EXHIBIT 1.1
Endocare, Inc.
4,000,000 Shares
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
________ __, 2001
UNDERWRITING AGREEMENT
________ __, 2001
Bear, Xxxxxxx & Co. Inc.
UBS Warburg LLC
Banc of America Securities LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
As the Representatives of the several Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Endocare, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule A annexed hereto (the
"Underwriters") an aggregate of 4,000,000 shares of Common Stock, $0.001 par
value per share (the "Common Stock"), of the Company (the "Firm Shares"). In
addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company up
to an additional 600,000 shares of Common Stock (the "Additional Shares"). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the "Shares." The Shares are described in the Prospectus which is
referred to below.
The Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the "Act"), with the Securities and
Exchange Commission (the "Commission"), a registration statement on Form S-3
(File No. 333-69748) under the Act (the "registration statement"). Amendments to
such registration statement have been similarly prepared and filed with the
Commission. Such registration statement, as so amended, and any post-effective
amendments thereto, have been declared by the Commission to be effective under
the Act. A form of prospectus supplement to the basic prospectus included in the
registration statement and relating to the Shares and the offering thereof is
included as part of the registration statement. The Company will next file with
the Commission pursuant to Rule 424(b) under the Act a final prospectus
supplement to the basic prospectus, describing the Shares and the offering
thereof, in such form as has been provided to or discussed with, and approved,
by the Underwriters.
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The term "Registration Statement" as used in this Agreement means
the registration statement, as amended at the time it became effective and as
supplemented or amended prior to the execution of this Agreement, including (i)
all financial schedules and exhibits thereto and (ii) all documents incorporated
by reference or deemed to be incorporated by reference therein. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Shares may commence, the term "Registration
Statement" as used in this Agreement means the registration statement as amended
by said post-effective amendment. If an abbreviated registration statement is
prepared and filed with the Commission in accordance with Rule 462(b) under the
Act (an "Abbreviated Registration Statement"), the term "Registration Statement"
includes the Abbreviated Registration Statement. The term "Basic Prospectus" as
used in this Agreement means the basic prospectus included in the Registration
Statement. The term "Prepricing Prospectus" as used in this Agreement means any
form of preliminary prospectus used in connection with the marketing of the
Shares, including any preliminary prospectus supplement at any time included in
the Registration Statement or filed with the Commission pursuant to Rule 424
under the Act and the Basic Prospectus (whether or not in preliminary form) as
used with any such preliminary prospectus supplement in connection with the
marketing of the Shares, in each case as any of the foregoing may be amended or
supplemented by the Company. The term "Prospectus Supplement" as used in this
Agreement means any prospectus supplement specifically relating to the Shares,
in the form filed with, or transmitted for filing to, the Commission pursuant to
Rule 424 under the Act. The term "Prospectus" as used in this Agreement means
the Basic Prospectus together with the Prospectus Supplement except that if such
Basic Prospectus is amended or supplemented on or prior to the date on which the
Prospectus Supplement was first filed pursuant to Rule 424, the term
"Prospectus" shall refer to the Basic Prospectus as so amended or supplemented
and as supplemented by the Prospectus Supplement. Any reference in this
Agreement to the registration statement, the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Form S-3 under the Act, as of the date of the
registration statement, the Registration Statement, the Basic Prospectus, such
Prepricing Prospectus, such Prospectus Supplement or the Prospectus, as the case
may be, and any reference to the terms "amend," "amendment" or "supplement" with
respect to the registration statement, the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement or the
Prospectus shall be deemed to refer to and include any documents filed after
such date under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which, upon filing, are incorporated by reference therein. As used
herein, the term "Incorporated Documents" means the documents which are
incorporated by reference in the registration statement, the Registration
Statement, the Basic Prospectus, any Prepricing Prospectus, any Prospectus
Supplement, the Prospectus, or any amendment or supplement thereto.
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The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the respective
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A annexed hereto in each case at a purchase price of $____ per Share
(the "purchase price per share"). The Company is advised by you that the
Underwriters intend (i) to make a public offering of their respective portions
of the Firm Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the Firm
Shares upon the terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial public offering
to such extent as you may determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
for the Firm Shares. This option may be exercised by you on behalf of the
several Underwriters at any time and from time to time on or before the 30th day
following the date hereof by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the "additional time
of purchase"); provided, however, that the additional time of purchase shall not
be earlier than the time of purchase (as defined below) nor earlier than the
second business day 1 after the date on which the option shall have been
exercised nor later than the tenth business day after the date on which the
option shall have been exercised. The number of Additional Shares to be sold to
each Underwriter shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares.
2. Payment and Delivery. Payment of the purchase price for the
Firm Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to the Underwriters through the
facilities of the Depository
--------------
(1) As used herein, "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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Trust Company ("DTC") for the respective accounts of the Underwriters. Such
payment and delivery shall be made at 10:00 A.M., New York City time, on
_________ __, 2001 (unless another time shall be agreed to by you and the
Company or unless postponed in accordance with the provisions of Section 8
hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called the "time of purchase." Electronic transfer of the
Firm Shares shall be made to the Underwriters at the time of purchase in such
names and in such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be
made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to the Underwriters at the additional time of purchase in
such names and in such denominations as you shall specify.
3. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters that:
(a) the Company has not received nor has notice of any order of
the Commission preventing or suspending the use of the Basic Prospectus,
any Prepricing Prospectus, the Prospectus Supplement or the Prospectus
or instituting proceedings for that purpose, and the Basic Prospectus,
any Prepricing Prospectus, the Prospectus Supplement or the Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act; the Company is eligible to use Form S-3 and the
offering of the Shares complies with the requirements of Rule 415. Such
registration statement, as amended at the date of this Agreement, meets
the requirements set forth in Rule 415 under the Act and complies in all
material respects with said Rule 415; when the Registration Statement
became or becomes effective, the Registration Statement and the
Prospectus conformed or will conform in all material respects with the
provisions of the Act, and the Registration Statement did not or will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation
or warranty with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or
on behalf of any Underwriter through you to the Company expressly for
use in the Registration Statement or the Prospectus; and neither the
Company nor any of its affiliates has distributed any offering material
in connection with the offer or sale of the Shares other than the
Registration Statement, the Prepricing Prospectus and the Prospectus or
any other materials, if any, permitted by the Act; and the Incorporated
Documents, when they were filed with the
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Commission, conformed in all material respects to the requirements of
the Exchange Act, and none of such documents, when they were filed with
the Commission, contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement and/or the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, as applicable, and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein not misleading;
(b) as of the date of this Agreement, the Company's
capitalization is as set forth under the heading entitled "Actual" in
the section of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of purchase and the additional time
of purchase, as the case may be, the Company's capitalization shall be
as set forth under the heading entitled "As Adjusted" in the section of
the Registration Statement and the Prospectus entitled "Capitalization"
(subject, in each case, to the issuance of shares of Common Stock upon
the exercise of stock options disclosed as outstanding in the
Registration Statement and the Prospectus); all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable,
have been issued in compliance with all federal and state securities
laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own,
lease and operate its properties and conduct its business as described
in the Registration Statement and the Prospectus;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify
could not reasonably be expected to (i) have a material adverse effect
on the properties, business, results of operations, condition (financial
or otherwise), affairs or prospects of the Company and the Subsidiary
(as hereinafter defined) taken as a whole, (ii) interfere with or
adversely affect the issuance or marketability of the Shares or (iii) in
any manner draw into question the validity of this Agreement or the
transactions described herein (any of the events set forth in clauses
(i), (ii) or (iii), a "Material Adverse Effect"). The Company has no
subsidiaries (as defined in the Act) other than Advanced Medical
Procedures, Inc. (the "Subsidiary"); except as described in the
Registration Statement and the Prospectus, the Company owns 100% of the
outstanding capital stock of the Subsidiary; except for the Subsidiary
and the Company's ownership interests in each of Sanarus Medical,
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Inc. and U.S. Therapies, L.L.C. as described in the Registration
Statement and the Prospectus, the Company does not own, directly or
indirectly, any long-term debt or any equity interest in any firm,
corporation, partnership, joint venture, association or other entity;
complete and correct copies of the certificates of incorporation and of
the bylaws of the Company and the Subsidiary and all amendments thereto
have been delivered to you; the Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, with the requisite corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus; the Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of the properties or the conduct of its business
requires such qualification, except where the failure to so qualify
could not reasonably be expected to have a Material Adverse Effect; all
of the outstanding shares of capital stock of the Subsidiary have been
duly authorized and validly issued, are fully paid and non-assessable,
have been issued in compliance with all applicable securities laws and
were not issued in violation of any preemptive right, resale right,
right of first refusal or similar right;
(e) neither the Company nor the Subsidiary is in breach or
violation of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach or violation
of, or constitute a default under) (each such breach, violation, default
or event, a "Default Event"), (i) its charter, bylaws or other
organizational documents, (ii) any obligation, agreement, covenant or
condition contained in any license, permit, indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness,
or any lease, contract or other agreement or instrument to which the
Company or the Subsidiary is a party or by which any of them or any of
their properties is bound or affected, (iii) any federal, state, local
or foreign law, regulation or rule or (iv) any decree, judgment or order
applicable to the Company, the Subsidiary or any of their respective
properties, other than, in the case of clause (ii), such Default Events
as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, including the issuance and sale of the
Shares and the consummation of the other transactions contemplated
hereby, does not constitute and will not result in a Default Event under
(w) any provisions of the charter, bylaws or other organizational
documents of the Company or the Subsidiary, (x) under any provision of
any license, permit, indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company or the
Subsidiary or by which any of them or their respective properties may be
bound or affected, (y) under any federal, state, local or foreign law,
regulation or rule or (z) under any decree, judgment or order applicable
to the Company, the Subsidiary or any of their respective properties,
except, in the case of clause (x) for such Default
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Events as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(f) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of
the Company;
(g) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus;
(h) the Shares have been duly and validly authorized by the
Company and, when issued and delivered by the Company against payment
therefor as provided herein, will be validly issued, fully paid and
non-assessable;
(i) no approval, authorization, consent or order of or filing
with any national, state, local or other governmental or regulatory
commission, board, body, authority or agency is required to be obtained
or made by the Company or the Subsidiary in connection with the issuance
and sale of the Shares or the consummation by the Company of the other
transactions contemplated hereby other than registration of the offer
and sale of the Shares under the Act, which has been or will be
effected, and any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters;
(j) except as set forth in the Registration Statement and the
Prospectus (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it any shares of Common Stock or
shares of any other capital stock or other equity interests of the
Company, (ii) no person has any preemptive rights, co-sale rights,
rights of first refusal or other rights to purchase any shares of Common
Stock or shares of any other capital stock or other equity interests of
the Company, and (iii) no person has the right to act as an underwriter,
or as a financial advisor to the Company, in connection with the offer
and sale of the Shares, in the case of each of the foregoing clauses
(i), (ii) and (iii), whether as a result of the filing or effectiveness
of the Registration Statement or the sale of the Shares as contemplated
thereby or otherwise; no person has the right, contractual or otherwise,
to cause the Company to register under the Act any shares of Common
Stock or shares of any other capital stock or other equity interests of
the Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby whether as a
result of the filing or effectiveness of the Registration Statement or
the sale of the Shares as contemplated thereby or otherwise, except for
such rights as have been complied with or waived;
(k) KPMG LLP, whose report on the consolidated financial
statements of the Company and the Subsidiary is filed with the
Commission as part of the
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Registration Statement and the Prospectus, are independent public
accountants as required by the Act;
(l) each of the Company and the Subsidiary has all necessary
licenses, permits, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule (collectively, "Permits"), and has
obtained all necessary authorizations, consents and approvals from other
persons (collectively, "Approvals"), in order to conduct its business as
described in the Registration Statement and the Prospectus, other than
such Permits and Approvals the failure of which to obtain could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; neither the Company nor the Subsidiary is in
violation of, or in default under, any such Permit or Approval or any
federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company or the Subsidiary the effect
of which could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(m) all legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or any document incorporated by reference
therein or to be filed as an exhibit to the Registration Statement or
any document incorporated by reference therein have been so described or
filed as required;
(n) except as disclosed in the Registration Statement and the
Prospectus, there are no actions, suits, claims, investigations or
proceedings pending or threatened to which the Company or the Subsidiary
or any of their respective directors or officers is a party or of which
any of their respective properties is subject at law or in equity, or
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which, if
adversely decided, could reasonably be expected to result in a judgment,
decree or order having a Material Adverse Effect or prevent consummation
of the transactions contemplated hereby;
(o) the financial statements, together with the related schedules
and notes, included in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and
the Subsidiary as of the dates indicated and the consolidated results of
operations and cash flows of the Company and the Subsidiary for the
periods specified and have been prepared in compliance with the
requirements of the Act and in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved; any pro forma financial statements or data included in the
Registration Statement and the Prospectus comply as to form in all
material respects with the applicable accounting requirements of
Regulation S-X of the Act, and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those
statements; the other
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financial and statistical data set forth in the Registration Statement
and the Prospectus are accurately presented and prepared on a basis
consistent with such financial statements and books and records of the
Company; and there are no financial statements (historical or pro forma)
that are required to be included in the Registration Statement and the
Prospectus that are not included as required;
(p) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been (i) any material adverse change, or any development involving a
prospective material adverse change, in the properties, business,
results of operations, condition (financial or otherwise), affairs or
prospects of the Company and the Subsidiary taken as a whole, (ii) any
transaction which is material to the Company or the Subsidiary taken as
a whole, (iii) any obligation, direct or contingent, which is material
to the Company and the Subsidiary taken as a whole, incurred by the
Company or the Subsidiary, (iv) any change in the capital stock or
outstanding indebtedness of the Company or the Subsidiary (other than
pursuant to the exercise of stock options described in the Registration
Statement and the Prospectus as outstanding or the grant of stock
options under stock option plans described in the Registration Statement
and the Prospectus) or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company; neither the
Company nor the Subsidiary has any material contingent obligation which
is not disclosed in the Registration Statement and the Prospectus;
(q) the Company has obtained for the benefit of the Underwriters
the agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit
A hereto, of each of its officers and directors and each of [______],
[______] and [______] and in the form set forth as Exhibit B hereto, of
each of Technology Funding Inc., [________] and [_________]; the Company
will not release or purport to release any of its officers or directors
or the security holders described above from any Lock-Up Agreement
without the prior written consent of Bear, Xxxxxxx & Co. Inc. and UBS
Warburg LLC;
(r) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment Company
Act");
(s) any statistical and market-related data included in the
Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and the Company has obtained the
written consent to the use of such data from such sources to the extent
required;
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(t) neither the Company nor the Subsidiary nor any of their
respective affiliates has taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(u) the Company and the Subsidiary maintain insurance of the
types and in amounts reasonably adequate for their respective
businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and the Subsidiary
against theft, damage, destruction, acts of vandalism and other risks
customarily insured against, all of which insurance is in full force and
effect;
(v) neither the Company nor the Subsidiary has sustained since
the date of the latest financial statements included in the Prospectus
any losses or interferences with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Registration
Statement and the Prospectus or other than any losses or interferences
which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(w) the Company and the Subsidiary have good title to all
personal property owned by them as described in the Registration
Statement and the Prospectus, free and clear of all liens, encumbrances
and defects except such as are described in the Registration Statement
and the Prospectus or such as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
except as described in the Registration Statement and the Prospectus,
any real property and buildings held under lease by the Company or the
Subsidiary are held by it under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the
Company or the Subsidiary, as the case may be;
(x) neither the Company nor the Subsidiary has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, nor any federal
or state law relating to discrimination in the hiring, promotion or pay
of employees nor any applicable federal or state wages and hours laws,
nor any provisions of the Employee Retirement Income Security Act or the
rules and regulations promulgated thereunder, which could, individually
or in the aggregate, reasonably be expected to result in a Material
Adverse Effect;
(y) the Company and the Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations;
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(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(z) all tax returns required to be filed by the Company and the
Subsidiary have been filed, other than those filings being contested in
good faith, and all taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or the
Subsidiary have been paid, other than those being contested in good
faith and for which adequate reserves have been provided;
(aa) the Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of
the Exchange Act, and none of such documents, when they were filed with
the Commission, contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement and/or the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, as applicable, and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein not misleading;
(bb) other than as set forth in the Registration Statement and
the Prospectus, or as would not individually or in the aggregate have a
Material Adverse Effect, the Company and the Subsidiary own, possess,
license or have other rights to use, all patents, trademarks,
servicemarks, trade names, copyrights, trade secrets, information,
proprietary rights and processes ("Intellectual Property") necessary for
their business as described in the Registration Statement and the
Prospectus and necessary in connection with the commercialization of the
existing products of the Company and the Subsidiary and the products
described in the Prospectus as being under development, without any
conflict with or infringement of the interests of others, and the
Company and the Subsidiary have taken all reasonable steps necessary to
secure interests in such Intellectual Property; except as described in
the Registration Statement and the Prospectus, the Company is not aware
after due inquiry of any options, licenses or agreements of any kind
relating to the Intellectual Property of the Company or the Subsidiary
that are outstanding and which are required to be described in the
Registration Statement and the Prospectus, and, except as described in
the Registration Statement and the Prospectus, neither the Company nor
the Subsidiary is a party to or bound by any options, licenses or
agreements with respect
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to the Intellectual Property of any other person or entity which are
required to be described in the Registration Statement and the
Prospectus; none of the technology employed by the Company and the
Subsidiary has been obtained or is used or proposed to be used by the
Company or the Subsidiary in violation of any contractual obligation
binding on the Company or the Subsidiary or any of their respective
directors or executive officers or, to the Company's knowledge after due
inquiry, any employees of the Company or the Subsidiary or otherwise in
violation of the rights of any persons, other than any violation which
would not individually or in the aggregate have a Material Adverse
Effect; except as described in the Registration Statement and the
Prospectus, to the Company's knowledge after due inquiry, neither the
Company nor the Subsidiary has violated, infringed or conflicted with,
or, by conducting its business as described the Registration Statement
and the Prospectus and commercializing the products under development
described therein, would violate, infringe or conflict with any of the
Intellectual Property of any other person or entity other than any such
violation, infringement or conflict which would not individually or in
the aggregate have a Material Adverse Effect; and
(cc) the clinical, pre-clinical and other studies and tests
conducted by or on behalf of or sponsored by the Company or the
Subsidiary or in which the Company, the Subsidiary or their licensors or
the products or product candidates of the Company or the Subsidiary have
participated that are described in the Registration Statement and the
Prospectus or the results of which are referred to in the Registration
Statement and the Prospectus were and, if still pending, are being
conducted in accordance with standard medical and scientific research
procedures; the descriptions in the Registration Statement and the
Prospectus of the results of such studies and tests are accurate and
complete in all material respects and fairly present the data derived
from such studies and tests, and each of the Company and the Subsidiary
has no knowledge, after due inquiry, of any other studies or tests the
results of which are inconsistent with or otherwise call into question
the results described or referred to in the Prospectus; except to the
extent disclosed in the Registration Statement and the Prospectus, each
of the Company and the Subsidiary has operated and currently is in
compliance in all material respects with all applicable rules,
regulations and policies of the U.S. Food and Drug Administration and
comparable drug regulatory agencies outside of the United States
(collectively, the "Regulatory Authorities"); and except to the extent
disclosed in the Registration Statement and the Prospectus, the Company
has not received any notices or other correspondence from the Regulatory
Authorities or any other governmental agency requiring the termination,
suspension or modification of any clinical or pre-clinical studies or
tests that are described in the Registration Statement and the
Prospectus or the results of which are referred to in the Registration
Statement and the Prospectus.
4. Certain Covenants of the Company. The Company hereby agrees:
12
(a) to furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the Company shall
not be required to qualify as a foreign corporation or to consent to the
service of process under the laws of any such state (except service of
process with respect to the offering and sale of the Shares); and to
promptly advise you of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
sale in any jurisdiction or the initiation or threat of any proceeding
for such purpose;
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as many
copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes contemplated
by the Act; in case any Underwriter is required to deliver a prospectus
after the nine-month period referred to in Section 10(a)(3) of the Act
in connection with the sale of the Shares, the Company will prepare
promptly upon request such amendment or amendments to the Registration
Statement and such prospectuses as may be necessary to permit compliance
with the requirements of Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm
such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes
effective and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act (which the Company agrees to file in a timely manner under such
Rules);
(d) to advise you promptly, confirming such advice in writing (if
requested by you), of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information with respect thereto, or of notice of institution
of proceedings for, or the entry of a stop order suspending the
effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible; to advise you
promptly of any proposal to amend or supplement the Registration
Statement or Prospectus and to file no such amendment or supplement to
which you shall object in writing after being timely furnished in
advance a copy thereof;
13
(e) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(f) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Shares, and
to promptly notify you of such filing;
(g) if, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective
amendment thereto or any Abbreviated Registration Statement to be
declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and
will advise you promptly and, if requested by you, will confirm such
advice in writing, when the Registration Statement or such
post-effective amendment has become effective;
(h) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement
(i) copies of any reports or other communications which the Company
shall send to its stockholders or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar forms, as may be designated by the Commission, (iii)
copies of documents or reports filed with any national securities
exchange on which any class of securities of the Company is listed, and
(iv) such other information as you may reasonably request regarding the
Company or the Subsidiary, in each case as soon as reasonably
practicable after such reports, communications, documents or information
become available;
(i) to advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a Prospectus
relating to the Shares is required to be delivered under the Act which
would require the making of any change in the Prospectus then being
used, or in the information incorporated therein by reference, so that
the Prospectus would not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading, and, during such time, to timely prepare and furnish, at
the Company's expense, to the Underwriters promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such
change and to timely furnish you a copy of such proposed amendment or
supplement and an opportunity to object in writing before filing any
such amendment or supplement with the Commission;
14
(j) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of 12
months beginning after the effective date of the Registration Statement
(as defined in Rule 158(c) of the Act) and ending not later than 15
months thereafter;
(k) to furnish to you five conformed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and sufficient additional
conformed copies (other than exhibits) for distribution of a copy to
each of the other Underwriters;
(l) to furnish to you as early as reasonably practicable prior to
the time of purchase and the additional time of purchase, as the case
may be, but not later than two business days prior thereto, a copy of
the latest available unaudited interim consolidated financial
statements, if any, of the Company and the Subsidiary which have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(g) hereof;
(m) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection with
(i) the preparation and filing of the Registration Statement, the Basic
Prospectus, each Prepricing Prospectus, the Prospectus, and any
amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including
costs of mailing and shipment), (ii) the registration, issuance, sale
and delivery of the Shares, (iii) the producing, word processing and/or
printing of this Agreement, any Agreement Among Underwriters, any dealer
agreements, any Powers of Attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except
closing documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under state
laws and the determination of their eligibility for investment under
state law as aforesaid (including associated filing fees and the
reasonable legal fees and disbursements of counsel for the Underwriters)
and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) any
listing of the Shares on any securities exchange or qualification of the
Shares for quotation on the Nasdaq National Market and any registration
thereof under the Exchange Act, (vi) any required review of the public
offering of the Shares by NASD Regulation, Inc. (including associated
filing fees and the reasonable legal fees and disbursements of counsel
for the Underwriters), (vii) the costs and expenses of the Company
relating to presentations or meetings undertaken in connection with the
marketing of the offer and sale of the Shares to prospective investors
and the
15
Representatives' sales forces, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations, travel, lodging and other expenses incurred by the
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show and (viii) the
performance of the other obligations of the Company hereunder;
(o) for so long as the delivery of the Prospectus is required in
connection with the offer or sale of the Shares, to furnish to you,
before filing with the Commission, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(p) not to sell, offer or agree to sell, contract to sell,
hypothecate, pledge, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or
other rights to purchase Common Stock or any other securities of the
Company that are substantially similar to Common Stock, or file or cause
to be declared effective a registration statement under the Act relating
to the offer and sale of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock or
other rights to purchase Common Stock or any other securities of the
Company that are substantially similar to Common Stock, for a period of
90 days after the date hereof (the "Lock-up Period"), without the prior
written consent of Bear, Xxxxxxx & Co. Inc. and UBS Warburg LLC, except
for (i) the registration of the Shares and the sales to the Underwriters
pursuant to this Agreement, (ii) issuances of Common Stock upon the
exercise of options or warrants disclosed as outstanding in the
Registration Statement and the Prospectus and (iii) the issuance of
employee stock options not exercisable during the Lock-up Period
pursuant to stock option plans described in the Registration Statement
and the Prospectus; and
(q) neither the Company nor the Subsidiary nor any of their
respective affiliates will take, directly or indirectly, any action
designed to or which will constitute or which may reasonably be expected
to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the last paragraph of Section 8 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
agrees, in addition to paying the amounts described in Section 4(n) hereof, to
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of their counsel.
16
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof and
at the time of purchase (and the several obligations of the Underwriters at the
additional time of purchase are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (unless previously waived) and at the additional time of purchase, as
the case may be), the performance by the Company of its obligations hereunder
and to the following additional conditions precedent:
(a) You shall have received, at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxxxxx,
Phleger & Xxxxxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form reasonably satisfactory to the
Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus, to
execute and deliver this Agreement and to issue, sell and deliver
the Shares as herein contemplated;
(ii) the Subsidiary has been duly incorporated and is validly
existing as a corporation is in good standing under the laws of
its jurisdiction of incorporation with the corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement;
(iii) the Company and the Subsidiary are duly qualified to do
business as a foreign corporation and are in good standing in
each jurisdiction in which such qualification is necessary,
except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Firm Shares have been duly authorized and, when
issued (in the case of the Firm Shares) and delivered to and paid
for by the Underwriters, will be duly and validly issued and will
be fully paid and non-assessable;
(vi) the Company has authorized and outstanding shares of
capital stock as set forth in the Registration Statement and the
Prospectus; the
17
outstanding shares of capital stock of the Company (A) have been
duly and validly authorized and issued and are fully paid and
non-assessable, (B) are free of preemptive rights, resale rights,
rights of first refusal and similar rights under the Delaware
General Corporation Law (the "DGCL") or the charter or bylaws or
other organizational documents of the Company or any contract,
commitment or instrument described in or filed as an exhibit to
the Registration Statement or otherwise known to such counsel and
(C) to such counsel's knowledge, were issued in compliance with
all applicable federal and state securities laws; the Firm Shares
when issued will be free of preemptive or similar rights under
the DGCL or any contract, commitment or instrument described in
or filed as an exhibit to the Registration Statement or otherwise
known to such counsel; the holders of the Shares will not be
subject to personal liability by reason of being such holders;
and the certificates for the Shares are in due and proper form
and conform to the requirements of the DGCL and the Nasdaq
National Market;
(vii) all of the outstanding shares of capital stock of the
Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable, are owned of record by the
Company, are not subject to any perfected security interest or,
to such counsel's knowledge, any other encumbrance or adverse
claim and, to such counsel's knowledge, have been issued and sold
in compliance with all applicable federal and state securities
laws; to such counsel's knowledge, no options, warrants or other
rights to purchase, agreements or other obligations to issue or
other rights to convert any obligation into shares of capital
stock or ownership interests in the Subsidiary are outstanding;
(viii) the capital stock of the Company, including the
Shares, conforms in all material respects to the description
thereof contained in the Registration Statement and Prospectus;
(ix) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial and
statistical data contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Act;
(x) the Registration Statement has become effective under the
Act, and to such counsel's knowledge no stop order with respect
to the effectiveness thereof has been issued and no stop order
proceedings with respect thereto are pending or threatened under
the Act; and any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424 under the Act has been
made in the manner and within the time period required by such
Rule 424;
18
(xi) no approval, authorization, consent or order of or
filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the execution and delivery of this
Agreement and the issuance and sale of the Shares and
consummation of the other transactions contemplated hereby other
than those that have been obtained under the Act, the Exchange
Act and the rules of the Nasdaq National Market and other than
any necessary qualification under the state securities or blue
sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters or any necessary approval of
the Corporate Financing Department of NASD Regulation, Inc., as
to which such qualification and approval such counsel need
express no opinion;
(xii) the execution, delivery and performance of this
Agreement by the Company, including the consummation of the
transactions contemplated hereby and by the Registration
Statement, do not constitute, and will not result in, a Default
Event pursuant to (A) any provision of the charter or bylaws or
other organizational documents of the Company or the Subsidiary,
(B) any provision of any license, permit, franchise,
authorization, indenture, mortgage, deed of trust, note, bank
loan or credit agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument filed as an
exhibit to the Registration Statement or otherwise known to such
counsel and issued to the Company or the Subsidiary, or to which
the Company or the Subsidiary is a party or by which any of them
may be bound or affected, or to which any of the property or
assets of the Company or the Subsidiary is subject or may be
bound or affected, (C) any federal, state, local or foreign law,
regulation or rule or (D) any decree, judgment or order known by
such counsel to be applicable to the Company or the Subsidiary
other than, in the case of clause (B) such Default Events as
could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(xiii) to such counsel's knowledge, (A) neither the Company
nor the Subsidiary is in violation of its charter or bylaws or
other organizational documents and (B) no Default Event exists
under any license, permit, franchise, authorization, indenture,
mortgage, deed of trust, note, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company or the Subsidiary is
or was a party or by which it or its properties may be bound or
affected, other than such Default Events as could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect , and (C) neither the Company nor the
Subsidiary is in violation of any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or the Subsidiary;
19
(xiv) to such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which
are required to be filed as exhibits to the Registration
Statement or to be summarized or described in the Prospectus
which have not been so filed, summarized or described;
(xv) to such counsel's knowledge, there are no actions,
suits, claims, investigations or proceedings pending or
threatened to which the Company or the Subsidiary is subject or
of which any of their respective properties is subject, whether
at law, in equity or before or by any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency, which are required to be described in the
Prospectus but are not so described;
(xvi) the Incorporated Documents complied as to form, at the
time such documents were filed with the Commission, with the
requirements of the Exchange Act;
(xvii) the Company is not and, after giving effect to the
offer and sale of the Shares, will not be an "investment company"
or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act;
(xviii) those statements in the Registration Statement and
the Prospectus that are descriptions of contracts, agreements or
other legal documents or of legal proceedings, or refer to
statements of law or legal conclusions, are accurate in all
material respects and present fairly the information required to
be shown; and
(xix) no person has the right, pursuant to the terms of any
contract, agreement or other instrument described in or filed as
an exhibit to the Registration Statement or otherwise known to
such counsel to have any securities issued by the Company and
owned by them registered pursuant to the Act, included in the
Registration Statement or sold in the offering contemplated
thereby, whether as a result of the filing or effectiveness of
the Registration Statement or the transactions contemplated by
this Agreement or otherwise, except for such rights as have been
complied with or waived.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although such counsel
is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or
20
Prospectus (except as and to the extent stated in subparagraphs (vii), (viii),
(ix) and (xviii) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes them to believe that the Registration
Statement or any amendment thereto at the time such Registration Statement or
amendment became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus or any
supplement thereto at the date of such Prospectus or such supplement, and at all
times up to and including the time of purchase or additional time of purchase,
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 light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no opinion
with respect to the financial statements and schedules and other financial data
included in the Registration Statement or Prospectus).
(b) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Knobbe,
Martens, Xxxxx & Bear, LLP, patent counsel for the Company, dated the
time of purchase or the additional time of purchase, as the case may be,
with reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to the Underwriters, stating that:
(i) to such counsel's knowledge, except as described in the
Prospectus, (A) the Company (either directly or through the
Subsidiary) has valid license rights or clear title to the
Intellectual Property referenced in the Prospectus, and there are
no rights of third parties to any such Intellectual Property; (B)
there is no infringement or other violation by third parties of
any of the Intellectual Property of the Company referenced in the
Prospectus; (C) there is no infringement or other violation by
the Company or the Subsidiary of any Intellectual Property of
others nor would there be any such infringement upon
commercialization of the Company's products described as under
development in the Registration Statement and the Prospectus; (D)
there is no pending or threatened action, suit proceeding or
claim by governmental authorities or others that the Company or
the Subsidiary infringes or otherwise violates any Intellectual
Property of others, and such counsel is unaware of any facts
which would form a reasonable basis for any such claim; (E) there
is no pending or threatened action, suit, proceeding or claim by
governmental authorities or others challenging the rights of the
Company or the Subsidiary in or to, or challenging the scope of,
any Intellectual Property of the Company referenced in the
Prospectus, and such counsel is unaware of any facts which would
form a reasonable basis for any such claim; and (F) there is no
prior art that may render any patent held by the Company invalid
or any patent application held by the Company unpatentable which
has not been disclosed to the U.S. Patent and Trademark Office;
21
(ii) to such counsel's knowledge, the patent applications of
the Company and the Subsidiary presently on file disclose
patentable subject matter, and such counsel is not aware of any
inventorship challenges, any interference which has been declared
or provoked, or any other material fact with respect to the
patent applications of the Company presently on file that (A)
would preclude the issuance of patents with respect to such
applications, or (B) would lead such counsel to conclude that
such patents, when issued, would not be valid and enforceable in
accordance with applicable regulations;
(iii) the statements in the Registration Statement and the
Prospectus referencing Intellectual Property matters, insofar as
such statements constitute summaries of legal matters, contracts,
agreements, documents or proceedings referred to therein, or
refer to statements of law or legal conclusions, are in all
material respects accurate and complete statements or summaries
of the matters therein set forth; and
(iv) nothing has come to such counsel's attention that causes
them to believe that such above described portions of the
Registration Statement, at the time such 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 that such above described portions of the
Prospectus and at the date of the Prospectus and at all times
leading up to and including the time of purchase and the
additional time of purchase, as the case may be, contained an
untrue statement of 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.
Such counsel may state that, as to clauses (i), (ii) and (iii)
above, the opinion of such counsel is limited to those patents and patent
applications (and the Company's products and technology to which they relate)
for which such counsel has rendered substantive legal advice to the Company.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxxxxx
X. Xxxxxxxx, intellectual property counsel for the Company, dated the
time of purchase or the additional time of purchase, as the case may be,
with reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to the Underwriters, stating that:
(i) to such counsel's knowledge, except as described in the
Prospectus, (A) the Company (either directly or through the
Subsidiary) has valid license rights or clear title to the
Intellectual Property referenced in the
22
Prospectus, and there are no rights of third parties to any such
Intellectual Property; (B) there is no infringement or other
violation by third parties of any of the Intellectual Property of
the Company referenced in the Prospectus; (C) there is no
infringement or other violation by the Company or the Subsidiary
of any Intellectual Property of others nor would there be any
such infringement upon commercialization of the products
described as under development in the Registration Statement and
the Prospectus; (D) there is no pending or threatened action,
suit proceeding or claim by governmental authorities or others
that the Company or the Subsidiary infringes or otherwise
violates any Intellectual Property of others, and such counsel is
unaware of any facts which would form a reasonable basis for any
such claim; (E) there is no pending or threatened action, suit,
proceeding or claim by governmental authorities or others
challenging the rights of the Company or the Subsidiary in or to,
or challenging the scope of, any Intellectual Property of the
Company referenced in the Prospectus, and such counsel is unaware
of any facts which would form a reasonable basis for any such
claim; and (F) there is no prior art that may render any patent
held by the Company invalid or any patent application held by the
Company unpatentable which has not been disclosed to the U.S.
Patent and Trademark Office;
(ii) to such counsel's knowledge, the patent applications of
the Company and the Subsidiary presently on file disclose
patentable subject matter, and such counsel is not aware of any
inventorship challenges, any interference which has been declared
or provoked, or any other material fact with respect to the
patent applications of the Company presently on file that (A)
would preclude the issuance of patents with respect to such
applications, or (B) would lead such counsel to conclude that
such patents, when issued, would not be valid and enforceable in
accordance with applicable regulations;
(iii) the statements in the Registration Statement and the
Prospectus referencing Intellectual Property matters, insofar as
such statements constitute summaries of legal matters, contracts,
agreements, documents or proceedings referred to therein, or
refer to statements of law or legal conclusions, are in all
material respects accurate and complete statements or summaries
of the matters therein set forth; and
(iv) nothing has come to such counsel's attention that causes
them to believe that such above described portions of the
Registration Statement, at the time such 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 that such above described portions of the
Prospectus and at the date of the
23
Prospectus and at all times leading up to and including the time
of purchase and the additional time of purchase, as the case may
be, contained an untrue statement of 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.
(d) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Winston
& Xxxxxx, healthcare regulatory counsel for the Company, dated the time
of purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to the Underwriters, stating that:
(i) the statements in (A) the Registration Statement and the
Prospectus under the captions "Risk Factors--There is uncertainty
relating to third party reimbursement, which is critical to
market acceptance of our products.", "--We could be negatively
impacted by future interpretation or implementation of federal or
state fraud and abuse laws, including anti-kickback laws.", "--We
could be negatively impacted by future interpretation or
implementation of the federal Xxxxx Law and other federal and
state anti-referral laws.", "Business--Reimbursement,"
"--Healthcare Regulatory Issues," "--Anti-kickback Laws,"
"--Patient Referral Laws" and "--HIPAA and Other Privacy Laws,"
(B) the Company's annual report for the year ended December 31,
2000 filed with the Commission on Form 10-K under the captions
"Item 1.--There is uncertainty relating to third party
reimbursement which is critical to market acceptance of our
products.", "--We have limited manufacturing experience." and
"--Governmental regulation can have a significant impact on our
business.", (C) the Company's quarterly report for the quarter
ended March 31, 2001 filed with the Commission on Form 10-Q under
the caption "Item 2.--There is uncertainty relating to third
party reimbursement which is critical to market acceptance of our
products.", (D) the Company's quarterly report for the quarter
ended June 30, 2001 filed with the Commission on Form 10-Q under
the captions "Item 2.--There is uncertainty relating to third
party reimbursement which is critical to market acceptance of our
products.", "--We could be negatively impacted by future
interpretation or implementation of federal and state fraud and
abuse laws, including anti-kickback laws." and "--We could be
negatively impacted by future interpretation or implementation of
the federal Xxxxx Law and other state and federal anti-referral
laws." and (E) the Company's quarterly report for the quarter
ended September 30, 2001 filed with the Commission on Form 10-Q
under the captions "Item 2.--There is uncertainty relating to
third party reimbursement, which is critical to market acceptance
of our products.", "--We could be negatively impacted by future
interpretation or implementation of
24
federal and state fraud and abuse laws, including anti-kickback
laws.", "--We could be negatively impacted by future
interpretation or implementation of the federal Xxxxx Law and
other federal and state anti-referral laws." and "Item 5.--Other
Information", insofar as such statements constitute summaries of
legal matters, as of the date of the Registration Statement and
the Prospectus and as of the date of such opinion, are in all
material respects accurate and complete statements or summaries
of the matters therein set forth; and
(ii) nothing has come to such counsel's attention that causes
such counsel to believe that the above-described portions of the
Registration Statement and the Prospectus and the Incorporated
Documents, at the date of the Registration Statement and the
Prospectus or at the date of such opinion, contained or contains
an untrue statement of material fact or omitted or omits to state
a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxx,
Xxxxxx & XxXxxxxx, P.C., regulatory counsel for the Company, dated the
time of purchase or the additional time of purchase, as the case may be,
with reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to the Underwriters, stating that:
(i) the statements in (A) the Registration Statement and the
Prospectus under the captions "Risk Factors--We have limited
experience manufacturing our products and if we are unable to
meet customer demand, we may not become profitable.", "--If we
fail to obtain or maintain regulatory clearances or approvals for
products, or if approvals are delayed or withdrawn, we will be
unable to commercially distribute and market our products or any
product modifications.", "--Our products are subject to product
recalls even after receiving FDA clearance or approval, which
would harm our reputation and our business.",
"Business--Manufacturing," "--Government Regulation,", "--Other
United States Regulatory Requirements" and "--Facilities," (B)
the Company's annual report for the year ended December 31, 2000
filed with the Commission on Form 10-K under the captions
"Business--Manufacturing," "--Government Regulation," "Item
1.--We have limited manufacturing experience." and
"--Governmental regulation can have a significant impact on our
business.", (C) the Company's quarterly report for the quarter
ended March 31, 2001 filed with the Commission on Form 10-Q under
the captions "Item 2.--We have limited manufacturing experience."
and "--Government regulation can have a significant impact on our
business.", (D) the Company's quarterly report for the quarter
ended June 30, 2001 filed with the Commission
25
on Form 10-Q under the caption "Item 2.--Government regulation
can have a significant impact on our business.", (E) the
Company's quarterly report for the quarter ended September 30,
2001 filed with the Commission on Form 10-Q under the captions
"Item 2.--We have limited experience manufacturing our products
and if we are unable to meet customer demand, we may not become
profitable.", "If we fail to obtain or maintain necessary
regulatory clearances or approvals for products, or if approvals
are delayed or withdrawn, we will be unable to commercially
distribute and market our products or any product
modifications.", "Our products may be subject to product recalls
even after receiving FDA clearance or approval, which would harm
our reputation and our business." and "--Government regulation
can have a significant impact on our business." and (F) such
other statements in the Registration Statement and the Prospectus
and the Incorporated Documents regarding the receipt by the
Company (either directly or through the Subsidiary) of
governmental approvals or clearances and the applications for, or
the submissions with the FDA regarding, such approvals or
clearances, insofar as such statements constitute summaries of
legal documents or legal proceedings or refer to statements of
law and legal conclusions, as of the date of the Registration
Statement and the Prospectus and as of the date of such opinion,
are in all material respects accurate and complete statements or
summaries of the matters therein set forth; and
(ii) nothing has come to such counsel's attention that causes
such counsel to believe that the above-described portions of the
Registration Statement and the Prospectus and the Incorporated
Documents, at the date of the Registration Statement and the
Prospectus or at the date of such opinion, contained or contains
an untrue statement of material fact or omitted or omits to state
a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
(f) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, dated the time of purchase
or the additional time of purchase, as the case may be, with respect to
the issuance and sale of the Shares by the Company, the Registration
Statement, the Prospectus (together with any supplement thereto) and
other related matters as the Underwriters may require.
(g) You shall have received from KPMG LLP letters dated,
respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for
26
each of the Underwriters) in the forms heretofore approved by Bear,
Xxxxxxx & Co. Inc. and UBS Warburg LLC.
(h) No amendment or supplement to the Registration Statement or
Prospectus, or document which upon filing with the Commission would be
incorporated by reference therein, shall at any time have been filed to
which you have objected or shall object in writing.
(i) The Registration Statement shall have become effective, or if
Rule 430A under the Act is used, the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) under the Act, at or before
5:00 P.M., New York City time, on the date of this Agreement, unless a
later time (but not later than 5:00 P.M., New York City time, on the
second full business day after the date of this Agreement) shall be
agreed to by the Company and you in writing or by telephone, confirmed
in writing; provided, however, that the Company and you may from time to
time agree on a later date.
(j) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(k) Between the time of execution of this Agreement and the time
of purchase or the additional time of purchase, as the case may be, (i)
no material and adverse change or any development involving a
prospective material and adverse change (other than as specifically
described in the Registration Statement and Prospectus), in the
properties, business, results of operations, condition (financial or
otherwise), affairs or prospects of the Company and the Subsidiary,
taken as a whole, shall occur or become known and (ii) no transaction
which is material and adverse to the Company shall have been entered
into by the Company or the Subsidiary.
(l) The Company will, at the time of purchase or additional time
of purchase, as the case may be, deliver to you a certificate signed by
two of the Company's executive officers to the effect that the
representations and warranties of the Company as set forth in this
Agreement are true and correct as of each such date, that the Company
has performed such of its obligations under this Agreement as are to
27
be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be, and the conditions set
forth in paragraphs (j) and (k) of this Section 6 have been met.
(m) You shall have received the letters referred to in Section
3(q).
(n) The Company shall have furnished to you such other documents
and certificates as to the accuracy and completeness of any statement in
the Registration Statement and the Prospectus as of the time of purchase
and the additional time of purchase, as the case may be, as you may
reasonably request.
(o) The Shares shall have been approved for listing for quotation
on the Nasdaq National Market, subject only to notice of issuance at or
prior to the time of purchase or the additional time of purchase, as the
case may be.
(p) Between the time of execution of this Agreement and the time
of purchase or additional time of purchase, as the case may be, there
shall not have occurred any downgrading, nor shall any notice or
announcement have been given or made of (i) any intended or potential
downgrading or (ii) any review or possible change that does not indicate
an improvement, in the rating accorded any securities of or guaranteed
by the Company or the Subsidiary by any "nationally recognized
statistical rating organization," as that term is defined in Rule
436(g)(2) under the Act.
7. Effective Date of Agreement; Termination. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in your absolute discretion, (i) if, since the time of
execution of this Agreement or the respective dates as of which information is
given in the Registration Statement and Prospectus, there has been any material
adverse change, financial or otherwise (other than as specifically described in
the Registration Statement and Prospectus), in the operations, business,
condition, affairs or prospects of the Company and the Subsidiary taken as a
whole, which would, in your judgment, make it impracticable to market the
Shares, (ii) there shall have occurred any downgrading, or any notice shall have
been given of (x) any intended or potential downgrading or (y) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company or the Subsidiary by any
"nationally recognized statistical rating organization," as that term is defined
in Rule 436(g)(2) under the Act or (iii) if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or limitations or
28
minimum prices shall have been established on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market, or if a banking
moratorium shall have been declared by any state or federal authority or if any
material disruption in commercial banking or securities settlement or clearance
services shall have occurred, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or act of terrorism or other
national or international calamity or crisis or any change in political,
financial or economic conditions, the effect of which, in your judgment, makes
it impracticable or inadvisable to market the Shares or to proceed with the
completion of the public offering or the sale and payment for the Shares on the
terms and in the manner contemplated by the Prospectus.
If you elect to terminate this Agreement as provided in this
Section 7, the Company and each other Underwriter shall be notified promptly by
letter or telegram from such terminating Underwriter.
If the sale to the Underwriters of the Shares, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(n), 5 and 9 hereof), and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6
and 7, if any Underwriter shall default in its obligation to purchase and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a reason
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to purchase and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
purchase and pay for (in addition to the aggregate number of Firm Shares they
are obligated to purchase pursuant to Section 1 hereof) the number of Firm
Shares agreed to be purchased by all such defaulting Underwriters, as
hereinafter provided. Such Shares shall be purchased and paid for by such
non-defaulting Underwriter or Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be purchased and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
29
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the five business day period stated above for the purchase of all the Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall terminate without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph or in the last paragraph of Section 7, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, and the successors and assigns of all
of the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or any such person may
incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of
or is based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment
thereof by the Company) or in a Prospectus (the term Prospectus for the
purpose of this Section 9 being deemed to include the Basic Prospectus,
any Prepricing Prospectus, any Prospectus Supplement or the Prospectus,
as any of the foregoing may be amended or supplemented from time to
time), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements
made therein not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
and in conformity with
30
information furnished in writing by or on behalf of any Underwriter
through you to the Company expressly for use with reference to such
Underwriter in such Registration Statement or such Prospectus or arises
out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated
in such Registration Statement or such Prospectus or necessary to make
such information not misleading, or (ii) any untrue statement or alleged
untrue statement made by the Company in Section 3 of this Agreement or
the failure by the Company to perform when and as required any agreement
or covenant contained herein or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any audio or visual
materials provided by the Company or based upon written information
furnished by or on behalf of the Company including, without limitation,
slides, videos, films, tape recordings, used in connection with the
marketing of the Shares.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise. Such Underwriter or such person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the Company shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in conflict
with those available to the Company (in which case the Company shall not have
the right to direct the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company shall not be liable for any
settlement of any Proceeding effected without the written consent of the
Company, but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Underwriter and any such person from
and against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of
31
this paragraph, then the indemnifying party agrees that it shall be liable for
any settlement of any Proceeding effected without the Company's written consent
if (i) such settlement is entered into more than 60 business days after receipt
by the indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, and any person
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and the successors and assigns of all of
the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which the Company or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by or on behalf
of such Underwriter through you to the Company expressly for use with
reference to such Underwriter in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment
thereof by the Company) or in a Prospectus, or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or such person shall promptly
notify such Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise.
The Company or such person shall have the right to employ their or its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the Company or such person unless the employment of such counsel
shall have been authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
32
defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of
this Section 9 in respect of any losses, damages, expenses, liabilities
or claims referred to therein, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion
as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the 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 Company on the one
hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and
33
the Underwriters on the other shall be deemed to be in the same
respective proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company and the total underwriting discounts and
commissions received by the Underwriters, bear to the aggregate public
offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Company or by 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, damages, expenses, liabilities and claims referred to in this
subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to
in subsection (c) above. Notwithstanding the provisions of this Section
9, in no case shall any Underwriter be required to make indemnification
or contribution payments under this Section 9 in an aggregate amount in
excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damage which such
Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and
not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls any of the foregoing
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company and each
34
Underwriter agree promptly to notify each other of the commencement of
any Proceeding against it and against any of the officers or directors
of the Company in connection with the issuance and sale of the Shares,
or in connection with the Registration Statement or Prospectus.
10. Notices, Consents, Etc. Except as otherwise herein provided,
all statements, requests, notices, consents, waivers and agreements shall be in
writing or by telegram and, if to the Underwriters, shall be sufficient in all
respects if delivered or sent to Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, X.X. 00000, Attention : Xxxxxxx Parish, Equity Syndicate Department and
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department; and if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 7
Studebaker, Xxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxxxxx, Chief Operating
Officer and Chief Financial Officer. All references to you in this Agreement
shall be deemed to refer to each of Bear, Xxxxxxx & Co. Inc. and UBS Warburg
LLC. Any statements, requests, notices, consents, waivers and agreements shall
be deemed to be made, given or entered into on behalf of the Underwriters only
if made, given or entered into in writing by each of Bear, Xxxxxxx & Co. Inc.
and UBS Warburg LLC.
11. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page of the Prospectus Supplement and
the statements set forth in the fifth, seventh, eighth, ninth and tenth
paragraphs under the caption "Underwriting" in the Prospectus Supplement
constitute the only information furnished by or on behalf of the Underwriters as
such information is referred to in Sections 3 and 9 hereof.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Representatives and the Company consent to the jurisdiction of such courts and
personal service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
an Underwriter or any indemnified party. Each Underwriter and the Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or
35
otherwise) in any way arising out of or relating to this Agreement. The Company
agrees that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding thereupon, and may be
enforced in any other courts in the jurisdiction to which the Company is or may
be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been
and is made solely for the benefit of the Underwriters, the Company and, to the
extent provided in Section 9 hereof, the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in
one or more counterparts which together shall constitute one and the same
agreement among the parties.
16. Successors and Assigns. This Agreement shall be binding upon
the Underwriters and the Company and their successors and assigns and any
successor or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS Warburg LLC. Because UBS Warburg LLC
is a separately incorporated entity, it is solely responsible for its own
contractual obligations and commitments, including obligations with respect to
sales and purchases of securities. Securities sold, offered or recommended by
UBS Warburg LLC are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending
relationships with issuers of securities underwritten or privately placed by UBS
Warburg LLC. To the extent required under the securities laws, prospectuses and
other disclosure documents for securities underwritten or privately placed by
UBS Warburg LLC will disclose the existence of any such lending relationships
and whether the proceeds of the issue will be used to repay debts owed to
affiliates of UBS Warburg LLC.
36
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the several Underwriters.
Very truly yours,
ENDOCARE, INC.
By:_________________________________
Name:
Title:
Accepted and agreed to as of the date
first above written
Bear, Xxxxxxx & Co. Inc.
UBS Warburg LLC
Banc of America Securities LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
By: Bear, Xxxxxxx & Co. Inc.
By: ______________________________
Name:
Title:
By: UBS Warburg LLC
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
37
SCHEDULE A
UNDERWRITER NUMBER OF FIRM SHARES
----------- ---------------------
Bear, Xxxxxxx & Co. Inc....................... _________
UBS Warburg LLC............................... _________
Banc of America Securities LLC................ _________
Xxxxx, Xxxxxxxx & Xxxx, Inc................... _________
Total 4,000,000
=========
1
EXHIBIT A
Endocare, Inc.
Common Stock
($.001 Par Value)
____________, 2001
Bear, Xxxxxxx & Co. Inc.
UBS Warburg LLC
Banc of America Securities LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
As Representatives of the several Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by Endocare, Inc. (the "Company") and you, as
Representatives of the several Underwriters named therein, with respect to the
public offering (the "Offering") of common stock, par value $.001 per share, of
the Company (the "Common Stock").
In order to induce you to enter into the Underwriting Agreement,
the undersigned agrees that for a period of 90 days after the date of the final
prospectus supplement relating to the Offering the undersigned will not, without
the prior written consent of Bear, Xxxxxxx & Co. Inc. and UBS Warburg LLC (i)
sell, offer to sell, contract to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of, directly or indirectly, contract to dispose
of, or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the "Commission") in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder with respect to, any Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock, or
warrants or other rights to purchase Common Stock, (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic
consequences of ownership of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock, whether any such transaction is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, or (iii)
publicly announce an intention to effect any transaction specified in clause (i)
or (ii). The foregoing sentence shall not apply to (a) the registration of or
sale to the Underwriters of any Common Stock pursuant to the Offering and the
Underwriting Agreement, (b) bona fide gifts, provided the recipient or
recipients thereof agree in writing to be bound by the terms of this Lock-Up
Letter Agreement and confirm that he, she or it has been in compliance with the
terms of this Lock-Up Letter Agreement since the date hereof, (c) dispositions
to any trust for the direct or indirect benefit of the undersigned and/or the
immediate family of the undersigned, provided that such trust agrees in writing
to be bound by the terms of this Lock-Up Letter Agreement and confirms that it
has been in compliance with the terms of this Lock-Up Letter Agreement since the
date hereof, (d) by will or intestate succession to his or her immediate family,
provided that such transferee agrees in writing to be bound by the terms of this
Lock-Up Letter Agreement and confirms that he or she has been in compliance with
the terms of this Lock-Up Letter Agreement since the date hereof, (e) if the
undersigned is a partnership or corporation or similar entity, as a distribution
to partners or stockholders of the undersigned, if any, provided that such
transferee agrees in writing to be bound by the terms of this Lock-Up Letter
Agreement and confirms that he, she or it has been in compliance with the terms
of this Lock-Up Letter Agreement since the date hereof or (f) shares of Common
Stock acquired in the public market on or after the date of the Underwriting
Agreement.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period of 90 days after the date of the final
prospectus supplement relating to the Offering, the undersigned will not,
without the prior written consent of Bear, Xxxxxxx & Co. Inc. and UBS Warburg
LLC, make any demand for, or exercise any right with respect to, the
registration of Common Stock of the Company or any securities convertible into
or exercisable or exchangeable for Common Stock.
If (i) the Company notifies you in writing that it does not
intend to proceed with the Offering, (ii) the registration statement filed with
the Securities and Exchange Commission with respect to the Offering is withdrawn
or (iii) for any reason the Underwriting Agreement shall be terminated prior to
the time of purchase (as defined in the Underwriting Agreement), this Lock-Up
Letter Agreement shall be terminated and the undersigned shall be released from
its obligations hereunder.
Yours very truly,
-------------------------------
Name:
2
EXHIBIT B
Endocare, Inc.
Common Stock
($.001 Par Value)
____________, 2001
Bear, Xxxxxxx & Co. Inc.
UBS Warburg LLC
Banc of America Securities LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
As Representatives of the several Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by Endocare, Inc. (the "Company") and you, as
Representatives of the several Underwriters named therein, with respect to the
public offering (the "Offering") of common stock, par value $.001 per share, of
the Company (the "Common Stock").
In order to induce you to enter into the Underwriting Agreement,
the undersigned agrees that for a period of 90 days after the date of the final
prospectus supplement relating to the Offering the undersigned will not, without
the prior written consent of Bear, Xxxxxxx & Co. Inc. and UBS Warburg LLC (i)
sell, offer to sell, contract to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of, directly or indirectly, contract to dispose
of, or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the "Commission") in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder with respect to, any Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock, or
warrants or other rights to purchase Common Stock, (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic
consequences of ownership of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock, whether any such transaction is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, or (iii)
publicly announce an intention to effect any transaction specified in clause (i)
or (ii); provided, however, that in the event the Company does not include
182,000 shares of Common Stock currently held by the undersigned in the
Offering, the term of this Lock-Up Letter Agreement shall be reduced to fourteen
(14) days after the date of the final prospectus supplement relating to the
Offering with respect to such 182,000 shares of Common Stock held by the
undersigned; provided, further, that as to the remaining shares of Common Stock
held by the undersigned, the undersigned shall remain bound by the terms of this
Lock-Up Letter Agreement. The foregoing sentence shall not apply to (a) the
registration of or sale to the Underwriters of any Common Stock pursuant to the
Offering and the Underwriting Agreement, (b) bona fide gifts, provided that the
recipient or recipients thereof agree in writing to be bound by the terms of
this Lock-Up Letter Agreement and confirm that he, she or it has been in
compliance with the terms of this Lock-Up Letter Agreement since the date
hereof, (c) dispositions to any trust for the direct or indirect benefit of the
undersigned and/or the immediate family of the undersigned, provided that such
trust agrees in writing to be bound by the terms of this Lock-Up Letter
Agreement and confirms that it has been in compliance with the terms of this
Lock-Up Letter Agreement since the date hereof, (d) by will or intestate
succession to his or her immediate family, provided that each transferee agrees
in writing to be bound by the terms of this Lock-Up Letter Agreement and
confirms that he or she has been in compliance with the terms of this Lock-Up
Letter Agreement since the date hereof, (e) if the undersigned is a partnership
or corporation or similar entity, as a distribution to partners or stockholders
of the undersigned, if any, provided that such transferee agrees in writing to
be bound by the terms of this Lock-Up Letter Agreement and confirms that he, she
or it has been in compliance with the terms of this Lock-Up Letter Agreement
since the date hereof or (f) shares of Common Stock acquired in the public
market on or after the date of the Underwriting Agreement.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period of 90 days after the date of the final
prospectus supplement relating to the Offering, the undersigned will not,
without the prior written consent of Bear, Xxxxxxx & Co. Inc. and UBS Warburg
LLC, make any demand for, or exercise any right with respect to, the
registration of Common Stock of the Company or any securities convertible into
or exercisable or exchangeable for Common Stock.
* * *
2
If (i) the Company notifies you in writing that it does not
intend to proceed with the Offering, (ii) the registration statement filed with
the Securities and Exchange Commission with respect to the Offering is
withdrawn, (iii) for any reason the Underwriting Agreement shall be terminated
prior to the time of purchase (as defined in the Underwriting Agreement) or (iv)
the Offering does not close by March 31, 2002, this Lock-Up Letter Agreement
shall be terminated and the undersigned shall be released from its obligations
hereunder.
Yours very truly,
-------------------------------
Name:
3
