set forth or contemplated by the Registration
Statement or the Prospectus, no material verbal or written agreement or other
transaction shall have been entered into by the Company or any of its
subsidiaries, which is not in the ordinary course of business or which could
result in a material reduction in the future earnings of the Company and its
subsidiaries, (iii) no loss or damage (whether or not insured) to the property
of the Company or any of its subsidiaries shall have been sustained which
materially and adversely affects the condition (financial or otherwise),
business, results of operations or prospects of the Company and its
subsidiaries, (iv) no legal or governmental action, suit or proceeding affecting
the Company or any of its subsidiaries which is material to the Company and its
subsidiaries or which affects or may affect the transactions contemplated by
this Agreement shall have been
21
instituted or threatened, and (v) there shall not have been any material change
in the condition (financial or otherwise), business, management, results of
operations or prospects of the Company and its subsidiaries which makes it
impractical or inadvisable in the judgment of the Representatives to proceed
with the public offering or purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you, as
Representatives of the Underwriters, on each Closing Date, in form and substance
satisfactory to you, except as otherwise expressly provided below:
(i) An opinion of Xxxxxx & Xxxxxxx, counsel
for the Company and the Selling Stockholder, addressed to the Underwriters and
dated the First Closing Date, or the Second Closing Date, as the case may be, to
the effect that:
(1) Each of the Company and its
subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business as a foreign
corporation and is in good standing in all other jurisdictions where
the ownership or leasing of properties or the conduct of its business
requires such qualification, except for jurisdictions in which the
failure to so qualify would not have a material adverse effect on the
Company and its subsidiaries taken as a whole, and has full corporate
power and authority to own its properties and conduct its business as
described in the Registration Statement;
(2) The authorized, issued and
outstanding capital stock of the Company is as set forth under the
caption "Capitalization" in the Prospectus; all necessary and proper
corporate proceedings have been taken in order to authorize validly
such authorized Common Stock; all outstanding shares of Common Stock
(including the Firm Common Shares and at the Second Closing Date any
Optional Common Shares sold by the Selling Stockholder) have been duly
and validly issued, are fully paid and nonassessable, have been issued
in compliance with federal and state securities laws, were not issued
in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase any securities arising under the laws of the
State of Delaware, pursuant to the Certificate of Incorporation or
By-laws of the Company or, to the best of such counsel's
22
knowledge, pursuant to any contract or agreement and conform to the
description thereof contained in the Prospectus; without limiting the
foregoing, there are no preemptive or other rights to subscribe for or
purchase any of the Common Shares to be sold by the Company or the
Selling Stockholder hereunder arising under the laws of the State of
Delaware, pursuant to the Certificate of Incorporation or By-laws of
the Company or, to the best of such counsel's knowledge, pursuant to
any contract or agreement;
(3) All of the issued and
outstanding shares of the Company's subsidiaries have been duly and
validly authorized and issued, are fully paid and nonassessable and are
owned beneficially by the Company free and clear of all liens,
encumbrances, equities, claims, security interests, voting trusts or
other defects of title whatsoever;
(4) The certificates evidencing the
Common Shares to be delivered hereunder are in due and proper form
under Delaware law, and when duly countersigned by the Company's
transfer agent and registrar, and delivered to you or upon your order
against payment of the agreed consideration therefor in accordance with
the provisions of this Agreement, the Common Shares represented thereby
will be duly authorized and validly issued, fully paid and
nonassessable, will not have been issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities, arising under the laws of the State of Delaware, pursuant
to the Certificate of Incorporation or By-laws of the Company or, to
the best of such counsel's knowledge, pursuant to any contract or
agreement and will conform in all respects to the description thereof
contained in the Prospectus;
(5) Except as disclosed in or
specifically contemplated by the Prospectus, to the best of such
counsel's knowledge, there are no outstanding options, warrants or
other rights calling for the issuance of, and no commitments, plans or
arrangements to issue, any shares of capital stock of the Company or
any security convertible into or exchangeable for capital stock of the
Company;
(6) (a) The Registration Statement
has become effective under the Act, and, to the best of such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or
23
preventing the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or are
pending or contemplated by the Commission; any required filing
of the Prospectus and any supplement thereto pursuant to Rule
424(b) of the Rules and Regulations has been made in the
manner and within the time period required by such Rule
424(b);
(b) The Registration Statement,
the Prospectus and each amendment or supplement thereto
(except for the financial statements and schedules included
therein as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations;
(c) To the best of such
counsel's knowledge, there are no franchises, leases,
contracts, agreements or documents of a character required to
be disclosed in the Registration Statement or Prospectus or to
be filed as exhibits to the Registration Statement which are
not disclosed or filed, as required; and
(d) To the best of such
counsel's knowledge, there are no legal or governmental
actions, suits or proceedings pending or threatened against
the Company which are required to be described in the
Prospectus which are not described as required;
(7) The Company has full right,
power and authority to enter into this Agreement and to sell and
deliver the Common Shares to be sold by it to the several Underwriters;
this Agreement has been duly and validly authorized by all necessary
corporate action by the Company, has been duly and validly executed and
delivered by and on behalf of the Company, and is a valid and binding
agreement of the Company in accordance with its terms, except as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and except as to those provisions
relating to indemnity or contribution for liabilities arising under the
Act as to which no opinion need be expressed; and no approval,
authorization, order, consent, registration, filing, qualification,
license or permit of or with any court, regulatory, administrative or
other governmental body is
24
required for the execution and delivery of this Agreement by the
Company or the consummation of the transactions contemplated by this
Agreement, except such as have been obtained and are in full force and
effect under the Act and such as may be required under applicable Blue
Sky laws in connection with the purchase and distribution of the
Common Shares by the Underwriters and the clearance of such offering
with the NASD as to which no opinion need be expressed;
(8) The execution and performance of
this Agreement and the consummation of the transactions herein
contemplated will not conflict with, result in the breach of, or
constitute, either by itself or upon notice or the passage of time or
both, a default under, any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument known to such
counsel to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or any of its or their
property may be bound or affected which is material to the Company and
its subsidiaries taken as a whole, or violate any of the provisions of
the certificate of incorporation or bylaws, or other organizational
documents, of the Company or any of its subsidiaries or, so far as is
known to such counsel, violate any statute, judgment, decree, order,
rule or regulation of any court or governmental body having
jurisdiction over the Company or any of its subsidiaries or any of its
or their property;
(9) Neither the Company nor any
subsidiary is in violation of its certificate of incorporation or
bylaws, or other organizational documents, or to the best of such
counsel's knowledge, in breach of or default with respect to any
provision of any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument known to such counsel to
which the Company or any such subsidiary is a party or by which it or
any of its properties may be bound or affected, except where such
default would not materially adversely affect the Company and its
subsidiaries taken as a whole; and such counsel is not aware of any
failure of the Company or any of its subsidiaries to comply with all
laws, rules, regulations, judgments, decrees, orders and statutes of
any court or jurisdiction to which they are subject, except where
noncompliance would not materially adversely affect the Company and its
subsidiaries taken as a whole;
25
(10) The statements in the
Registration Statement and the Prospectus summarizing statutes, rules
and regulations (other than the statements under the captions "Risk
Factors - Dependence on Government Regulation" and "Business -
Government Regulation" as to which such counsel need express no
opinion), including the Delaware corporation law and the description of
the certificate of incorporation and bylaws of the Company, are
accurate in all material respects and fairly present the information
required to be presented by the Act or the Rules and Regulations; and
such counsel does not know of any statutes, rules or regulations
required to be described in the Registration Statement or the
Prospectus that are not described or referred to therein as required;
(11) The statements under the
captions "Risk Factors - Shares Eligible for Future Sale," "Management
- Stock Option Plans," "Management - Employment Contracts," "Management
- 401(k) Plan," "Management Compensation Committee Interlocks and
Insider Participation," "Certain Relationships and Related Party
Transactions," and "Description of Capital Stock" in the Prospectus and
Item 15 in the Registration Statement, insofar as such statements
constitute a summary of documents referred to therein or matters of
law, are accurate summaries and fairly present, in all material
respects, the information called for with respect to such documents and
matters;
(12) The information required to be
set forth in the Registration Statement in answer to Items 9, 10
(insofar as it relates to such counsel) and 11(c) of Form S-1 is, to
the best of such counsel's knowledge, accurately and adequately set
forth therein in all material respects or no response is required with
respect to such Items;
(13) Such counsel is not aware of
any failure of the Company or any of its subsidiaries to obtain any
licenses, consents, certificates, orders, approvals or permits of any
federal, state, local or foreign government authority that are
necessary to conduct its business substantially as described in the
Registration Statement and the Prospectus, except where failure to have
such licenses, consents, certificates, orders, approvals and permits
would not have a material adverse effect on the condition (financial or
otherwise), business, properties, results of
26
operations or prospects of the Company and its subsidiaries taken as a
whole;
(14) To the best of such counsel's
knowledge, no holders of securities of the Company have rights which
have not been waived to the registration of shares of Common Stock or
other securities, because of the filing of the Registration Statement
by the Company or the offering contemplated hereby;
(15) To the best of such counsel's
knowledge, this Agreement and the Stockholders Agreement have been duly
authorized, executed and delivered by or on behalf of the Selling
Stockholder; the Agent has been duly and validly authorized to act as
the custodian of the Common Shares to be sold by such Selling
Stockholder; and the performance of this Agreement and the Stockholders
Agreement and the consummation of the transactions herein contemplated
by the Selling Stockholder will not result in a breach of, or
constitute a default under, any indenture, mortgage, deed of trust,
trust (constructive or other), loan agreement, lease, franchise,
license or other agreement or instrument known to such counsel to which
the Selling Stockholder is a party or by which the Selling Stockholder
or any of its properties may be bound, or violate any statute,
judgment, decree, order, rule or regulation known to such counsel of
any court or governmental body having jurisdiction over the Selling
Stockholder or any of its properties; and to the best of such counsel's
knowledge, no approval, authorization, order or consent of any court,
regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the
Stockholders Agreement or the consummation by the Selling Stockholder
of the transactions contemplated by this Agreement, except such as have
been obtained and are in full force and effect under the Act and such
as may be required under the rules of the NASD and applicable Blue Sky
laws as to which no opinion need be expressed;
(16) To the best of such counsel's
knowledge, the Selling Stockholder has full right, power and authority
to enter into this Agreement and the Stockholders Agreement and to
sell, transfer and deliver the Common Shares to be sold on such Closing
Date by such Selling Stockholder hereunder and good and marketable
title to such Common Shares so sold, free and clear of all liens,
encumbrances, equities, claims, restrictions, security
27
interests, voting trusts, or other defects of title whatsoever, has
been transferred to the Underwriters (whom counsel may assume to be
bona fide purchasers) who have purchased such Common Shares hereunder;
and
(17) To the best of such counsel's
knowledge, this Agreement and the Stockholders Agreement are valid and
binding agreements of the Selling Stockholder in accordance with their
terms except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally and except with respect to
those provisions relating to indemnities or contributions for
liabilities under the Act, as to which no opinion need be expressed.
(18) No transfer taxes are required
to be paid in connection with the sale and delivery of the Common
Shares to the Underwriters hereunder.
In rendering such opinion, such counsel may rely as to matters
of local law not involving the laws of Pennsylvania or Delaware, on opinions of
local counsel, and as to matters of fact, on certificates of the Selling
Stockholder and of officers of the Company and of governmental officials, in
which case their opinion is to state that they are so doing and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates are to be attached to the opinion.
In addition, such counsel shall include a statement to the
effect that such counsel has participated in conferences with officials and
other representatives of the Company, the Representatives, Underwriters' Counsel
and the independent public accountants of the Company, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed, and although they have not verified the accuracy or completeness
of the statements contained in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel which caused them to believe
that, at the time the Registration Statement became effective the Registration
Statement (except as to financial statements (including notes and schedules) as
to which such counsel need express no opinion) contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or at the
First Closing Date or the Second Closing Date, as the case may be, the
28
Registration Statement or the Prospectus (except as aforesaid) 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, in light of
the circumstances under which they were made, not misleading;
(ii) An opinion of King & Spalding, regulatory
counsel for the Company, addressed to the Underwriters and dated the First
Closing Date or the Second Closing Date, as the case may be, to the effect that:
(1) The statements in the Prospectus under the
captions "Risk Factors - Dependence on Government Regulation,"
and "Business - Government Regulation," and other references
in the Prospectus to those matters described in such sections,
insofar as such statements purport to summarize applicable
provisions of the Federal Food, Drug and Cosmetic Act
("FFDCA"), Part F of the Public Health Service Act ("PHSA")
relating to the licensing of biological products and clinical
laboratories, and the regulations established thereunder, are
accurate summaries in all material respects of the provisions
purported to be summarized under such captions in the
Prospectus; and
(2) Nothing has come to such counsel's
attention in the course of our representation of the Company
that causes them to believe that the statements, to the extent
such statements relate to the FFDCA, or regulations or legal
conclusions under the FFDCA, or to Part F of PHSA relating to
the licensing of biological products and clinical
laboratories, or regulations or legal conclusions under Part F
of the PHSA, under the captions entitled "Risk Factors
Dependence on Government Regulation" and "Business Government
Regulation" and other references to those matters described in
such sections in the Registration Statement at the time the
Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or in the Prospectus, at
the time the Prospectus was issued and at the First Closing
Date or the Second Closing Date, as the case may be, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in
29
light of the circumstances under which they were made, not
misleading.
(iii) Such opinion or opinions of Xxxxxxx Xxxxx
Xxxxxxx & Xxxxxxxxx, counsel for the Underwriters dated the First Closing Date
or the Second Closing Date, as the case may be, with respect to the
incorporation of the Company, the sufficiency of all corporate proceedings and
other legal matters relating to this Agreement, the validity of the Common
Shares, the Registration Statement and the Prospectus and other related matters
as you may reasonably require, and the Company and the Selling Stockholder shall
have furnished to such counsel such documents and shall have exhibited to them
such papers and records as they may reasonably request for the purpose of
enabling them to pass upon such matters. In connection with such opinions, such
counsel may rely on representations or certificates of officers of the Company,
governmental officials and the Selling Stockholder.
(iv) A certificate of the Parent and the Company
executed by the Chairman of the Board or President and the chief financial or
accounting officer of the Parent and the Company, respectively, dated the First
Closing Date or the Second Closing Date, as the case may be, to the effect that:
(1) The representations and
warranties of the Parent and the Company set forth in Section 2 of this
Agreement are true and correct as of the date of this Agreement and as
of the First Closing Date or the Second Closing Date, as the case may
be, and the Parent and the Company have complied with all the
agreements and satisfied all the conditions on their part to be
performed or satisfied on or prior to such Closing Date;
(2) The Commission has not issued
any order preventing or suspending the use of the Prospectus or any
Preliminary Prospectus filed as a part of the Registration Statement or
any amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best of the
knowledge of the respective signers, no proceedings for that purpose
have been instituted or are pending or contemplated under the Act;
(3) Each of the respective signers
of the certificate has carefully examined the Registration Statement
and the Prospectus; in his opinion and to the best
30
of his knowledge, the Registration Statement and the Prospectus and
any amendments or supplements thereto contain all statements required
to be stated therein regarding the Company and its subsidiaries, and
neither the Registration Statement nor the Prospectus nor any
amendment or supplement thereto includes any untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading;
(4) Since the initial date on which
the Registration Statement was filed, no agreement, written or oral,
transaction or event has occurred which should have been set forth in
an amendment to the Registration Statement or in a supplement to or
amendment of any prospectus which has not been disclosed in such a
supplement or amendment;
(5) Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, and except as disclosed in or contemplated by the
Prospectus, there has not been any material adverse change or a
development involving a material adverse change in the condition
(financial or otherwise), business, properties, results of operations,
management or prospects of the Company and its subsidiaries; and no
legal or governmental action, suit or proceeding is pending or
threatened against the Company or any of its subsidiaries which is
material to the Company and its subsidiaries, whether or not arising
from transactions in the ordinary course of business, or which may
adversely affect the transactions contemplated by this Agreement; since
such dates and except as so disclosed, neither the Company nor any of
its subsidiaries has entered into any verbal or written agreement or
other transaction which is not in the ordinary course of business or
which could result in a material reduction in the future earnings of
the Company or incurred any material liability or obligation, direct,
contingent or indirect, made any change in its capital stock, made any
material change in its short-term debt or funded debt or repurchased or
otherwise acquired any of the Company's capital stock; and the Company
has not declared or paid any dividend, or made any other distribution,
upon its outstanding capital stock payable to stockholders of record on
a date prior to the First Closing Date or Second Closing Date; and
31
(6) Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus and except as disclosed in or contemplated by the
Prospectus, the Company and its subsidiaries have not sustained a
material loss or damage by strike, fire, flood, windstorm, accident or
other calamity (whether or not insured).
(v) A certificate, dated the First Closing Date or
the Second Closing Date, as the case may be, and addressed to you, signed by or
on behalf of the Selling Stockholder to the effect that the representations and
warranties of such Selling Stockholder in this Agreement are true and correct,
as if made at and as of the First Closing Date or the Second Closing Date, as
the case may be, and such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied prior to the First Closing Date or the Second Closing Date, as the
case may be.
(vi) On the date before this Agreement is executed
and also on the First Closing Date and the Second Closing Date a letter
addressed to you, as Representatives of the Underwriters, from Xxxxxx Xxxxxxxx
LLP, independent accountants, the first one to be dated the day before the date
of this Agreement, the second one to be dated the First Closing Date and the
third one (in the event of a Second Closing) to be dated the Second Closing
Date, in form and substance satisfactory to you.
(vii) On or before the First Closing Date, letters
from the Selling Stockholder, each holder of the Company's Common Stock or an
option to purchase the Company's Common Stock and each director and officer of
the Company, in form and substance satisfactory to you, confirming that for a
period of 180 days (365 days in the case of Xx. Xxxx Xxxxxxxxxx) after the first
date that any of the Common Shares are released by you for sale to the public,
such person will not directly or indirectly sell or offer to sell or otherwise
dispose of any shares of Common Stock or any right to acquire such shares
without the prior written consent of Xxxxxxxxxx Securities, which consent may be
withheld at the sole discretion of Xxxxxxxxxx Securities.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are satisfactory to you
and to Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, counsel for the Underwriters. The
Company shall furnish you with
32
such manually signed or conformed copies of such opinions, certificates, letters
and documents as you request. Any certificate signed by any officer of the
Company and delivered to the Representatives or to counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company to the
Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you as
Representatives to the Company and the Selling Stockholder without liability on
the part of any Underwriter, the Company or the Selling Stockholder except for
the expenses to be paid or reimbursed by the Company and by the Selling
Stockholder pursuant to Sections 7 and 9 hereof and except to the extent
provided in Section 11 hereof.
SECTION 9. Reimbursement of Underwriters' Expenses.
Notwithstanding any other provisions hereof, if this Agreement shall be
terminated by you pursuant to Section 8, or if the sale to the Underwriters of
the Common Shares at the First Closing is not consummated because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholder to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse you and the other Underwriters upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by you and them in connection with the proposed purchase and the sale of the
Common Shares, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, telegraph charges and telephone
charges relating directly to the offering contemplated by the Prospectus. Any
such termination shall be without liability of any party to any other party
except that the provisions of this Section, Section 7 and Section 11 shall at
all times be effective and shall apply.
SECTION 10. Effectiveness of Registration Statement. You, the
Company and the Selling Stockholder will use your and their best efforts to
cause the Registration Statement to become effective, to prevent the issuance of
any stop order suspending the effectiveness of the Registration Statement and,
if such stop order be issued, to obtain as soon as possible the lifting thereof.
SECTION 11. Indemnification. (a) The Parent, the Company and
the Selling Stockholder, jointly and severally, agree to indemnify and hold
harmless each Underwriter and each person,
33
if any, who controls any Underwriter within the meaning of the Act against any
losses, claims, damages, liabilities or expenses, joint or several, to which
such Underwriter or such controlling person may become subject, under the Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state in any of them a
material fact required to be stated therein or necessary to make the statements
in any of them not misleading, or arise out of or are based in whole or in part
on any inaccuracy in the representations and warranties of the Parent, the
Company or the Selling Stockholder contained herein or any failure of the
Parent, the Company or the Selling Stockholder to perform their respective
obligations hereunder or under law; and will reimburse each Underwriter and each
such controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that neither the
Parent, the Company nor the Selling Stockholder will be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with the information furnished to the Company pursuant to
Section 4 hereof. The Parent, the Company and the Selling Stockholder may agree,
as among themselves and without limiting the rights of the Underwriters under
this Agreement, as to the respective amounts of such liability for which they
each shall be responsible. In addition to its other obligations under this
Section 11(a), the Parent, the Company and the Selling Stockholder agree,
jointly and severally, that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission, or
any inaccuracy in the representations and warranties of the Parent, the Company
or the Selling Stockholder herein or failure
34
to perform their respective obligations hereunder, all as described in this
Section 11(a), they will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Parent's, the Company's or the Selling Stockholder's
obligation to reimburse each Underwriter for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, each Underwriter shall promptly return
it to the Company together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by Bank of America NT&SA,
San Francisco, California (the "Prime Rate"). Any such interim reimbursement
payments which are not made to an Underwriter within 30 days of a request for
reimbursement, shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement will be in addition to any liability which the
Parent, the Company or the Selling Stockholder may otherwise have.
(b) Each Underwriter will severally indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Stockholder and each person, if
any, who controls the Company or the Selling Stockholder within the meaning of
the Act, against any losses, claims, damages, liabilities or expenses to which
the Company, or any such director, officer, Selling Stockholder or controlling
person may become subject, under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary
35
Prospectus, the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with the information furnished to the Company pursuant to
Section 4 hereof; and will reimburse the Company, or any such director, officer,
Selling Stockholder or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer, Selling
Stockholder or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action. In addition to its other obligations under this Section
11(b), each Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 11(b) which relates to information
furnished to the Company pursuant to Section 4 hereof, it will reimburse the
Company (and, to the extent applicable, each officer, director or controlling
person or the Selling Stockholder) on a quarterly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person or the Selling
Stockholder) for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Company (and, to the extent applicable, each officer, director or
controlling person or the Selling Stockholder) shall promptly return it to the
Underwriters together with interest, compounded daily, determined on the basis
of the Prime Rate. Any such interim reimbursement payments which are not made to
the Company within 30 days of a request for reimbursement, shall bear interest
at the Prime Rate from the date of such request. This indemnity agreement will
be in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or
36
otherwise than under the indemnity agreement contained in this Section or to the
extent it is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such indemnified party
seeks or intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with all other indemnifying parties similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence or (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action, in each of which cases the fees and expenses of counsel shall be at
the expense of the indemnifying party.
(d) If the indemnification provided for in this
Section 11 is required by its terms but is for any reason held to be unavailable
to or otherwise insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Parent, the Company, the Selling Stockholder and the
Underwriters from the
37
offering of the Common Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Parent, the Company, the Selling Stockholder and
the Underwriters in connection with the statements or omissions or inaccuracies
in the representations and warranties herein which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Parent, the Company, the Selling Stockholder and the Underwriters shall be
deemed to be in the same proportion, in the case of the Parent, the Company and
the Selling Stockholder as the total price paid to the Company and to the
Selling Stockholder, respectively, for the Common Shares sold by them to the
Underwriters (net of underwriting commissions but before deducting expenses)
bears to the total price to the public set forth on the cover of the Prospectus,
and in the case of the Underwriters as the underwriting commissions received by
them bears to the total price to the public set forth on the cover of the
Prospectus. The relative fault of the Parent, the Company, the Selling
Stockholder and the Underwriters 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 or the inaccurate
or the alleged inaccurate representation and/or warranty relates to information
supplied by the Parent, the Company, the Selling Stockholder or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in subparagraph (c) of this Section 11, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
subparagraph (c) of this Section 11 with respect to notice of commencement of
any action shall apply if a claim for contribution is to be made under this
subparagraph (d); provided, however, that no additional notice shall be required
with respect to any action for which notice has been given under subparagraph
(c) for purposes of indemnification. The Parent, the Company, the Selling
Stockholder and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 11 were determined solely by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
38
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 11, no Underwriter shall be
required to contribute any amount in excess of the amount of the total
underwriting commissions received by such Underwriter in connection with the
Common Shares underwritten by it and distributed to the public. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 11 are several in proportion to their respective
underwriting commitments and not joint.
(e) It is agreed that any controversy arising out of
the operation of the interim reimbursement arrangements set forth in Sections
11(a) and 11(b) hereof, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of the Constitution and Rules of the
Board of Governors of the New York Stock Exchange, Inc. or pursuant to the Code
of Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 11(a) and 11(b)
hereof and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of such
Sections 11(a) and 11(b) hereof.
SECTION 12. Default of Underwriters. It shall be a condition
to this Agreement and the obligation of the Company and the Selling Stockholder
to sell and deliver the Common Shares hereunder, and of each Underwriter to
purchase the Common Shares in the manner as described herein, that, except as
hereinafter in this paragraph provided, each of the Underwriters shall purchase
and pay for all the Common Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such shares in accordance
with the terms hereof. If any Underwriter or Underwriters default in their
obligations to purchase Common Shares hereunder on either the First or Second
Closing Date and the aggregate number of Common Shares which such defaulting
Underwriter or Underwriters agreed but failed to
39
purchase on such Closing Date does not exceed 10% of the total number of Common
Shares which the Underwriters are obligated to purchase on such Closing Date,
the non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common Shares which such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of Common
Shares with respect to which such default occurs is more than the above
percentage and arrangements satisfactory to the Representatives and the Company
for the purchase of such Common Shares by other persons are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company or the Selling Stockholder
except for the expenses to be paid by the Company and the Selling Stockholder
pursuant to Section 7 hereof and except to the extent provided in Section 11
hereof.
In the event that Common Shares to which a default relates are
to be purchased by the non-defaulting Underwriters or by another party or
parties, the Representatives or the Company shall have the right to postpone the
First or Second Closing Date, as the case may be, for not more than five
business days in order that the necessary changes in the Registration Statement,
Prospectus and any other documents, as well as any other arrangements, may be
effected. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
SECTION 13. Effective Date. This Agreement shall become
effective immediately as to Sections 7, 9, 11, 14 and 16 and, as to all other
provisions, (i) if at the time of execution of this Agreement the Registration
Statement has not become effective, at 2:00 P.M., California time, on the first
full business day following the effectiveness of the Registration Statement, or
(ii) if at the time of execution of this Agreement the Registration Statement
has been declared effective, at 2:00 P.M., California time, on the first full
business day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time after the
Registration Statement becomes effective as you may determine on and by notice
to the Company or by release of any of the Common Shares for sale to the public.
For the purposes of this Section 13, the Common Shares shall be deemed to have
been so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the
40
release by you of telegrams (i) advising Underwriters that the Common Shares are
released for public offering, or (ii) offering the Common Shares for sale to
securities dealers, whichever may occur first.
SECTION 14. Termination. Without limiting the right to
terminate this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company
by notice to you and the Selling Stockholder or by you by notice to the Company
and the Selling Stockholder at any time prior to the time this Agreement shall
become effective as to all its provisions, and any such termination shall be
without liability on the part of the Company or the Selling Stockholder to any
Underwriter (except for the expenses to be paid or reimbursed by the Company and
the Selling Stockholder pursuant to Sections 7 and 9 hereof and except to the
extent provided in Section 11 hereof) or of any Underwriter to the Company or
the Selling Stockholder (except to the extent provided in Section 11 hereof).
(b) This Agreement may also be terminated by you
prior to the First Closing Date by notice to the Company (i) if additional
material governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum or
maximum prices shall have been generally established on the New York Stock
Exchange or on the American Stock Exchange or in the over the counter market by
the NASD, or trading in securities generally shall have been suspended on either
such Exchange or in the over the counter market by the NASD, or a general
banking moratorium shall have been established by federal, New York or
California authorities, (ii) if an outbreak of major hostilities or other
national or international calamity or any substantial change in political,
financial or economic conditions shall have occurred or shall have accelerated
or escalated to such an extent, as, in the judgment of the Representatives, to
affect adversely the marketability of the Common Shares, (iii) if any adverse
event shall have occurred or shall exist which makes untrue or incorrect in any
material respect any statement or information contained in the Registration
Statement or Prospectus or which is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened, or there
shall have been any development
41
or prospective development involving particularly the business or properties or
securities of the Company or any of its subsidiaries or the transactions
contemplated by this Agreement, which, in the reasonable judgment of the
Representatives, may materially and adversely affect the Company's business or
earnings and makes it impracticable or inadvisable to offer or sell the Common
Shares. Any termination pursuant to this subsection (b) shall without liability
on the part of any Underwriter to the Company or the Selling Stockholder or on
the part of the Company or the Selling Stockholder to any Underwriter (except
for expenses to be paid or reimbursed by the Company and the Selling Stockholder
pursuant to Sections 7 and 9 hereof and except to the extent provided in Section
11 hereof.
SECTION 15. Failure of the Selling Stockholder to Sell and
Deliver. If the Selling Stockholder shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by such Selling
Stockholder at the First Closing Date under the terms of this Agreement, then
the Underwriters may at their option, by written notice from you to the Company
and the Selling Stockholder, either (i) terminate this Agreement without any
liability on the part of any Underwriter or, except as provided in Sections 7, 9
and 11 hereof, the Company or the Selling Stockholder, or (ii) purchase the
shares which the Company has agreed to sell and deliver in accordance with the
terms hereof. In the event of a failure by the Selling Stockholder to sell and
deliver as referred to in this Section, either you or the Company shall have the
right to postpone the Closing Date for a period not exceeding seven business
days in order that the necessary changes in the Registration Statement,
Prospectus and any other documents, as well as any other arrangements, may be
effected.
SECTION 16. Representations and Indemnities to Survive
Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Parent, the Company, the Selling Stockholder and
their respective officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Parent, the
Company, the Selling Stockholder or any of their respective partners, officers
or directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Common Shares sold hereunder and any termination
of this Agreement.
42
SECTION 17. Notices. All communications hereunder shall be in
writing and, if sent to the Representatives shall be mailed, delivered or
telecopied or telegraphed and confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, with a copy to Xxxx X.
Xxxxx, Esquire; and if sent to the Company or the Selling Stockholder shall be
mailed, delivered or telecopied or telegraphed and confirmed to the Company at
000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Xxxx Xxxxxxxxxx, M.D.,
with a copy to the Selling Stockholder at 00 Xxxxxx Xxxxxx, Xxxxxxxxxxx, XX
00000, Attention: Xxxxxx X. Xxxxx, Xx. The Company, the Selling Stockholder or
you may change the address for receipt of communications hereunder by giving
notice to the others.
SECTION 18. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto, including any substitute
Underwriters pursuant to Section 12 hereof, and to the benefit of the officers
and directors and controlling persons referred to in Section 11, and in each
case their respective successors, personal representatives and assigns, and no
other person will have any right or obligation hereunder. No such assignment
shall relieve any party of its obligations hereunder. The term "successors"
shall not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 19. Representation of Underwriters. You will act as
Representatives for the several Underwriters in connection with all dealings
hereunder, and any action under or in respect of this Agreement taken by you
jointly or by Xxxxxxxxxx Securities, as Representatives, will be binding upon
all the Underwriters.
SECTION 20. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 21. Applicable Law. This Agreement shall be governed
by and construed in accordance with the internal laws (and not the laws
pertaining to conflicts of laws) of the State of California.
43
SECTION 22. General. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company, the Selling Stockholder and
you.
Any person executing and delivering this Agreement as
Attorney-in-fact for the Selling Stockholder represents by so doing that he has
been duly appointed as Attorney-in-fact by the Selling Stockholder pursuant to a
validly existing and binding Power of Attorney which authorizes such
Attorney-in-fact to take such action.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding
44
agreement among the Parent, the Company, the Selling Stockholder and the several
Underwriters including you, all in accordance with its terms.
Very truly yours,
PREMIER RESEARCH WORLDWIDE, LTD.
By:__________________________
President
SELLING STOCKHOLDER
UM Equity Corp.
By:___________________________
PARENT
UM Holdings, Ltd.
By:___________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in San Francisco, California as of
the date first above written.
XXXXXXXXXX SECURITIES
XXXXXX XXXX LLC
GENESIS MERCHANT GROUP SECURITIES
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By XXXXXXXXXX SECURITIES
45
By:______________________________
Partner
46
SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------- ---------------
Xxxxxxxxxx Securities ................
Xxxxxx Xxxx LLC.......................
Genesis Merchant Group Securities.....
---------
TOTAL ...................... 2,750,000
=========
47
[SCHEDULE B
Number of Firm
Common Shares to
be Sold by Selling
Name of Selling Stockholder Stockholder
--------------------------- -----------
UM Equity Corp.......................... 750,000
TOTAL ................ 750,000
=======
48
