FORM OF UNDERWRITING AGREEMENT
NXSTAGE MEDICAL, INC.
(a Delaware corporation)
5,613,371 Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: June [ ], 2006
NXSTAGE MEDICAL, INC.
(a Delaware corporation)
5,613,371 Shares of Common Stock
(Par Value $0.001 Per Share)
UNDERWRITING AGREEMENT
June [ ], 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
X.X. XXXXXX SECURITIES INC.
Xxxxxx Xxxxxx Partners LLC
JMP Securities LLC
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
NxStage Medical, Inc., a Delaware corporation (the "Company"), and the
persons listed in Schedule B-1 and B-2 hereto (the "Selling Shareholders")
confirm their respective agreements with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), X.X. Xxxxxx Securities
Inc. ("JPMorgan") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Xxxxxxx
Xxxxx, JPMorgan, Xxxxxx Xxxxxx Partners LLC and JMP Securities LLC are acting as
representatives (in such capacity, the "Representatives"), with respect to the
sale by the Company and the Selling Shareholders, acting severally and not
jointly, and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of shares of Common Stock, par value $0.001 per share,
of the Company ("Common Stock") set forth in Schedules A and B hereto and with
respect to the grant by the Company to the Underwriters, acting severally and
not jointly, of the option described in Section 2(b) hereof to purchase all or
any part of 825,000 additional shares of Common Stock to cover overallotments,
if any. The aforesaid 5,613,371 shares of Common Stock (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
825,000 shares of Common Stock subject to the option described in Section 2(b)
hereof (the "Option Securities") are hereinafter called, collectively, the
"Securities".
The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-134187, including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the Securities Act of 1933, as amended (the
"1933 Act"). Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations. The information included in such
prospectus that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information." Each prospectus used before such registration
statement became effective, and any prospectus that omitted the Rule 430A
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the amendments thereto, the exhibits and
any schedules thereto, at the time it became effective, and including the Rule
430A Information, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Applicable
Time referred to in Section 1(a)(i) hereof, as of the Closing Time referred to
in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b), hereof and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or, to the knowledge
of the Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the Closing Time
(and, if any Option Securities are purchased, at the Date of Delivery),
the Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, any preliminary prospectus and any
supplement thereto or prospectus wrapper prepared in connection therewith,
at their respective times of issuance and at the Closing Time, complied
and will comply in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus and such
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved Securities.
Neither the Prospectus nor any amendments or supplements thereto
(including any prospectus wrapper), at the time the Prospectus or any
amendments or supplements thereto were issued and at the Closing Time
(and, if any Option Securities are purchased, at the Date of Delivery),
included or will include an untrue statement of a material fact
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or omitted or will 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.
As of the Applicable Time (as defined below), neither (x) the Issuer
General Use Free Writing Prospectus(es) (as defined below) issued at or
prior to the Applicable Time and the Statutory Prospectus (as defined
below) as of the Applicable Time and the information included on Schedule
C hereto, all considered together (collectively, the "General Disclosure
Package"), nor (y) any individual Issuer Limited Use Free Writing
Prospectus, when considered together with the General Disclosure Package,
included any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
"Applicable Time" means [ ]:00 [a/p]m (Eastern time) on [INSERT
DATE] or such other time as agreed by the Company, Xxxxxxx Xxxxx and
JPMorgan.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433 of the 1933 Act Regulations ("Rule
433"), relating to the Securities that (i) is required to be filed with
the Commission by the Company, (ii) is a "road show for an offering that
is a written communication" within the meaning of Rule 433(d)(8)(i)
whether or not required to be filed with the Commission or (iii) is exempt
from filing pursuant to Rule 433(d)(5)(i) because it contains a
description of the Securities or of the offering that does not reflect the
final terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed , in the form retained in
the Company's records pursuant to Rule 433(g).
"Issuer General Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is intended for general distribution to
prospective investors (other than a Bona Fide Electronic Road Show (as
defined below)), as evidenced by its being specified in Schedule E hereto.
"Issuer Limited Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
"Statutory Prospectus" as of any time means the prospectus relating
to the Securities that is included in the Registration Statement
immediately prior to that time, including any document incorporated by
reference therein.
The Company has made available a "bona fide electronic road show,"
as defined in Rule 433, in compliance with Rule 433(d)(8)(ii) (the "Bona
Fide Electronic Road Show") such that no filing of any "road show" (as
defined in Rule 433(h)) is required in connection with the offering of the
Securities.
Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of
the Securities or until any earlier date that the issuer notified or
notifies Xxxxxxx Xxxxx and JPMorgan as described in Section 3(e), did not,
does not and will not include any information that conflicted, conflicts
or will conflict with the information contained in the Registration
Statement or the Prospectus and any preliminary or other prospectus deemed
to be a part thereof that has not been superseded or modified.
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The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any Issuer Free Writing Prospectus made in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through any of the Representatives expressly for use therein.
Each preliminary prospectus (including the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto) complied when so filed in all material respects with
the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
At the time of filing the Registration Statement, any 462(b)
Registration Statement and any post-effective amendments thereto and at
the date hereof, the Company was not and is not an "ineligible issuer," as
defined in Rule 405 of the 1933 Act Regulations.
(ii) Independent Accountants. Ernst & Young LLP, the accountants who
certified the financial statements and the supporting schedules, if any,
included in the Registration Statement are registered independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus,
together with the related schedules and notes, present fairly, in all
material respects the financial position of the Company and its
consolidated Subsidiary (as defined below) at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The selected financial data and the
summary financial information included in the Prospectus present fairly in
all material respects, the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has not been
any material adverse change or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
EIR Medical, Inc., a Massachusetts corporation (the "Subsidiary")
considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or the Subsidiary, other than
those in the ordinary course of business, which are material with respect
to the Company and the Subsidiary considered as one enterprise, and (C)
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good
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standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not reasonably be expected to result in a Material
Adverse Effect. The Company is qualified as a foreign corporation to
transact business in the Commonwealth of Massachusetts.
(vi) Good Standing of Subsidiaries. The Subsidiary has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
reasonably be expected to result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of the Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through the Subsidiary, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
none of the outstanding shares of capital stock of the Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder of the Subsidiary. The only subsidiaries of the Company are
listed on Exhibit 21.1 to the Registration Statement.
(vii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for issuances
subsequent to March 31, 2006, if any, pursuant to this Agreement, pursuant
to reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock of the Company, including the Securities to be
purchased by the Underwriters from the Selling Shareholders, have been
duly authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company, including
the Securities to be purchased by the Underwriters from the Selling
Shareholders, was (or will be at the Closing Time) issued in violation of
the preemptive or other similar rights of any securityholder of the
Company.
(viii) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The Securities to
be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein will be
validly issued, fully paid and non-assessable; the Common Stock conforms
to all statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor the
Subsidiary is in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or the Subsidiary is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or the Subsidiary is subject (collectively,
5
"Agreements and Instruments") except for such defaults that would not
reasonably be expected to result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated herein and in the Registration Statement
(including the issuance and sale of Securities to be purchased by the
Underwriters from the Company and the use of the proceeds from the sale of
such Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or the Subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches, defaults or Repayment Events or liens, charges
or encumbrances that would not reasonably be expected to result in a
Material Adverse Effect), nor will such action result in any violation of
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or the Subsidiary or any of
their assets, properties or operations (except for such violations that
would not reasonably be expected to result in a Material Adverse Effect),
or the provisions of the charter or by-laws of the Company or the
Subsidiary. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or the Subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the employees
of the Company or the Subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or the
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, would reasonably be expected to result in a
Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or the
Subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which would be reasonably
expected to result in a Material Adverse Effect, or which might materially
and adversely affect the properties or assets thereof or the consummation
of the transactions contemplated herein or the performance by the Company
of its obligations hereunder (other than as disclosed in the Registration
Statement); the aggregate of all pending legal or governmental proceedings
to which the Company or the Subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, would not reasonably be expected to result in
a Material Adverse Effect.
(xiii) Statistical and Market Related Data. The statistical and
market related data included in the Registration Statement are based on or
derived from sources that the Company believes to be reliable and
accurate.
(xiv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
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(xv) Intellectual Property Rights. The Company and the Subsidiary
own, possess or can acquire on reasonable terms sufficient trademarks,
trade names, patent rights, copyrights, domain names, licenses, approvals,
trade secrets, inventions, technology, know-how and other intellectual
property and similar rights, including registrations and applications for
registration thereof as are necessary or material to conduct the business
as now conducted or proposed in the Registration Statement to be conducted
by them, or presently employed by them (collectively, "Intellectual
Property Rights"). The expected expiration of any of the Intellectual
Property Rights owned by or licensed to the Company and the Subsidiary
would not, individually or in the aggregate, have a Material Adverse
Effect. The Company or the Subsidiary is the exclusive owner of the entire
and unencumbered right, title and interest to the Intellectual Property
Rights, and the Company or the Subsidiary has a valid right to use the
Intellectual Property Rights in the ordinary course of the business as now
conducted or proposed in the Prospectus to be conducted by the Company and
the Subsidiary. There is no pending or, to the knowledge of the Company
and the Subsidiary, threatened action, suit, proceeding or claim by others
challenging the Company's or the Subsidiary's rights in or to any of the
Intellectual Property Rights owned by or licensed to the Company and the
Subsidiary. To the knowledge of the Company and the Subsidiary there is no
material infringement, misappropriation or other violation by third
parties of any of the Intellectual Property Rights owned by or licensed to
the Company and the Subsidiary. To the knowledge of the Company and the
Subsidiary the Intellectual Property Rights owned by or licensed to the
Company and the Subsidiary are valid and enforceable. To the knowledge of
the Company and the Subsidiary, there is no pending or threatened action,
suit, proceeding or claim by others challenging the validity,
enforceability or scope of any of the Intellectual Property Rights owned
by or licensed to the Company and the Subsidiary. To the knowledge of the
Company and the Subsidiary, the operation of the business as now conducted
or proposed in the Prospectus to be conducted does not conflict with,
infringe, misappropriate or otherwise violate the Intellectual Property
Rights or other proprietary rights of any third party. There is no pending
or, to the knowledge of the Company and the Subsidiary, threatened action,
suit, proceeding or claim by others that the Company or the Subsidiary
infringes, misappropriates or otherwise violates or conflicts with any
Intellectual Property Rights or other proprietary rights of others, the
Company and the Subsidiary have not received any written notice of any
such claim. To the knowledge of the Company and the Subsidiary, no
officer, director or employee of the Company or the Subsidiary is in or
has ever been in violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition
agreement, non-solicitation agreement, nondisclosure agreement or any
restrictive covenant to or with a former employer, where the basis of such
violation relates to such employee's employment with the Company or the
Subsidiary or actions undertaken by the employee while employed with the
Company or the Subsidiary. None of the Intellectual Property Rights used
by the Company or the Subsidiary in its their business as now conducted,
or proposed in the Prospectus to be conducted, has been obtained or is
being used by the Company or the Subsidiary in violation of any
contractual obligation binding on the Company, the Subsidiary, or any of
their officers, directors or employees or otherwise in violation of the
rights of any persons.
(xvi) Patent Applications. The Company and the Subsidiary have duly
and properly filed or caused to be filed with the U. S. Patent and
Trademark Office (the "PTO") or foreign and international patent
authorities all patent applications disclosed in the Prospectus as owned
by the Company and the Subsidiary (the "Company Patent Applications"). To
the knowledge of the Company and the Subsidiary, the Company has complied
with the PTO's duty of candor and disclosure for the Company Patent
Applications and has made no material misrepresentation during prosecution
of the Company Patent Applications. To knowledge of the Company and the
Subsidiary, the Company Patent Applications disclose patentable subject
matters, and the Company has not been notified of any inventorship
challenges nor has any interference been
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declared or provoked nor is any material fact known by the Company and the
Subsidiary that would preclude the issuance of patents with respect to the
Company Patent Applications or would render such patents, if issued,
invalid or unenforceable.
(xvii) Intellectual Property Licenses. The Company and the
Subsidiary have not breached and are not currently in breach of any
provision of any license, contract or other agreement governing the
Company's or the Subsidiary's use of Intellectual Property Rights owned by
third parties (collectively, the "Licenses"), except for breaches that
would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, no third party has alleged any such
breach, and the Company and the Subsidiary are unaware of any facts that
would form a reasonable basis for such a claim. To the knowledge of the
Company and the Subsidiary, no other party to the Licenses has breached or
is currently in breach of any provision of the Licenses, except for
breaches that would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. Each of the Licenses is
in full force and effect and constitutes a valid and binding agreement
between the parties thereto, enforceable in accordance with its terms, and
there has not occurred any breach or default under any such Licenses or
any event that with the giving of notice or lapse of time would constitute
a breach or default thereunder, except for breaches or defaults that would
not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect. Except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect,
neither the Company nor the Subsidiary have been or are currently involved
in any disputes regarding the Licenses. To the knowledge of the Company
and the Subsidiary, all Intellectual Property Rights licensed to the
Company and the Subsidiary pursuant to the Licenses are valid, enforceable
and being duly maintained. To knowledge of the Company and the Subsidiary,
all applications for registration of Intellectual Property Rights that are
licensed to the Company or the Subsidiary pursuant to the Licenses are
being duly prosecuted.
(xviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation by the Company of the
transactions contemplated by this Agreement, except (i) such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and foreign or state securities or blue sky laws.
(xix) Absence of Manipulation. Neither the Company nor, to the
knowledge of the Company, any affiliate of the Company, has taken, nor
will the Company or any affiliate take, directly or indirectly, any action
which is designed to or which has constituted or which would be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(xx) Possession of Licenses and Permits. The Company and the
Subsidiary possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where the
failure to possess such Governmental licenses would not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect;
the Company and the Subsidiary are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, reasonably be expected to
result in a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be
in full force and effect
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would not, singly or in the aggregate, reasonably be expected to result in
a Material Adverse Effect; and neither the Company nor the Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would reasonably be expected to result in a Material Adverse Effect.
(xxi) Title to Property. The Company and the Subsidiary have good
and marketable title to all real property owned by the Company and the
Subsidiary and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Registration Statement or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or the Subsidiary; and all of the leases and subleases
material to the business of the Company and the Subsidiary, considered as
one enterprise, and under which the Company or the Subsidiary holds
properties described in the Prospectus, are in full force and effect, and
neither the Company nor the Subsidiary has any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights
of the Company or the Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or
the Subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxii) Investment Company Act. The Company is not required, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be required, to register as an "investment company" under the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxiii) ERISA compliance. No "prohibited transaction" (as defined in
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended from time to time, including the regulations and published
interpretations thereunder ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code")) or
"accumulated funding deficiency" (as defined in Section 302 of ERISA) or
any of the reportable events set forth in Section 4043(c) of ERISA (other
than events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred with respect to any
employee benefit plan of the Company or the Subsidiary which would
reasonably be expected to have a Material Adverse Effect, each such
employee benefit plan is in compliance with applicable law, including
ERISA and the Code, except where such noncompliance, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect, the Company and the Subsidiary have not incurred and do not expect
to incur liability under Title IV of ERISA with respect to the termination
of, or withdrawal from, any pension plan for which the Company or the
Subsidiary would reasonably be expected to have any liability that would
have a Material Adverse Effect; and each such pension plan maintained by
the Company or the Subsidiary that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification, in each case, except where any such
failure to qualify or loss of qualification would not reasonably be
expected to have a Material Adverse Effect.
(xxiv) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, reasonably
be expected to result in a Material Adverse Effect, (A) neither the
Company nor the Subsidiary is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative
9
order, consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products, asbestos-containing materials or mold (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company and the Subsidiary
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the Company's knowledge,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or the Subsidiary and (D) to the Company's knowledge, there are no
events or circumstances that would reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or the Subsidiary relating to Hazardous Materials or
any Environmental Laws.
(xxv) Tax Law Compliance. The Company has filed all necessary
federal, state and foreign income and franchise tax returns or has validly
requested extensions thereof (except for any failures to file that would
not individually or in the aggregate reasonably be expected to have a
Material Adverse Effect or as disclosed in the Registration Statement) and
has paid all taxes required to be paid and, if due and payable, any
related or similar assessment, fine or penalty levied against it, except
for any tax or related or similar assessment, fine or penalty that is
currently being contested in good faith through appropriate proceedings or
as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or as disclosed in the Registration
Statement. The Company has made adequate charges, accruals and reserves in
the applicable financial statements referred to in Section l(a)(iv) above
in respect of all federal, state and foreign income and franchise taxes
for all periods as to which the tax liability of the Company has not been
finally determined, except as would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect or as disclosed
in the Registration Statement. There are no tax audits or investigations
pending, which if adversely determined would individually or in the
aggregate reasonably be expected to result in a Material Adverse Effect,
except as disclosed in the Registration Statement, nor, to the Company's
knowledge, are there any proposed additional tax assessments against the
Company which if adversely determined would individually or in the
aggregate reasonably be expected to result in a Material Adverse Effect,
except as disclosed in the Registration Statement.
(xxvi) Insurance. The Company and the Subsidiary carry, or are
covered by, insurance covering their respective properties, operations,
personnel and businesses which insurance is in such amounts and insures
against such losses and risks as are adequate to protect the Company and
the Subsidiary and their respective businesses. The Company has no reason
to believe that it will not be able (i) to renew its existing insurance
coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to
conduct its business as now conducted and at a cost that would not
reasonably be expected to result in a Material Adverse Effect. The Company
has not been denied any insurance coverage, for which it has applied.
(xxvii) FDA Compliance. Each of the Company and the Subsidiary has
filed with the U.S. Food and Drug Administration (the "FDA") and all other
applicable foreign, state and local regulatory bodies for, and received
approval of, all registrations, applications, licenses, requests
10
for exemptions, permits and other regulatory authorizations material to
the conduct of its business as now conducted, except where such failure to
file or receive approval would not reasonably be expected to have a
Material Adverse Effect; each of the Company and the Subsidiary is in
compliance in all material respects with all such registrations,
applications, licenses, requests for exemptions, permits and other
regulatory authorizations, and all applicable FDA, foreign, state and
local rules and regulations; and the Company has no reason to believe that
any party granting any such registration, application, license, request
for exemption, permit or other authorization is considering limiting,
suspending or revoking the same in any material respect.
(xxviii) Medicare and Medicaid. Except as would not, individually or
in the aggregate, result in a Material Adverse Effect, the Company is in
compliance in all material respects with all applicable laws, statutes,
ordinances, rules or regulations with respect to Medicare and Medicaid
(including, without limitation, all provisions of the Social Security Act
pertaining to Medicare and Medicaid and The False Claims Act).
(xxix) FDA, Medicare, Medicaid and PTO Proceedings. To the best of
the Company's knowledge, except as disclosed in the Registration
Statement, there are no rulemaking or similar proceedings before the FDA,
The Centers for Medicare and Medicare Services or the U.S. Patent and
Trademark Office or any similar entity in any other jurisdiction which
affects or involves, or will affect or involve, the Company or any of the
processes or products which the Prospectus discloses the Company has
developed, is developing or proposes to develop or uses or proposes to use
which, if the subject of an action unfavorable to the Company, would
reasonably be expected to have a Material Adverse Effect upon the Company.
(xxx) No Actions by FDA. Other than as disclosed in the Registration
Statement, the FDA has not commenced, or, to the Company's knowledge,
threatened to initiate, any action to withdraw its approval of any product
of the Company or the Subsidiary or commenced or, to the Company's
knowledge, threatened to initiate any action to withdraw its approval of
any facility of the Company or the Subsidiary.
(xxxi) Clinical and Preclinical Tests. Each of the human clinical
trials and other preclinical tests conducted by the Company or the
Subsidiary, or in which the Company or the Subsidiary has participated,
that are described in the Registration Statement or the Prospectus or the
results of which are referred to in the Registration Statement or the
Prospectus, and such studies and tests conducted on behalf of the Company
or the Subsidiary, were and, if still pending, are being conducted in all
material respects (i) in accordance with experimental protocols,
procedures and controls generally used by qualified experts in the
preclinical or clinical study of products comparable to those developed by
the Company and (ii) for pre-market investigational device exemption
studies, in compliance with all applicable current Good Laboratory and
Good Clinical Practices; the descriptions of the results of such studies,
tests and trials contained in the Registration Statement and the
Prospectus are accurate and complete in all material respects, and the
Company has no knowledge of any other trials, studies or tests, the
results of which reasonably call into question the results described or
referred to in the Registration Statement and the Prospectus; neither the
Company nor the Subsidiary has received any notices or correspondence from
the FDA or any other governmental agency requiring the termination,
suspension or modification (other than such suspensions as have been
lifted or such modifications as have been complied with as disclosed in
the Registration Statement) of preclinical tests or clinical trials
conducted by or on behalf of the Company or the Subsidiary or in which the
Company or the Subsidiary has participated that are described in the
Registration Statement or the Prospectus or the results of which are
referred to in the Registration Statement or the Prospectus.
11
(xxxii) No Violation of FCPA. None of the Company, the Subsidiary
or, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or the Subsidiary is aware of, or has
taken, any action, directly or indirectly, that would reasonably be
expected to result in a violation by such Persons of Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations
thereunder (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 and the Subsidiary 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.
(xxxiii) Registration Rights. Except as otherwise disclosed in the
Registration Statement, there are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xxxiv) Compliance with Xxxxxxxx-Xxxxx Act. The Company and the
Subsidiary are in compliance in all material respects with the provisions
of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith (the "Xxxxxxxx-Xxxxx Act") that are
effective and are applicable to the Company as an "issuer" as defined
under the Xxxxxxxx-Xxxxx Act and to which it is then subject.
(xxxv) Disclosure and Internal Controls. As of the Closing Time, the
Company will have established disclosure controls and procedures (as such
term is defined in Rules 13a-14 and 15d-14 under the 0000 Xxx) that (A)
are designed to ensure that material information relating to the Company
and the Subsidiary is known to the Company's Chief Executive Officer and
its Chief Financial Officer by others within the Company and the
Subsidiary, particularly during the periods in which the filings made by
the Company with the Commission which it may make under the 1934 Act are
being prepared, (B) will be evaluated for effectiveness as of the end of
each fiscal quarter and (C) are effective in all material respects to
perform the functions for which they were established. The Company and the
Subsidiary maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in
accordance with management's general or specific authorization, (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for
assets, (C) access to assets is permitted only in accordance with
management's general or specific authorization and (D) the recorded
accountability for assets is compared in all material respects with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company and its consolidated
subsidiaries employ disclosure controls and procedures that are designed
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in
the Commission's rules and forms, and is accumulated and communicated to
the Company's management, including its principal executive officer or
officers and principal financial officer or officers, as appropriate, to
allow timely decisions regarding disclosure.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally and not jointly represents and warrants to each
Underwriter as of the date hereof, as of the
12
Closing Time, and, if the Selling Shareholder is selling Option Securities on a
Date of Delivery, as of each such Date of Delivery, and agrees with each
Underwriter, as follows:
(i) Accurate Disclosure. (A) To the best knowledge of the Selling
Shareholder listed on Schedule B-1 hereto, the representations and
warranties of the Company contained in Section 1(a) hereof are true and
correct; such Selling Shareholder has reviewed and is familiar with the
Registration Statement, the General Disclosure Package and the Prospectus
and none of the General Disclosure Package, the Prospectus, any amendments
or supplements thereto includes any untrue statement of a material fact 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; such Selling Shareholder is not prompted to sell the
Securities to be sold by such Selling Shareholder hereunder by any
information concerning the Company or any subsidiary of the Company which
is not set forth in the General Disclosure Package or the Prospectus. (B)
To the best knowledge of the Selling Shareholder listed on Schedule B-2
hereto, the information that relates specifically to such Selling
Shareholder, as set forth in the General Disclosure Package and the
Prospectus under the caption "Principal and Selling Stockholders," does
not contain and, as amended or supplemented, if applicable, will not
contain, 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 are made, not misleading; such
Selling Shareholder is not prompted to sell the Securities to be sold by
such Selling Shareholder hereunder by any information concerning the
Company or any subsidiary of the Company which is not set forth in the
General Disclosure Package or Prospectus.
(ii) Authorization of this Agreement. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Shareholder.
(iii) Authorization of Power of Attorney and Custody Agreement. The
Power of Attorney and Custody Agreement, in the form heretofore furnished
to the Representatives (the "Power of Attorney and Custody Agreement"),
has been duly authorized, executed and delivered by such Selling
Shareholder and, assuming the due authorization, execution and delivery by
the other parties thereto, is the valid and binding agreement of such
Selling Shareholder.
(iv) Noncontravention. The execution and delivery of this Agreement
and the Power of Attorney and Custody Agreement and the sale and delivery
of the Securities to be sold by such Selling Shareholder and the
consummation of the transactions contemplated herein and compliance by
such Selling Shareholder with its obligations hereunder do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any tax, lien, charge or encumbrance upon
the Securities to be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or
other agreement or instrument to which such Selling Shareholder is a party
or by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, (except for
such conflicts, breaches or defaults that would not adversely affect such
Selling Shareholder's ability to fulfill its obligations hereunder or
under the Power of Attorney and Custody Agreement), nor will such action
result in any violation of the provisions of the charter or by-laws or
other organizational instrument of such Selling Shareholder, if
applicable, or any applicable treaty, law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties.
13
(v) Certificates Suitable for Transfer. The Securities to be sold by
such Selling Shareholder pursuant to this Agreement are certificated
securities in registered form and are not held in any securities account
or by or through any securities intermediary within the meaning of the
Uniform Commercial Code as in effect in the State of New York (the "UCC").
Certificates for all of the Securities to be sold by such Selling
Shareholder pursuant to this Agreement, in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or
assignment in blank with signatures guaranteed, have been placed in
custody with the Company (the "Custodian") with irrevocable conditional
instructions to deliver such Securities to the Underwriters pursuant to
this Agreement.
(vi) Valid Title. Such Selling Shareholder has, and at the Closing
Time will have, valid title to the Securities to be sold by such Selling
Shareholder free and clear of all security interests, claims, liens,
equities or other encumbrances other than pursuant to this Agreement and
the legal right and power, and all authorization and approval required by
law, to enter into this Agreement and the Power of Attorney and Custody
Agreement and to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder or a valid security entitlement in respect of
such Securities.
(vii) Delivery of Securities. Upon the Underwriters' acquiring
possession of the Securities to be sold by such Selling Shareholder and
paying the purchase price therefor pursuant to this Agreement, the
Underwriters (assuming that no such Underwriter has notice of any "adverse
claim," within the meaning of Section 8-105 of the New York Uniform
Commercial Code, to such Securities) will acquire their respective
interests in such Securities (including, without limitation, all rights
that such Selling Shareholder had or has the power to transfer in such
Securities) free and clear of any adverse claim within the meaning of
Section 8-102 of the New York Uniform Commercial Code.
(viii) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or would be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(ix) Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by such Selling Shareholder of
its obligations hereunder or in the Power of Attorney and Custody
Agreement, or in connection with the sale and delivery of the Securities
by such Selling Shareholder hereunder or the consummation of the
transactions contemplated by this Agreement with respet to such Selling
Shareholder, except such as may have previously been made or obtained or
as may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(x) Restriction on Sale of Securities. Such Selling Shareholder has
previously delivered to the Representatives a lock-up agreement
substantially in the form attached as Exhibit F hereto.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or the Subsidiary delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby; and any certificate signed
by or on behalf of a Selling Shareholder as such and delivered to the
Representatives or to counsel for the Underwriters pursuant to the terms of this
Agreement shall be
14
deemed a representation and warranty by such Selling Shareholder to the
Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and each Selling Shareholder, severally and not jointly, agrees to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company and such Selling
Shareholder, at the price per share set forth in Schedule C, that proportion of
the number of Initial Securities set forth in Schedule B opposite the name of
the Company or such Selling Shareholder, as the case may be, which the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters to purchase
up to an additional 825,000 shares of Common Stock at the price per share set
forth in Schedule C, less an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but
not payable on the Option Securities. The option hereby granted will expire 30
days after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering overallotments which may be made in
connection with the offering and distribution of the Initial Securities upon
notice by Xxxxxxx Xxxxx to the Company and the Selling Shareholders setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery for the Option
Securities (a "Date of Delivery") shall be determined by Xxxxxxx Xxxxx, but
shall not be later than five full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, or
at such other place as shall be agreed upon by the Representatives, the Company
and the Selling Shareholders, at 9:00 A.M. (Eastern time) on the third (fourth,
if the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business
day after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives, the Company and the Selling
Shareholders (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company and the Selling Shareholders, on each Date of Delivery as
specified in the notice from the Representatives to the Company and the Selling
Shareholders, but not earlier than the third business day after delivery of such
notice.
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to a bank account designated by the
Company and the Custodian pursuant to such Selling Shareholder's Power of
Attorney and Custody Agreement, as the case may be, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the
15
Securities to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial Securities and the
Option Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A, and will notify the Representatives immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and (v) if the Company becomes the subject
of a proceeding under Section 8A of the 1933 Act in connection with the offering
of the Securities. The Company will effect the filings required under Rule
424(b), in the manner and within the time period required by Rule 424(b)
(without reliance on Rule 424(b)(8)), and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments and Exchange Act Documents. The Company will give
the Representatives notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus, and
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall reasonably object. The Company has given the
Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act
Regulations within 48 hours prior to the Applicable Time; the Company will give
the Representatives notice of its intention to make any such filing from the
Applicable Time to the Closing Time and will furnish the Representatives with
copies of any such documents a reasonable amount of time prior to such proposed
filing, as the case
16
may be, and will not file or use any such document to which the Representatives
or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters, without charge,
four signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and copies of all consents and certificates of experts, and
will also deliver to the Representatives, without charge, a conformed copy of
the Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of such counsel, at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement relating to the Securities or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company
will promptly notify Xxxxxxx Xxxxx and JPMorgan and will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the
17
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g) Rule 158. The Company will timely file such reports pursuant to the
Securities Exchange Act of 1934 (the "1934 Act") as are necessary in order to
make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company intends to use the net proceeds received
by it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect and maintain
the quotation of the Securities on the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 90 days from the
date of the Prospectus, the Company will not, without the prior written consent
of Xxxxxxx Xxxxx and JPMorgan, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Registration
Statement, (C) any shares of Common Stock issued or options to purchase Common
Stock granted pursuant to existing employee benefit plans of the Company
referred to in the Registration Statement, (D) any shares of Common Stock issued
pursuant to any non-employee director stock plan or dividend reinvestment plan
or (E) any shares of Common Stock issued by the Company to acquire any assets or
equity of one or more businesses, provided that such shares are subject in
writing to the restrictions on transfer set forth herein. Notwithstanding the
foregoing, if (1) during the last 17 days of the 90-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 90-day restricted
period, the Company announces that it will release earnings results or becomes
aware that material news or a material event will occur during the 16-day period
beginning on the last day of the 90-day restricted period, the restrictions
imposed in this clause (j) 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.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the rules and regulations
of the Commission thereunder.
(l) Issuer Free Writing Prospectuses. The Company represents and agrees
that, unless it obtains the prior consent of the Representatives, and each
Underwriter represents and agrees that, unless it obtains the prior consent of
the Company and the Representatives, it has not made and will not make any offer
relating to the Securities that would constitute an "issuer free writing
prospectus," as defined in Rule 433, or that would otherwise constitute a "free
writing prospectus," as defined in Rule 405, required to be filed with the
Commission. Any such free writing prospectus consented to by the Company and the
18
Representatives, as the case may be, is hereinafter referred to as a "Permitted
Free Writing Prospectus." Each of the Company and each Selling Shareholder
represents that it has treated or agrees that it will treat each Permitted Free
Writing Prospectus as an "issuer free writing prospectus," as defined in Rule
433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing
with the Commission where required, legending and record keeping.
SECTION 4. Payment of Expenses.
(a) Expenses. Except as otherwise set forth herein, the Company will pay
all expenses incident to the performance of the obligations of the Company and
the Selling Shareholders under this Agreement, including (i) the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto, (ii)
the preparation, printing and delivery to the Underwriters of this Agreement,
any Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto (provided that all such fees
and disbursements shall not exceed $20,000), (vi) the printing and delivery to
the Underwriters of copies of each preliminary prospectus, any Permitted Free
Writing Prospectus and of the Prospectus and any amendments or supplements
thereto and any costs associated with electronic delivery of any of the
foregoing by the Underwriters to investors, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of any transfer agent or registrar for the
Securities, (ix) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the Securities, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged with the consent of the Company in connection with the road
show presentations, travel and lodging expenses of the representatives and
officers of the Company and any such consultants with the consent of the
Company; provided, however, that, one half of the cost of aircraft and other
transportation chartered in connection with the road show shall be borne by the
Underwriters and (x) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. (the "NASD") of the terms
of the sale of the Securities and (xi) the fees and expenses incurred in
connection with the inclusion of the Securities in the Nasdaq National Market.
Except as otherwise set forth herein, the Underwriters shall be responsible for
all other expenses incurred by them, including the fees and expenses of their
counsel.
(b) Expenses of the Selling Shareholders. Each Selling Shareholders,
severally and not jointly, will pay the following expenses incident to the
performance of its respective obligations under, and the consummation of the
transactions contemplated by, this Agreement: (i) any stamp duties, capital
duties and stock transfer taxes payable upon the sale of Securities by such
Selling Shareholder to the Underwriters, and their transfer between the
Underwriters pursuant to an agreement between such Underwriters, and (ii) the
fees and disbursements of its counsel and other advisors.
(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company and the Selling
19
Shareholders shall reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or the Subsidiary or on behalf of any Selling Shareholder delivered pursuant to
the provisions hereof, to the performance in all material respects by the
Company of its covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in the
manner and within the time frame required by Rule 424(b) without reliance on
Rule 424(b)(8) or a post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
Rule 430A.
(b) Opinions of Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinions, each dated as of Closing Time, of
(A) Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, counsel for the Company, to the
effect set forth in Exhibit A hereto, (B) Xxxxx & Xxxxxxx L.L.P., regulatory
counsel for the Company with respect to certain federal health regulatory
matters to the effect set forth in Exhibit C hereto, (C) Proskauer Rose LLP,
patent counsel for the Company to the effect set forth in Exhibit D hereto, and
(D) Xxxxxxxx Xxxx, general counsel of the Company to the effect set forth in
Exhibit E hereto, each in form and substance reasonably satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters.
(c) Opinion of Counsel for the Selling Shareholders. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of counsel for each of the Selling Shareholders, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit B hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Shearman & Sterling LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters,
in form and substance satisfactory to the Underwriters. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York, the federal law of the United
States and the General Corporation Law of the State of Delaware, upon the
opinions of counsel satisfactory to the Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company and
the Subsidiary and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus or the General Disclosure Package, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
20
affairs or business prospects of the Company and the Subsidiary considered as
one enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the Company signed by
the President or a Vice President of the Company and the chief financial officer
of the Company, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied
in all material respects with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or, to
their knowledge, contemplated by the Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance reasonably satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from Ernst & Young LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (g) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have been
approved for inclusion in the Nasdaq National Market, subject only to official
notice of issuance.
(j) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the Representatives
shall have received an agreement substantially in the form of Exhibit F hereto
signed by the persons listed on Schedule D hereto.
(l) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company and the Selling Shareholders contained herein and the statements
in any certificates furnished by the Company, the Subsidiary and the Selling
Shareholders hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Company signed by the President or a Vice
President of the Company and the chief financial officer of
the Company confirming that the certificate delivered at the
21
Closing Time pursuant to Section 5(e) hereof remains true and
correct as of such Date of Delivery.
(ii) Certificate of Selling Shareholders. A certificate, dated such
Date of Delivery, of an Attorney-in-Fact on behalf of each
Selling Shareholder confirming that the certificate delivered
at Closing Time pursuant to Section 5(f) remains true and
correct as of such Date of Delivery.
(iii) Opinions of Counsel for Company. The favorable opinions of (i)
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, counsel for the
Company, (ii) Xxxxx & Xxxxxxx, L.L.P., regulatory counsel for
the Company with respect to certain federal health regulatory
matters and (iii) Proskauer Rose LLP, patent counsel for the
Company, each in form and substance reasonably satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Selling Shareholders. The favorable
opinion of counsel for each of the Selling Shareholders, in
form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(v) Opinion of Counsel for Underwriters. The favorable opinion of
Shearman & Sterling LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst & Young LLP, in
form and substance reasonably satisfactory to the
Representatives and dated such Date of Delivery, substantially
in the same form and substance as the letter furnished to the
Representatives pursuant to Section 5(h) hereof, except that
the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to
such Date of Delivery.
(m) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such standard and
customary documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company and the Selling Shareholders in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters.
(n) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company and the Selling
Shareholders at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any
22
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter, its affiliates, as such term is defined in Rule
501(b) under the 1933 Act (each, an "Affiliate"), its selling agents and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus any
Issuer Free Writing Prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided that any such settlement is
effected with the written consent of the Company and the Selling
Shareholders;
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx
and JPMorgan), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through any of the Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information or any preliminary prospectus, any Issuer Free Writing Prospectus or
the Prospectus (or any amendment or supplement thereto).
(b) Each Selling Shareholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter, its Affiliates and selling agents
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the extent and in
the manner set forth in clauses (a)(i) and (ii) above; provided, however, that
this indemnity agreement shall only apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Selling Shareholder
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information or any preliminary prospectus, any Issuer
Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto). It is hereby understood that each Selling Shareholder shall be deemed
to have
23
provided the information with respect to such Selling Shareholder as set forth
under the caption "Principal and Selling Shareholders." Notwithstanding anything
to the contrary contained herein, the extent of such Selling Shareholder's
liability under this Agreement shall be limited to the net proceeds received by
such Selling Shareholder from the sale of Securities by such Selling Shareholder
pursuant to this Agreement.
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Shareholder and each person, if any, who controls any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information or any preliminary prospectus, any Issuer
Free Writing Prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through any of the Representatives expressly
for use therein. The parties hereto agree that such written information consists
of the first, second and third paragraph under the caption "Price Stabilization,
Short Positions and Penalty bids" appearing on page 101 of the Prospectus.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx and
JPMorgan, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) or settlement of any claim in connection with any violation
referred to in Section 6(e) effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 45 days prior to such settlement
being entered into,
24
(iii) such indemnifying party shall have been provided with a reasonably
detailed description of the fees and expenses to be reimbursed and (iv) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the Selling Shareholders and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of the
Securities as set forth on the cover of the Prospectus.
The relative fault of the Company and the Selling Shareholders on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company and the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
25
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or any Selling Shareholders within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company or such Selling Shareholder,
as the case may be. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint. No selling Shareholder shall be required to contribute any amount in
excess of the net proceeds received by such Selling Shareholder from the sale of
Securities by such Selling Shareholder pursuant to this Agreement, and the
Selling Shareholders' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the number of Securities set forth
opposite their respective names in Schedule B hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Subsidiary or the Selling
Shareholders submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or its Affiliates or selling agents, any person controlling any
Underwriter, its officers or directors, any person controlling the Company or
any person controlling any Selling Shareholders and (ii) delivery of and payment
for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus or General Disclosure Package, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Subsidiary considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the Nasdaq National Market,
or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority,
(iv) a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States or with respect to
Clearstream or Euroclear systems in Europe, or (v) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and
26
provided further that Sections 1, 6, 7 and 8 shall survive such termination and
remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company and [any/the]
Selling Shareholders shall have the right to postpone Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Default by One or More of the Selling Shareholders or the
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of Securities which such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder to the total number to be sold by all Selling Shareholders as set
forth in Schedule B hereto, then the Underwriters may, at option of the
Representatives, by notice from the Representatives to the Company and the
non-defaulting Selling Shareholders, either (i) terminate this Agreement without
any liability on the fault of any non-defaulting party except that the
provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or
(ii) elect to purchase the Securities which the non-defaulting Selling
Shareholders and the Company have agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve any Selling Shareholder so defaulting
from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to
27
postpone Closing Time or Date of Delivery for a period not exceeding seven days
in order to effect any required change in the Registration Statement or
Prospectus or in any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at the Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
nondefaulting party; provided, however, that the provisions of Sections 1, 4, 6,
7 and 8 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
SECTION 12. Tax Disclosure. Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the transactions
contemplated hereby, the Company (and each employee, representative or other
agent of the Company) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.
SECTION 13. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at 0 Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxx Xxxxxx; notices to the
Company shall be directed to it at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxxxx 00000, attention of Chief Executive Officer, with a copy
to Xxxxx X. Xxxxxx, Esq., Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, 00 Xxxxx
Xxxxxx, Xxxxxx, XX 00000; and notices to the Selling Shareholders shall be
directed to [ ] with a copy to [ ].
SECTION 14. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 15. No Fiduciary Duties. The Company and each Selling Shareholder
acknowledge and agree that (i) the purchase and sale of the Securities pursuant
to this Agreement, including the determination of the public offering price of
the Securities and any related discounts and commissions, is an arm's-length
commercial transaction between the Company and the Selling Shareholders, on the
one hand, and the several Underwriters, on the other hand, (ii) in connection
with the offering contemplated hereby and the process leading to such
transaction each Underwriter is and has been acting solely as a principal and is
not the agent or fiduciary of the Company or any Selling Shareholder, or its
respective stockholders, creditors, employees or any other party, (iii) no
Underwriter has assumed or will assume an advisory or fiduciary responsibility
in favor of the Company or any Selling Shareholder with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company or any Selling
Shareholder on other matters) and no Underwriter has any obligation to the
Company or any Selling Shareholder with respect to the offering contemplated
hereby except the obligations expressly set forth in this Agreement, (iv) the
Underwriters
28
and their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company and each Selling
Shareholder, and (v) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and
the Company and each of the Selling Shareholders has consulted its own
respective legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate.
SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 19. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the Underwriters,
the Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
NxSTAGE MEDICAL, INC.
By _____________________________
Title:
By _____________________________
As Attorney-in-Fact acting on behalf of
the Selling Shareholders named in
Schedule B-1 and Schedule B-2 hereto
30
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXX PARTNERS LLC
JMP SECURITIES LLC
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By _________________________________________________________
Authorized Signatory
By: X.X. XXXXXX SECURITIES INC.
By _________________________________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
31
SCHEDULE A
Number of
Initial U.S.
Name of Underwriter Securities
------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated................................................ [ ]
X.X. Xxxxxx Securities Inc.............................................. [ ]
Xxxxxx Xxxxxx Partners LLC.............................................. [ ]
JMP Securities LLC...................................................... [ ]
---------------
Total................................................................... [ ]
===============
Sch A-1
SCHEDULE B-1
Number of Initial
Name of Selling Shareholder Securities to be Sold
--------------------------- ---------------------
Xxxxxxx Xxxxxxx 54,771
Sch B-1
SCHEDULE B-2
Number of Initial
Name of Selling Shareholder Securities to be Sold
--------------------------- ---------------------
Xxxxxxx Xxxxxx 178,748
Sch B-2
SCHEDULE C
NxStage Medical, Inc.
[ ] Shares of Common Stock
(Par Value $10 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial public
offering price set forth above less $[ ] per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
overallotment option described in Section 2(b) shall be reduced by an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
Sch X-0
XXXXXXXX X
Xxx X-0
SCHEDULE E
SPECIFY EACH ISSUER GENERAL USE FREE WRITING PROSPECTUS
Sch E-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1. The Company 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 and to enter into and perform its obligations under the
Underwriting Agreement.
2. The Company is duly qualified and is in good standing as a foreign
corporation authorized to do business in the Commonwealth of
Massachusetts.
3. The Subsidiary is validly existing as a corporation in good standing under
the laws of the Commonwealth of Massachusetts and has the corporate power
and authority to carry on its business as it is, to the knowledge of such
counsel, currently conducted, and to own, lease and operate its properties
that, to our knowledge, it currently owns, leases and operates.
4. All of the outstanding shares of capital stock of the Company have been
duly authorized and are validly issued, fully paid and non-assessable.
5. All the outstanding shares of capital stock of the Subsidiary have been
duly authorized and are validly issued, fully paid and non-assessable, and
are owned of record by the Company.
6. 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).
7. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
8. 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.
9. Except as may be required under the Securities Act and the rules and
regulations of the Commission thereunder and 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 state governmental authority or agency is necessary for
the issuance, sale and delivery of the Shares by the Company to the
Underwriters pursuant to the Underwriting Agreement.
10. 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
A-1
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 state law, rule
or regulation that in our 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 we are aware.
11. The statements in the Prospectus under the captions "Description of
Capital Stock", "Certain Material United States Federal Income Tax
Considerations for Non-United States Holders", "Underwriting" and "Shares
Eligible for Future Sale" and in Item 14 of Part II of the Registration
Statement, insofar as such statements constitute matters of law or legal
conclusions or summarize the terms of agreements, are correct in all
material respects.
12. The statements in the Prospectus under the captions (A) "Risk Factors -
Risks Related to our Regulatory Environment", insofar as such statements
constitute matters of law relating to the United States Food, Drug and
Cosmetic Act, as amended (the "FDC Act"), the regulations promulgated
under the FDC Act (the "FDC Regulations") and the FDA approval process
under the FDC Act (the "FDA Approval Process"), (B) "Business - Government
Regulation", insofar as such statements constitute matters of law relating
to the FDC Act, the FDC Regulations and the FDA Approval Process, and (C)
"Business - Fraud and Abuse Laws", insofar as such statements constitute
matters of law, are correct in all material respects.
13. 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.
14. To our 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, except for any such rights as have been waived.
In addition to the opinions provided above, we confirm to you as follows: In the
course of acting as counsel for the Company in connection with the preparation
of the Registration Statement, the General Disclosure Package and the
Prospectus, we have participated in conferences with officers and other
representatives of the Company, representatives of and counsel for the
Underwriters and representatives of the independent public accountants of the
Company, during which the contents of the Registration Statement, the General
Disclosure Package 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 we are not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement, the
General
A-2
Disclosure Package or the Prospectus (except to the extent expressly set forth
in paragraphs 12 and 13 above), 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, and
other financial and accounting data and information, and
information relating to the Underwriters and the method of
distribution of the Shares by the Underwriters included
therein or omitted therefrom, as to which we express 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 to our attention that have caused us 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), (ii) the General Disclosure Package, as of [insert
date and time] (which the Underwriters have informed us is a
time prior to the time of the first sale of the Shares by any
Underwriter), contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading (except that we
express no belief as to the information as set forth in the
parenthetical in clause (a) above), or (iii) the Prospectus,
as of the date it was filed with the Commission pursuant to
Rules 424(b)(4) and 430A) under the Securities Act 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) we are 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) we are 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 Securities Act or the rules and
regulations thereunder to be described in the Registration
Statement or the Prospectus that is not so described.
A-3
Exhibit B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) No filing with, or consent, approval, authorization, license, order,
registration, qualification or decree of, any United States federal or
Massachusetts state court or governmental authority or agency, (other than such
filings, consents, approvals, authorizations, licenses, orders, registrations,
qualifications or decrees as may be required pursuant to the Securities Act of
1933, as amended (the "Act") and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder and the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the rules and regulations of
the Commission thereunder, and such authorizations, approvals or consents as may
be necessary under state securities laws, as to which we express no opinion) is
necessary or required to be obtained by the Selling Shareholder for the
consummation by the Selling Shareholder of the transactions contemplated by the
Purchase Agreement or in the Power of Attorney and Custody Agreement, or in
connection with the offer, sale or delivery of the Shares.
(ii) The Power of Attorney and Custody Agreement have been duly executed
and delivered by the Selling Shareholder and constitute the valid and binding
agreement of the Selling Shareholder.
(iii) When executed and delivered by the attorney-in-fact in accordance
with the Power of Attorney, the Purchase Agreement will have been duly executed
and delivered on behalf of the Selling Shareholder.
(iv) Except with respect to the Act and the rules and regulations of the
Commission thereunder and the Exchange Act and the rules and regulations of the
Commission thereunder, the execution, delivery and performance of the Purchase
Agreement, the Power of Attorney and Custody Agreement by or on behalf of the
Selling Shareholder and the sale and delivery of the Shares and the consummation
of the transactions contemplated by the Purchase Agreement will not result in
any violation of any United States federal or Massachusetts state law, rule or
regulation that in our experience is normally applicable to transactions of the
type contemplated by the Purchase Agreement, except for such violations that
would not have an adverse effect on the ability of the Selling Shareholder to
consummate the transactions contemplated by the Purchase Agreement, Custody
Agreement and the Power of Attorney.
(v) Assuming that each Underwriter acquires a security entitlement
(within the meaning of Sections 8-102(a)(17) and 8-105 of the UCC) in the Shares
transferred by the Selling Shareholder by having such Shares credited to the
securities account or accounts of such Underwriter maintained with DTC or
another securities intermediary, and makes payment for such Shares as provided
in the Purchase Agreement, in each case without notice of any adverse claim
(within the meaning of Section 8-105 and 8-502 of the UCC), no action based on
an adverse claim (within the meaning of Section 8-102 of the UCC) may be
asserted against such Underwriter with respect to such Shares.
B-1
Exhibit C
FORM OF OPINION OF COMPANY'S REGULATORY COUNSEL WITH RESPECT TO
CERTAIN FEDERAL HEALTH REGULATORY MATTERS TO BE DELIVERED
PURSUANT TO SECTION 5(b)(B)
The statements in the following captioned sections of the Prospectus,
insofar as they purport to summarize applicable provisions of provisions of the
Titles XVIII and XIX of the Social Security Act, Sections 1128A and 1128B(b) of
the Social Security Act, Section 1173(d) of the Social Security Act, Section 264
of the Health Insurance Portability and Accountability Act of 1996 and 31 U.S.C.
Section 3729, and the regulations promulgated thereunder, and of the Medicare
Benefit Policy Manual, are accurate summaries in all material respects of the
provisions purported to be summarized under such captions in the Prospectus:
(i) "Prospectus Summary - Our Business"(first and second sentences of
paragraph 5)
(ii)"Risk Factors - Risks Related to Our Business - Current Medicare
reimbursement rates limit the price at which we can market the System One, and
adverse changes to reimbursement could affect the adoption of System One."
(fourth sentence)
(iii)"Risk Factors - Risks Related to the Regulatory Environment - Changes
in reimbursement for treatment for ESRD could affect the adoption of our System
One and the level of our future products revenues." (first and fifth sentences
of paragraph 1; second and third sentences of paragraph 2; and first, second and
third sentences of paragraph 3)
(iv) "Risk Factors - Risks Related to the Regulatory Environment - "We
currently have obligations under our contracts with dialysis clinics to protect
the privacy of patient health information." (sixth sentence of paragraph 1)
(v) "Risk Factors - Risks Related to the Regulatory Environment - We are
subject to federal and state laws prohibiting "kickbacks" and false and
fraudulent claims which, if violated, could subject us to substantial penalties.
Additionally, any challenges to or investigation into our practices under these
laws could cause adverse publicity and be costly to respond to, and thus could
harm our business." (first sentence of paragraph 1; and first sentence of
paragraph 2(only with respect to Medicare and Medicaid), second sentence of
paragraph 2(only with respect to the portion of the sentence stating
'manufacturers can be held liable under these laws if they are deemed to "cause"
the submission of false or fraudulent claims')and fifth sentence of paragraph 2)
(vi) "Business - Government Regulation - Fraud and Abuse Laws -
Anti-Kickback Statutes" (first,fourth, fifth, and sixth sentences of paragraph
1; and second and third sentences of paragraph 2)
(vii) "Business - Government Regulation - Fraud and Abuse Laws - False
Claims Laws" (first, second, third, and sixth sentences)
(viii) "Business - Government Regulation - Fraud and Abuse Laws - Privacy
and Security" (first and second sentences of paragraph 1)
(ix)"Business - Reimbursement - Chronic Care" (first sentence)
(x) "Business - Reimbursement - Chronic Care - Medicare" (first, second,
third and fifth sentences of paragraph 1; first sentence of paragraph 2, second
sentence of paragraph 2 (only with respect to the portion stating "During the
waiting period, the patient's existing insurer is responsible for paying primary
benefits at the rate specified in the plan") and third sentence of paragraph 2;
first, second and third sentences of paragraph 3; first, second and third
sentences of paragraph 4; and first and second sentences of paragraph 5)
(xi) "Business - Reimbursement -- Chronic Care - Medicaid" (first, second
and third sentences)
(xii) "Business - Reimbursement -- Chronic Care - Private Insurers" (third
and fourth sentences)
(xiii) "Business - Reimbursement -- Chronic Care - Critical Care" (first
and second sentences).
The statement in the fifth sentence of paragraph 1 under the caption "Risk
Factors - Risks Related to the Regulatory Environment - We are subject to
federal and state laws prohibiting "kickbacks" and false and fraudulent claims
which, if violated, could subject us to substantial penalties. Additionally, any
challenges to or investigation into our practices under these laws could cause
adverse publicity and be costly to respond to, and thus could harm our
business." in the Prospectus, insofar as such statement purports to state
certain possible legal consequences of the application of Section 1128B(b) of
the Social Security Act and the regulations promulgated thereunder to the
hypothetical described therein, is accurate in all material respects.
C-1
Exhibit D
FORM OF OPINION OF PATENT COUNSEL
1. To the best of our knowledge, Schedule A attached hereto is a true list of
patents and patent applications ("Patents"), owned by the Company.
2. To the best of our knowledge, the Company is the exclusive owner of all
right, title, and interest in the owned Patents; all such Patents have
been properly prepared as to form and have been assigned solely to the
Company, which assignments are either recorded in the U.S. Patent and
Trademark Office or other foreign patent office, as applicable, or are
assignments expected to be filed after execution by employees of the
Company, or have been submitted for recording in the U.S. Patent and
Trademark Office or other foreign patent office, as applicable; and each
of the pending patent applications included in the Patents is being
diligently prosecuted by the Company. With respect to Patents that have
been assigned to the Company, we have no reason to believe that such
assignments are invalid.
3. To the best of our knowledge, there is no prior art or combination of
prior art that would invalidate (a) the claims of any issued Patents. In
relation to any pending patent applications in which pending claims have
not been rejected by the patent office, to the best of our knowledge,
there is no prior art that would invalidate any of the claims. In relation
to the applications where there has been a rejection, to the best of our
knowledge, the arguments responding to any rejections have been advanced
in good faith.
4. To the best of our knowledge, the issued Patents have been duly maintained
and are in full force and in effect and none has been adjudged invalid or
unenforceable in whole or in part.
5. To the best of our knowledge, the operation of the business of the
Company, as now conducted or as proposed to be conducted, together with
the use of the Intellectual Property Rights owned by or licensed to the
Company, does not conflict with, infringe, misappropriate or otherwise
violate the intellectual property rights of any third party. To the best
of our knowledge, no actions, suits, claims or proceedings have been
asserted or threatened against the Company alleging any of the foregoing
or seeking to challenge, deny or restrict the operation of the business of
the Company. Also to the best of our knowledge, no Court has issued any
order, judgment, decree or injunction restricting the operation of the
business of the Company.
6. To the best of our knowledge, the statements and the information contained
in the Intellectual Property Sections in so far as they relate to patents
are accurate in all material respects, fairly represent the matters
disclosed therein and do not omit to state a material fact or facts
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
D-1
Exhibit E
FORM OF OPINION OF GENERAL COUNSEL
(1) The Company is duly incorporated under the laws of the State of Delaware.
(2) The Subsidiary is duly incorporated under the laws of the Commonwealth of
Massachusetts.
E-2
Exhibit F
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT
TO SECTION 5(i)]
o, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxx Partners LLC
JMP Securities LLC
as Representatives of the several
Underwriters to be named in the
within-mentioned Underwriting Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by NxStage Medical, Inc.
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Dear Sirs:
The undersigned, a stockholder and/or an officer and/or director of NxStage
Medical, Inc., a Delaware corporation (the "Company"), understands that Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx"), X.X. Xxxxxx Securities Inc. ("JPMorgan"), Xxxxxx Xxxxxx Partners LLC
and JMP Securities LLC propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with the Company providing for the public offering
(the "Offering") of shares (the "Securities") of the Company's common stock, par
value $0.0001 per share (the "Common Stock"). In recognition of the benefit that
such an offering will confer upon the undersigned as a stockholder and an
officer and/or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Underwriting
Agreement that, during the period from the date hereof through the date that is
of 90 days from the date of the Underwriting Agreement (the "Lock-Up Period"),
the undersigned will not, without the prior written consent of Xxxxxxx Xxxxx and
JPMorgan, directly or indirectly, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant for the sale of, or otherwise dispose
of or transfer any shares of the Company's Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file, or
cause to be filed, any registration statement under the Securities Act of 1933,
as amended, with respect to any of the foregoing (collectively, the "Lock-Up
Securities") or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lock-Up Securities, whether any such
swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
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Notwithstanding the foregoing, and subject to the conditions below, the
undersigned may transfer the Lock-Up Securities without the prior written
consent of Xxxxxxx Xxxxx and JPMorgan:
(i) as a bona fide gift or gifts; or
(ii) upon the undersigned's death, by gift, will or intestate succession
to the undersigned's immediate family; or
(iii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned; or
(iv) as a distribution to limited partners or stockholders of the
undersigned;
provided that (1) Xxxxxxx Xxxxx and JPMorgan receive a signed lock-up agreement
for the balance of the lock-up period from each donee, trustee, distributee, or
transferee, as the case may be, (2) any such transfer shall not involve a
disposition for value, (3) such transfers are not required to be reported in any
public report or filing with the Securities and Exchange Commission, or
otherwise and (4) the undersigned does not otherwise voluntarily effect any
public filing or report regarding such transfers.
For purposes of this lock-up agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
Furthermore, the undersigned may sell shares of Common Stock of the
Company purchased by the undersigned: (A) as part of the Offering of shares (the
"Directed Share Offering") reserved for sale to directors, officers, employees,
business associates and related persons; (B) that are allocated to the
undersigned by Xxxxxxx Xxxxx and JPMorgan as part of the Offering; or (C) on the
open market following the Offering; if and only if (i) such sales are not
required to be reported in any public report or filing with the Securities
Exchange Commission, or otherwise and (ii) the undersigned does not otherwise
voluntarily effect any public filing or report regarding such sales. In
addition, the undersigned may sell 64,000 shares of Common Stock acquired from
JAFCO and such shares shall not be considered Lock-up Securities.
Notwithstanding the foregoing, 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 or becomes aware that material news or a
material event will occur during the 16-day period beginning on the last day of
the Lock-Up Period,
the restrictions imposed by this letter 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, as applicable,
unless Xxxxxxx Xxxxx and JPMorgan waive, in writing, such extension.
The undersigned hereby acknowledges and agrees that written notice of any
extension of the Lock-Up Period pursuant to the previous paragraph will be
delivered by Xxxxxxx Xxxxx and JPMorgan to the Company (in accordance with
Section 12 of the Underwriting Agreement) and that any such notice properly
delivered will be deemed to have been given to, and received by, the
undersigned. The undersigned further agrees that, prior to engaging in any
transaction or taking any other action that is subject to the terms of this
lock-up agreement during the period from the date of this lock-up agreement to
F-2
and including the 34th day following the expiration of the initial Lock-Up
Period, it will give notice thereof to the Company and will not consummate such
transaction or take any such action unless it has received written confirmation
from the Company that the Lock-Up Period (as may have been extended pursuant to
the previous paragraph) has expired.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Lock-Up Securities except in compliance with the foregoing
restrictions.
This agreement shall lapse and become null and void on June 30, 2006, in
the event that the registration statement has not been declared effective by
that date.
Very truly yours,
Signature:
-----------------------
Print Name:
----------------------
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