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EXHIBIT 1.1
2,900,000 Shares
POLYMEDICA CORPORATION
Common Stock
UNDERWRITING AGREEMENT
, 1999
CIBC World Markets Corp.
First Union Capital Markets Corp.
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several Underwriters named on Schedule I attached hereto.
Ladies and Gentlemen:
PolyMedica Corporation, a Delaware corporation (the "Company")
and the stockholders of the Company named in Schedule II to this Agreement (the
"Selling Stockholders"), propose, subject to the terms and conditions contained
herein, to sell to you and the other underwriters named on Schedule I to this
Agreement (the "Underwriters"), for whom you are acting as Representatives (the
"Representatives"), an aggregate of 2,900,000 shares (the "Firm Shares") of the
Company's Common Stock, $0.01 par value (the "Common Stock"). Of the 2,900,000
Firm Shares, 2,250,000 are to be issued and sold by the Company, _______ are to
be sold by the Selling Stockholders listed under the heading "Institutional
Selling Stockholders" on Schedule II to this Agreement (the "Institutional
Selling Stockholders") and _______ are to be sold by the Selling Stockholders
listed under the heading "Non-Institutional Selling Stockholders" on Schedule II
to this Agreement (the "Non-Institutional Selling Stockholders"). The respective
amounts of the Firm Shares to be purchased by each of the several Underwriters
are set forth opposite their names on Schedule I hereto. In addition, the
Company and the Non-Institutional Selling Stockholders propose to grant to the
Underwriters an option to purchase up to an additional 435,000 shares (the
"Option Shares") of Common Stock from them for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. Of the 435,000
Option Shares, _______ are to be issued and sold by the Company and ______ are
to be sold by the Non-Institutional Selling Stockholders. The Firm Shares and
the Option Shares are together called the "Shares."
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1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a price of $_____ per share
(the "Initial Price"), the number of Firm Shares set forth opposite the
name of such Underwriter under the column "Number of Firm Shares to be
Purchased from the Company" on Schedule I to this Agreement, subject to
adjustment in accordance with Section 11 hereof. Each of the Selling
Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Selling Stockholders, at the Initial
Price, the number of Firm Shares set forth opposite the name of such
Underwriter under the column "Number of Firm Shares to be Purchased
from the Selling Stockholders" on Schedule I to this Agreement, subject
to adjustment in accordance with Section 11 hereof.
(b) The Company and each of the Non-Institutional Selling
Stockholders, as and to the extent indicated in Schedule II hereto,
grants to the several Underwriters an option to purchase, severally and
not jointly, all or any part of the Option Shares at the Initial Price.
The number of Option Shares to be purchased by each Underwriter shall
be the same percentage (adjusted by the Representatives to eliminate
fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. The
Option Shares to be sold shall be allocated among the Company and the
Non-Institutional Selling Stockholders in proportion to the maximum
number of Option Shares to be sold by the Company and each
Non-Institutional Selling Stockholder as set forth in Schedule II
hereto. Such option may be exercised only to cover over-allotments in
the sales of the Firm Shares by the Underwriters and may be exercised
in whole or in part at any time on or before 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date (as
defined below), and from time to time thereafter within 30 days after
the date of this Agreement, in each case upon written, facsimile or
telegraphic notice, or verbal or telephonic notice confirmed by
written, facsimile or telegraphic notice, by the Representatives to the
Company no later than 12:00 noon, New York City time, on the business
day before the Firm Shares Closing Date or at least two business days
before the Option Shares Closing Date (as defined below), as the case
may be, setting forth the number of Option Shares to be purchased and
the time and date (if other than the Firm Shares Closing Date) of such
purchase.
2. Delivery and Payment. Delivery by the Company and the
Selling Stockholders of the Firm Shares to the Representatives for the
respective accounts of the Underwriters, and payment of the purchase price by
certified or official bank check or checks payable in New York Clearing House
(same day) funds drawn to the order of the Company for the shares purchased from
the Company and to the Selling Stockholders for the shares purchased from the
Selling Stockholders, against delivery of the respective certificates therefor
to the Representatives, shall take place at the offices of CIBC World Markets
Corp., One World Financial
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Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the
third business day following the date of this Agreement, or at such time on such
other date, not later than 10 business days after the date of this Agreement, as
shall be agreed upon by the Company and the Representatives (such time and date
of delivery and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is
exercised in whole or in part on one or more occasions, delivery by the Company
and the Non-Institutional Selling Stockholders of the Option Shares to the
Representatives for the respective accounts of the Underwriters and payment of
the purchase price thereof in immediately available funds by wire transfer or by
certified or official bank check or checks payable in New York Clearing House
(same day) funds to the Company for the shares purchased from the Company and to
the Non-Institutional Selling Stockholders for the shares purchased from the
Non-Institutional Selling Stockholders, against delivery of the respective
certificates therefor to the Representatives, shall take place at the offices of
CIBC World Markets Corp. specified above at the time and on the date (which may
be the same date as, but in no event shall be earlier than, the Firm Shares
Closing Date) specified in the notice referred to in Section 1(b) (such time and
date of delivery and payment are called the "Option Shares Closing Date"). The
Firm Shares Closing Date and the Option Shares Closing Date are called,
individually, a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such
names and shall be in such denominations as the Representatives shall request at
least two full business days before the Firm Shares Closing Date or, in the case
of Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
3. Registration Statement and Prospectus; Public Offering. The
Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a Registration Statement (as hereinafter
defined) on Form S-3 (No. 333-_____), including a preliminary prospectus
relating to the Shares, and such amendments thereof as may have been required to
the date of this Agreement. Copies of such Registration Statement (including all
amendments thereof) and of the related Preliminary Prospectus (as hereinafter
defined) have heretofore been delivered by the Company to you. The term
"Preliminary Prospectus" means any preliminary prospectus (as described in Rule
430 of the Rules) included at any time as a part of the Registration Statement
or filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules. The term "Registration
Statement" as used in this Agreement means the initial registration statement
(including all exhibits, financial schedules and information deemed to be a part
of the Registration Statement through incorporation by reference or otherwise),
as amended at the time and on the date it becomes effective (the "Effective
Date") including the information (if any) deemed to be part thereof at the time
of effectiveness pursuant to Rule 430A of the Rules, and as thereafter amended
by post-effective amendments. If the Company has filed an abbreviated
registration statement to register additional Shares pursuant to Rule 462(b)
under the Rules (the "462(b) Registration Statement") then any reference herein
to the Registration Statement shall also be
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deemed to include such 462(b) Registration Statement. The term "Prospectus" as
used in this Agreement means the prospectus in the form included in the
Registration Statement at the time of effectiveness or, if Rule 430A of the
Rules is relied on, the term Prospectus shall also include the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules.
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Representatives deem advisable. The Company and the
Selling Stockholders hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter and to each Institutional Selling
Stockholder as follows:
(a) On the Effective Date, the Registration Statement
complied, and on the date of the Prospectus, the date any
post-effective amendment to the Registration Statement becomes
effective, the date any supplement or amendment to the Prospectus is
filed with the Commission and each Closing Date, the Registration
Statement and the Prospectus (and any amendment thereof or supplement
thereto) will comply, in all material respects, with the applicable
provisions of the Securities Act and the Rules and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the Commission thereunder. The Registration
Statement did not, as of the Effective Date, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and on the Effective Date and the
other dates referred to above neither the Registration Statement nor
the Prospectus, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether
filed as part of the Registration Statement or any amendment thereto or
pursuant to Rule 424(a) of the Rules) and when any amendment thereof or
supplement thereto was first filed with the Commission, such
preliminary prospectus as amended or supplemented complied in all
material respects with the applicable provisions of the Securities Act
and the Rules and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
Notwithstanding the foregoing, none of the representations and
warranties in this paragraph 4(a) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus made in
reliance upon, and in conformity with, information herein or otherwise
furnished in writing by the Representatives on behalf of the several
Underwriters for use in the Registration Statement or the Prospectus.
With respect to the preceding sentence, the Company acknowledges that
the only information furnished in writing by the Representatives on
behalf of the several Underwriters for use in the Registration
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Statement or the Prospectus is the paragraph with respect to
stabilization on the inside front cover page of the Prospectus and the
statements contained under the caption "Underwriting" in the
Prospectus.
(b) The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or preventing
the use of the Prospectus has been issued and no proceedings for that
purpose have been instituted or are threatened under the Securities
Act. Any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) of the Rules has been or will be made in the
manner and within the time period required by such Rule 424(b).
(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, at the time they were filed
with the Commission, complied in all material respects with the
requirements of the Exchange Act and, when read together and with the
other information in the Registration Statement and the Prospectus, do
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except to the extent that any
statements in such documents have been superseded by statements
specifically set forth in the Registration Statement and the
Prospectus.
(d) The financial statements of the Company (including all
notes and schedules thereto) included or incorporated by reference in
the Registration Statement and Prospectus present fairly the financial
position, the results of operations, the statements of cash flows and
the statements of stockholders' equity and the other information
purported to be shown therein of the Company at the respective dates
and for the respective periods to which they apply; and such financial
statements and related schedules and notes have been prepared in
conformity with generally accepted accounting principles, consistently
applied throughout the periods involved, and all adjustments necessary
for a fair presentation of the results for such periods have been made.
The summary and selected financial data included in the Prospectus
present fairly the information shown therein as at the respective dates
and for the respective periods specified and the summary and selected
financial data have been presented on a basis consistent with the
consolidated financial statements so set forth in the Prospectus and
other financial information.
(e) PricewaterhouseCoopers LLP, whose reports are filed with
the Commission as a part of the Registration Statement, are and, during
the periods covered by their reports, were independent public
accountants as required by the Securities Act and the Rules.
(f) Exhibit 21.1 to the Registration Statement contains a
true, correct and complete list of all of the subsidiaries of the
Company controlled directly or indirectly by the Company (collectively,
"Subsidiaries"). The Company and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under
the laws of
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its jurisdiction of its incorporation. The Company and each of its
Subsidiaries is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of
the business conducted by it or location of the assets or properties
owned, leased or licensed by it requires such qualification, except for
such jurisdictions where the failure to so qualify would not have a
material adverse effect on the assets or properties, business, results
of operations or financial condition of the Company (a "Material
Adverse Effect"). The Company and each of its Subsidiaries have all
requisite corporate power and authority, and all necessary
authorizations, approvals, consents, orders, licenses, certificates and
permits of and from all governmental or regulatory bodies or any other
person or entity (collectively, the "Permits"), to own, lease and
license its assets and properties and conduct its business, all of
which are valid and in full force and effect, as described in the
Registration Statement and the Prospectus, except where the lack of
such Permits, individually or in the aggregate, would not have a
Material Adverse Effect. The Company and each of its Subsidiaries have
fulfilled and performed in all material respects all of their material
obligations with respect to such Permits and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Company or such Subsidiaries thereunder. Except as may be
required under the Securities Act and state and foreign Blue Sky laws,
no other Permits are required to enter into, deliver and perform this
Agreement and to issue and sell the Shares.
(g) The Company and each of its Subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and
proprietary knowledge (collectively, "Intangibles") described in the
Prospectus as being owned by it necessary for the conduct of its
business. Neither the Company nor any of its Subsidiaries has received
any notice of, or is not aware of, any infringement of or conflict with
asserted rights of others with respect to any Intangibles.
(h) The Company and each of its Subsidiaries has good and
marketable title in fee simple to all items of real property and good
and marketable title to all personal property described in the
Prospectus as being owned by it. Any real property and buildings
described in the Prospectus as being held under lease by the Company
and each of its Subsidiaries is held by it under valid, existing and
enforceable leases, free and clear of all liens, encumbrances, claims,
security interests and defects, except such as are described, or
incorporated by reference, in the Registration Statement and the
Prospectus or would not have a Material Adverse Effect.
(i) There are no litigation or governmental proceedings to
which the Company or its Subsidiaries are subject or which are pending
or, to the knowledge of the Company, threatened, against the Company or
any of its Subsidiaries, which, individually or in the aggregate, might
have a Material Adverse Effect, affect the consummation of this
Agreement or which are required to be disclosed in the Registration
Statement and the Prospectus that are not so disclosed.
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(j) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (a) there has not been any material adverse change
with regard to the assets or properties, business, results of
operations or financial condition of the Company; (b) neither the
Company nor its Subsidiaries has sustained any loss or interference
with its assets, businesses or properties (whether owned or leased)
from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree which would
have a Material Adverse Effect; and (c) since the date of the latest
balance sheet included in the Registration Statement and the
Prospectus, except as reflected therein, neither the Company nor its
Subsidiaries has (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of business,
(ii) entered into any transaction not in the ordinary course of
business or (iii) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire
any shares of its stock.
(k) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required by the Securities Act or
Rules. Each description of a contract, document or other agreement in
the Registration Statement and the Prospectus accurately reflects in
all respects the terms of the underlying document, contract or
agreement. Each agreement described in the Registration Statement and
Prospectus or listed in the Exhibits to the Registration Statement or
incorporated by reference is in full force and effect and is valid and
enforceable by and against the Company or any of its the Subsidiaries,
as the case may be, in accordance with its terms. Neither the Company
nor any Subsidiary, if any Subsidiary is a party, nor to the Company's
knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any
such agreement, and no event has occurred which with notice or lapse of
time or both would constitute such a default, in any such case which
default or event, individually or in the aggregate, would have a
Material Adverse Effect. 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, by the Company or any of its Subsidiaries, if any of its
Subsidiaries is a party thereto, of any other agreement or instrument
to which the Company or any of such Subsidiaries is a party or by which
the Company, any of its Subsidiaries or their properties or businesses
may be bound or affected which default or event, individually or in the
aggregate, would have a Material Adverse Effect.
(l) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its charter or by-laws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation, individually or
in the aggregate, would have a Material Adverse Effect.
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(m) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, or require any consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or
any of its Subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which either the
Company or any of its Subsidiaries or any of their properties or
businesses is bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or
any of its Subsidiaries or violate any provision of the charter or
by-laws of the Company or any of its Subsidiaries, except for such
consents or waivers which have already been obtained and are in full
force and effect and except where such event would not have a Material
Adverse Effect.
(n) The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the
issued and outstanding shares of Common Stock have been duly and
validly issued and are fully paid and nonassessable. There are no
statutory preemptive or other similar rights to subscribe for or to
purchase or acquire any shares of Common Stock of the Company or its
Subsidiaries or any such rights pursuant to its Certificate of
Incorporation or by-laws or any agreement or instrument to or by which
the Company or any of its Subsidiaries is a party or bound. The Shares,
when issued and sold pursuant to this Agreement, will be duly and
validly issued, fully paid and nonassessable and none of them will be
issued in violation of any preemptive or other similar right. Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of,
and there is no commitment, plan or arrangement to issue, any share of
stock of the Company or its Subsidiaries or any security convertible
into, or exercisable or exchangeable for, such stock. The Common Stock
and the Shares conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the
Prospectus. All outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued, and are fully paid and
nonassessable and are owned directly by the Company or by another
wholly-owned subsidiary of the Company free and clear of any security
interests, liens, encumbrances, equities or claims, other than those
described in the Prospectus, except that the Company owns 89% of the
outstanding capital stock of Liberty Home Pharmacy Corp. and 89% of the
outstanding capital stock of Liberty Direct Services Corp.
(o) Except for the Institutional Selling Stockholders and
certain stockholders of the Company having rights under warrants
originally issued to Xxxxxxxx & Co. in 1995, no holder of any security
of the Company has the right to have any security owned by such holder
included in the Registration Statement or to demand registration of any
security owned by such holder during the period ending 90 days after
the date of this
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Agreement (the "Lock-Up Period"). Each stockholder of the Company
(other than the Institutional Selling Stockholders) known to the
Company who, as of the expiration date of the Lock-Up Period, will own
beneficially 25,000 shares or more of Common Stock and each director
and executive officer of the Company, has delivered to the
Representatives his enforceable written lock-up agreement in the form
attached to this Agreement ("Lock-Up Agreement").
(p) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
by the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes and will
constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(q) Neither the Company nor any of its Subsidiaries is
involved in any labor dispute nor, to the knowledge of the Company, is
any such dispute threatened, which dispute would have a Material
Adverse Effect. The Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers or
contractors which would have a Material Adverse Effect. The Company is
not aware of any threatened or pending litigation between the Company
or its Subsidiaries and any of its executive officers which, if
adversely determined, could have a Material Adverse Effect and has no
reason to believe that such officers will not remain in the employment
of the Company.
(r) No transaction has occurred between or among the Company
and any of its officers or directors or five percent shareholders or
any affiliate or affiliates of any such officer or director or five
percent shareholders that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(s) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock to facilitate the sale or resale of
any of the Shares.
(t) Each of the Company and its Subsidiaries has filed all
Federal, state, local and foreign tax returns which are required to be
filed through the date hereof, or has received extensions thereof, and
has paid all taxes shown on such returns and all assessments received
by it to the extent that the same are material and have become due.
There are no tax audits or investigations pending, which if adversely
determined would have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company and
any of its Subsidiaries.
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(u) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation
("Nasdaq") National Market System, subject to official Notice of
Issuance. A registration statement has been filed on Form 8-A pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which registration statement complies in all material
respects with the Exchange Act.
(v) The Company has complied with all of the requirements and
filed the required forms as specified in Florida Statutes Section
517.075.
(w) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. The Company and each
of its Subsidiaries 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 accordance with generally
accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(x) Each of the Company and its Subsidiaries is insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which
they are engaged or propose to engage after giving effect to the
transactions described in the Prospectus; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
Subsidiaries or the Company's or its Subsidiaries' respective
businesses, assets, employees, officers and directors against such
losses and risks are in full force and effect; the Company and each of
its Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and neither the Company nor any
Subsidiary of the Company has any reason to believe that it will not be
able to renew its existing insurance coverage against such losses and
risks 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 have a Material Adverse Effect. Neither the Company
nor any Subsidiary has been denied any insurance coverage against such
losses and risks which it has sought or for which it has applied.
(y) Each approval, consent, order, authorization, designation,
declaration or filing of, 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 required to be obtained or performed
by the Company (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 the state securities or Blue Sky laws) has been obtained or made
and is in full force and effect.
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(z) There are no affiliations with the NASD among the
Company's officers, directors or, to the best of the knowledge of the
Company, any five percent or greater stockholder of the Company, except
as set forth in the Registration Statement or otherwise disclosed in
writing to the Representatives.
(aa) (i) Each of the Company and its Subsidiaries is in
compliance in all material respects with all rules, laws and
regulations relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment
("Environmental Law") which are applicable to its business; (ii)
neither the Company nor its Subsidiaries has received any notice from
any governmental authority or third party of an asserted claim under
Environmental Laws; (iii) each of the Company and its Subsidiaries has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and is in
compliance with all terms and conditions of any such permit, license or
approval; (iv) to the Company's knowledge, no facts currently exist
that will require the Company or its Subsidiaries to make future
material capital expenditures to comply with Environmental Laws; and
(v) no property which is or has been owned, leased or occupied by the
Company or its Subsidiaries has been designated as a Superfund site
pursuant to the Comprehensive Environmental Response, Compensation of
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.)
("CERCLA") or otherwise designated as a contaminated site under
applicable state or local law. Neither the Company nor any of its
Subsidiaries has been named as a "potentially responsible party" under
CERCLA.
(bb) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which the Company identifies and evaluates associated costs
and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect.
(cc) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds thereof
as described in the Prospectus, will not be an "investment company"
within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(dd) The Company, its Subsidiaries or any other person
associated with or acting on behalf of the Company or its Subsidiaries
including, without limitation, any director, officer, agent or employee
of the Company or its Subsidiaries has not, directly or indirectly,
while acting on behalf of the Company or its Subsidiaries (i) used any
corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or
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campaigns from corporate funds; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
other unlawful payment.
(ee) The Company has reviewed its operations and that of its
Subsidiaries to evaluate the extent to which the business or operations
of the Company or any of its subsidiaries will be affected by the Year
2000 Problem (that is, any significant risk that computer hardware or
software applications used by the Company and its subsidiaries will
not, in the case of dates or time periods occurring after December 31,
1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000); as a result of such
review, (i) the Company has no reason to believe, and does not believe,
that (A) there are any issues related to the Company's preparedness to
address the Year 2000 Problem that are of a character required to be
described or referred to in the Registration Statement or Prospectus
which have not been accurately described in the Registration Statement
or Prospectus and (B) the Year 2000 Problem will have a Material
Adverse Effect, or result in any material loss or interference with the
business or operations of the Company and its subsidiaries, taken as a
whole; and (ii) the Company reasonably believes, after due inquiry,
that the suppliers, vendors, customers or other material third parties
used or served by the Company and such subsidiaries are addressing or
will address the Year 2000 Problem in a timely manner, except to the
extent that a failure to address the Year 2000 by a supplier, vendor,
customer or material third party would not have a Material Adverse
Effect.
5. Representations and Warranties of the Non-Institutional
Selling Stockholders. Each of the Non-Institutional Selling
Stockholders, severally and not jointly, hereby represents and warrants
to each Underwriter as follows:
(a) Such Non-Institutional Selling Stockholder has caused
certificates for the number of Shares to be sold by such
Non-Institutional Selling Stockholder hereunder to be delivered to
_______________ (the "Custodian"), endorsed in blank or with blank
stock powers duly executed, with a signature appropriately guaranteed,
such certificates to be held in custody by the Custodian for delivery,
pursuant to the provisions of this Agreement and an agreement dated
____________, 1999 among the Custodian and such Non-Institutional
Selling Stockholder (the "Custody Agreement").
(b) Such Non-Institutional Selling Stockholder has granted an
irrevocable power of attorney (the "Power of Attorney") to the person
named therein, on behalf of such Non-Institutional Selling Stockholder,
to execute and deliver this Agreement and any other document necessary
or desirable in connection with the transactions contemplated hereby
and to deliver the shares to be sold by such Non-Institutional Selling
Stockholder pursuant hereto.
(c) This Agreement, the Custody Agreement, the Power of
Attorney and the Lock-Up Agreement have each been duly authorized,
executed and delivered by or on behalf of such Non-Institutional
Selling Stockholder and, assuming due authorization, execution and
delivery by the other parties hereto, constitutes the valid and legally
binding agreement of such Non-Institutional Selling Stockholder,
enforceable against
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such Non-Institutional Selling Stockholder in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws
now or hereafter in effect relating to creditors' rights generally, and
subject to general principles of equity.
(d) The execution and delivery by such Non-Institutional
Selling Stockholder of this Agreement and the performance by such
Non-Institutional Selling Stockholder of its obligations under this
Agreement (i) will not contravene any provision of applicable law,
statute, regulation or filing or any agreement or other instrument
binding upon such Non-Institutional Selling Stockholder or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over such Non-Institutional Selling Stockholder,
(ii) does not require any consent, approval, authorization or order of
or registration or filing with any court or governmental agency or body
having jurisdiction over it, except such as may be required by the Blue
Sky laws of the various states in connection with the offer and sale of
the Shares which have been or will be effected in accordance with this
Agreement, (iii) does not and will not violate any statute, law,
regulation or filing or judgment, injunction, order or decree
applicable to such Non-Institutional Selling Stockholder or (iv) will
not result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of such Non-Institutional
Selling Stockholder pursuant to the terms of any agreement or
instrument to which such Non-Institutional Selling Stockholder is a
party or by which such Non-Institutional Selling Stockholder may be
bound or to which any of the property or assets of such
Non-Institutional Selling Stockholder is subject.
(e) Such Non-Institutional Selling Stockholder has, and on the
Firm Shares Closing Date will have, valid and unencumbered title to the
Shares to be sold by such Non-Institutional Selling Stockholder free
and clear of any lien, claim, security interest or other encumbrance,
including, without limitation, any restriction on transfer, except as
otherwise described in the Registration Statement and Prospectus.
(f) Such Non-Institutional Selling Stockholder has, and on the
Firm Shares Closing Date will have, full legal right, power and
authorization, and any approval required by law, to sell, assign,
transfer and deliver the Shares to be sold by such Non-Institutional
Selling Stockholder in the manner provided by this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by
such Non-Institutional Selling Stockholder pursuant to this Agreement,
the several Underwriters will receive valid and unencumbered title to
such Shares free and clear of any lien, claim, security interest or
other encumbrance, provided, such Underwriters are without notice of
any "adverse claim" (as such term is defined in Section 8-102(a)(1) of
the New York Uniform Commercial Code (the "NYUCC")) and are otherwise
bona fide purchasers for purposes of the NYUCC.
(h) All information relating to such Non-Institutional Selling
Stockholder furnished in writing by such Non-Institutional Selling
Stockholder expressly for use in the Registration Statement and
Prospectus is, and on each Closing Date will be, true, correct, and
complete, and does not, and on each Closing Date will not, contain any
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untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading.
(i) Such Non-Institutional Selling Stockholder has reviewed
the Registration Statement and Prospectus and, although such
Non-Institutional Selling Stockholder has not independently verified
the accuracy or completeness of all the information contained therein,
nothing has come to the attention of such Non-Institutional Selling
Stockholder that would lead such Non-Institutional Selling Stockholder
to believe that (i) on the Effective Date, the Registration Statement
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein in order to make the
statements made therein not misleading and (ii) on the Effective Date
the Prospectus contained and, on each Closing Date contains, no untrue
statement of a material fact or omitted or omits 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.
(j) The sale of Shares by such Non-Institutional Selling
Stockholder pursuant to this Agreement is not prompted by such
Non-Institutional Selling Stockholder's knowledge of any material
information concerning the Company or its Subsidiaries which is not set
forth in the Prospectus.
(k) Such Non-Institutional Selling Stockholder has not taken
and will not take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(l) Such Non-Institutional Selling Stockholder has no actual
knowledge that any representation or warranty of the Company set forth
in Section 4 above is untrue or inaccurate in any material respect.
(m) The representations and warranties of such
Non-Institutional Selling Stockholder in the Custody Agreement are and
on each Closing Date will be, true and correct.
6. Representations and Warranties of the Institutional Selling
Stockholders. Each of the Institutional Selling Stockholders, severally
and not jointly, hereby represents and warrants to each Underwriter as
follows:
(a) Such Institutional Selling Stockholder has caused
certificates for the number of Shares to be sold by such Institutional
Selling Stockholder hereunder to be delivered to _______________ (the
"Custodian"), endorsed in blank or with blank stock powers duly
executed, with a signature appropriately guaranteed, such certificates
to be held in custody by the Custodian for delivery, pursuant to the
provisions of this Agreement and an agreement dated ____________, 1999
among the Custodian and such Institutional Selling Stockholder (the
"Custody Agreement").
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(b) Such Institutional Selling Stockholder has granted an
irrevocable power of attorney (the "Power of Attorney") to the person
named therein, on behalf of such Institutional Selling Stockholder, to
execute and deliver this Agreement and any other document necessary or
desirable in connection with the transactions contemplated hereby and
to deliver the shares to be sold by such Institutional Selling
Stockholder pursuant hereto.
(c) This Agreement, the Custody Agreement and the Power of
Attorney have each been duly authorized, executed and delivered by or
on behalf of such Institutional Selling Stockholder and, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes the valid and legally binding agreement of such
Institutional Selling Stockholder, enforceable against such
Institutional Selling Stockholder in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws now or hereafter
in effect relating to creditors' rights generally, including without
limitation, the rights and priorities of creditors provided in Chapter
175, Sections 180A through 180L of the Mass. Gen. Laws in any
rehabilitation or liquidation proceeding begun in the Commonwealth of
Massachusetts against an insolvent Massachusetts insurer, and subject
to general principles of equity.
(d) The execution and delivery by such Institutional Selling
Stockholder of this Agreement and the performance by such Institutional
Selling Stockholder of its obligations under this Agreement (i) will
not contravene any provision of applicable law, statute, regulation or
filing or any agreement or other instrument binding upon such
Institutional Selling Stockholder or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over such
Institutional Selling Stockholder, (ii) does not require any consent,
approval, authorization or order of or registration or filing with any
court or governmental agency or body having jurisdiction over it,
except such as may be required by the Blue Sky laws of the various
states in connection with the offer and sale of the Shares which have
been or will be effected in accordance with this Agreement, (iii) does
not and will not violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to such Institutional
Selling Stockholder or (iv) will not result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of such Institutional Selling Stockholder pursuant to the terms
of any agreement or instrument to which such Institutional Selling
Stockholder is a party or by which such Institutional Selling
Stockholder may be bound or to which any of the property or assets of
such Institutional Selling Stockholder is subject.
(e) Such Institutional Selling Stockholder has, and on the
Firm Shares Closing Date will have, valid and unencumbered title to the
Shares to be sold by such Institutional Selling Stockholder free and
clear of any lien, claim, security interest or other encumbrance,
including, without limitation, any restriction on transfer, except as
otherwise described in the Registration Statement and Prospectus.
(f) Such Institutional Selling Stockholder has, and on the
Firm Shares Closing Date will have, full legal right, power and
authorization, and any approval required by
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law, to sell, assign, transfer and deliver the Shares to be sold by
such Institutional Selling Stockholder in the manner provided by this
Agreement.
(g) Upon delivery of and payment for the Shares to be sold by
such Institutional Selling Stockholder pursuant to this Agreement, the
several Underwriters will receive valid and unencumbered title to such
Shares free and clear of any lien, claim, security interest or other
encumbrance, provided, such Underwriters are without notice of any
"adverse claim" (as such term is defined in the NYUCC) and are
otherwise bona fide purchasers for purposes of the NYUCC.
(h) All information relating to such Institutional Selling
Stockholder furnished in writing by such Institutional Selling
Stockholder expressly for use in the Registration Statement and
Prospectus is, and on each Closing Date will be, true, correct, and
complete, and does not, and on each Closing Date will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading.
(i) Such Institutional Selling Stockholder has not taken and
will not take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares.
(j) The representations and warranties of such Institutional
Selling Stockholder in the Custody Agreement are and on each Closing
Date will be, true and correct.
7. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters under this Agreement are several and not joint.
The respective obligations of the Underwriters to purchase the Shares are
subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 8(a) of this Agreement.
(b) No order preventing or suspending the use of any
preliminary prospectus or the Prospectus shall have been or shall be in
effect and no order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Commission and the
Representatives.
(c) The representations and warranties of the Company and the
Selling Stockholder contained in this Agreement and in the certificates
delivered pursuant to Section 7(d) shall be true and correct when made
and on and as of each Closing Date as if made on such date. The Company
and the Selling Stockholder shall have performed all
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covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by them at or
before such Closing Date.
(d) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives and dated such
Closing Date, of the chief executive or chief operating officer and the
chief financial officer or chief accounting officer of the Company to
the effect that (i) the signers of such certificate have carefully
examined the Registration Statement, the Prospectus and this Agreement
and that the representations and warranties of the Company in this
Agreement are true and correct on and as of such Closing Date with the
same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by it
at or prior to such Closing Date, and (ii) no stop order suspending the
effectiveness of the Registration Statement has been issued and to the
best of their knowledge, no proceedings for that purpose have been
instituted or are pending under the Securities Act.
(e) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives and dated such
Closing Date, from each of the Non-Institutional Selling Stockholders,
to the effect that such Non-Institutional Selling Stockholder has
carefully examined the Registration Statement, the Prospectus and this
Agreement and that the representations and warranties of such
Non-Institutional Selling Stockholder in this Agreement are true and
correct on and as of such Closing Date with the same effect as if made
on such Closing Date and such Non-Institutional Selling Stockholder has
performed all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by
him at or prior to such Closing Date.
(f) The Representatives shall have received on the Firm Shares
Closing Date a certificate, addressed to the Representatives and dated
such Closing Date, from each of Institutional Selling Stockholders, to
the effect that such Institutional Selling Stockholder has carefully
examined the information concerning such Institutional Selling
Stockholder contained in the Registration Statement, the Prospectus and
this Agreement and that the representations and warranties of such
Institutional Selling Stockholder in this Agreement are true and
correct on and as of such Closing Date with the same effect as if made
on such Closing Date and such Institutional Selling Stockholder has
performed all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by it
at or prior to such Closing Date.
(g) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from
PricewaterhouseCoopers LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance reasonably satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of
the Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and
stating in effect that:
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(i) in their opinion the audited financial statements included
or incorporated by reference in the Registration Statement and the
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the Rules;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the headings "Summary
Consolidated Financial Data" and "Selected Consolidated Financial
Data," carrying out certain procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments
set forth in such letter, a reading of the minutes of the meetings of
the stockholders and directors of the Company, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company as to transactions and events
subsequent to the date of the latest audited financial statements,
except as disclosed in the Registration Statement and the Prospectus,
nothing came to their attention which caused them to believe that:
(A) the amounts in "Summary Consolidated Financial
Information," and "Selected Consolidated Financial Data"
included in the Registration Statement and the Prospectus do
not agree with the corresponding amounts in the audited and
unaudited financial statements from which such amounts were
derived; or
(B) with respect to the Company, there were, at a
specified date not more than five business days prior to the
date of the letter, any increases in the current liabilities
and long-term liabilities of the Company or any decreases in
net income or in working capital or the stockholders' equity
in the Company, as compared with the amounts shown on the
Company's unaudited balance sheet as of June 30, 1999 and on
the Company's unaudited statement of operations for the three
months ended June 3, 1999 included in the Registration
Statement;
(iii) they have performed certain other procedures as may be
permitted under Generally Acceptable Auditing Standards as a result of
which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company) set forth in the Registration
Statement and the Prospectus and reasonably specified by the
Representatives agrees with the accounting records of the Company; and
(iv) based upon the procedures set forth in clauses (ii) and
(iii) above and a reading of the amounts included in the Registration
Statement under the headings "Summary Consolidated Financial Data" and
"Selected Consolidated Financial Data" included in the Registration
Statement and Prospectus and a reading of the financial statements from
which certain of such data were derived,
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nothing has come to their attention that gives them reason to believe
that the "Summary Consolidated Financial Data" and "Selected
Consolidated Financial Data" included in the Registration Statement and
Prospectus do not comply as to the form in all material respects with
the applicable accounting requirements of the Securities Act and the
Rules or that the information set forth therein is not fairly stated in
relation to the financial statements included in the Registration
Statement or Prospectus from which certain of such data were derived
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement and
Prospectus.
References to the Registration Statement and the Prospectus in
this paragraph (g) are to such documents as amended and supplemented at
the date of the letter.
(h) The Representatives shall have received on each Closing Date from
Xxxx and Xxxx LLP, counsel for the Company, an opinion, addressed to the
Representatives and dated such Closing Date and stating that the Institutional
Selling Stockholders may rely on such opinion, and stating in effect that:
(i) Each of the Company and its Subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of its incorporation. Each of the
Company and its Subsidiaries is duly qualified and in good standing as
a foreign corporation in each jurisdiction listed in a schedule to the
opinion.
(ii) Each of the Company and its Subsidiaries has all
requisite corporate power and authority to own, lease and license its
assets and properties and conduct its business as now being conducted
and as described in the Registration Statement and the Prospectus and,
with respect to the Company, to enter into, deliver and perform this
Agreement and to issue and sell the Shares other than those required
under the state and foreign Blue Sky laws.
(iii) The Company has authorized and issued capital stock as
set forth in the Registration Statement and the Prospectus under the
caption "Capitalization"; the certificates evidencing the Shares are in
due and proper legal form and have been duly authorized for issuance by
the Company; all of the outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued and are fully
paid and nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares when issued and sold
pursuant to this Agreement will be duly and validly issued,
outstanding, fully paid and nonassessable and none of them will have
been issued in violation of any preemptive or other similar right. To
such counsel's knowledge, except as disclosed in the Registration
Statement and the Prospectus, there are no preemptive or other rights
to subscribe for or to purchase or any restriction upon the voting or
transfer of any securities of the Company
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pursuant to the Company's Certificate of Incorporation or by-laws. To
such counsel's knowledge based upon a review by such counsel of the
minute books of the Company and the documents filed by the Company with
the Securities and Exchange Commission, except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of stock of the
Company or any security convertible into, exercisable for, or
exchangeable for stock of the Company. The Common Stock and the Shares
conform in all material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus. The issued and
outstanding 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 by the Company or by another
wholly owned subsidiary of the Company as set forth in a schedule to
the opinion and none of the documents filed as exhibits to the
Registration Statement or incorporated by reference into the
Registration Statement (including documents filed as exhibits to
document so incorporated by reference into the Registration Statement
creates any security interest, lien, encumbrance, equity or claim,
other than as described in the Registration Statement and the
Prospectus.
(iv) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares.
This Agreement has been duly and validly authorized, executed and
delivered by the Company.
(v) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of,
or constitute a default (or any event which with notice or lapse of
time, or both, would constitute a default) under, or require consent or
waiver under, or result in the execution or imposition of any lien,
charge, claim, security interest or encumbrance upon any properties or
assets of the Company or any of its Subsidiaries pursuant to the terms
of any agreement or instrument that is filed as an exhibit to the
Registration Statement or to any of the documents incorporated by
reference into the Registration Statement, or violate any provision of
the charter or by-laws of the Company or any of its Subsidiaries.
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(vi) No consent, approval, authorization or order of any court
or governmental agency or regulatory body is required for the
execution, delivery or performance of this Agreement by the Company or
the consummation of the transactions contemplated hereby or thereby,
except such as have been obtained under the Securities Act and such as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the several
Underwriters.
(vii) To such counsel's knowledge, there is no litigation or
governmental or other proceeding or investigation, before any court or
before or by any public body or board pending or threatened against, or
involving the assets, properties or businesses of, the Company which
would have a Material Adverse Effect.
(viii) The statements (A) incorporated by reference into the
Prospectus under the caption "Description of Capital Stock" and (B) in
the Registration Statement in Item 15, in each case insofar as such
statements constitute summaries of documents referred to therein or
matters of law, fairly present the information required with respect to
such documents and matters of law and fairly summarize in all material
respects the matters required to be disclosed therein. To such
counsel's knowledge, there are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described therein or filed as required.
(ix) The Registration Statement, all preliminary prospectuses
and the Prospectus and each amendment or supplement thereto (except for
the financial statements and schedules and other financial and
statistical data included therein, as to which such counsel expresses
no opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules.
(x) The Registration Statement has become effective under the
Securities Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Securities Act.
(xi) The Shares have been authorized for quotation on the
Nasdaq National Market.
(xii) The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
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To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the Commonwealth of Massachusetts, the General Corporation Law of the State of
Delaware and the Federal laws of the United States; provided that such counsel
shall state that, in their opinion, the Underwriters and they are justified in
relying on such other opinions. Copies of such certificates and other opinions
shall be furnished to the Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except as
specified in the foregoing opinion), on the basis of the foregoing, no facts
have come to the attention of such counsel which lead such counsel to believe
that the Registration Statement at the time it became effective (except with
respect to the financial statements and notes and schedules thereto and other
financial data, as to which such counsel need express no belief and after giving
effect to any changes incorporated pursuant to Section 430A under the Securities
Act) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as amended or supplemented
(except with respect to the financial statements, notes and schedules thereto
and other financial data, as to which such counsel need make no statement) on
the date thereof contained any untrue statement of a material fact or omitted 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.
(i) The Representatives shall have received on the Firm Shares
Closing Date from Xxxxxx, Hall & Xxxxxxx, counsel for the Institutional
Selling Stockholders, an opinion, addressed to the Representatives and
dated such Closing Date, and stating in effect that:
(i) This Agreement, the Custody Agreement and the
Power of Attorney each constitute the valid and binding
obligation of each Institutional Selling Stockholder. The
Custody Agreement and the Power of Attorney are enforceable
against such Institutional Selling Stockholder in accordance
with their respective terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws now or hereafter in
effect relating to creditors' rights generally, including
without limitation, the rights and priorities of creditors
provided in Chapter 175, Sections 180A through 180L of the
Mass. Gen. Laws in any rehabilitation or liquidation
proceeding begun in the Commonwealth of Massachusetts against
an insolvent Massachusetts insurer, and subject to general
principles of equity.
(ii) All of the rights of each Institutional Selling
Stockholder in the Shares to be sold by such Institutional
Selling Stockholder pursuant to this Agreement,
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have been transferred to the Underwriters who have severally purchased
such Shares pursuant to this Agreement, free and clear of adverse
claims, assuming for purposes of this opinion that the Underwriters
purchased the same in good faith without notice of any adverse claims.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of the Institutional Selling Stockholders and on
the opinions of other counsel satisfactory to the Representatives as to matters
which are governed by laws other than the laws of the Commonwealth of
Massachusetts, the General Corporation Law of the State of Delaware or the
Federal laws of the United States; provided that such counsel shall state that,
in their opinion, the Underwriters and they are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished to the Representatives and counsel for the Underwriters.
(j) The Representatives shall have received on the Firm Shares
Closing Date from internal legal counsel of Xxxx Xxxxxxx Mutual Life
Insurance Company, counsel for the Institutional Selling Stockholders,
an opinion, addressed to the Representatives and dated such Closing
Date, and stating in effect that:
(i) This Agreement has been duly and validly executed
and delivered by or on behalf of the Institutional Selling
Stockholders.
(ii) Each Institutional Selling Stockholder has full
legal right and authority to enter into this Agreement and to
sell, transfer and deliver in the manner provided in this
Agreement, the Shares to be sold by such Institutional Selling
Stockholder hereunder.
(iii) The transfer and sale by each Institutional
Selling Stockholder of the Shares to be sold by such
Institutional Selling Stockholder as contemplated by this
Agreement will not conflict with, result in a breach of, or
constitute a default under any agreement or instrument known
to such counsel to which such Institutional Selling
Stockholder is a party or by which such Institutional Selling
Stockholder or any of its properties may be bound, or any
franchise, license, permit, judgment, decree, order, statute,
rule or regulation.
(iv) No consent, approval, authorization, license,
certificate, permit or order of any court, governmental or
regulatory agency, authority or body or financial institution
is required in connection with the performance of this
Agreement by the Institutional Selling Stockholders or the
consummation of the transactions contemplated hereby,
including the delivery and sale of the Shares to be delivered
and sold by the Institutional Selling Stockholders, except
such as may be required under state securities or blue sky
laws in connection with the purchase and distribution of the
Shares by the several Underwriters.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of the Institutional Selling Stockholders and on
the opinions of other counsel satisfactory to the Representatives as to matters
which are governed by laws other than the laws of the
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Commonwealth of Massachusetts, the General Corporation Law of the State of
Delaware or the Federal laws of the United States; provided that such counsel
shall state that, in their opinion, the Underwriters and they are justified in
relying on such other opinions. Copies of such certificates and other opinions
shall be furnished to the Representatives and counsel for the Underwriters.
(k) The Representatives shall have received on the each
Closing Date from Xxxx and Xxxx LLP, counsel for the
Non-Institutional Selling Stockholders, an opinion, addressed to
the Representatives and dated such Closing Date, and stating in
effect that:
(i) This Agreement has been duly and validly
executed and delivered by or on behalf of the Non-Institutional
Selling Stockholders.
(ii) This Agreement, the Custody Agreement, the
Power of Attorney and the Lock-Up Agreement each constitute the
valid and binding obligation of each Non-Institutional Selling
Stockholder. The Custody Agreement, the Power of Attorney and the
Lock-up Agreement are enforceable against such Non-Institutional
Selling Stockholder in accordance with their respective terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar
laws now or hereafter in effect relating to creditors' rights
generally, and subject to general principles of equity; and each
Non-Institutional Selling Stockholder has full legal right and
authority to enter into this Agreement and to sell, transfer and
deliver in the manner provided in this Agreement, the Shares to be
sold by such Non-Institutional Selling Stockholder hereunder.
(iii) The transfer and sale by each
Non-Institutional Selling Stockholder of the Shares to be sold by
such Non-Institutional Selling Stockholder as contemplated by this
Agreement will not conflict with, result in a breach of, or
constitute a default under any agreement or instrument known to
such counsel to which such Non-Institutional Selling Stockholder is
a party or by which such Non-Institutional Selling Stockholder or
any of its properties may be bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation.
(iv) All of the rights of each Non-Institutional
Selling Stockholder in the Shares to be sold by such the
Non-Institutional Selling Stockholder pursuant to this Agreement,
have been transferred to the Underwriters who have severally
purchased such Shares pursuant to this Agreement, free and clear of
adverse claims, assuming for purposes of this opinion that the
Underwriters purchased the same in good faith without notice of any
adverse claims.
(v) No consent, approval, authorization, license,
certificate, permit or order of any court, governmental or
regulatory agency, authority or body or financial institution is
required in connection with the performance of this Agreement by
the Non-Institutional Selling Stockholders or the consummation of
the transactions contemplated hereby, including the delivery and
sale of the Shares to be delivered and sold by the
Non-Institutional Selling Stockholders, except such as may be
required under state securities or blue sky laws in connection with
the purchase and distribution of the Shares by the several
Underwriters.
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To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of the Non-Institutional Selling Stockholders
and on the opinions of other counsel satisfactory to the Representatives as to
matters which are governed by laws other than the laws of the Commonwealth of
Massachusetts, the General Corporation Law of the State of Delaware or the
Federal laws of the United States; provided that such counsel shall state that,
in their opinion, the Underwriters and they are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished to the Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed. While such counsel has not undertaken to independently verify and
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus
(except as specified in the foregoing opinion), on the basis of the foregoing,
no facts have come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective (except
with respect to the financial statements, notes and schedules thereto and other
financial data, as to which such counsel need express no belief and after giving
effect to any changes incorporated pursuant to Section 430A under the Securities
Act) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as amended or supplemented
(except with respect to the financial statements, notes and schedules thereto
and other financial data, as to which such counsel need make no statement) on
the date thereof and the date of such opinion contained any untrue statement of
a material fact or omitted 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.
(l) All proceedings taken in connection with the sale of
the Firm Shares and the Option Shares as herein contemplated shall
be reasonably satisfactory in form and substance to the
Representatives, and their counsel and the Underwriters shall have
received on each Closing Date from Xxxxx Xxxxxxx & Xxxxxxxxx LLP a
favorable opinion, addressed to the Representatives, with respect
to the Shares, the Registration Statement and the Prospectus, and
such other related matters, as the Representatives may reasonably
request, and the Company shall have furnished to Xxxxx Xxxxxxx &
Xxxxxxxxx LLP such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(m) If the Shares have been qualified for sale in Florida,
the Representatives shall have received on each Closing Date
certificates, addressed to the Representatives, and dated such
Closing Date, of an executive officer of the Company, to the effect
that the signer of such certificate has reviewed and understands
the provisions of Section 517.075 of the Florida Statutes, and
represents that the Company has complied, and at all times will
comply, with all provisions of Section 517.075 and further, that as
of such Closing Date, neither the Company nor any of its affiliates
does business with the government of Cuba or with any person or
affiliate located in Cuba.
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(n) The Representatives shall have received copies of the
Lock-up Agreements executed by each entity or person described in
Section 4(o).
(o) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to the Representatives such
further certificates or documents as the Representatives shall have
reasonably requested.
8. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) 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. The
Company shall prepare the Prospectus in a form approved by
the Representatives and file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day
following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the
Representatives in writing (A) when any amendment to the
Registration Statement shall have become effective, (B) of
any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any
additional information, (C) of the prevention or
suspension of the use of any preliminary prospectus or the
Prospectus or of the issuance by the Commission of any
stop order suspending the effectiveness of the
Registration Statement or the institution or threatening
of any proceeding for that purpose and (D) of the receipt
by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company shall not file
any amendment of the Registration Statement or supplement
to the Prospectus unless the Company has furnished the
Representatives a copy for its review prior to filing and
shall not file any such proposed amendment or supplement
to which the Representatives reasonably object. The
Company shall use its best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating
to the Shares is required to be delivered under the
Securities Act and the Rules, 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 any material fact necessary to make the
statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply
with the Securities Act or the Rules, the Company promptly
shall prepare and file with the Commission, subject to the
second sentence of
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paragraph (ii) of this Section 7(a), an amendment or
supplement which shall correct such statement or omission or
an amendment which shall effect such compliance.
(iv) The Company shall make generally available to
its security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90 days
if such 12-month period coincides with the Company's fiscal
year), an earnings statement (which need not be audited) of
the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Securities Act
or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including all exhibits
thereto and amendments thereof) and to each other Underwriter
a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by
the Securities Act or the Rules, as many copies of any
preliminary prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may
reasonably request.
(vi) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify
the Shares for offer and sale in connection with the offering
under the laws of such jurisdictions as the Representatives
may designate and shall maintain such qualifications in effect
so long as required for the distribution of the Shares;
provided, however, that the Company shall not be required in
connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service
of process in any jurisdiction or subject itself to taxation
as doing business in any jurisdiction.
(vii) Without the prior written consent of CIBC World
Markets Corp., for a period of 90 days after the date of this
Agreement, the Company and each of its individual directors
and executive officers shall not issue, sell or register with
the Commission (other than on Form S-8 or on any successor
form), or otherwise dispose of, directly or indirectly, any
equity securities of the Company (or any securities
convertible into, exercisable for or exchangeable for equity
securities of the Company), except for the issuance of the
Shares pursuant to the Registration Statement, the grant of
options and issuance of shares pursuant to the Company's
existing stock option plan or bonus plan and the issuance of
shares pursuant to options granted pursuant to the Company's
existing stock option plan, in each case as described, or
incorporated by reference, in the Registration Statement and
the Prospectus. In the event that during this period, (i) any
shares are issued pursuant to the Company's existing stock
option plan or bonus plan that are exercisable during
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such 90 day period or (ii) any registration is effected on
Form S-8 or on any successor form relating to shares that are
exercisable during such 90 period, the Company shall obtain
the written agreement of such grantee or purchaser or holder
of such registered securities that, for a period of 90 days
after the date of this Agreement, such person will not,
without the prior written consent of CIBC World Markets Corp.,
offer for sale, sell, distribute, grant any option for the
sale of, or otherwise dispose of, directly or indirectly, or
exercise any registration rights with respect to, any shares
of Common Stock (or any securities convertible into,
exercisable for, or exchangeable for any shares of Common
Stock) owned by such person.
(viii) On or before completion of this offering, the
Company shall make all filings required under applicable
securities laws and by the Nasdaq National Market (including
any required registration under the Exchange Act).
(ix) The Company shall file timely and accurate
reports in accordance with the provisions of Florida Statutes
Section 517.075, or any successor provision, and any
regulation promulgated thereunder, if at any time after the
Effective Date, the Company or any of its affiliates commences
engaging in business with the government of Cuba or any person
or affiliate located in Cuba.
(x) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives and/or any Institutional Selling Stockholder, whether
or not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the public
offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the
preparation, printing, filing and distribution of the Registration
Statement including all exhibits thereto, each preliminary prospectus,
the Prospectus, all amendments and supplements to the Registration
Statement and the Prospectus, and the printing, filing and distribution
of this Agreement; (ii) the preparation and delivery of certificates
for the Shares to the Underwriters; (iii) the registration or
qualification of the Shares for offer and sale under the securities or
Blue Sky laws of the various jurisdictions referred to in Section
7(a)(vi), including the reasonable fees and disbursements of counsel
for the Underwriters and the Institutional Selling Stockholders in
connection with such registration and qualification and the
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to the Representatives and to the Underwriters
and the Institutional Selling Stockholders of copies of each
preliminary prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished, as may be reasonably requested for use
in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (v) the filing
fees of the NASD in connection with its review of the terms of the
public offering and reasonable fees and disbursements of counsel for
the Underwriters in connection with such review; (vi) inclusion of the
Shares for quotation on the Nasdaq National Market; and (vii) all
transfer taxes, if any, with
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respect to the sale and delivery of the Shares by the Company to the
Underwriters. Subject to the provisions of Section 10, the Underwriters
agree to pay, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the performance of the obligations of the Underwriters
under this Agreement not payable by the Company pursuant to the
preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriters.
(c) The Company agrees to pay, or reimburse if paid by the
Institutional Selling Stockholders, any transfer taxes incident to the
transfer to the Underwriters of the Shares being sold by the
Institutional Selling Stockholders. The Non-Institutional Selling
Stockholders will pay any transfer taxes incident to the transfer to
the Underwriters of the Shares being sold by the Non-Institutional
Selling Stockholders. Nothing herein shall alter the continuing
obligations of the Company to the Institutional Selling Stockholders
arising under that certain Note and Warrant Agreement dated January 26,
1993 (as amended, modified and supplemented, the "Note and Warrant
Agreement") and the other Operative Agreements (as defined in the Note
and Warrant Agreement), including, without limitation, sections 22 and
23 of the Note and Warrant Agreement.
9. Indemnification.
(a) The Company and the Selling Stockholders agree, jointly
and severally, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Securities Act, the
Exchange Act or other Federal or state law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based (i) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto, or in any Blue Sky application
or other information or other documents executed by the Company filed
in any state or other jurisdiction to qualify any or all of the Shares
under the securities laws thereof (any such application, document or
information being hereinafter referred to as a "Blue Sky Application")
or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) in whole
or in part upon any breach of the representations and warranties set
forth in Section 4 hereof, or (iii) in whole or in part upon any
failure of the Company to perform any of its obligations hereunder or
under law; provided, however, that (A) such indemnity shall not inure
to the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter
if such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration
Statement or the Prospectus, or such amendment or supplement thereto,
or in any Blue Sky Application and (1) such Underwriter failed to send
or give a copy of the Prospectus, as the same may then be supplemented
or amended, to such person within the time required by the Act and the
untrue statement or
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omission (or alleged untrue statement or omission) was contained in the
Prospectus or (2) in reliance upon and in conformity with information
furnished in writing to the Company by the Representatives on behalf of
any Underwriter specifically for use therein, and (B) no Selling
Stockholder shall be liable or have any obligation except if and only
to the extent that 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) contained in (or omitted from) any such
document in reliance upon and in conformity with information furnished
in writing to the Company by such Selling Stockholder specifically for
use therein. Notwithstanding the foregoing, the liability of each
Selling Stockholder pursuant to the provisions of this Section 9(a) and
Section 10 shall be limited to the lesser of (i) an amount equal to the
aggregate net proceeds actually received by such Selling Stockholder
from the sale of such Shares sold by the Selling Stockholder hereunder
and (ii) that percentage of the total amount of such losses, claims,
damages or liabilities indemnified against by the Selling Stockholder
equal to the percentage obtained by dividing the total number of Shares
sold by the Selling Stockholder hereunder by the total number of shares
sold hereunder, including any Option Shares so sold. Notwithstanding
anything to the contrary contained in this Section 9(a), each
Underwriter agrees not to assert its rights to indemnity under this
Section 9(a) against any Selling Stockholder until (i) such Underwriter
has requested indemnification and reimbursement from the Company for
such losses, claims, damages, liabilities or expenses and (ii) the
Company does not within 90 days of such request (A) agree to so
indemnify such Underwriter and (B) reimburse in full such Underwriter
or controlling person for any such losses, claims, damages, liabilities
or expenses incurred. This indemnity agreement will be in addition to
any liability which the Company and the Selling Stockholders may
otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders and
each person, if any, who controls the Company or the Institutional
Selling Stockholders within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each director of the Company,
and each officer of the Company who signs the Registration Statement,
to the same extent as the foregoing indemnity from the Company and the
Selling Stockholders to each Underwriter, but only insofar as such
losses, claims, damages or liabilities arise out of or are based upon
any untrue statement or omission or alleged untrue statement or
omission which was made in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment thereof or supplement
thereto, contained in the (i) concession and reallowance figures
appearing under the caption "Underwriting" and (ii) the stabilization
information contained under the caption "Underwriting" in the
Prospectus; provided, however, that the obligation of each Underwriter
to indemnify the Company or the Selling Stockholders (including any
controlling person, director or officer thereof) shall be limited to
the net proceeds received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section (or contribution under Section 10, as
further provided in the last sentence to this Section 9(c)) will,
promptly after receipt of notice of commencement of any action, suit
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or proceeding against such party in respect of which a claim is to be
made against an indemnifying party or parties under this Section,
notify each such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 9(a) or 9(b) shall be available
to any party who shall fail to give notice as provided in this Section
9(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 omission so to notify such
indemnifying party of any such action, suit or proceeding shall not
relieve it from any liability that it may have to any indemnified party
for contribution or otherwise than under this Section. In case any such
action, suit or 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 in,
and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses,
except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party shall have
the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the employment of counsel by such indemnified party
has been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to it which are different from or
in addition to those available to the indemnifying party (in which case
the indemnifying parties shall not have the right to direct the defense
of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened
action, claim or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, claim or proceeding
and does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified
party. If an indemnifying party has agreed to assume the defense of any
claim against an indemnified party, the indemnified party shall provide
the indemnifying party with prior written notice of any proposed
settlement and shall not complete any settlement without the prior
written consent of the indemnifying party. An indemnifying party shall
not be liable for any settlement of any action, suit, proceeding or
claim effected without its written consent, which consent shall not be
unreasonably withheld or delayed. Proceedings with respect to
contribution obligations under section 10 shall be subject to the same
conditions as provided in this Section 9(c).
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10. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for
in Section 9(a) or 9(b) is due in accordance with its terms but for any
reason is held to be unavailable to or insufficient to hold harmless an
indemnified party under Section 9(a) or 9(b), then each indemnifying
party shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled
hereunder to contribution from any person who may be liable for
contribution) to which the indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Shares or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received
notice as provided in Section 9 hereof, in such proportion as is
appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company and the Selling Stockholders
on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the
Company, the Selling Stockholders and the Underwriters shall be deemed
to be in the same proportion as (x) the total net proceeds from the
offering (net of underwriting discounts but before deducting expenses)
received by the Company or the Selling Stockholder, as set forth in the
table on the cover page of the Prospectus, bear to (y) the underwriting
discounts received by the Underwriters, as set forth in the table on
the cover page of the Prospectus. The relative fault of the Company and
the Selling Stockholders or the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact related to information supplied by the
Company and the Selling Stockholders or the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this
Section 10 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. Notwithstanding the provisions of
this Section 10, (i) in no case shall any Underwriter (except as may be
provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the
Shares purchased by such Underwriter hereunder; (ii) the Company shall
be liable and responsible for any amount in excess of such underwriting
discount; and (iii) in no case shall any Selling Stockholder be liable
and responsible under Section 9 and this Section 10 for any amount in
excess of the lesser of (x) the aggregate net proceeds of the sale of
Shares received by such Selling Stockholder and (y) that percentage of
the total amount of such losses, claims, damages or liabilities
indemnified against by such Selling Stockholder equal to the percentage
obtained by dividing the total number of Shares sold by such Selling
Stockholder hereunder by the total number of Shares sold hereunder,
including any Option Shares so sold; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act)
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shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 10,
each person, if any, who controls an Underwriter or an Institutional
Selling Stockholder within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Underwriter or Institutional Selling Stockholder,
and each person, if any, who controls the Company within the meaning of
the Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights
to contribution as the Company, subject in each case to clauses (i) and
(ii) in the immediately preceding sentence of this Section 10. Any
party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another
party or parties under this Section, notify such party or parties from
whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve
the party or parties from whom contribution may be sought from any
other obligation it or they may have hereunder or otherwise than under
this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its written
consent. The Underwriter's obligations to contribute pursuant to this
Section 10 are several in proportion to their respective underwriting
commitments and not joint. The Selling Stockholders' obligations in
this Agreement, including without limitation obligations under Section
9 and this Section 10 to indemnify and/or contribute, are several and
not joint, and no Selling Stockholder shall be liable for any act or
omission of any other Selling Stockholder.
11. Termination. This Agreement may be terminated with respect
to the Shares to be purchased on a Closing Date by the Representatives by
notifying the Company and the Selling Stockholders at any time:
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted,
or in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such
a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of
the Representatives, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission or
trading generally on the New York Stock Exchange, Inc., on the American
Stock Exchange, Inc. or the Nasdaq National Market has been suspended
or limited, or minimum or maximum ranges for prices for securities
shall have been fixed, or maximum ranges for prices for securities have
been required, by said exchanges or by order of the Commission, the
National Association of Securities Dealers, Inc., or any other
governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or Federal
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authority; or (vi) if, in the judgment of the Representatives, there
has occurred a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 6 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, neither the Company nor the Selling Stockholders shall be under any
liability to any Underwriter, and no Underwriter shall be under any liability to
the Company or any of the Selling Stockholders, except that (y) if this
Agreement is terminated by the Representatives or the Underwriters because of
any failure, refusal or inability on the part of the Company or the Selling
Stockholders to comply with the terms or to fulfill any of the conditions of
this Agreement, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees and disbursements of their
counsel) incurred by them in connection with the proposed purchase and sale of
the Shares or in contemplation of performing their obligations hereunder and (z)
no Underwriter who shall have failed or refused to purchase the Shares agreed to
be purchased by it under this Agreement, without some reason sufficient
hereunder to justify cancellation or termination of its obligations under this
Agreement, shall be relieved of liability to the Company, the Selling
Stockholders or to the other Underwriters for damages occasioned by its failure
or refusal.
12. Substitution of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 11) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 12
by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to one additional business day
within which it may, but is not obligated to, find one or more
substitute underwriters reasonably satisfactory to the Representatives
to purchase such Shares upon the terms set forth in this Agreement.
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In any such case, either the Representatives or the Company
shall have the right to postpone the applicable Closing Date for a period of not
more than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company or the Selling
Stockholders and without liability on the part of the Company, except in both
cases as provided in Sections 8(b), 9, 10 and 11. The provisions of this Section
shall not in any way affect the liability of any defaulting Underwriter to the
Company or the nondefaulting Underwriters arising out of such default. A
substitute underwriter hereunder shall become an Underwriter for all purposes of
this Agreement.
13. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, of
the Selling Stockholders and of the Underwriters set forth in or made pursuant
to this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or the
Selling Stockholders or any of the officers, directors or controlling persons
referred to in Sections 9 and 10 hereof, and shall survive delivery of and
payment for the Shares. The provisions of Sections 8(b), 9, 10 and 11 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters, the Institutional Selling
Stockholders, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Representatives, c/o CIBC World Markets Corp., Xxx
Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxx X. Xxxxxxx,
with a copy to Xxxxxx X. Xxxxx, Esq., Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 and (b) if to the Company, to its agent for
service as such agent's address appears on the cover page of the Registration
Statement with a copy to Xxxx X.X. Xxxxx, Esq., Xxxx and Xxxx LLP, 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (c) if to the Non-Institutional Selling
Stockholders to each of them at the addresses set forth in their respective
Custody Agreements with a copy to Xxxx X.X. Xxxxx, Esq., Xxxx and Xxxx LLP, 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 and (d) if to the Institutional
Selling Stockholders, c/o Xxxx Xxxxxxx Mutual Life Insurance Company, Bond and
Corporate Finance Department, 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: D. Xxxx Xxxxxxx, with a copy to X. Xxxxxxxx Lee, Choate, Hall &
Xxxxxxx, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
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This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
POLYMEDICA CORPORATION
By:
---------------------------------
Title:
NON-INSTITUTIONAL
SELLING STOCKHOLDERS
By:
---------------------------------
Title: Attorney-In-Fact
XXXX XXXXXXX MUTUAL
LIFE INSURANCE COMPANY
By:
---------------------------------
Title:
XXXXXXX & CO.
By:
---------------------------------
Title:
Confirmed:
CIBC WORLD MARKETS CORP.
FIRST UNION CAPITAL MARKETS CORP.
Acting severally on behalf of itself and as representative of the several
Underwriters named in Schedule I annexed hereto.
By: CIBC WORLD MARKETS CORP.
By:
---------------------------------
Title:
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SCHEDULE I
Number of Firm Shares to Number of Firm Shares
Be Purchased From the to Be Purchased From
Name Company the Selling Stockholders
---- ------------------------ ------------------------
CIBC World Markets Corp.
First Union Capital Markets Corp.
------------------ ------------------
TOTAL
================== ==================
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SCHEDULE II
Number of Number of
Institutional Selling Stockholders Firm Shares Option Shares
---------------------------------- ----------- -------------
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxxxxx & Co.
Non-Institutional Selling Stockholders
Xxxxxx X. Xxx
Xxxxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxx
----------- --------------
TOTAL
=========== ==============
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