EXHIBIT 1.1
Shares
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Respironics, Inc.
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
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, 1996
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Alex. Xxxxx & Sons Incorporated
Xxxxx & Company
Xxxxxx/Xxxxxx Incorporated
As Representatives of the
Several Underwriters
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
Respironics, Inc., a Delaware corporation (the "Company"), and certain
shareholders of the Company (the "Selling Shareholders") propose to sell to the
several underwriters (the "Underwriters") named in Schedule I hereto for whom
you are acting as representatives (the "Representatives") an aggregate of
3,030,000 shares of the Company's Common Stock, $.01 par value (the "Firm
Shares"), of which 2,000,000 shares will be sold by the Company and
1,030,000 shares will be sold by the Selling Shareholders. The respective
amounts of the Firm Shares to be so purchased by the several Underwriters are
set forth opposite their names in Schedule I hereto, and the respective amounts
to be sold by the Selling Shareholders are set forth opposite their names in
Schedule II hereto. The Company and the Selling Shareholders are
sometimes referred to herein collectively as the "Sellers." The Company and
a Selling Shareholder also propose to sell at the Underwriters' option an
aggregate of up to 454,500 additional shares of the Company's Common Stock
(the "Option Shares") as set forth below.
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and
the Option Shares (to the extent the aforementioned option is exercised) are
herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING SHAREHOLDERS.
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(a) The Company represents and warrants as follows:
(i) A registration statement on Form S-3 (File No. 333-______) with
respect to the Shares has been carefully prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended, (the "Act") and
the Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission under the Act. The Company has complied with the conditions for the
use of Form S-3 with respect to the proposed offering. Copies of such
registration statement, including any amendments thereto, the preliminary
prospectuses (meeting the requirements of Rule 430A of the Rules and
Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, together with any registration
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statement filed by the Company pursuant to Rule 462(b) of the Act, herein
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referred to as the "Registration Statement," which shall be deemed to include
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has been declared effective by the Commission
under the Act and no post-effective amendment to the Registration Statement has
been filed as of the date of this Agreement. The form of prospectus first filed
by the Company with the Commission pursuant to its Rule 424(b) and Rule 430A is
herein referred to as the "Prospectus." Each preliminary prospectus included in
the Registration Statement prior to the time it becomes effective is herein
referred to as a "Preliminary Prospectus." Any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be, and, in the case of
any reference herein to any Prospectus, also shall be deemed to include any
documents incorporated by reference therein, and any supplements
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or amendments thereto, filed with the Commission after the date of filing of the
Prospectus under Rules 424(b) and 430A, and prior to the termination of the
offering of the Shares by the Underwriters.
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Registration Statement; each of the subsidiaries of the Company
(collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement;
the Company and each of the Subsidiaries are duly qualified to transact business
in all jurisdictions in which the conduct of their business requires such
qualification; the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and to the extent shown in Exhibit A hereto are owned by the
Company or another Subsidiary free and clear of all liens, encumbrances and
security interests; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(iii) The outstanding shares of Common Stock of the Company, including
all shares to be sold by the Selling Shareholders, have been duly authorized and
validly issued and are fully paid and non-assessable; the portion of the Shares
to be issued and sold by the Company have been duly authorized and when issued
and paid for as contemplated herein will be validly issued, fully paid and non-
assessable; and no preemptive rights of stockholders exist with respect to any
of the Shares or the issue and sale thereof.
(iv) The Shares conform with the statements concerning them in the
Registration Statement.
(v) The Commission has not issued an order preventing or suspending
the use of any Preliminary Prospectus relating to the proposed offering of the
Shares nor instituted proceedings for that purpose. The Registration Statement
contains and the Prospectus and any amendments or supplements thereto will
contain all statements which are required to be stated therein by, and in all
respects conform or will conform, as the case may be, to the requirements of,
the Act and the Rules and Regulations. The documents incorporated by reference
in the Prospectus, at the time they will be filed with the Commission will
conform at the time of filing, in all respects to the requirements of the
Securities Exchange Act of 1934 or the Act, as applicable, and the Rules and
Regulations of the Commission thereunder. Neither the Registration Statement nor
any amendment thereto, and neither the Prospectus nor any supplement thereto,
including any documents incorporated by reference therein, contains or will
contain, as the case may be, any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company
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makes no representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, or any documents incorporated by reference therein, in reliance
upon, and in conformity with, written information furnished to the Company by or
on behalf of any Underwriter through the Representatives, specifically for use
in the preparation thereof.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly the financial position and the results of
operations of the Company and Subsidiaries consolidated, at the indicated dates
and for the indicated periods. Such financial statements have been prepared in
accordance with generally accepted principles of accounting, consistently
applied throughout the periods involved, and all adjustments necessary for a
fair presentation of results for such periods have been made. The summary
financial and statistical data included in the Registration Statement presents
fairly the information shown therein and have been compiled on a basis
consistent with the financial statements presented therein.
(vii) There is no action or proceeding pending or, to the knowledge of
the Company, threatened against the Company or any of the Subsidiaries before
any court or administrative agency which might result in any material adverse
change in the business or condition of the Company and of the Subsidiaries taken
as a whole, except as set forth in the Registration Statement.
(viii) The Company and the Subsidiaries have good and marketable title
to all of the properties and assets reflected in the financial statements (or as
described in the Registration Statement) hereinabove described, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except those reflected
in such financial statements (or as described in the Registration Statement) or
which are not material in amount. The leases under which the Company and the
Subsidiaries occupy their leased properties conform to the description thereof
set forth in the Registration Statement and, to the best of the Company's
knowledge, such leases are valid and binding obligations of the landlords.
(ix) The Company and the Subsidiaries have filed all Federal, State
and foreign income tax returns which have been required to be filed and have
paid all taxes indicated by said returns and all assessments received by them or
any of them to the extent that such taxes have become due and are not being
contested in good faith.
(x) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not been
any material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or the earnings, business affairs,
management, or business prospects of the Company and its Subsidiaries taken as a
whole, whether or not occurring in the ordinary course of business, and there
has not been any material transaction entered into by the Company or the
Subsidiaries, other
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than transactions in the ordinary course of business and changes and
transactions contemplated by the Registration Statement, as it may be amended or
supplemented. The Company and the Subsidiaries have no material contingent
obligations which are not disclosed in the Registration Statement, as it may be
amended or supplemented.
(xi) Neither the Company nor any of the Subsidiaries is in default
under any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it or any of its properties is
bound and which default is of material significance in respect of the business
or financial condition of the Company and the Subsidiaries taken as a whole. The
consummation of the transactions herein contemplated and the fulfillment of the
terms hereof will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any Subsidiary is
a party, or of the Charter or by-laws of the Company or any order, rule or
regulation applicable to the Company or any Subsidiary of any court or of any
regulatory body or administrative agency or other governmental body having
jurisdiction.
(xii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or may be necessary to
qualify the Shares for public offering by the Underwriters under State
securities or Blue Sky laws) has been obtained or made and is in full force and
effect.
(xiii) The Company owns or possesses adequate licenses or other rights
to use all patents, patent applications, trademarks, trademark applications,
service marks, service xxxx applications, tradenames, copyrights, manufacturing
processes, formulae, trade secrets and know-how or other information
(collectively, "Intellectual Property") described in the Prospectus as owned by
or used by it or which is necessary to the conduct of its business as now
conducted or proposed to be conducted as described in the Prospectus. To the
knowledge of the Company, none of the patent rights owned or licensed by the
Company are unenforceable or invalid. Except as disclosed in the Prospectus, the
Company is not aware of any infringement of or conflict with the rights or
claims of others with respect to any of the Company's products or Intellectual
Property which could have a material adverse effect on the business or financial
condition of the Company or the Subsidiaries, taken as a whole. The Company is
not aware of any infringement of any of the Company's Intellectual Property
rights by any third party which could have a material adverse effect on the
business or financial condition of the Company and the Subsidiaries, taken as a
whole.
(xiv) Except as described in the Prospectus, the Company and each of
the Subsidiaries are conducting their business in compliance with all the laws,
rules and regulations of the jurisdictions in which they are conducting
business, including, without limitation, those of the United States Food and
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Drug Administration (the "FDA"), except where failure to be so in
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compliance, singly or in the aggregate, would not have a material adverse effect
on the business or financial condition of the Company and the Subsidiaries,
taken as a whole.
(xv) Except as described in the Prospectus, each of the Company and
the Subsidiaries (i) holds and is operating in compliance with all licenses,
authorizations, consents, approvals, certificates and permits (individually, a
"Permit") from any regulatory body or administrative agency or other
governmental body having jurisdiction including, without limitation, the FDA,
(ii) has made all necessary filings required under any Federal, State or foreign
law, rule or regulation and (iii) has obtained all necessary authorizations,
consents, and approvals (individually, an "Approval") from other persons which
are necessary to own or lease its properties and assets and to the conduct of
its business, except where the failure to so hold or comply with any Permit, the
failure to make any such filing or the failure to obtain any Approval would not
have, singly or in the aggregate, a material adverse effect on the business or
financial condition of the Company and the Subsidiaries, taken as a whole.
Neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such Permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
could have a material adverse effect on the business or financial condition of
the Company and the Subsidiaries. To the best of the Company's knowledge, all of
the properties now or formerly owned or leased by the Company or any Subsidiary,
all research and manufacturing operations conducted thereon (including
discharges and emissions therefrom) and all research and manufacturing equipment
now or formerly used at said properties, have been and are in compliance with
all Federal, state, local and foreign status, ordinances, regulations, rules and
standards concerning or relating to industrial hygiene and the protection of
health, safety, welfare and the environment (collectively, "the Environmental
Laws"), except to the extent that any failure to be in compliance, singly or in
the aggregate, would not have a material adverse effect on the business or
financial condition of the Company and the Subsidiaries, taken as a whole.
Neither the Company nor any Subsidiary has received notice or has actual or
constructive knowledge, of any claim, demand, investigation, regulatory action,
suit or other action instituted or threatened against it or said property
relating to any of the Environmental Laws.
(xvi) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Preliminary
Prospectus, the Prospectus or other materials, if any, permitted by the Act.
(xvii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded
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accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(xviii) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has made
any payment of funds of the Company or any Subsidiary or received or retained
any funds in violation of any law, rule or regulation, which payment, receipt or
retention of funds is of character required to be disclosed in the Prospectus.
(xix) No holder of any security of the Company has any right, which
right has not been duly waived or exercised or has lapsed, to require
registration of shares of Common Stock or any other security of the Company
because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement.
(xx) The Company has filed in a timely manner each document or report
required to be filed by it pursuant to the Exchange Act and the rules and
regulations thereunder; each such document or report at the time it was filed
conformed to the requirements of the Exchange Act and the rules and regulations
thereunder; and none or such documents or reports contained an untrue statement
of any material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(xxi) Ernst & Young LLP, who have certified certain of the financial
statements filed with the Commission as part of the Registration Statement, are
independent public accountants as required by the Act and the Rules and
Regulations.
(xxii) The Shares to be issued and sold by the Company have been
listed on the Nasdaq National Market System, subject to notice of issuance.
(b) Each of the Selling Shareholders severally represents and warrants as
follows:
(i) Such Selling Shareholder has and at the Closing Date and the
Option Closing Date (as such dates are hereinafter defined) will have good and
valid title to the Firm Shares and the Option Shares to be sold by such Selling
Shareholder, free of any liens, encumbrances, equities and claims, and full
right, power and authority to effect the sale and delivery of such Firm Shares
and Option Shares; and upon the delivery of and payment for such Firm Shares and
Option Shares pursuant to this Agreement, good and valid title thereto, free of
any liens, encumbrances, equities and claims, will be transferred to the several
Underwriters.
(ii) The consummation by such Selling Shareholder of the transactions
herein contemplated and the fulfillment by such Selling Shareholder of the terms
hereof will not result in a breach of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which such Selling Shareholder is a
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party, or of any order, rule or regulation applicable to such Selling
Shareholder of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted, or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock of the Company.
(iv) Without having undertaken to determine independently the accuracy
or completeness of either the representations and warranties of the Company
contained herein or the information contained in the Registration Statement and
documents incorporated by reference therein, such Selling Shareholder has no
reason to believe that the representations and warranties of the Company
contained in this Section 1 are not true and correct, is familiar with the
Registration Statement and has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement or the documents
incorporated by reference therein which has adversely affected or may adversely
affect the business of the Company or any of the Subsidiaries; and the sale of
the Firm Shares and the Option Shares by such Selling Shareholder pursuant
hereto is not prompted by any information concerning the Company or any of the
Subsidiaries which is not set forth in the Registration Statement or the
documents incorporated by reference therein.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES. On the basis of the
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representations, warranties and covenants herein contained, and subject to the
conditions herein set forth, the Sellers agree to sell to the Underwriters and
each Underwriter agrees, severally and not jointly, to purchase, at a price of
$_____ per share, the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance with
Section 9 hereof. The number of Firm Shares to be purchased by each Underwriter
from each Seller shall be as nearly as practicable in the same proportion to the
total number of Firm Shares being sold by each Seller as the number of Firm
Shares being purchased by each Underwriter bears to the total number of Firm
Shares to be sold hereunder. The obligations of the Company and of each of the
Selling Shareholders to sell the Firm Shares shall be several and not joint.
Certificates in negotiable form for the total number of the Shares to be
sold hereunder by the Selling Shareholders have been placed in custody with
____________________ as custodian (the "Custodian") pursuant to the Custodian
Agreement executed by each Selling Shareholder for delivery of all Firm Shares
and any Option Shares to be sold hereunder by the Selling Shareholders. Each of
the Selling Shareholders specifically agrees that the Firm Shares and any Option
Shares represented by the certificates held in custody for the Selling
Shareholders under the Custodian Agreement are subject to the interests of the
Underwriters hereunder, that the arrangements made by the Selling Shareholders
for such custody are to that extent irrevocable, and that the obligations of the
Selling Shareholders hereunder shall not be terminable by any act or deed of the
Selling Shareholders (or by any other person, firm or corporation including the
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Company, the Custodian or the Underwriters) or by operation of law (including
the death of an individual Selling Shareholder or the dissolution of a corporate
Selling Shareholder) or by the occurrence of any other event or events, except
as set forth in the Custodian Agreement. If any such event should occur prior to
the delivery to the Underwriters of the Firm Shares or the Option Shares
hereunder, certificates for the Firm Shares or the Option Shares, as the case
may be, shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such event has not occurred. The Custodian is
authorized to receive and acknowledge receipt of the proceeds of sale of the
Shares held by it against delivery of such Shares.
Payment for the Firm Shares to be sold hereunder is to be made in New York
Clearing House funds by certified or bank cashier's checks drawn to the order of
the Company for the shares to be sold by it and to the order of
"____________________" for the shares to be sold by the Selling Shareholders, in
each case against delivery of certificates therefor to the Representatives for
the several accounts of the Underwriters. Such payment and delivery are to be
made at the offices of Alex. Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx, at 10:00 a.m., Baltimore time, on [fill in date for
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T+3] or at such other time and date thereafter as you and the Company shall
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agree upon, such time and date being herein referred to as the "Closing Date."
(As used herein, "business day" means a day on which the New York Stock Exchange
is open for trading and on which banks in New York are open for business and not
permitted by law or executive order to be closed.) The certificates for the Firm
Shares will be delivered in such denominations and in such registrations as the
Representatives requests in writing not later than the second full business day
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prior to the Closing Date, and will be made available for inspection by the
Representatives at least one business day prior to the Closing Date .
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
and a Selling Shareholder listed on Schedule III hereto hereby grants an
option to the several Underwriters to purchase the Option Shares at the price
per share as set forth in the first paragraph of this Section 2. The maximum
number of Option Shares to be sold by the Company and the Selling Shareholders
is set forth opposite their respective names on Schedule III hereto. The
option granted hereby may be exercised in whole or in part but only once and
at any time upon written notice given within 30 days after the date of this
Agreement, by you, as Representatives of the several Underwriters, to the
Company and the Custodian setting forth the number of Option Shares as to which
the several Underwriters are exercising the option, the names and denominations
in which the Option Shares are to be registered and the time and date at which
such certificates are to be delivered. If the option granted hereby is exercised
in part, the respective number of Option Shares to be sold by the Company and
each of the Selling Shareholders listed in Schedule III hereto shall be
determined on a pro rata basis in accordance with the percentages set forth
opposite their names on Schedule II hereto, adjusted by you in such manner as to
avoid fractional shares. The time and date at which certificates for Option
Shares are to be delivered shall be determined by the Representatives but shall
not be earlier than three nor later than 10 full business days after the
exercise of such option, nor in any event prior to the Closing Date (such time
and date being
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herein referred to as the "Option Closing Date"). If the date of exercise of the
option is three or more days before the Closing Date, the notice of exercise
shall set the Closing Date as the Option Closing Date. The number of Option
Shares to be purchased by each Underwriter shall be in the same proportion to
the total number of Option Shares being purchased as the number of Firm Shares
being purchased by such Underwriter bears to the total number of Firm Shares,
adjusted by you in such manner as to avoid fractional shares. The option with
respect to the Option Shares granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters. You, as
Representatives of the several Underwriters, may cancel such option at any time
prior to its expiration by giving written notice of such cancellation to the
Company. To the extent, if any, that the option is exercised, payment for the
Option Shares shall be made on the Option Closing Date in New York Clearing
House funds by certified or bank cashier's check drawn to the order of the
Company for the Option Shares to be sold by it and to the order of
"____________________" for the Option Shares to be sold by the Selling
Shareholders against delivery of certificates therefor at the offices of Alex.
Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
3. OFFERING BY THE UNDERWRITERS. It is understood that the several
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Underwriters are to make a public offering of the Firm Shares as soon as the
Representatives deems it advisable to do so. The Firm Shares are to be initially
offered to the public at the initial public offering price set forth in the
Prospectus. The Representatives may from time to time thereafter change the
public offering price and other selling terms. To the extent, if at all, that
any Option Shares are purchased pursuant to Section 2 hereof, the Underwriters
will offer them to the public on the foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
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(a) The Company covenants and agrees with the several Underwriters and the
Selling Shareholders that:
(i) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a Prospectus containing
information previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A of the Rules and Regulations, (ii) not file
any amendment to the Registration Statement or supplement to the Prospectus or
document incorporated by reference therein of which the Representatives shall
not previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations and (iii) file on a timely basis all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Shares by the Underwriters.
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(ii) The Company will advise the Representatives promptly of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, or of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose, and the Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of such
jurisdictions as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Representatives may reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement,
including documents incorporated by reference therein, but without exhibits, and
of all amendments thereto, as the Representatives may reasonably request.
(v) If during the period in which a prospectus is required by law to
be delivered by an Underwriter or dealer any event shall occur as a result of
which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, not misleading, or, if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law, the Company promptly will either (i) prepare and file with the
Commission an appropriate amendment to the Registration Statement or supplement
to the Prospectus or (ii) prepare and file with the Commission an appropriate
filing under the Securities Exchange Act of 1934 which shall be incorporated by
reference in the Prospectus so that the Prospectus as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the law.
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(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later than
18 months after the effective date of the Registration Statement, an earning
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statement (which need not be audited) in reasonable detail, covering a period of
at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earning statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise you in writing when such statement has been so made available.
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of all
other documents, reports and information furnished by the Company to its
stockholders or filed with any securities exchange pursuant to the requirements
of such exchange or with the Commission pursuant to the Act or the Securities
Exchange Act of 1934, as amended. The Company will deliver to the
Representatives similar reports with respect to significant subsidiaries, as
that term is defined in the Rules and Regulations, which are not consolidated in
the Company's financial statements.
(viii) No offering, sale or other disposition of any Common Stock of
the Company will be made for a period of 120 days after the date of this
Agreement, directly or indirectly, by the Company otherwise than hereunder or
with the prior written consent of the Representatives except that the Company
may, without such consent, issue shares upon the exercise of options outstanding
on the date of this Agreement.
(ix) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description in the Prospectus.
(b) Each of the Selling Shareholders covenants and agrees with the several
Underwriters and the Company that:
(i) For a period of 90 days after the date of this Agreement, he will
not offer to sell, contract to sell, transfer or otherwise dispose of, directly
or indirectly, any shares of Common Stock, any options, rights or warrants to
purchase any shares of Common Stock (including any stock appreciation right, or
similar right with an exercise or conversion privilege at a price related to, or
derived from, the market price of the Common Stock) or any securities
convertible into or exchangeable for shares of Common Stock owned directly by
such Selling Shareholder with respect to which he has the power of disposition
(including, without limitation, shares of Common Stock that he may be deemed to
beneficially own in accordance with the rules and regulations promulgated under
the Exchange Act), or (ii) engage in any hedging transactions with respect to
the Common Stock that may have an impact on the market price of the Common
Stock, otherwise than hereunder or with the prior written consent of the
Representatives.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with
respect to the transactions herein contemplated,
-12-
each of the Selling Shareholders agrees to deliver to you prior to or on 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).
5. COSTS AND EXPENSES. The Company will pay all costs, expenses and fees
------------------
incident to the performance of the obligations of the Sellers under this
Agreement, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of counsel
for the Company; the cost of printing and delivering to, or as requested by, the
Underwriters copies of the Registration Statement, Preliminary Prospectuses, the
Prospectus, this Agreement, the Agreement Among Underwriters, the Underwriters'
Selling Memorandum, the Underwriters' Questionnaire, the Invitation Letter, the
Power of Attorney, the Listing Application, the Blue Sky Survey and any
supplements or amendments thereto; the filing fees of the Commission; the filing
fees and expenses incident to securing any required review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Shares; the Listing Fee of the Nasdaq National Market System; and the
expenses, including the fees and disbursements of counsel for the Underwriters,
incurred in connection with the qualification of the Shares under State
securities or Blue Sky laws. To the extent, if at all, that any of the Selling
Shareholders engage special legal counsel to represent them in connection with
this offering, the fees and expenses of such counsel shall be borne by such
Selling Shareholder. Any transfer taxes imposed on the sale of the Shares to the
several Underwriters will be paid by the Sellers pro rata. The Sellers shall
not, however, be required to pay for any of the Underwriters expenses (other
than those related to qualification under State securities or Blue Sky laws)
except that, if this Agreement shall not be consummated because the conditions
in Section 7 hereof are not satisfied, or because this Agreement is terminated
by the Representatives pursuant to Section 6 hereof, or by reason of any
failure, refusal or inability on the part of the Company or the Selling
Shareholders to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on their part to be
performed, unless such failure to satisfy said condition or to comply with said
terms be due to the default or omission of any Underwriter, then the Company
shall reimburse the several Underwriters for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the Company and the
Selling Shareholders shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The several obligations of
---------------------------------------------
the Underwriters to purchase the Firm Shares on the Closing Date and the Option
Shares, if any, on the Option Closing Date are subject to the accuracy, as of
the Closing Date or the Option Closing Date, as the case may be, of the
representations and warranties of the Company and the Selling Shareholders
contained herein, and to the performance by the Company and the Selling
Shareholders of their covenants and obligations hereunder and to the following
additional conditions:
-13-
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge of the
Company or the Selling Shareholders, shall be contemplated by the Commission.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxx Xxxxx Xxxx &
XxXxxx, counsel for the Company and the Selling Shareholders, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the
Underwriters to the effect that:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus; each of the Subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus; the Company
and each of the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, or in which the failure to qualify would have a materially
adverse effect upon the business of the Company and the Subsidiaries taken as a
whole; and the outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by the Company or a Subsidiary, to the best of such counsel's
knowledge, free and clear of all liens, encumbrances and security interests; to
the best of such counsel's knowledge, except as stated in the Prospectus, there
are outstanding no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into any
shares of capital stock or of ownership interests in the Subsidiaries.
(ii) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus; the authorized
shares of its Common Stock have been duly authorized; the outstanding shares of
its Common Stock, including the Shares to be sold by the Selling Shareholders,
have been duly authorized and validly issued and are fully paid and non-
assessable; all of the Shares conform to the description thereof contained in
the Prospectus; the certificates for the Shares are in due and proper form; the
shares of Common Stock, including the Option Shares, if any, to be sold by the
Company pursuant to this Agreement have been duly authorized and, when issued
and paid for as contemplated by this Agreement, will be validly issued, fully
paid and non-assessable; and no preemptive rights of stockholders exist with
respect to any of the Shares or the issue and sale thereof.
(iii) The Registration Statement has become effective under the Act
and, to the best of the knowledge of such counsel, no stop order proceedings
with respect thereto have been instituted or are pending or threatened under the
Act.
-14-
(iv) The Registration Statement, all Preliminary Prospectuses, the
Prospectus and each amendment or supplement thereto and document incorporated by
reference therein comply as to form in all material respects with the
requirements of the Act or the Securities Exchange Act of 1934, as applicable
and the applicable rules and regulations thereunder (except that such counsel
need express no opinion as to the financial statements, schedules and other
financial information included or incorporated by reference therein).
(v) Such counsel does not know of any contracts or documents required
to be filed as exhibits to or incorporated by reference in the Registration
Statement or described in the Registration Statement or the Prospectus which are
not so filed, incorporated by reference or described as required, and such
contracts and documents as are summarized in the Registration Statement or the
Prospectus are fairly summarized in all material respects.
(vi) Such counsel knows of no material legal proceedings pending or
threatened against the Company or any of the Subsidiaries except as set forth in
the Prospectus.
(vii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Charter or by-laws of the Company, or any
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 may
be bound or violate any applicable law or regulation or, to the best of such
counsel's knowledge, any order, writ, injunction or decree of any jurisdiction,
court or governmental instrumentality binding upon the Company, any Subsidiary
or any of their properties, except that counsel need express no opinion as to
state securities or blue sky laws.
(viii) This Agreement has been duly authorized, executed and delivered
by the Company.
(ix) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and delivery of
this Agreement and the consummation of the transactions herein contemplated
(other than as may be required by the National Association of Securities
Dealers, Inc. or as required by State securities and Blue Sky laws as to which
such counsel need express no opinion) except such as have been obtained or made,
specifying the same.
(x) This Agreement has been duly authorized, executed and delivered on
behalf of the Selling Shareholders.
(xi) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as required by State
securities and Blue Sky laws as to which such counsel need express no opinion),
to sell, assign, transfer and deliver the portion of the Shares to be sold by
such Selling Shareholder.
-15-
(xii) The Custodian Agreement has been duly authorized, executed and
------------------------
delivered by each Selling Shareholder and, pursuant to the Custodian Agreement,
-----------------------------------------
each Selling Shareholder has authorized the attorneys-in-fact named therein to
------------------------------------------------------------------------------
carry out the transactions contemplated by the Underwriting Agreement on its
----------------------------------------------------------------------------
behalf and to deliver the Shares to be sold by such Selling Shareholder pursuant
--------------------------------------------------------------------------------
to this Agreement.
------------------
(xiii) The Underwriters (assuming that they are bona fide purchasers
within the meaning of the Uniform Commercial Code) have acquired good and
marketable title to the Shares being sold by each Selling Shareholder on the
Closing Date, free and clear of all claims, liens, encumbrances and security
interests whatsoever.
In rendering such opinion Xxxx Xxxxx Xxxx & XxXxxx may rely as to matters
governed by the laws of states other than Pennsylvania, the Delaware General
Corporation Law or Federal laws on counsel in such jurisdictions and as to the
matters set forth in subparagraphs (xi), (xii) and (xiii) on opinions of other
counsel representing the respective Selling Shareholders, provided that in each
case Xxxx Xxxxx Xxxx & XxXxxx shall state that they believe that they and the
Underwriters are justified in relying on such other counsel. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that such counsel believes that the Registration Statement, as of the
---------------------
time it became effective under the Act, the Prospectus or any amendment or
supplement thereto, on its date and on the Closing Date, or any of the documents
incorporated by reference therein, as of the date of effectiveness of the
Registration Statement or, in the case of documents incorporated by reference in
the Prospectus after the date of effectiveness of the Registration Statement, as
of the respective dates when such documents were filed with the Commission, as
the case may be, did not contain an untrue statement of a material fact or omit
-------
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading (except that such counsel need express no view
as to financial statements, schedules and other financial information included
or incorporated by reference therein). With respect to such statement, Xxxx
Xxxxx Xxxx & XxXxxx may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.
(c) The Representatives shall have received on the Closing Date the opinion
of Xxxxx, Xxxxxx & XxXxxxxx, P.C., regulatory counsel for the Company, dated the
Closing Date addressed to the Underwriters in form and substance reasonably
satisfactory to the Underwriters and their counsel.
(d) The Representatives shall have received from Ropes & Xxxx, counsel for
the Underwriters, an opinion dated the Closing Date or the Option Closing Date,
as the case may be, substantially to the effect specified in subparagraphs (ii)
(with respect to the Shares), (iii), (iv) and (viii) of Paragraph (b) of this
Section 6, and that the Company is a validly organized and existing corporation
under the laws of the State of Delaware. In rendering such opinion Ropes & Xxxx
may rely as to all matters governed other than by the Delaware General
Corporation Law or
-16-
Federal laws on the opinion of counsel referred to in Paragraph (b) of this
Section 6. In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that the Registration Statement, as of the
time it became effective under the Act, and the Prospectus or any amendment or
supplement thereto, on its date and on the Closing Date, or any of the documents
incorporated by reference therein, as of the date of effectiveness of the
Registration Statement or, in the case of documents incorporated by reference in
the Prospectus after the date of effectiveness of the Registration Statement, as
of the respective dates when such documents were filed with the Commission,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading (except that such counsel need express no view as to financial
statements, schedules and other financial information included or incorporated
by reference therein). With respect to such statement, Ropes & Xxxx may state
that their belief is based upon the procedures set forth therein, but is without
independent check and verification.
(e) The Representatives shall have received at or prior to the Closing Date
from Ropes & Xxxx a memorandum or summary, in form and substance satisfactory to
the Representatives, with respect to the qualification for offering and sale by
the Underwriters of the Shares under the State securities or Blue Sky laws of
such jurisdictions as the Representatives may reasonably have designated to the
Company.
(f) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a signed letter from Ernst & Young LLP,
dated the Closing Date or the Option Closing Date, as the case may be, which
shall confirm, on the basis of a review in accordance with the procedures set
forth in the letter signed by such firm and dated and delivered to the
Representatives on the date hereof that nothing has come to their attention
during the period from the date five days prior to the date hereof, to a date
not more than five days prior to the Closing Date or the Option Closing Date, as
the case may be, which would require any change in their letter dated the date
hereof if it were required to be dated and delivered on the Closing Date or the
Option Closing Date, as the case may be. All such letters shall be in form and
substance satisfactory to the Representatives and their counsel.
(g) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the Act and
no stop order suspending the effectiveness of the Registrations Statement has
been issued, and no proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission.
-17-
(ii) He does not know of any litigation instituted or threatened
against the Company of a character required to be disclosed in the Registration
Statement which is not so disclosed; he does not know of any material contract
required to be filed as an exhibit to the Registration Statement which is not so
filed; and the representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be .
(iii) He has carefully examined the Registration Statement and the
Prospectus and, in his opinion, as of the effective date of the Registration
Statement, the statements contained in the Registration Statement, including any
document incorporated by reference therein, were true and correct, and such
Registration Statement and Prospectus or any document incorporated by reference
therein did not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading and, in his
opinion, since the effective date of the Registration Statement, no event has
occurred which should have been set forth in a supplement to or an amendment of
the Prospectus which has not been so set forth in such supplement or amendment.
(h) The Company and the Selling Shareholders shall have furnished to the
Representatives such further certificates and documents confirming the
representations and warranties contained herein and related matters as the
Representatives may reasonably have requested.
(i) The Firm Shares and Option Shares, if any, have been approved for
listing upon notice of issuance on the Nasdaq National Market System.
(j) The Company shall have furnished to you "lock-up" letters, in form and
substance satisfactory to you, signed by each director and executive officer who
is not a Selling Shareholder.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Ropes & Xxxx, counsel for
the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company and the Selling Shareholders of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.
In such event, the Selling Shareholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
-18-
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS. The obligations of the
--------------------------------------------
Sellers to sell and deliver the portion of the Shares required to be delivered
as and when specified in this Agreement are subject to the conditions that at
the Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and in effect or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
---------------
(a) The Company and the Selling Shareholders, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act against any losses,
claims, damages or liabilities to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with investigating
or defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company and the Selling Shareholders 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 an untrue statement or alleged untrue
statement, or omission or alleged omission made or incorporated by reference in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. In no event, however, shall the
liability of any Selling Shareholder for indemnification under this Section 8(a)
exceed the proceeds received by such Selling Shareholder from the Underwriters
in the offering. This indemnity agreement will be in addition to any liability
which the Company or the Selling Shareholders may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement,
the Selling Shareholders, and each person, if any, who controls the Company or
any Selling Shareholder within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, Selling Shareholder or controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained or
incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein
-19-
not misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, Selling Shareholder or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that each Underwriter will
be liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made or incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by or through
the Representatives specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided in this
Section 8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of the provisions of Section 8(a) or (b). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred the fees and expenses of the counsel retained by the indemnified
party in the event (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated in
writing by you in the case of parties indemnified pursuant to Section 8(a) and
by the Company and the Selling Shareholders in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgement for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
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(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under Section 8(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholders on
the one hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under Section 8(c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Shareholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholders bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Shareholders on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation, and (iii) no Selling Shareholder
shall be required to contribute any amount in excess of the proceeds received by
such Selling Shareholder from the Underwriters in the offering. The
Underwriters' obligations in this Section 8(d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
-21-
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
9. DEFAULT BY UNDERWRITERS. If on the Closing Date or the Option Closing
-----------------------
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of the Company
or a Selling Shareholder), you, as Representatives of the Underwriters, shall
use your best efforts to procure within 24 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Shareholders such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 24
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company and the
Selling Shareholders or you as the Representatives of the Underwriters will have
the right, by written notice given within the next 24-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company or of the Selling Shareholders
except to the extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9, the Closing
Date or Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. NOTICES. All communications hereunder shall be in writing and, except as
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otherwise provided herein, will be mailed, delivered or telegraphed and
confirmed as follows: if to the Underwriters, to Alex. Xxxxx & Sons
Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
-22-
Maryland 21202, Attention: Xxxxxx X. Xxxxx; if to the Company or the Selling
Shareholders, to Respironics, Inc., 0000 Xxxxx Xxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx.
11. TERMINATION. This Agreement may be terminated by you by notice to the
-----------
Sellers as follows:
(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m. on
the first business day following the date of this Agreement;
(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business affairs, management or business prospects of
the Company and its Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, (ii) any outbreak or escalation of hostilities or
declaration of war or national emergency after the date hereof or other national
or international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, escalation, declaration, emergency,
calamity, crisis or change on the financial markets of the United States would,
in your reasonable judgment, make the offering or delivery of the Shares
impracticable or inadvisable, (iii) suspension of trading in securities on the
New York Stock Exchange or the American Stock Exchange or limitation on prices
(other than limitations on hours or numbers of days of trading) for securities
on either such Exchange, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your reasonable opinion
materially and adversely affects or will materially or adversely affect the
business or operations of the Company, (v) declaration of a banking moratorium
by either federal or New York State authorities, or (vi) the taking of any
action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the Sellers, as
to any obligation of the Underwriters to purchase the Option Shares, upon the
occurrence at any time prior to the Option Closing Date of any of the events
described in subparagraph (b) above or as provided in Sections 6 and 9 of this
Agreement.
12. SUCCESSORS. This Agreement has been and is made solely for the benefit of
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the Underwriters , the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons
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referred to herein, and no other person will have any right or obligation
hereunder. The term "successors" shall not include any purchaser of the Shares
merely because of such purchase.
13. MISCELLANEOUS. The reimbursement, indemnification and contribution
-------------
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers and (c) delivery of and payment for the
Shares under this Agreement.
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.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland.
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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
RESPIRONICS, INC.
By
--------------------------------------------
President
Selling Shareholders listed on Schedule II
By
--------------------------------------------
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. XXXXX & SONS INCORPORATED
XXXXX & COMPANY
XXXXXX/XXXXXX INCORPORATED
As Representatives of the several
Underwriters listed on Schedule I
By: Alex. Xxxxx & Sons Incorporated
By:
---------------------------
Authorized Officer
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SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Alex. Xxxxx & Sons Incorporated
Xxxxx & Company
Xxxxxx/Xxxxxx Incorporated
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Total
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SCHEDULE II
Schedule of Selling Shareholders
Number of Firm Shares
Selling Shareholder to be Sold
------------------- --------------------------
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Total
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SCHEDULE III
Schedule of Option Shares
Maximum Number Percentage of
of Option Shares Total Number of
Name of Seller to be Sold Option Shares
-------------- -------------------- -----------------
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Total 100%
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