Exhibit 1.1
CYNOSURE, INC.
5,000,000 Shares
Class A Common Stock
($0.001 par value)
UNDERWRITING AGREEMENT
______________, 0000
XXXXXXXXXXXX XXXXXXXXX
Xxx Xxxx, Xxx Xxxx
______________, 2005
Citigroup Global Markets Inc.
UBS Securities LLC
Xxxxxxxxx & Company, Inc.
Xxxxxxx & Company, Inc.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Cynosure, Inc., a corporation organized under the laws of Delaware
(the "Company"), proposes to sell to the several underwriters named in Schedule
I hereto (the "Underwriters"), for whom you (the "Representatives") are acting
as representatives, 4,000,000 shares of Class A Common Stock, $0.001 par value
("Class A Common Stock") of the Company, and BRCT, Inc., a Connecticut
corporation (the "Selling Stockholder"), a wholly owned subsidiary of El. En.
S.p.A., a corporation organized under the laws of Italy (the "Parent"), proposes
to sell to the several Underwriters 1,000,000 shares of Class A Common Stock
(said shares to be issued and sold by the Company and shares to be sold by the
Selling Stockholder collectively being hereinafter called the "Underwritten
Securities"). The Company also proposes to grant to the Underwriters an option
to purchase up to 750,000 additional shares of Class A Common Stock to cover
over-allotments (the "Option Securities"; the Option Securities, together with
the Underwritten Securities, being hereinafter called the "Securities"). To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. The use of the neuter in this Agreement shall include
the feminine and masculine wherever appropriate. Certain terms used herein are
defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Company, the Parent and the Selling Stockholder jointly and
severally represent and warrant to, and agree with, each Underwriter as set
forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-127463) on Form S-1, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of
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the Securities. The Company may have filed one or more amendments thereto,
including a related preliminary prospectus, each of which has previously
been furnished to you. The Company will next file with the Commission one
of the following: either (1) prior to the Effective Date of such
registration statement, a further amendment to such registration statement
(including the form of final prospectus) or (2) after the Effective Date
of such registration statement, a final prospectus in accordance with
Rules 430A and 424(b). In the case of clause (2), the Company has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the
rules thereunder to be included in such registration statement and the
Prospectus. As filed, such amendment and form of final prospectus, or such
final prospectus, shall contain all Rule 430A Information, together with
all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing
Date (a "settlement date"), the Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements of
the Act and the rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will 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; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company, the Parent and the Selling Stockholder make no
representations or warranties as to the information contained in or
omitted from the Registration Statement, or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
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(c) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except where the failure to be
qualified as a foreign corporation could not reasonably be expected,
individually or in the aggregate, to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(d) All the outstanding shares of capital stock of each subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and
clear of any perfected security interest or any other security interests,
claims, liens or encumbrances.
(e) The entities listed on Annex A attached hereto are the only
subsidiaries of the Company as defined by Rule 1-02 of Regulation S-X (the
"Subsidiaries").
(f) The Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company, including the Class A
Common Stock and the Company's Class B Common Stock, par value $0.001 per
share (the "Class B Common Stock," and together with the Class A Common
Stock, the "Common Stock"), conforms in all material respects to the
description thereof contained in the Prospectus; the outstanding shares of
Common Stock (including the Securities being sold hereunder by the Selling
Stockholder) have been duly and validly authorized and issued and are
fully paid and nonassessable; the Securities being sold hereunder by the
Company have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement,
will be fully paid and nonassessable; the Securities being sold by the
Selling Stockholder are duly listed, and admitted and authorized for
trading, on the Nasdaq National Market and the Securities being sold
hereunder by the Company and the Selling Stockholder are duly listed, and
admitted and authorized for trading, subject to official notice of
issuance on the Nasdaq National Market; the certificates for the
Securities are in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities other than any such rights as
have heretofore been duly waived, or satisfied, in full; and,
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except as set forth in the Prospectus, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding.
(g) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or
to be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Prospectus under the headings "Risk
Factors - Risks Related to our Intellectual Property", "Risk Factors -
Risks Related to Government Regulation", "Risk Factors - Risks Relating to
the Offering - Provisions in our corporate charter documents and under
Delaware law may delay or prevent attempts by our stockholders to change
our management and hinder efforts to acquire a controlling interest in
us", "Business - El. En. Commercial Relationship", "Business - Patents,
Proprietary Technology and Trademarks", "Business - Government
Regulation", "Management - Employment Agreements", "Management - Stock
Option and Other Compensation Plans", "Certain Relationships and Related
Party Transactions", "Description of Capital Stock" , "Shares Eligible for
Future Sale" and "Material U.S. Federal Income and Estate Tax Consequences
to Non-U.S. Holders", insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate and
fair summaries of such legal matters, agreements, documents or
proceedings.
(h) This Agreement has been duly authorized, executed and delivered
by the Company, the Parent and the Selling Stockholder.
(i) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(j) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act, the Exchange Act and the Corporate Financing Rule of the National
Association of Securities Dealers, Inc. and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(k) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation of, or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or
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any of its subsidiaries pursuant to, (i) the charter or by-laws of the
Company or any of its subsidiaries, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement
or other agreement, obligation, condition, covenant or instrument to which
the Company or any of its subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or any of its subsidiaries or any of its or their properties,
except, in the case of clause (ii) above, for such conflicts, breaches,
violations, liens, charges or encumbrances that could not reasonably be
expected, individually or in the aggregate, to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(l) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(m) The consolidated historical financial statements and schedules
of the Company and its consolidated subsidiaries included in the
Prospectus and the Registration Statement present fairly in all material
respects the consolidated financial condition, results of operations and
cash flows of the Company and its consolidated subsidiaries as of the
dates and for the periods indicated, comply as to form in all material
respects with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). The selected financial data set forth under the
caption "Selected Financial Information" in the Prospectus and
Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included
therein.
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
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(o) Each of the Company and each of its subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted.
(p) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company
or such subsidiary or any of its properties, as applicable, except where
such violation or default would not, individually or in the aggregate,
have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(q) Ernst and Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act and
within the meaning of Rule 3600T of the Public Company Accounting
Oversight Board.
(r) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities.
(s) Except as described in the Registration Statement and
Prospectus, the Company and its subsidiaries own, possess, license or have
other rights to use all patents, patent applications, trade and service
marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual Property")
necessary for the conduct of the Company's business as now conducted or as
proposed in the Prospectus to be conducted. Except as set forth in the
Registration Statement and Prospectus, (i) to the Company's knowledge,
there are no rights of third parties to any such Intellectual Property
other than the retained rights of licensors with respect to any such
licensed intellectual property; (ii) to the Company's knowledge, there is
no material infringement by third parties of any such Intellectual
Property; (iii) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or
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claim by others challenging the Company's rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (iv) to the Company's
knowledge, there is no pending or threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (v) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others,
and the Company is unaware of any other fact which would form a reasonable
basis for any such claim; (vi) to the Company's knowledge, there is no
U.S. patent or published U.S. patent application which contains claims
that dominate or may dominate any Intellectual Property described in the
Prospectus as being owned by or licensed to the Company or that interferes
with the issued or pending claims of any such Intellectual Property; and
(vii) there is no prior art of which the Company is aware that may render
any U.S. patent held by the Company invalid or any U.S. patent application
held by the Company unpatentable which has not been disclosed to the U.S.
Patent and Trademark Office.
(t) Except as disclosed in the Registration Statement and the
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of Citigroup Global
Markets Holdings Inc. and (ii) does not intend to use any of the proceeds
from the sale of the Securities hereunder to repay any outstanding debt
owed to any affiliate of Citigroup Global Markets Holdings Inc.
(u) Except as set forth in the Registration Statement and
Prospectus, the Company and the subsidiaries have each operated and
currently are in compliance in all material respects with all applicable
rules, regulations and policies of the U.S. Food and Drug Administration
and comparable foreign medical device regulatory agencies outside of the
United States.
(v) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently
being contested in good faith or as would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its
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subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(w) No labor problem or dispute with the employees of the Company or
any of its subsidiaries exists or, to the Company's knowledge, is
threatened or imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or its
subsidiaries' principal suppliers, contractors or customers, that could
have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(x) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; all material policies of insurance and fidelity or
surety bonds insuring the Company or any of its subsidiaries or their
respective businesses, assets, employees, officers and directors are in
full force and effect; the Company and its subsidiaries are in compliance
with the terms of such policies and instruments in all material respects;
and there are no material claims by the Company or any of its subsidiaries
under any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause;
neither the Company nor any such subsidiary has been refused any material
insurance coverage sought or applied for; and neither the Company nor any
such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(y) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in or
contemplated by the Prospectus (exclusive of any supplement thereto).
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(z) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, except for such licenses, certificates,
permits and other authorizations the absence of which, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto); and neither the Company nor any
such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(aa) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(bb) The Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(cc) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability under any
environmental law, except where such non-compliance with
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Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, have
a material adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto). Except as set
forth in the Prospectus, neither the Company nor any of the subsidiaries
has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.
(dd) 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 it 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 on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(ee) The minimum funding standard under Section 302 of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
and published interpretations thereunder ("ERISA"), has been satisfied by
each "pension plan" (as defined in Section 3(2) of ERISA) which has been
established or maintained by the Company and/or one or more of its
subsidiaries, and the trust forming part of each such plan which is
intended to be qualified under Section 401 of the Code is so qualified;
each of the Company and its subsidiaries has fulfilled its obligations, if
any, under Section 515 of ERISA; neither the Company nor any of its
subsidiaries maintains or is required to contribute to a "welfare plan"
(as defined in Section 3(1) of ERISA) which provides retiree or other
post-employment welfare benefits or insurance coverage (other than
"continuation coverage" (as defined in Section 602 of ERISA)); each
pension plan and welfare plan established or maintained by the Company
and/or one or more of its subsidiaries is in compliance in all material
respects with the currently applicable provisions of ERISA; and neither
the Company nor any of its subsidiaries has incurred or could reasonably
be expected to incur any withdrawal liability under Section 4201 of ERISA,
any liability under Section 4062, 4063, or 4064 of ERISA, or any other
liability under Title IV of ERISA.
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(ff) There is and has been no failure on the part of the Company or,
to the Company's knowledge, any of the Company's directors or officers, in
their capacities as such, to comply in all material respects with any
provision of the Sarbanes Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the "Sarbanes Oxley Act"), including
Section 402 related to loans and Sections 302 and 906 related to
certifications.
(gg) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a violation
by such Persons of the FCPA, including, without limitation, making use of
the mails or any means or instrumentality of interstate commerce corruptly
in furtherance of an offer, payment, promise to pay or authorization of
the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any "foreign official"
(as such term is defined in the FCPA) or any foreign political party or
official thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company, its subsidiaries and, to the
knowledge of the Company, its affiliates have conducted their businesses
in compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.
"FCPA" means Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder.
(hh) The operations of the Company and its subsidiaries are and have
been conducted at all times in compliance in all material respects with
applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively,
the "Money Laundering Laws") and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with respect
to the Money Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
(ii) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department ("OFAC"); and the Company will not
directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such
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proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(jj) Neither the Company nor any of its subsidiaries nor any of its
or their properties or assets has any immunity from the jurisdiction of
any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise)
under the laws of New York.
Any certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
(ii) The Parent and the Selling Stockholder, jointly and severally,
represent and warrant to, and agree with, each Underwriter that:
(a) The Selling Stockholder is the record and beneficial owner of
the Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims and has duly endorsed such Securities in
blank, and, assuming that each Underwriter acquires its interest in the
Securities it has purchased from the Selling Stockholder without notice of
any adverse claim (within the meaning of Section 8-105 of the New York
Uniform Commercial Code ("UCC")), each Underwriter that has purchased such
Securities delivered on the Closing Date to The Depository Trust Company
or other securities intermediary by making payment therefor as provided
herein, and that has had such Securities credited to the securities
account or accounts of such Underwriters maintained with The Depository
Trust Company or such other securities intermediary will have acquired a
security entitlement (within the meaning of Section 8-102(a)(17) of the
UCC) to such Securities purchased by such Underwriter, and no action based
on an adverse claim (within the meaning of Section 8-105 of the UCC) may
be asserted against such Underwriter with respect to such Securities.
(b) Neither the Selling Stockholder nor the Parent has taken,
directly or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities.
(c) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Selling Stockholder or the Parent of the transactions contemplated herein,
except such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of
13
the Securities by the Underwriters and such other approvals as have been
obtained.
(d) Neither the sale of the Securities being sold by the Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by the Parent or the Selling Stockholder or the fulfillment
of the terms hereof by the Parent or the Selling Stockholder will conflict
with, result in a breach or violation of, or constitute a default under
any law or the charter or by-laws of the Parent or the Selling Stockholder
or the terms of any indenture or other agreement or instrument to which
the Parent or the Selling Stockholder or any of its subsidiaries is a
party or bound, or any judgment, order or decree applicable to the Parent
or the Selling Stockholder or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Parent or the Selling Stockholder or any of
its subsidiaries.
Any certificate signed by any officer of the Parent or the Selling
Stockholder and delivered to the Representatives or counsel for the Underwriters
in connection with the offering of the Securities shall be deemed a
representation and warranty by the Parent and the Selling Stockholder, as to
matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
and the Selling Stockholder agree, severally and not jointly, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company and the Selling Stockholder, at a purchase price of $_____ per
share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
750,000 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time on or before the 30th day after the date of the Prospectus upon
written or telegraphic notice by the Representatives to the Company setting
forth the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
14
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
______________, 2005, or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement among the Representatives, the
Company and the Selling Stockholder or as provided in Section 9 hereof (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the respective aggregate
purchase prices of the Securities being sold by the Company and the Selling
Stockholder to or upon the order of the Company and the Selling Stockholder by
wire transfer payable in same-day funds to the accounts specified in writing by
the Company and the Selling Stockholder, respectively. Delivery of the
Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
The Selling Stockholder will pay all applicable state transfer
taxes, if any, involved in the transfer to the several Underwriters of the
Securities to be purchased by them from the Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to the accounts specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
15
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the
Registration Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed in a form approved by
the Representatives with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (2) when the Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the offering
of the Securities, any amendment to the Registration Statement shall have
been filed or become effective, (4) of any request by the Commission or
its staff for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the Prospectus or
for any additional information, (5) 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
(6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then 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
the Registration Statement or supplement the Prospectus to comply with the
Act, the Company promptly will (1) notify the Representatives of any such
event, (2) prepare and file with the Commission, subject to the second
sentence of paragraph (i)(a) of this Section 5, an amendment or supplement
which will correct such statement or omission or effect such compliance
and (3) supply any supplemented Prospectus to you in such quantities as
you may reasonably request.
16
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or
any person in privity with the Company or any affiliate of the Company)
directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Exchange
Act, any other shares of Class A Common Stock or any securities
convertible into, or exercisable, or exchangeable for, shares of Class A
Common Stock (including shares of Class B Common Stock), or publicly
announce an intention to effect any such transaction, for a period of 180
days after the date of the Underwriting Agreement, provided, however, that
this Section 5(f) shall not prohibit the Company from, and no consent of
Citigroup Global Markets, Inc. shall be required prior to the Company, (i)
issuing any shares of Class A Common Stock, or securities convertible into
Class A Common Stock (other than Class B Common Stock) in connection with
any acquisition, licensing or similar strategic arrangements, provided
that, (a) the total number of shares of Class A Common Stock, including
shares underlying convertible or exercisable securities, which may be
issued pursuant to this clause (i) cannot exceed 1,500,000 shares of Class
17
A Common Stock and (b) prior to the issuance of any such shares of Class A
Common Stock, or securities convertible into Class A Common Stock, the
Company shall cause the recipients of such securities to execute and
deliver to you agreements in the form of Exhibit A hereto, (ii) issuance
and sale pursuant to any employee stock option plan, stock ownership plan
or dividend reinvestment plan of the Company in effect at the Execution
Time (iii) issuance of Class A Common Stock or Class B Common Stock
issuable upon the conversion of securities or the exercise of warrants
outstanding at the Execution Time or (iv) filing with the Commission of
any registration statement on Form S-8 under the Act, as contemplated by
the Registration Statement and Prospectus. If (1) during the last 17 days
of the 180-day restricted period the Company issues an earnings release or
material news or a material event relating to the Company occurs or (2)
prior to the expiration of the 180-day restricted period the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, then the foregoing
restrictions shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence
of the material news or material event.
(g) The Company will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, the
Sarbanes Oxley Act, and to use its best efforts to cause the Company's
directors and officers, in their capacities as such, to comply with such
laws, rules and regulations, including, without limitation, the provisions
of the Sarbanes Oxley Act.
(h) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(i) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the Prospectus, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and
all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky
18
memorandum and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Securities; (v) the
registration of the Securities under the Exchange Act and the listing of
the Securities on the Nasdaq National Market; (vi) any registration or
qualification of the Securities for offer and sale under the securities or
blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to
such registration and qualification); (vii) any filings required to be
made with the National Association of Securities Dealers, Inc. (including
filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such filings); (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Securities;
(ix) the fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the Company;
and (x) all other costs and expenses incident to the performance by the
Company of its obligations hereunder.
(j) Upon the written request of Citigroup or any Underwriter, the
Company shall (i) furnish to Citigroup or such other Underwriter, a
certification, as contemplated by and in compliance with Treasury
regulations Section 1.897-2(h), that as of any Closing Date (or such other
date as may be specified in such request), the Offered Securities are not
United States real property interests as defined in Section 897(c)(1) of
the Code, (ii) file such certification with the Internal Revenue Services
in the manner and within the time period specified in Treasury regulations
Section 1.897-2(h) and (iii) promptly after such filing, furnish to
Citigroup or the Underwriter that has requested a certificate, as the case
may be, proof of such filing.
(ii) The Parent and the Selling Stockholder each agree with the
several Underwriters that:
(a) Neither the Parent nor the Selling Stockholder will take,
directly or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities.
(b) The Parent and the Selling Stockholder will advise you promptly,
and if requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter or
dealer may be required under the Act, of (i) any material change in the
Company's condition (financial or otherwise), prospects, earnings,
business or properties, (ii) any change in information in the Registration
Statement or the Prospectus relating to the Parent or the Selling
Stockholder or (iii) any new material information relating
19
to the Company or relating to any matter stated in the Prospectus which
comes to the attention of the Parent or the Selling Stockholder.
(c) In the event the Company fails in its obligations under Section
5(i), the Selling Stockholder will assume such obligations and pay any
amounts due.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company, the Parent and the
Selling Stockholder contained herein as of the Execution Time, the Closing Date
and any settlement date pursuant to Section 3 hereof, to the accuracy of the
statements of the Company, the Parent and the Selling Stockholder made in any
certificates pursuant to the provisions hereof, to the performance by the
Company, the Parent and the Selling Stockholder of their respective obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Xxxxxx Xxxxxx
Xxxxxxxxx Xxxx and Xxxx LLP, counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to
the Representatives, to in the form set forth in Exhibit C.
(c) The Parent and the Selling Stockholder shall have requested and
caused Pavia & Harcourt LLP, special counsel for the Parent and the
Selling Stockholder, to have furnished to the Representatives their
opinion dated the Closing Date and addressed to the Representatives,
substantially in the form set forth in Exhibit D.
(d) The Company shall have requested and caused Xxxxxxxx, Xxxxx,
Xxxxx & Xxxxxxxx, P.C., special counsel for the Company with respect to
patents and proprietary rights, to have furnished to the Representatives
their opinion,
20
dated the Closing Date and addressed to the Representatives, in
substantially the form set forth in Exhibit E.
(e) The Company shall have requested and caused Xxxxxxx & Xxxxxx
LLP, special counsel for the Company with respect to patents and
proprietary rights, to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the Representatives,
substantially in the form set forth in Exhibit F.
(f) The Company shall have requested and caused ____________,
special foreign counsel to the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, substantially in the form set forth in Exhibit G.
(g) The Representatives shall have received from Xxxxx Xxxxxxxxxx
LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the
Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company,
the Parent and the Selling Stockholder shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(h) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its
21
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(i) The Parent and the Selling Stockholder shall have furnished to
the Representatives a certificate, signed by the Chairman of the Board or
the President and the principal financial or accounting officer of the
Parent and the Selling Stockholder, respectively, dated the Closing Date,
to the effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that the representations and warranties
of the Selling Stockholder in this Agreement are true and correct in all
material respects on and as of the Closing Date to the same effect as if
made on the Closing Date.
(j) The Company shall have requested and caused Ernst and Young LLP
to have furnished to the Representatives letters, at the Execution Time
and at the Closing Date, dated respectively as of the Execution Time and
as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the applicable rules and regulations adopted by
the Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the nine-month
period ended September 30, 2005 and as at September 30, 2005, in
accordance with Statement on Auditing Standards No. 100, and stating in
effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included 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
Act and the related rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 100, of the
unaudited interim financial information for the nine-month period
ended September 30, 2005, and as at September 30, 2005; carrying out
certain specified 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, directors and the audit and _____
committees of the Company and the Subsidiaries; and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters of the Company and its subsidiaries
as to transactions and events subsequent to December 31, 2004,
nothing came to their
22
attention which caused them to believe that:
(1) any unaudited financial statements included in the
Registration Statement and the Prospectus do not comply as to
form in all material respects with applicable accounting
requirements of the Act and with the related rules and
regulations adopted by the Commission with respect to
registration statements on Form S-1; and said unaudited
financial statements 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 the
Prospectus;
(2) with respect to the period subsequent to September
30, 2005, there were any changes, at a specified date not more
than five days prior to the date of the letter, in the
long-term debt of the Company and its subsidiaries or capital
stock of the Company or decreases in the stockholders' equity
of the Company as compared with the amounts shown on the
September 30, 2005, consolidated balance sheet included in the
Registration Statement and the Prospectus, or for the period
from October 1, 2005 to such specified date there were any
decreases, as compared the comparable period in 2004, in net
revenues or income before income taxes or in total or per
share amounts of net income of the Company and its
subsidiaries, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; and
(iii) they have performed certain other specified procedures
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 and its subsidiaries) set
forth in the Registration Statement and the Prospectus agrees with
the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(k) The Company shall have requested and used its reasonable
commercial efforts to cause T. Xxxxx Xxxxxxx, CPA, to have furnished to
the Representatives a letter, at the Execution Time, dated as of the
Execution Time, in form and substance satisfactory to the Representatives.
23
(l) The Company shall have requested and used its reasonable
commercial efforts to cause Xxxxxxxxx Black Xxxxxx & Xxxx PC to have
furnished to the Representatives a letter, at the Execution Time, dated as
of the Execution Time, in form and substance satisfactory to the
Representatives.
(m) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified
in the letter or letters referred to in paragraph (g) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries taken as a whole, whether
or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(n) Prior to the Closing Date, the Company, the Parent and the
Selling Stockholder shall have furnished to the Representatives such
further information, certificates and documents as the Representatives may
reasonably request.
(o) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(p) The Securities shall have been listed and admitted and
authorized for trading on the Nasdaq National Market, and satisfactory
evidence of such actions shall have been provided to the Representatives.
(q) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto
from each officer and director of the Company and holders of substantially
all of the outstanding shares of Class B Common Stock addressed to the
Representatives.
(r) At the Execution Time, the Parent and the Selling Stockholder
shall have furnished to the Representatives a letter in the form of
Exhibit B hereto addressed to the Representatives.
24
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company and
each Selling Stockholder in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters,
at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company, the Parent or the
Selling Stockholder to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Underwriters, the Company
will reimburse the Underwriters severally through Citigroup Global Markets Inc.
on demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. If the Company is
required to make any payments to the Underwriters under this Section 7 because
of the Selling Stockholder's refusal, inability or failure to satisfy any
condition to the obligations of the Underwriters set forth in Section 6, the
Selling Stockholder shall reimburse the Company on demand for all amounts so
paid.
8. Indemnification and Contribution. (a) The Company, the Parent and
the Selling Stockholder jointly and severally agree to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Securities
as originally filed or in any amendment thereof, or in any Preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
25
liability or action; provided, however, that the Company, the Parent and the
Selling Stockholder will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company, the Parent or the
Selling Stockholder may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, the Parent and the
Selling Stockholder, to the same extent as the foregoing indemnity to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company, the Parent and
the Selling Stockholder acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities and, under the
heading "Underwriting" (i) the list of underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances and (iii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids in any Preliminary Prospectus
and the Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary Prospectus
or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ
26
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Parent and the Selling
Stockholder, jointly and severally, and the Underwriters severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company, the Parent, the
Selling Stockholder and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Parent and the Selling Stockholder on the one hand and by the
Underwriters on the other from the offering of the Securities; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company, the Parent and the Selling Stockholder, jointly and
severally, and the Underwriters severally shall contribute in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company, the Parent and the Selling Stockholder on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company, the Parent and the Selling
Stockholder shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by it, and benefits received by
the Underwriters shall be deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things,
27
whether any untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
provided by the Company, the Parent or the Selling Stockholder on the one hand
or the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company, the Parent, the Selling Stockholder
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or 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 the applicable terms and conditions of this
paragraph (d).
(e) The liability of the Selling Stockholder and the Parent under
the Selling Stockholder's and the Parent's representations and warranties
contained in Section 1 hereof and under the indemnity and contribution
agreements contained in this Section 8 shall be limited to an amount equal to
the initial public offering price of the Securities sold by the Selling
Stockholder to the Underwriters. The Company, the Parent and the Selling
Stockholder may agree, as among themselves and without limiting the rights of
the Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Parent, the Selling
28
Stockholder or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Prospectus
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Company, the Parent, the Selling Stockholder and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Class A Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or the Nasdaq National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of the Selling Stockholder, of the Parent and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter, the Selling Stockholder or the Company or any of the officers,
directors, employees, agents or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to (000) 000-0000 and confirmed to it at 0 Xxxxxxxx Xxxx, Xxxxxxxx, XX
00000 c/o Xxxxxxx X. Xxxxx; or if sent to the Parent will be mailed, delivered
or telefaxed to (00) 000-00-00-000 and comfirmed to it at Xxx Xxxxxxxxxx, 00,
000000 Xxxxxxxxx, Xxxxxxx, Xxxxx or the Selling Stockholder, will be
29
mailed, delivered or telefaxed and confirmed to it at the address set forth in
Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(i)(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
30
"Prospectus" shall mean the prospectus relating to the Securities
that is first filed pursuant to Rule 424(b) after the Execution Time or,
if no filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in
the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred to
in Section 1(a) hereof.
18. No fiduciary duty. The Company, the Parent and the Selling
Stockholder hereby acknowledge that (a) the Underwriters are acting as principal
and not as agent or fiduciary of the Company and (b) their engagement of the
Underwriters in connection with the Offering is as independent contractors and
not in any other capacity. Furthermore, each of the Company, the Parent and the
Selling Stockholder agrees that it is solely responsible for independently
making its own judgments in connection with the Offering (irrespective of
whether the Underwriters has advised or is currently advising the Company, the
Parent or the Selling Stockholder on related or other matters.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Parent, the Selling Stockholder(s) and the several Underwriters.
Very truly yours,
CYNOSURE, INC.
31
By:
---------------------
Name:
Title:
BRCT, Inc.
By:
---------------------
Name:
Title:
EL. EN. S.P.A.
By:
---------------------
Name:
Title:
32
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
UBS Securities LLC
Xxxxxxxxx & Company, Inc.
Xxxxxxx & Company, Inc.
By: Citigroup Global Markets Inc.
By:
------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
NUMBER OF UNDERWRITTEN SECURITIES TO
UNDERWRITERS BE PURCHASED
------------ ------------
Citigroup Global Markets Inc.
UBS Securities LLC
Xxxxxxxxx & Company, Inc.
Xxxxxxx & Company, Inc.
---------
Total ........................ 5,000,000
=========
SCHEDULE II
MAXIMUM NUMBER OF
NUMBER OF UNDERWRITTEN OPTION SECURITIES
SELLING STOCKHOLDER: SECURITIES TO BE SOLD TO BE SOLD
------------------- --------------------- ----------
BRCT, Inc. 1,000,000 0
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Tel.: (000) 000-0000
Fax.: (000) 000-0000
--------- ---------
Total 1,000,000 0
========= =========
[Form of Lock-Up Agreement] EXHIBIT A
[Letterhead of officer, director or stockholder of Cynosure, Inc.]
Cynosure, Inc.
Public Offering of Class A Common Stock
August __, 2005
Citigroup Global Markets Inc.
Xxxxxxxxx & Company, Inc.
Xxxxxxx & Company, Inc.
UBS Securities LLC
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among Cynosure, Inc., a
Delaware corporation (the "Company"), El. En. S.p.A., an Italian corporation,
and each of you as representatives of a group of Underwriters named therein (the
"Underwriters"), relating to an underwritten public offering (the "Offering") of
Class A Common Stock, $0.001 par value per share (the "Class A Common Stock"),
of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge
or otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction during the period (the "Lock-up
Period") commencing on the date hereof and ending 180 days after the date of the
Underwriting Agreement. The foregoing sentence shall not apply to (a)
registration of or sale to the Underwriters of any Class A Common Stock pursuant
to the Offering and the Underwriting Agreement, (b) transactions relating to
shares of Class A Common Stock or other securities acquired in open market
transactions after completion of the Offering, (c) transfers of shares of Class
A Common Stock or any security convertible into Class A Common Stock as bona
fide gifts, (d) transfers of shares of Class A Common Stock or any security
convertible into Class A Common Stock to any trust for the direct or indirect
benefit of the undersigned or a member of the "immediate family" (i.e., any
relationship by blood, marriage or adoption, not more remote
2
than first cousins) of the undersigned not involving a disposition for value,
and (e) distribution of shares of Class A Common Stock or any security
convertible into Class A Common Stock to limited partners or stockholders of the
undersigned; provided that (i) in the case of any transfer or distribution
pursuant to clause (b), no filing by the undersigned or any other party to such
transfer or distribution (donor, donee, trustee, beneficiary, transferor or
transferee) under Section 16(a) of the Securities Exchange Act of 1934, as
amended, shall be required or shall be made voluntarily in connection with such
transfer or distribution (other than a filing on a Form 5 made after the
expiration of the Lock-up Period), and (ii) in the case of any transfer or
distribution pursuant to clauses (c), (d) and (e), each donee, trustee or
transferee shall execute and deliver to Citigroup Global Markets Inc. a
duplicate form of this letter agreement. If (1) during the last 17 days of the
Lock-up Period the Company issues an earnings release or material news or a
material event relating to the Company occurs or (2) prior to the expiration of
the Lock-up Period the Company announces that it will release earnings results
during the 16 day period beginning on the last day of the Lock-up Period, then
the foregoing restrictions shall continue to apply until the expiration of the
18 day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event unless Citigroup Global
Markets Inc. waives, in writing, such extension.
The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the undersigned shares of Class A Common Stock or securities
convertible into Class A Common Stock except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this letter agreement in proceeding toward consummation of the
Offering. The undersigned further understands that this letter agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation among
the Company, El.En. S.p.A. and the Underwriters.
This letter agreement shall automatically terminate upon the earliest to
occur, if any, of: (a) either Citigroup Global Markets Inc., on the one hand, or
the Company, on the other hand, advising the other in writing prior to the
execution of the Underwriting Agreement, that it has determined not to proceed
with the Offering, (b) termination of the Underwriting Agreement prior to the
sale of any shares of Class A Common Stock to the Underwriters, or (c) July 31,
2006, in the event that the registration statement has not been declared
effective by that date.
Yours very truly,
------------------------------
(Signature)
[Form of El. En. S.p.A. Lock-up Agreement] EXHIBIT B
Cynosure, Inc.
Public Offering of Class A Common Stock
August __, 2005
Citigroup Global Markets Inc.
Xxxxxxxxx & Company, Inc.
Xxxxxxx & Company, Inc.
UBS Securities LLC
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among Cynosure, Inc., a
Delaware corporation (the "Company"), the undersigned, and each of you as
representatives of a group of Underwriters named therein (the "Underwriters"),
relating to an underwritten public offering (the "Offering") of Class A Common
Stock, $0.001 par value per share (the "Class A Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge
or otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock (collectively, "Capital
Stock"), or publicly announce an intention to effect any such transaction during
the period commencing on the date hereof and ending on (and including) the
second anniversary of the date of the Underwriting Agreement (the "Lock-up
Period"); provided that:
1. commencing on the first day after the first anniversary of the
Underwriting Agreement (the "First Release Date"), the foregoing
restrictions shall not apply to the
2
transfer, in one or more transactions (or the public announcement of such
transfer), of a number of shares of Capital Stock equal, in the aggregate,
to 33% of the number of shares of Capital Stock beneficially owned by the
undersigned on the date of the Underwriting Agreement, after giving effect
to the Offering; and
2. commencing on the day after the date that is one year and six
months after the date of the Underwriting Agreement (the "Second Release
Date"), the foregoing restrictions shall not apply to the transfer, in one
or more transactions (or the public announcement of such transfer), of a
number of shares of Capital Stock equal, in the aggregate, to an
additional 33% of the number of shares of Capital Stock beneficially owned
by the undersigned on the date of the Underwriting Agreement, after giving
effect to the Offering.
In the event of any recapitalization, reclassification, stock dividend, stock
split, reverse stock split, or other distribution with respect to the Capital
Stock, the number of shares of Capital Stock subject to the restrictions above
shall be adjusted accordingly, including with regard to the number of shares
subject to the restrictions above after the First Release Date and the Second
Release Date, as the case may be.
The foregoing restrictions shall not apply to (a) registration of or sale
to the Underwriters of any Class A Common Stock pursuant to the Offering and the
Underwriting Agreement, (b) transactions after the First Release Date relating
to shares of Class A Common Stock or other securities acquired in open market
transactions.
If (1) during the 17 days before the First Release Date, the Second
Release Date or the date of the expiration of the Lock-up Period (such
expiration date shall be hereinafter referred to as the "Final Release Date",
and the First Release Date, the Second Release Date and the Final Release Date
shall each be referred to as a "Release Date") the Company issues an earnings
release or material news or a material event relating to the Company occurs or
(2) prior to any Release Date the Company announces that it will release
earnings results during the 16 day period beginning on such Release Date, then
the foregoing restrictions shall continue to apply until the expiration of the
18 day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event unless Citigroup Global
Markets Inc. waives, in writing, such extension.
The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the undersigned shares of Class A Common Stock or securities
convertible into Class A Common Stock except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this letter agreement in proceeding toward consummation of the
Offering. The undersigned further understands that this letter agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation among
the Company, the undersigned and the
3
Underwriters.
This letter agreement shall automatically terminate upon the earliest to
occur, if any, of: (a) either Citigroup Global Markets Inc., on the one hand, or
the Company, on the other hand, advising the other in writing prior to the
execution of the Underwriting Agreement, that it has determined not to proceed
with the Offering, (b) termination of the Underwriting Agreement prior to the
sale of any shares of Class A Common Stock to the Underwriters, or (c) July 31,
2006, in the event that the registration statement has not been declared
effective by that date.
Yours very truly,
------------------------------
(Signature)
------------------------------
(Print Name)
------------------------------
El. En., S.p.A.
------------------------------
(Address)
[Form of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx & Xxxx LLP Opinion] EXHIBIT C
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware
and has the corporate power and authority to carry on its business
and to own, lease and operate its properties, as such business and
properties are described in the Prospectus.
2. The Company is duly qualified and is in good standing as a foreign
corporation authorized to do business in each of the States listed
on Schedule A attached hereto.
3. All the outstanding shares of capital stock of the Company have been
duly authorized and are validly issued, fully paid and
non-assessable.
4. The Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor as provided by the
Underwriting Agreement, will be validly issued, fully paid and non
assessable, and the issuance of such Shares will not be subject to
any preemptive rights under the Delaware General Corporation Law
statute or the Certificate of Incorporation or, to our knowledge,
similar contractual rights granted by the Company (except for such
preemptive or contractual rights as have been waived).
5. The authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof contained in
the Prospectus under the captions "Description of Capital Stock -
Common Stock" and "Description of Capital Stock - Preferred Stock."
6. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
7. The Registration Statement has become effective under the Securities
Act, and, to our knowledge, (A) no stop order suspending its
effectiveness has been issued and (B) no proceedings for that
purpose are pending before or threatened by the Commission. Any
required filing of the Prospectus pursuant to Rules 424 and 430A
under the Securities Act have been made in a manner and within the
time period required by such Rules.
8. Except as may be required under the Securities Act and the rules and
regulations of the Commission thereunder or as have been obtained or
made under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder, no filing with,
or authorization, approval, consent, license, order, registration,
qualification or decree of, any United States federal or
Massachusetts or New York state governmental authority or agency is
necessary for the issuance, sale
2
and delivery of the Shares by the Company to the Underwriters
pursuant to the Underwriting Agreement.
9. The execution and delivery of the Underwriting Agreement by the
Company and the consummation by the Company of the transactions
contemplated thereby will not (A) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
Certificate of Incorporation or By laws or any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which
the Company is a party and that is filed as an exhibit to the
Registration Statement or (B) violate or conflict with any United
States federal or Massachusetts or New York state law, rule or
regulation that in such counsel's experience is normally applicable
in transactions of the type contemplated by the Underwriting
Agreement, the Delaware General Corporation Law statute, or any
judgment, order or decree specifically naming the Company of which
such counsel is aware.
10. The statements in the Prospectus under the captions "Risk Factors -
Risks Related to Regulation", "Risk Factors - Risks Relating to the
Offering - Provisions in our corporate charter documents and under
Delaware law may prevent or frustrate attempts by our stockholders
to change our management and hinder efforts to acquire a controlling
interest in us", "Business - El. En. Commercial Relationship",
"Business - Government Regulation", "Management - Employment
Agreements", "Management - Stock Option and Other Compensation
Plans", "Certain Relationships and Related Party Transactions",
"Description of Capital Stock" , "Shares Eligible for Future Sale"
and "Material U.S. Federal Income and Estate Tax Consequences to
Non-U.S. Holders", insofar as such statements constitute matters of
law or legal conclusions or summarize the terms of agreements, are
correct in all material respects.
11. 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.
12. To such counsel's knowledge, except as described in the Registration
Statement, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.
13. The Shares have been approved by The NASDAQ Stock Market, Inc. for
3
listing on The NASDAQ National Market.
Such counsel shall also state that, in the course of acting as counsel for the
Company in connection with the preparation of the Registration Statement and the
Prospectus, such counsel has participated in conferences with officers and other
representatives of the Company, representatives of and counsel for the
Underwriters and representatives of the registered independent public accounting
firm of the Company, during which the contents of the Registration Statement and
the Prospectus were discussed; while the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process are such that 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 or the Prospectus (except to
the extent expressly set forth in paragraph 10 above), and other than with
respect to patents and intellectual property matters relating to correspondence
with and claims by Palomar Medical Technologies, Inc. described in the
Registration Statement and Prospectus, subject to the foregoing and based on
such participation and discussions:
(a) the Registration Statement, as of the Effective Date, and the
Prospectus, as of the date thereof (except for the financial
statements, including the notes and schedules thereto, other
financial and accounting data and information and statistical data
derived therefrom, as to which such counsel expresses no view)
appear on their face to be appropriately responsive in all material
respects to the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder;
(b) no facts have come such counsel's attention that have caused such
counsel to believe that (i) the Registration Statement, as of the
Effective Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (except as
set forth in the parenthetical in clause (a) above) or (ii) the
Prospectus, as of its date or as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (except as set forth in the parenthetical in
clause (a) above);
(c) such counsel is not aware of any contract or other document of a
character required by the Securities Act and the applicable rules
and regulations of the Commission thereunder to be filed as an
exhibit to the Registration Statement that is not so filed; and
(d) such counsel is not aware of any action, proceeding or litigation
pending, contemplated or threatened against the Company before any
court or governmental or administrative agency or body that is
required by the
4
Securities Act or the rules and regulations thereunder to be
described in the Registration Statement or the Prospectus that is
not so described.
[Form of Pavia & Harcourt LLP Opinion] EXHIBIT D
1. The Underwriting Agreement has been duly authorized, executed and
delivered by each of the Selling Stockholder and the Parent.
2. The Selling Stockholder has the corporate power and authority to sell,
transfer and deliver the Securities being sold by the Selling Stockholder
pursuant to the Underwriting Agreement.
3. Assuming that each Underwriter acquires its interest in the Securities it
has purchased from the Selling Stockholder without notice of any adverse
claim (within the meaning of Section 8-105 of the UCC), each Underwriter
that has purchased such Securities delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by making
payment therefor as provided in the Underwriting Agreement, and that has
had such Securities credited to the securities account or accounts of such
Underwriters maintained with The Depository Trust Company or such other
securities intermediary will have acquired a security entitlement (within
the meaning of Section 8-102(a)(17) of the UCC) to such Securities
purchased by such Underwriter, and no action based on an adverse claim
(within the meaning of Section 8-105 of the UCC) may be asserted against
such Underwriter with respect to such Securities.
4. Except as may be required under the Act and the rules and regulations of
the Commission thereunder, and as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriters and such other approvals (specified in
such opinion) as have been obtained, no consent, approval, authorization
or order of any court or governmental agency or body is required for the
consummation by the Selling Stockholder or the Parent of the transactions
contemplated by the Underwriting Agreement.
5. Neither the sale of the Securities being sold by the Selling Stockholder
nor the consummation of any other transaction contemplated in the
Underwriting Agreement by the Selling Stockholder or the Parent will
conflict with, result in a breach or violation of, or constitute a default
under (A) the charter or By-laws of the Selling Stockholder or the Parent,
(B) to such counsel's knowledge, the terms of any indenture or other
agreement or instrument known to such counsel and to which the Selling
Stockholder or the Parent or any of their respective subsidiaries is a
party or bound, (C) any judgment, order or decree known to such counsel to
be applicable to the Selling Stockholder or the Parent or any of their
respective subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Selling Stockholder, the Parent or any of their respective subsidiaries or
(D) the Delaware General Corporation Law statute or any New York State or
U.S. Federal law, rule or regulation that in such counsel's experience is
normally applicable to transactions of the type contemplated by the
Underwriting Agreement.
6. In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Delaware or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Selling Stockholder, the Parent and public officials.
[Form of Xxxxxxxx, Xxxxx, Xxxxx & Xxxxxxxx, P.C. Opinion] EXHIBIT E
1. such counsel serves as special counsel to the Company with respect
to patents and proprietary rights other than with respect to patents
and intellectual property matters relating to the correspondence
with and claims raised by Palomar Medical Technologies, Inc.
described in the Registration Statement and the Prospectus;
2. the statements included in the Registration Statement and the
Prospectus relating to patents or proprietary rights (collectively,
the "Intellectual Property Information"), at the time such
Registration Statement became effective, as of the date of the
Prospectus and as of the date hereof, are accurate and complete in
all material respects and present fairly the information purported
to be shown; nothing has come to the attention of such counsel that
causes such counsel to believe that the Intellectual Property
Information, at the time such Registration Statement became
effective, or as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Intellectual Property
Information included in the Prospectus, as of the date of such
Prospectus, or as of the date hereof, contained or contains an
untrue statement of material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading;
3. To the knowledge of such counsel, (i) there are no legal or
governmental proceedings pending relating to patent rights, trade
secrets, trademarks, service marks, copyrights or other proprietary
information or materials of the Company or any of the Subsidiaries,
and (ii) no such proceedings are threatened or contemplated by
governmental authorities or others;
4. such counsel does not know of any contracts or other documents,
relating to the patents, trade secrets, trademarks, service marks or
other proprietary information or materials of the Company or any of
the Subsidiaries that is of a character required to be described in
the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which have not been so
described or filed as required;
5. To the knowledge of such counsel, (i) neither the Company nor any of
the Subsidiaries is infringing or otherwise violating the valid
claim of any issued patents, trade secrets, trademarks, service
marks, copyrights or other proprietary information or materials of
others, and such counsel is unaware of any facts which would form a
reasonable basis for a claim of any such infringement, and (ii)
there are no infringements by others of any of the patents, trade
secrets, trademarks, service marks, copyrights or other proprietary
information or materials of the Company or any of the Subsidiaries,
and such counsel is unaware of any facts which would form a
reasonable basis for a claim of any such infringement;
2
6. such counsel has no knowledge of any facts which would preclude the
Company or any of the Subsidiaries from having valid license rights
or clear title to the patents referenced in the Registration
Statement and the Prospectus; such counsel has no knowledge that the
Company or any of the Subsidiaries lacks or will be unable to obtain
any rights or licenses to use all patents and other material
intangible property and assets that are, or would be, necessary to
conduct the business now conducted or proposed to be conducted by
the Company or the Subsidiaries as described in the Registration
Statement or the Prospectus, except as described in the Registration
Statement and the Prospectus; and such counsel is unaware of any
facts which form a basis for a finding of unenforceability or
invalidity of any of the patents and other material intellectual
property and assets of the Company or any of the Subsidiaries; and
7. such counsel is not aware of any fact with respect to the patent
applications of the Company or any of the Subsidiaries presently on
file that (i) would preclude the issuance of patents with respect to
such applications, (ii) would lead such counsel to conclude that
such patents, when issued, would not be valid and enforceable in
accordance with applicable regulations or (iii) would result in a
third party having any rights in any patents issuing from such
patent applications.
[Form of Xxxxxxx & Angel LLP Opinion] EXHIBIT F
1. the statements included in the Registration Statement and the
Prospectus under the heading "Risk Factors - Risks Relating to
Intellectual Property - If we infringe or are alleged to infringe
intellectual property rights of third parties, it will adversely
affect our business" (collectively, the "Intellectual Property
Information"), at the time such Registration Statement became
effective, as of the date of the Prospectus and as of the date
hereof, are accurate and complete in all material respects and
present fairly the information purported to be shown; nothing has
come to the attention of such counsel that causes such counsel to
believe that, insofar as the matters addressed by the Intellectual
Property Information are concerned, the Registration Statement, at
the time the Registration Statement became effective, contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as of the
date of the Prospectus, or as of the date hereof, contained or
contains an untrue statement of material fact or omitted or omits to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading;
2. Such counsel is unaware of (i) any legal or governmental proceedings
pending relating to patent rights, trade secrets, trademarks,
service marks, copyrights or other proprietary information or
materials of the Company or any of the Subsidiaries (other than
normal processing of the Company's patent applications before
applicable patent authorities), and (ii) is unaware that any such
proceedings are threatened or contemplated by governmental
authorities or others;
3. Insofar as it relates to the third-party patents and proprietary
rights that we have been retained by the Company to consider, such
counsel is of the opinion that the Company has not infringed or
otherwise violated, and is not infringing or otherwise violating,
any valid claims of those certain patents;
4. such counsel has no knowledge of any facts which would preclude the
Company or any of the Subsidiaries from having valid license rights
or clear title to the patents referenced as owned by the Company or
by El.En. in the Registration Statement and the Prospectus; such
counsel has no knowledge that the Company or any of the Subsidiaries
lacks or will be unable to obtain any rights or licenses to use all
patents and other material intangible property and assets that are,
or would be, necessary to conduct the business now conducted or
proposed to be conducted by the Company or the Subsidiaries as
described in the Registration Statement or the Prospectus, except as
described in the Registration Statement and the Prospectus; and such
counsel is unaware of any facts which form a basis for a finding of
unenforceability or invalidity of any of the patents and other
material intellectual property and assets of the Company or any of
the Subsidiaries.
[Form of Foreign Counsel Opinion] EXHIBIT G
1. Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction
in which it is chartered or organized, with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus,
and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires
such qualification.
2. All the outstanding shares of capital stock of each Subsidiary have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock of the Subsidiaries are
owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest and,
to the knowledge of such counsel, after due inquiry, any other
security interest, claim, lien or encumbrance
3. Neither the issue and sale of the Securities, nor the consummation
of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Subsidiaries pursuant
to, (i) the charter or by-laws of such Subsidiary, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which such Subsidiary is a party or bound
or to which its or their property is subject, or (iii) any statute,
law, rule, regulation, judgment, order or decree applicable to the
such Subsidiary of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over such Subsidiary or any of its properties.
Such counsel shall also state that to such's knowledge, there is no litigation
or governmental or other action, suit, proceedings or investigations before any
court or before or by any public, regulatory or governmental agency or body
pending or threatened against or involving the properties or business of the
such Subsidiary which, if determined adversely to the such Subsidiary, would
have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
