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EXHIBIT 1.1
RADIANCE MEDICAL SYSTEMS, INC.
2,850,566 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
September __, 2000
PRUDENTIAL SECURITIES INCORPORATED
GRUNTAL & CO., L.L.C.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Radiance Medical Systems, Inc., a Delaware corporation (the "Company"),
and the Selling Stockholder (as defined herein) hereby confirm their respective
agreements with the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacity, the "Representatives"), as set forth below.
If you are the only Underwriters, all references herein to the Representatives
shall be deemed to be to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters an aggregate
of 1,500,000 shares of the Company's common stock, par value $0.001 per share
("Common Stock"). A selling stockholder of the Company identified on Schedule 2
hereto (the "Selling Stockholder") proposes to sell to the several Underwriters
an aggregate of 1,350,566 shares of Common Stock. The shares to be sold by the
Company and the shares to be sold by the Selling Stockholder are referred to
herein as the "Firm Securities." In addition, solely for the purpose of covering
over-allotments, the Company proposes to sell to the several Underwriters, if
requested by the Representatives as provided in Section 4 of this Agreement, up
to an additional 427,584 shares of Common Stock from the Company. Any and all
shares of Common Stock to be purchased by the Underwriters pursuant to such
option are referred to herein as the "Option Securities," and the Firm
Securities and any Option Securities are collectively referred to herein as the
"Securities."
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(1) Plus an option to purchase from the Radiance Medical Systems, Inc. up to
427,584 additional shares to cover over-allotments from the Company.
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2A. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-2 (File No.
333-_________) with respect to the Securities, including a prospectus subject to
completion, has been filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and one or more amendments to such registration statement may have been
so filed. After the execution of this Agreement, the Company will file with the
Commission either (i) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act,
either (A) if the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify the
Preliminary Prospectus (as hereinafter defined) that it supplements containing
such information as is required or permitted by Rules 434, 430A and 424(b) under
the Act or (B) if the Company does not rely on Rule 434 under the Act, a
prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been filed, in such
registration statement), with such changes or insertions as are required by Rule
430A under the Act or permitted by Rule 424(b) under the Act, and in the case of
either clause (i)(A) or (i)(B) of this sentence as have been provided to and
approved by the Representatives prior to the execution of this Agreement, or
(ii) if such registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the Act, an amendment to such
registration statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by the Representatives prior to the
execution of this Agreement. The Company may also file a related registration
statement with the Commission pursuant to Rule 462(b) under the Act for the
purpose of registering certain additional Securities, which registration shall
be effective upon filing with the Commission. As used in this Agreement, the
term "Original Registration Statement" means the registration statement
initially filed relating to the Securities, as amended at the time when it was
or is declared effective, including (A) all financial schedules and exhibits
thereto, (B) all documents (or portions thereof) incorporated by reference
therein filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and (C) any information omitted therefrom pursuant to Rule 430A
under the Act and included in the Prospectus (as hereinafter defined); the term
"Rule 462(b) Registration Statement" means any registration statement filed with
the Commission pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus or Prospectus incorporated therein at
the time such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term
Sheet relating to the Securities that is first filed pursuant
to Rule 424(b)(7) under the Act, together with the Preliminary
Prospectus identified therein that such Term Sheet
supplements;
(B) if the Company does not rely on Rule 434 under the Act,
the prospectus first filed with the Commission pursuant to
Rule 424(b) under the Act; or
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(C) if the Company does not rely on Rule 434 under the Act and
if no prospectus is required to be filed pursuant to Rule
424(b) under the Act, the prospectus included in the
Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending use of any Preliminary Prospectus. When any Preliminary Prospectus
was filed with the Commission it (i) contained all statements required to be
stated therein in accordance with, and complied in all material respects with
the requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (i) contained or will contain
all statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that is
a part thereof or any amendment or supplement to the Prospectus is filed with
the Commission pursuant to Rule 424(b) (or, if the Prospectus or part thereof or
such amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment or
supplement to the Prospectus was or is declared effective) and on the Firm
Closing Date (defined in Section 3 herein) and any Option Closing Date (both as
hereinafter defined), the Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects with
the requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The documents which
are incorporated by reference in any Preliminary Prospectus, the Prospectus or
any Term Sheet or from which information is so incorporated by reference, when
they became effective or were filed (or, if any amendment with respect to any
such document was filed, when such amendment was filed) with the Commission, as
the case may be, complied in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, and did not, when such
documents became effective or were so filed, as the case may be, include any
untrue statement of a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. The foregoing provisions
of this paragraph (b) do not apply to statements or omissions made in any
Preliminary Prospectus, the Registration Statement or any amendment thereto or
the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein.
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(c) If the Company has elected to rely on Rule 462(b) and the
Rule 462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with and
that is effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (ii) the Company has given irrevocable
instructions for transmission of the applicable filing fee in connection with
the filing of the Rule 462(b) Registration Statement, in compliance with Rule
111 promulgated under the Act or the Commission has received payment of such
filing fee.
(d) The Company and each of its subsidiaries listed in
Schedule 3 hereto (the "Subsidiaries") have been duly organized and are validly
existing as corporations in good standing under the laws of their respective
jurisdictions of incorporation and are duly qualified to transact business as
foreign corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective properties or
the conduct of their respective businesses requires such qualification, except
where the failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole.
(e) The Company and each of its subsidiaries have full power
(corporate or other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.
(f) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned beneficially by the Company free and clear
of any security interests, liens, encumbrances, equities or claims.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable. The Firm Securities and the Option Securities
have been duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. No holders of
outstanding shares of capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities, and no holder
of securities of the Company has any right which has not been fully exercised or
waived to request or require the Company to register the offer or sale of any
securities owned by such holder under the Act in the public offering
contemplated by this agreement.
(h) The capital stock of the Company conforms to the
description thereof contained in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), there
are no outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
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Company or any such subsidiary, (B) warrants, rights or options to subscribe for
or purchase from the Company or any such subsidiary any such capital stock or
any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such subsidiary to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options.
(j) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the Company and
its consolidated subsidiaries and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Consolidated Financial Data" in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated in the Prospectus
(or such Preliminary Prospectus), the information included therein.
(k) PricewaterhouseCoopers LLP and Ernst & Young LLP, each of
which has certified certain financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect to the audited
consolidated financial statements and schedules included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), are independent public accountants as
required by the Act, the Exchange Act and the applicable rules and regulations
thereunder.
(l) The execution and delivery of this Agreement have been
duly authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(m) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not described
therein (or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and no such proceedings have been threatened against the Company or
any of its subsidiaries or with respect to any of their respective properties;
and no contract or other document is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) or filed as required.
(n) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue
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sky laws and, if the registration statement filed with respect to the Securities
(as amended) is not effective under the Act as of the time of execution hereof,
such as may be required (and shall be obtained as provided in this Agreement)
under the Act, or (ii) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties are bound, or the charter
documents or by-laws of the Company or any of its subsidiaries, or any statute
or any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company or any of its
subsidiaries.
(o) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus, neither the Company
nor any of its subsidiaries has sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management, business
prospects, net worth, or results of the operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company (except for
the sale of Securities by the Selling Stockholder under this Agreement).
(q) The Company has not distributed and, prior to the later of
(i) the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or other materials, if any permitted by the Act.
(r) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), (1) the Company
and its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (3) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
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(s) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items of real property and marketable
title to all personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of such
property by the Company or such subsidiary, and any real property and buildings
held under lease by the Company or any such subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as are not material and
do not interfere with the use made or proposed to be made of such property and
buildings by the Company or such subsidiary, in each case except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(t) No labor dispute with the employees of the Company or any
of its subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(u) The Company and its subsidiaries own, license or possess,
or can acquire on reasonable terms, all material patents, patent applications,
trademarks, service marks, trade names, licenses, copyrights and proprietary or
other confidential information currently employed by them in connection with
their respective businesses, and neither the Company nor any such subsidiary has
received any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(v) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(w) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company
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or any other subsidiary of the Company, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(x) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its subsidiaries.
(y) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and this transaction will not cause
the Company to become an investment company subject to registration under such
Act.
(z) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have a
material adverse effect on the Company and its subsidiaries) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(aa) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to occupational
safety and health or to the storage, handling or transportation of hazardous or
toxic materials and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and state
occupational safety and health and environmental laws and regulations to conduct
their respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(bb) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
(cc) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the Company nor
any such subsidiary owns any shares
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of stock or any other equity securities of any corporation or has any equity
interest in any firm, partnership, association or other entity, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(dd) There are no holders of securities of the Company, who,
by reason of the filing of the Registration Statement, have the right (and have
not waived such right) to request the Company to register under the Act, or to
include in the Registration Statement, securities held by them.
(ee) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with management's
general or specific authorizations; (2) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3) access
to assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ff) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties is bound or may be
affected in any material adverse respect with regard to property, business or
operations of the Company and its subsidiaries.
(gg) None of the Company or its subsidiaries is in violation
of any health care law, ordinance, administrative or governmental rule or
regulation applicable to the Company or its subsidiaries, including, without
limitation, those relating to product testing, marketing approvals and
reimbursement by government agencies or third-party payors.
2B. Representations and Warranties of the Selling Stockholder. The
Selling Stockholder represents and warrants to, and agrees with, each of the
several Underwriters that:
(a) The Agreement has been duly authorized by the Selling
Stockholder, executed and delivered, and is the valid, binding agreement of the
Selling Stockholder, except (i) as enforceability hereof may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by general
equitable principles and (ii) that enforcement of rights to indemnity and
contribution hereunder may be limited by federal or state securities laws or
principles of public policy.
(b) The Selling Stockholder has full power to enter into this
Agreement and to sell, assign, transfer and deliver to the Underwriters the
Securities to be sold by the Selling Stockholder hereunder in accordance with
the terms of this Agreement and this Agreement has been duly executed and
delivered by the Selling Stockholder.
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(c) The Selling Stockholder has not distributed, and prior to
the later of (i) the Closing Date and (ii) the completion of the distribution of
the Securities, will not distribute any offering material in connection with the
offering and sale of the Securities, other than the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or other materials, if any permitted by the
Act.
(d) Any certificate signed by the Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters shall also
be deemed a representation and warranty made by the Selling Stockholder to each
Underwriter as to the matters covered thereby and shall also be deemed
incorporated herein in its entirety and shall be effective as if such
representation and warranty were made herein. No statement, representation,
warranty or covenant made by the Selling Stockholder in this Agreement or made
in any certificate or document required by this Agreement to be delivered to the
Representatives was or will be, when made, inaccurate, untrue or incorrect in
any material respect.
(e) Other than pursuant to this Agreement, the Selling
Stockholder has not, directly or indirectly, (i) taken any action designed to
cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities or
(ii) since the filing of the Registration Statement (A) sold, bid for,
purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(f) The Selling Stockholder is the lawful owner of the
Securities to be sold by the Selling Stockholder hereunder and upon sale and
delivery of, and payment for, such Securities, as provided herein, the Selling
Stockholder will convey to the extent that the Underwriters are purchasing for
value and without notice of adverse claims, good, valid and marketable title to
such Securities, free and clear of any security interests, liens, encumbrances,
equities, claims or other defects.
(g) The Selling Stockholder has reviewed the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus)
and the Registration Statement, and the information regarding the Selling
Stockholder set forth therein under the caption "Principal and Selling
Stockholder" is complete and accurate in all respects.
(h) The Selling Stockholder has no reason to believe, nor has
it undertaken an independent investigation to confirm, that the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus)
and the Registration Statement, as of its effective date, contain any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading.
(i) There are no outstanding options, warrants, rights or
other agreements or arrangements requiring the Selling Stockholder at any time
to transfer any Securities to be sold hereunder by it.
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(j) There are no pending actions, suits, arbitrations or other
proceedings or investigations (domestic or foreign, formal or informal) against
the Selling Stockholder which (A) questions the validity of this Agreement or of
any action taken or to be taken by it pursuant to or in connection with this
Agreement or (B) is required to be disclosed in the Registration Statement which
is not so disclosed.
(k) On the Firm Closing Date, all stock transfer or other
taxes (other than income taxes) which are required to be paid in connection with
the sale and transfer of the Securities to be sold by the Selling Stockholder to
the several Underwriters hereunder will have been fully paid or provided for by
the Selling Stockholder and all laws imposing such taxes will have been fully
complied with.
(l) The sale by the Selling Stockholder of Securities pursuant
hereto is not prompted by any adverse information , known to the Selling
Stockholder, concerning the Company that is not set forth in the Registration
Statement or the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(m) The sale of the Securities to the Underwriters by the
Selling Stockholder pursuant to this Agreement and the compliance by the Selling
Stockholder with the other provisions of this Agreement applicable to the
Selling Stockholder, do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except such
as have been obtained, such as may be required under state securities or blue
sky laws and, if the registration statement filed with respect to the Securities
(as amended) is not effective under the Act as of the time of execution hereof,
such as may be required (and shall be obtained as provided in this Agreement)
under the Act, or (ii) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Selling Stockholder or any of its subsidiaries is a party or by which the
Selling Stockholder or any of its subsidiaries or any of the Selling
Stockholder's properties are bound, or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or any
arbitrator applicable to the Selling Stockholder.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, and at a purchase price of
$_____ per share of Common Stock, (A) the Company agrees to sell to the several
Underwriters, and the Underwriters severally and not jointly, agree to purchase
from the Company the number of Securities set forth opposite the respective
names of the Underwriters in Column (1) of Schedule 1 hereto and (B) the Selling
Stockholder agrees to sell to the Underwriters, a pro rata portion of the total
number of Securities set forth opposite the name of the Selling Stockholder in
Column (1) of Schedule 2.
(b) One or more certificates in definitive form for the Firm
Securities that the several Underwriters have agreed to purchase hereunder, and
in such denomination or denominations and registered in such name or names as
the Representatives request upon notice to the Company at least 48 hours prior
to the Firm Closing Date, shall be delivered by or on behalf of the Company and
the Selling Stockholder to the Representatives for the respective accounts of
the Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor by wire transfer in
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same-day funds (the "Wired Funds") to the account of the Company and the Selling
Stockholder. Such delivery of and payment for the Firm Securities shall be made
at the offices of Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx
Xxxx 00000 at 9:30 A.M., New York time, on ________ __, 2000, or at such other
place, time or date as the Representatives, the Company and the Selling
Stockholder may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date." The Company and the Selling Stockholder
will make such certificate or certificates for the Firm Securities available for
checking and packaging by the Representatives at the offices in New York, New
York of the Company's transfer agent or registrar or of Prudential Securities
Incorporated, at least 24 hours prior to the Firm Closing Date.
(c) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus, the Company grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3. The option granted hereby may be exercised as to all or any part of
the Option Securities from time to time within (thirty) days after the date of
the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday,
on the next business day thereafter when the New York Stock Exchange is open for
trading). The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such option. The Representatives
may from time to time exercise the option granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Company setting forth the
aggregate number of Option Securities as to which the several Underwriters are
then exercising the option and the date and time for delivery of and payment for
such Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 10 hereof, is herein called the "Option Closing Date" with respect to
such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters, and,
subject to the terms and conditions herein set forth, each of the Underwriters
(severally and not jointly) shall become obligated to purchase from the Company,
the same percentage of the total number of the Option Securities as to which the
several Underwriters are then exercising the option as such Underwriter is
obligated to purchase of the aggregate number of Firm Securities, calculated as
set forth in (a) above, as adjusted by the Representatives in such manner as
they deem advisable to avoid fractional shares. If the option is exercised as to
all or any portion of the Option Securities, one or more certificates in
definitive form for such Option Securities, and payment therefor, shall be
delivered on the related Option Closing Date in the manner, and upon the terms
and conditions, set forth in paragraph (a) of this Section 3, except that
reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option Securities
and Option Closing Date, respectively.
(d) Each of the Company and the Selling Stockholder hereby
acknowledges that the wire transfer by or on behalf of the Underwriters of the
purchase price for any Securities does not
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constitute closing of a purchase and sale of the Securities. Only execution and
delivery of a receipt for Securities by the Underwriters indicates completion of
the closing of a purchase of the Securities from the Company and the Selling
Stockholder. Furthermore, in the event that the Underwriters wire funds to the
Company and to the Selling Stockholder prior to the completion of the closing of
a purchase of Securities, each of the Company and the Selling Stockholder hereby
acknowledges that until the Underwriters execute and deliver a receipt for the
Securities, by facsimile or otherwise, the Company and the Selling Stockholder
will not be entitled to the Wired Funds and shall return the Wired Funds to the
Underwriters as soon as practicable (by wire transfer of same-day funds) upon
demand. If the closing of a purchase of Securities is not completed and the
Wired Funds are not returned by the Company and the Selling Stockholder to the
Underwriters on the same day the Wired Funds were received by the Company and
the Selling Stockholder, each of the Company and the Selling Stockholder agrees
to pay to the Underwriters in respect of each day the Wired Funds are not
returned by it, in same-day funds, interest on the amount of such Wired Funds in
an amount representing the Underwriters' cost of financing as reasonably
determined by Prudential Securities Incorporated.
(e) It is understood that any of you, individually and not as
one of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5A. Covenants of the Company. The Company covenants and agrees with
each of the Underwriters as to the matters set forth below.
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term Sheet
that constitutes a part thereof and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rules 434 and
424(b) under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the Company (i) will
comply with all requirements imposed upon it by the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder to the extent
necessary to permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and of the Prospectus, as then amended or
supplemented, and (ii) will not file with the Commission the Prospectus, Term
Sheet or the amendment referred to in the second sentence of Section 2A(a)
hereof, any amendment or supplement to such Prospectus, Term Sheet or any
amendment to the Registration Statement or any Rule 462(b) Registration
Statement of which the Representatives previously have been advised and
furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the
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Commission, promptly upon request by the Representatives or counsel for the
Underwriters, any amendments to the Registration Statement or amendments or
supplements to the Prospectus that may be necessary or advisable in connection
with the distribution of the Securities by the several Underwriters, and will
use its best efforts to cause any such amendment to the Registration Statement
to be declared effective by the Commission as promptly as possible. The Company
will advise the Representatives, promptly after receiving notice thereof, of the
time when the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto has
been filed and will provide evidence satisfactory to the Representatives of each
such filing or effectiveness.
(b) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
(ii) the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date
when a prospectus relating to the Securities is required to be delivered under
the Act or (ii) the Option Closing Date, any event occurs as a result of which
the Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if for any other reason it is necessary at
any time to amend or supplement the Prospectus to comply with the Act, the
Exchange Act or the respective rules or regulations of the Commission
thereunder, the Company will promptly notify the Representatives thereof and,
subject to Section 5(a) hereof, will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto), (ii) to each other
Underwriter, a conformed copy of such registration statement or any Rule 462(b)
Registration
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Statement and each amendment thereto (in each case without exhibits thereto) and
(iii) so long as a prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request; without limiting the application of clause (iii) of this
sentence, the Company, not later than (A) 6:00 P.M., New York City time, on the
date of determination of the public offering price, if such determination
occurred at or prior to 10:00 A.M., New York City time, on such date or (B) 2:00
P.M., New York City time, on the business day following the date of
determination of the public offering price, if such determination occurred after
10:00 A.M., New York City time, on such date, will deliver to the Underwriters,
without charge, as many copies of the Prospectus and any amendment or supplement
thereto as the Representatives may reasonably request for purposes of confirming
orders that are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earnings statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock for
a period of 90 days after the date hereof, except pursuant to this Agreement and
except for issuances pursuant to the exercise of employee stock options
outstanding on the date hereof, pursuant to the Company's dividend reinvestment
plan or pursuant to the terms of convertible securities of the Company
outstanding on the date hereof.
(i) The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling Stockholder
under this Agreement).
(j) The Company will obtain the agreements described in
Section 7(g) hereof prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the Option
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your opinion the market price of the
Common Stock has been or is likely to be materially affected (regardless of
whether such
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rumor, publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you, responding to or commenting on such rumor,
publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on
the date of this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly included
for quotation on The Nasdaq Stock Market's National Market (the "Nasdaq National
Market") prior to the Firm Closing Date. The Company will ensure that the
Securities remain included for quotation on the Nasdaq National Market following
the Firm Closing Date.
5B. Covenants of the Selling Stockholder. The Selling Stockholder
covenants and agrees with each of the Underwriters as to the matters set forth
below.
(a) The Selling Stockholder will not, directly or indirectly,
(i) take any action designed to cause or result in, or that will constitute or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities, or (ii) from the filing of the Registration
Statement (A) sell, bid for, purchase, or pay anyone any compensation for
soliciting purchases of, the Securities or the Additional Securities or (B) pay
or agree to pay any person any compensation for soliciting another to purchase
any other securities of the Company (except for the sale of Securities by the
Selling Stockholder under this Agreement).
(b) During the period of 990 days from the date of the
Prospectus, the Selling Stockholder will not, without the prior written consent
of Prudential Securities Incorporated, on behalf of the Underwriters, directly
or indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase, or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or other capital stock
of the Company (or any securities convertible into, or exchangeable or
exercisable for, any shares of Common Stock or other capital stock of the
Company).
(c) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, the Selling
Stockholder will deliver to the Representatives prior to or at the Closing Date
a properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
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6. Expenses. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the Original Registration Statement with respect
to the Securities and any amendment thereto, any Rule 462(b) Registration
Statement, any Preliminary Prospectus and the Prospectus and any amendment or
supplement thereto, this Agreement and any blue sky memoranda, (ii) all
arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Securities, (vii) any
quotation of the Securities in the Nasdaq National Market and, (viii) any
meetings with prospective investors in the Securities (other than as shall have
been specifically approved by the Representatives to be paid for by the
Underwriters) and (ix) advertising relating to the offering of the Securities
(other than as shall have been specifically approved by the Representatives to
be paid for by the Underwriters). If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11 hereof or because of any failure,
refusal or inability on the part of the Company to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder other
than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including counsel fees and disbursements) that shall have been incurred by them
in connection with the proposed purchase and sale of the Securities. The Company
shall not in any event be liable to any of the Underwriters for the loss of
anticipated profits from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling Stockholder
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's officers and the Selling Stockholder made pursuant to the
provisions hereof, to the performance by the Company and the Selling Stockholder
of their respective covenants and agreements hereunder and to the following
additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective as
of the time of execution hereof, the Original Registration Statement or such
amendment and, if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have been declared effective not later than
the earlier of (i) 11:00 A.M., New York time, on the date on which the amendment
to the Original Registration Statement with respect to the Securities or to the
Registration Statement, as the case may be, containing information regarding the
initial public offering price of the Securities has been filed
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with the Commission and (ii) the time confirmations are sent or given as
specified by Rule 462(b)(2), or with respect to the Original Registration
Statement, or such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus or any Term Sheet that constitutes
a part thereof and any amendment or supplement thereto shall have been filed
with the Commission in the manner and within the time period required by Rules
434 and 424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Representatives, shall be contemplated by the
Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, counsel for the
Company [and the Selling Stockholder], to the effect that:
(i) the Company and the Subsidiaries have been duly
organized and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as
foreign corporations and are in good standing under the laws
of all other jurisdictions where the ownership or leasing of
their respective properties or the conduct of their respective
businesses requires such qualification, except where the
failure to be so qualified does not amount to a material
liability or disability to the Company and the Subsidiaries,
taken as a whole;
(ii) the Company and each of the Subsidiaries have
corporate power to own or lease their respective properties
and conduct their respective businesses as described in the
Registration Statement and the Prospectus, and the Company has
corporate power to enter into this Agreement and to carry out
all the terms and provisions hereof to be carried out by it;
(iii) the issued shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and are owned beneficially by
the Company free and clear of any perfected security interests
or any other security interests, liens, encumbrances, equities
or claims;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus; all
of the issued shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all
applicable federal and state securities laws and were not
issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities; the Firm
Securities have been duly authorized by all necessary
corporate action of the Company and, when issued and delivered
to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and
nonassessable; the Securities have been duly included for
trading on the Nasdaq National Market; no holders of
outstanding shares of capital stock of the
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Company are entitled as such to any preemptive or other rights
to subscribe for any of the Securities; and no holders of
securities of the Company are entitled to have such securities
registered under the Registration Statement;
(v) the statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as
such statements purport to summarize certain provisions of the
capital stock of the Company, provide a fair summary of such
provisions; and the statements set forth under the headings
"Business--Government Regulation" and "Business--Legal
Proceeding" in the Prospectus, insofar as such statements
constitute a summary of the legal matters, documents or
proceedings referred to therein, provide a fair summary of
such legal matters, documents and proceedings;
(vi) the execution and delivery of this Agreement
have been duly authorized by all necessary corporate action of
the Company and this Agreement has been duly executed and
delivered by the Company;
(vii) (A) no legal or governmental proceedings are
pending to which the Company or any of the Subsidiaries is a
party or to which the property of the Company or any of the
Subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not
described therein, and, to the best knowledge of such counsel,
no such proceedings have been threatened against the Company
or any of the Subsidiaries or with respect to any of their
respective properties and (B) no contract or other document is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required;
(viii) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the other
provisions of this Agreement and the consummation of the other
transactions herein contemplated do not (A) require the
consent, approval, authorization, registration or
qualification of or with any governmental authority, except
such as have been obtained and such as may be required under
state securities or blue sky laws, or (B) conflict with or
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or
instrument, known to such counsel, to which the Company or any
of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or any of their respective properties are
bound, or the charter documents or by-laws of the Company or
any of the Subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel
and applicable to the Company or Subsidiaries;
(ix) the Registration Statement is effective under
the Act; any required filing of the Prospectus, or any Term
Sheet that constitutes a part thereof, pursuant to Rules 434
and 424(b) has been made in the manner and within the time
period
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required by Rules 434 and 424(b); and no stop order suspending
the effectiveness of the Registration Statement or any
amendment thereto has been issued, and no proceedings for that
purpose have been instituted or threatened or, to the best
knowledge of such counsel, are contemplated by the Commission;
(x) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, any Rule
462(b) Registration Statement and the Prospectus (in each
case, other than the financial statements and other financial
information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act, the Exchange Act
and the respective rules and regulations of the Commission
thereunder;
(xi) if the Company elects to rely on Rule 434, the
Prospectus is not "materially different", as such term is used
in Rule 434, from the prospectus included in the Registration
Statement at the time of its effectiveness or an effective
post-effective amendment thereto (including such information
that is permitted to be omitted pursuant to Rule 430A);
(xii) upon the delivery by the Selling Stockholder to
the several Underwriters of certificates for the Firm
Securities or Option Securities, as the case may be, being
sold hereunder by the Selling Stockholder against payment
therefor as provided herein, assuming that each of the
Underwriters which has severally purchased such Firm
Securities acquires such Firm Securities in good faith and
without notice of any adverse claim (within the meaning of the
applicable Uniform Commercial Code), such Underwriter will
have acquired all of the rights of the Selling Stockholder to
the Firm Securities sold by the Selling Stockholder hereunder,
and in addition will have acquired title to such Firm
Securities free and clear of any adverse claim; and
(xiii) the sale of Firm Securities to the
Underwriters by the Selling Stockholder pursuant to this
Agreement, the compliance by the Selling Stockholder with the
other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (A) require the
consent, approval, authorization, registration or
qualification of or with any governmental authority, except
such as have been obtained and such as may be required under
state securities or blue sky laws, or (B) conflict with or
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or
instrument known to such counsel to which the Selling
Stockholder is a party or by which the Selling Stockholder or
any of the Selling Stockholder's properties are bound, or the
charter documents or bylaws of the Selling Stockholder; and
nothing has come to such counsel's attention which causes such
counsel to believe that the sale of Firm Securities
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to the Underwriters by the Selling Stockholder pursuant to
this Agreement, the compliance by the Selling Stockholder with
the other provisions of this Agreement and the consummation of
the other transactions herein contemplated will result in a
violation of any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or
any arbitrator known to such counsel to be applicable to the
Selling Stockholder.
(xiv) the Company is not subject to registration as
an investment company under the Investment Company Act of
1940, as amended.
(xv) neither the Company nor any of the Subsidiaries
is in violation of any federal or state law or regulation
relating to occupational safety and health or to the storage,
handling or transportation of hazardous or toxic materials and
the Company and each of the Subsidiaries has received all
permits, licenses or other approvals required of them under
applicable federal and state occupational safety and health
and environmental laws and regulations to conduct their
respective businesses, and the Company and each of the
Subsidiaries are in compliance with all terms and conditions
of any such permit, license or approval, except any such
violation of law or regulation, failure to receive required
permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, result
in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of
operations of the Company and the Subsidiaries, except as
described in the Prospectus.
(xvi) there are no holders of securities of the
Company, who, by reason of the filing of the Registration
Statement, have the right (and have not waived such right) to
request the Company to register under the Act, or to include
in the Registration Statement, securities held by them.
(xvii) neither the Company nor the Subsidiaries is in
violation of any healthcare law, ordinance, administrative or
governmental rule or regulation applicable to the Company or
the Subsidiaries, including, without limitation, those
relating to product testing, marketing approvals and
reimbursement by government agencies or third-party payors.
Such counsel shall also state that they have no reason to believe that
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
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In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Stroock & Stroock & Xxxxx LLP, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities, the
Registration Statement and the Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Representatives shall have received an opinion ("I.P.
Opinion Letter"), dated the Firm Closing Date, of Knobbe, Martens, Xxxxx & Bear
LLP, special counsel to the Company, relating to certain intellectual property
matters to the effect that:
(i) the statements in the Registration Statement,
insofar as such statements pertain to Intellectual Property
matters, accurately and fairly represent the information
referred to therein.
(ii) (A) there are no rights of parties other than
the Company to any of the patents, patent applications or
trade secret rights related to the technology described in the
Registration Statement or I.P. Opinion Letter, (B) other than
as disclosed in the Registration Statement or I.P. Opinion
Letter, there are no pending or threatened actions, suits,
proceedings or claims by others challenging the Company's
rights to or in any such patents, patent applications or trade
secret rights, and (C) there are no pending or threatened
actions, suits, proceedings or claims by others that the
Company is infringing or otherwise violating any patent or
trade secret rights of others.
(iii) there are no facts or circumstances which, if
asserted in litigation, would be likely to render any of the
trade secret rights reflected in the Company's filed patent
applications invalid or unenforceable except to the extent
they have been or will be disclosed upon publication of such
patent applications or upon the issuance of patents.
(iv) there are no agreements with third parties
relating to the acquisition, licensing and/or transfer of
intellectual property rights which have or are anticipated to
have a material impact on the Company's existing or future
business, including license agreements, joint venture
agreements, marketing and/or distribution agreements or other
collaboration agreements, that are not currently in effect or
that will be expiring soon, nor further has there been any
notice of termination or other act indicating a desire to
terminate any of the aforesaid agreements that are not
mentioned or discussed in the I.P. Opinion Letter.
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(e) The Representatives shall have received from
PricewaterhouseCoopers LLP (and Ernst & Young LLP, to the extent necessary to
provide the requested information) a letter or letters dated, respectively, the
date hereof and the Firm Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants with respect to
the Company and its consolidated subsidiaries within the
meaning of the Act, the Exchange Act and the applicable rules
and regulations thereunder;
(ii) in their opinion, the audited consolidated
financial statements and schedules examined by them and
included in the Registration Statement and the Prospectus
comply in form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the
related published rules and regulations;
(iii) on the basis of a reading of the latest
available interim unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries,
carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal
matters of significance with respect to the comments set forth
in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees
thereof of the Company and each of its consolidated
subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated condensed financial statements
of the Company and its consolidated subsidiaries included in
the Registration Statement and the Prospectus do not comply in
form in all material respects with the applicable accounting
requirements of the Act, the Exchange Act and the related
published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited consolidated financial statements included in the
Registration Statement and the Prospectus; and
(B) at a specific date not more than five business days prior
to the date of such letter, there were any changes in the
capital stock or long-term debt of the Company and its
consolidated subsidiaries or any decreases in net current
assets or stockholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts
shown on the December 31, 1999 consolidated balance sheet
included in the Registration Statement and the Prospectus, or
for the period from January 1, 2000 to such specified date
there were any decreases, as compared with December 31, 1999
in sales, net revenues, net income before income taxes or
total or per share amounts of
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net income of the Company and its consolidated subsidiaries
except in all instances for changes, decreases or increases
set forth in such letter; and
(iv) they have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information that are
derived from the general accounting records of the Company and
its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus under the captions
"Summary Consolidated Financial Data" and "Selected
Consolidated Financial Data" and have compared such amounts,
percentages and financial information with such records of the
Company and its consolidated subsidiaries and with information
derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(f) The Representatives shall have received a certificate,
dated the Firm Closing Date, of the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that:
(i) the representations and warranties of the Company
in this Agreement are true and correct as if made on and as of
the Firm Closing Date; the Registration Statement, as amended
as of the Firm Closing Date, does not include any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplemented as of the Firm
Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and
satisfied all conditions on its part to be performed or
satisfied at or prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement or any amendment thereto has been
issued, and no proceedings for that purpose have been
instituted or threatened or, to the best of the Company's
knowledge, are contemplated by the Commission; and
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(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries
has sustained any material loss or interference with their
respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective
material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or
results of operations of the Company or any of its
subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto).
(g) The Representatives shall have received from each person
who is a director or officer of the Company and from the Selling Stockholder an
agreement to the effect that such person will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days for each director or officer and the
Selling Stockholder after the date of this Agreement.
(h) The Representatives shall have received a certificate,
dated the Firm Closing Date, executed by the Selling Stockholder to the effect
that the representations and warranties of the Selling Stockholder in this
Agreement are true and correct in all material respects on and as of the Firm
Closing Date; the Selling Stockholder has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to the Firm Closing Date; and the Registration Statement and the
Prospectus, as amended or supplemented as of the Firm Closing Date contain all
statements required to be included therein regarding the Selling Stockholder,
and none of the Registration Statement nor any amendment thereto includes any
untrue statement of a material fact regarding the Selling Stockholder or omits
to state any material fact regarding the Selling Stockholder required to be
stated therein or necessary to make the statements therein regarding the Selling
Stockholder not misleading, and neither the Prospectus (and any supplements
thereto) or any Preliminary Prospectus includes or included any untrue statement
of a material fact regarding the Selling Stockholder or omits or omitted to
state a material fact regarding the Selling Stockholder required to be stated
therein or necessary in order to make the statements therein regarding the
Selling Stockholder, in the light of the circumstances under which they were
made, not misleading.
(i) On or before the Firm Closing Date, the Representatives
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(j) Prior to the commencement of the offering of the
Securities, the Securities shall have been included for trading on the Nasdaq
National Market.
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All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of, caused by, related to, based upon or arising out of or in connection with:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 2A of this Agreement,
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto or
(B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company
filed in any jurisdiction in order to qualify the Securities
under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities
exchange (each an "Application"),
(iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the
statements therein not misleading; or
(iv) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual
materials furnished by or on behalf of the Company, including,
without limitation, slides, videos, films and tape recordings
used in connection with the marketing of the Securities,
including, without limitation, statements communicated to
securities analysts employed by the Underwriters,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any
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such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and
provided, further, that the Company will not be liable to any Underwriter or any
person controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 5(d) and (e) of this Agreement. This indemnity agreement will be in
addition to any liability which the Company may otherwise have. The Company will
not, without the prior written consent of the Underwriter or Underwriters
purchasing, in the aggregate, more than fifty percent (50%) of the Securities,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not any such Underwriter or any person who
controls any such Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) The Selling Stockholder agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter or such controlling person may become subject under the Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of, caused by, related to,
based upon or arising out of or in connection with:
(i) any untrue statement or alleged untrue statement
made by the Selling Stockholder in Section 2B of this
Agreement,
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto or
(B) any application or other document, or any amendment or
supplement thereto, executed by the Selling Stockholder or
based upon written information furnished by or on behalf of
the Selling Stockholder filed in any jurisdiction in order to
qualify the Securities under the securities or blue sky laws
thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"),
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(iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the
statements therein not misleading; or
(iv) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual
materials, including, without limitation, slides, videos,
films and tape recordings used in connection with the
marketing of the Securities, including, without limitation,
statements communicated to securities analysts employed by the
Underwriters,
and will reimburse, as incurred, each Underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Selling Stockholder will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any
Application in reliance upon and in conformity with written information
furnished to the Selling Stockholder by such Underwriter through the
Representatives specifically for use therein; and provided, further, that the
Selling Stockholder will not be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Selling
Stockholder with Section 5(d) and (e) of this Agreement. This indemnity
agreement will be in addition to any liability which the Selling Stockholder may
otherwise have. The Selling Stockholder will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than fifty percent (50%) of the Securities, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
(c) Notwithstanding the other provisions of this Section 8,
the Selling Stockholder shall not be liable for indemnification under this
Section 8 for an amount exceeding the total proceeds received by the Selling
Stockholder from the Underwriters for the Firm Securities sold by the Selling
Stockholder hereunder.
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(d) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, the Selling Stockholder, each of the
Company's directors, each of the Company's officers who signed the Registration
Statement and each person, if any, who controls the Company or the Selling
Stockholder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company, the Selling Stockholder or any such director, officer or controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or the Selling
Stockholder by such Underwriter through the Representatives specifically for use
therein; and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses reasonably
incurred by the Company, the Selling Stockholder or any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(e) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the
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indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Representatives in
the case of paragraph (a) or (b) of this Section 8, representing the indemnified
parties under such paragraph (a) or (b) who are parties to such action or
actions) or (ii) the indemnifying party does not promptly retain counsel
satisfactory to the indemnified party or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party.
(f) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion (i) with respect to the Company, the total proceeds
from the offering (before deducting expenses) received by the Company and (ii)
with respect to the Selling Stockholder, the sum of the total proceeds from the
Offering (before deducting expenses) received by the Selling Stockholder, to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholder or the Underwriters, the
parties' relative intents, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company, the Selling
Stockholder and the Underwriters agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (f). Notwithstanding any
other provision of this paragraph (f), no Underwriter shall be obligated to make
contributions hereunder that in the aggregate exceed the total public offering
price of the Securities purchased by such Underwriter under this Agreement, less
the aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or any substantially similar claim, and
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
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misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (f), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, the Selling Stockholder and each person, if any, who
controls the Company or the Selling Stockholder within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company and the Selling Stockholder.
9. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 10 hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers, the
Selling Stockholder and the several Underwriters set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, any of its officers or directors, the Selling
Stockholder, any Underwriter or any controlling person referred to in Section 8
hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth
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in Sections 6 and 8 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company and the Selling Stockholder given prior
to the Firm Closing Date or the related Option Closing Date, respectively, if
the Company or the Selling Stockholder shall have failed, refused or been unable
to perform all obligations and satisfy all conditions on their part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Firm Closing Date or such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall
have, in the sole judgment of the Representatives, sustained
any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding
or there shall have been any material adverse change, or any
development involving a prospective material adverse change
(including without limitation a change in management or
control of the Company), in the condition (financial or
otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, except in each
case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or
trading in securities generally on the New York Stock Exchange
or the Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established on
either such exchange;
(iii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any
foreign power, (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or
(C) any other calamity or crisis or material adverse change in
general economic, political or financial conditions having an
effect on the U.S. financial markets that, in the sole
judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the
delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by Underwriters. The statements set forth
under the heading "Underwriting" in any Preliminary Prospectus or the Prospectus
(to the extent such statements relate to the Underwriters) constitute the only
information furnished by any Underwriter through the
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Representatives to the Company for the purposes of Sections 2A(b) and 8 hereof.
The Underwriters confirm that such statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
00000 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxxx, Chairman and Chief Executive Officer, and if sent to the Selling
Stockholder, shall be delivered or sent by mail, telex or facsimile transmission
and confirmed in writing to the Selling Stockholder at _________________________
___________________________.
14. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company, the Selling Stockholder
and their respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (i) the indemnities of the Company and the Selling Stockholder contained in
Section 8 of this Agreement shall also be for the benefit of any person or
persons who control any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 8 of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement, and any person or persons who control the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Securities from any Underwriter shall be deemed a successor because
of such purchase.
15. Applicable Law. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Selling Stockholder accepts for
itself and in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. A copy of any such process so served
shall be mailed by registered mail to the Selling Stockholder at its address
provided in Section 13 hereof; provided, however, that, unless otherwise
provided by applicable law, any failure to mail such copy shall not affect the
validity of service of such process. If any agent appointed by the Selling
Stockholder refuses to accept service, the Selling Stockholder hereby agrees
that service of process sufficient for personal jurisdiction in any action
against the Selling Stockholder in the State of New York may be made by
registered or certified mail, return receipt requested, to the Selling
Stockholder at the address provided in Section 13
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hereof, and the Selling Stockholder hereby acknowledges that such service shall
be effective and binding in every respect. Nothing herein shall affect the right
to serve process in any other manner permitted by law or shall limit the right
of any Underwriter to bring proceedings against the Selling Stockholder in the
courts of any other jurisdiction.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Remainder of page left blank]
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company, the
Selling Stockholder and each of the several Underwriters.
Very truly yours,
RADIANCE MEDICAL SYSTEMS, INC.
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
ENDOSONICS CORPORATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
As Selling Stockholder.
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
PRUDENTIAL SECURITIES INCORPORATED
GRUNTAL & CO., L.L.C.
By: PRUDENTIAL SECURITIES INCORPORATED
By:
--------------------------------------
Name: Xxxx-Xxxxxx Canfin
Title: Managing Director
For itself and on behalf of the Representatives.
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SCHEDULE 1
UNDERWRITERS
(1)
Number of
Securities to
Underwriter be Purchased
----------- -------------
Prudential Securities Incorporated
Gruntal & Co., L.L.C.
Total.................
-------------
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SCHEDULE 2
SELLING STOCKHOLDER
(1)
Number of Firm
Securities
Name to be Sold
---- --------------
EndoSonics Corporation
--------------
Total
==============
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SCHEDULE 3
SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
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