Exhibit 1.1
[_________] Shares
INTUITIVE SURGICAL, INC.
COMMON STOCK (PAR VALUE $0.001 PER SHARE)
UNDERWRITING AGREEMENT
_____, 1998
_____, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
BT Alex. Xxxxx Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Intuitive Surgical, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters"), an aggregate of [________] shares of the Common
Stock (par value $0.001 per share) of the Company (the "Firm Shares"). The
Company also proposes to sell to the several Underwriters not more than an
additional [________] shares of its Common Stock (par value $0.001 per share)
(the "Additional Shares"), if and to the extent that you, as Managers of the
offering, shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such shares of Common Stock granted to the Underwriters in
Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares." The shares of Common Stock (par value
$0.001 per share) of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "Common Stock."
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including a prospectus, relating to
the Shares. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement;" the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
As part of the offering contemplated by this Agreement, Xxxxxx
Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") has agreed to reserve out of the
Shares set forth opposite its name on Schedule I to this Agreement, up to
[________] shares, for sale to the Company's employees, officers, and directors
and other parties associated with the Company (collectively, "Participants"), as
set forth in the Prospectus under the heading "Underwriting" (the "Directed
Share Program"). The Shares to be sold by Xxxxxx Xxxxxxx pursuant to the
Directed Share Program (the "Directed Shares") will be sold by Xxxxxx Xxxxxxx
pursuant to this Agreement at the public offering price. Any Directed Shares
not orally confirmed for purchase by any Participants by the end of the first
business day after the date on which this Agreement is executed will be offered
to the public by Xxxxxx Xxxxxxx as set forth in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the
Company's knowledge, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did
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 required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, and (iii) the
Prospectus does not contain and, as supplemented,
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if applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
Section l(b) do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company.
(d) The Company does not own any equity or capital interests in
any corporation, partnership, joint venture, association or other entity.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters in all material respects to the description thereof
contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance
of the Shares to be sold by the Company have been duly authorized and are
validly issued, fully paid and non-assessable. Except as set forth in the
Prospectus and other than options to purchase [________] shares of the
Company's Common Stock granted to employees pursuant to the Company's 1998
Equity Incentive Plan (the "1998 Incentive Plan"), the Company's 1998
Employee Stock Purchase Plan (the "1998 Purchase Plan"), the Company's
1998 Non-Employee Directors' Stock Option Plan (the "1998 Directors'
Plan") and a warrant to purchase 11,000 shares, all as described in the
Prospectus, the Company has no outstanding options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. All outstanding
shares of capital stock and options and other rights to acquire capital
stock have been issued in compliance with the registration and
qualification provisions of all applicable securities laws (or applicable
exemptions thereof) and were not issued in violation of any preemptive
rights, rights of first refusal and other similar rights.
(h) The Shares have been duly authorized, and when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of the Company's Amended and Restated
Certificate of Incorporation, as amended, or bylaws of the Company or any
agreement or other instrument binding upon the Company that is material to
the Company or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or governmental agency is required for the performance
by the Company of its obligations under this Agreement, except such as may
be required by the National Association of Securities Dealers ("NASD") or
the securities or Blue Sky laws of the various states or international
jurisdictions in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company from that set forth in the Prospectus.
(k) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company is a party or to
which any of the properties of the Company
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is subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or documents required to be filed
as exhibits to the Registration Statement that are not described or filed
as required.
(l) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 or Rule 462 under the Securities Act, complied
when so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(m) 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" or an
entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
(n) There is no owner of any securities of the Company who has any
right, not effectively satisfied or waived, to require registration of any
shares of capital stock of the Company in connection with the filing of
the Registration Statement or the sale of the Shares thereunder. 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 in each case as described in the Prospectus.
(o) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) has received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct its
respective business and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties) which would, singly or in the aggregate, have a material
adverse effect on the Company.
(q) The Company has complied with all provisions of
Section 517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
(r) The Company has notified each holder of a currently
outstanding option issued under the 1998 Incentive Plan, 1998 Purchase
Plan, or the 1998 Directors' Plan and each person who has acquired shares
of Common Stock pursuant to the exercise of any option granted under the
1998 Incentive Plan, 1998 Purchase Plan, or the 1998 Directors' Plan, that
none of such options or shares may be sold or otherwise transferred or
disposed of for a period of 180 days after the date of the initial public
offering of the Shares and that the Company has the right to impose
stop-transfer instructions with the Company's transfer agent in order to
enforce the foregoing lock-up provision.
(s) As of the date the Registration Statement became effective,
the Common Stock was authorized for quotation on The Nasdaq National
Market upon official notice of issuance.
(t) The financial statements, including the notes thereto,
included in the Registration Statement and the Prospectus fairly present,
in all material respects, the financial position of the Company as of the
dates indicated and the results of its operations for the periods
specified; said financial statements
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have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis.
(u) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) the Company
has not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary
course of business; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (3) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company, except for options or warrants to purchase common stock which
have been exercised on or after [May 31, 1998], in each case as described
or contemplated in the Prospectus.
(v) The Company does not own any real property. The Company has
good and marketable title in fee simple to all personal property owned by
it which is material to the business of the Company, in each case free and
clear of all liens, encumbrances and defects except such as are described
in the Prospectus or such as do not 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; and any real property and buildings held
under lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company, in each case except as described in the
Prospectus.
(w) The Company owns or possess, or can acquire on reasonable
terms, all material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names currently employed
by them in connection with the business now operated by it, and the
Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing and there
are no legal or governmental proceedings other than patent applications
pending relating to patent rights of the Company to which the Company is a
party, which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse affect on the
Company. The U.S. patents assigned to the Company are held by the
Company, and, except as set forth in the Registration Statement and
Prospectus, no other entity or individual has any right or claim in any of
the applications, or any patent to be issued therefrom, by virtue of any
contract, license or other agreement entered into between such entity or
individual and the Company.
(x) No material labor dispute with the employees of the Company
exists, except as described in the Prospectus, or, to the knowledge of the
Company, is imminent.
(y) The Company is insured by the insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged; the
Company has not been refused any insurance coverage sought or applied for;
and, except as described in the Prospectus, the Company has no reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a material adverse effect on the Company.
(z) The Company possesses all consents, approvals, orders,
certificates, authorizations and permits issued by, and has made all
declarations and filings with all appropriate federal, state or foreign
regulatory authorities necessary to conduct its business as currently
being conducted or as proposed in the Registration Statement to be
conducted, except where the failure to possess such consents, approvals,
orders, certificates, authorizations and permits or to make all
declarations and filings would not have a material adverse effect on the
Company, and to own, lease, license, and use their properties in the
manner described in the Prospectus, and the Company has not received any
notice of proceedings relating to the revocation or modification of any
such consent, approval, order, certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse change in the condition,
financial, or otherwise, or in the earnings, business or operations
4
of the Company, except as described the Prospectus
(aa) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (1) transactions are
executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (3) access to
assets is permitted only in accordance with management's general or
specific authorization; and (4) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(bb) (i) The Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements
thereto will comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus or any preliminary prospectus, as
supplemented, if applicable, are distributed in connection with the
Directed Share Program, and (ii) no authorization, approval, consent,
license, order, registration or qualification of or with any government,
governmental instrumentality or court, other than such as have been
obtained, is necessary under the securities laws and regulations of
foreign jurisdictions in which the Directed Shares are offered outside the
United States.
(cc) The Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the Directed Share Program with
the specific intent to unlawfully influence (i) a customer or supplier of
the Company to alter the customer's or supplier's level or type of
business with the Company, or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its products.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective number of Firm Shares set forth in Schedule I hereto
opposite its name at $____ a share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to [________]
Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
ending 180 days after the date of the Prospectus, (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 to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such 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 Shares to be sold hereunder (B) the grant of options pursuant to the
1998 Incentive Plan or the 1998 Directors Plan (C) the sale of stock pursuant to
the 1998 Purchase Plan (D) the grant of any option or warrant pursuant to an
equipment lease or accounts receivable finance transaction (E) the issuance by
the Company of shares of Common Stock upon the exercise of an option or warrant
or the conversion of a security outstanding on
5
the date hereof of which the Underwriters have been advised in writing or (F)
the sale by the Company of securities for an aggregate consideration not to
exceed $__________, in connection with an investment by one or more strategic
partners, provided that the holders of such securities are subject to a
lock-up for six (6) months following the sale with substantially the same
terms as set forth in the Lock-Up Agreements (as defined in Section 5(h)
herein).
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
[$_____] a share (the "Public Offering Price") and to certain dealers selected
by you at a price that represents a concession not in excess of [$____] a share
under the Public Offering Price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of [$____] a share, to any
Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be
made to the Company in federal or immediately available funds in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on [_________, 1998] or at such
other time on the same or such other date, not later than [________, 1998], as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made in federal or
immediately available funds in New York City against delivery of such Additional
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on the date specified in Section 2 or at such other time on
the same or such other date, not later than [________, 1998], as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITER'S OBLIGATIONS. The obligations
of the Company to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than [5:30 p.m.] (New York time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company, from that set forth in the Registration Statement at
the time it was declared effective (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that,
in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
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(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company on behalf of the Company, to the effect set forth in
clause (a) above and to the effect that the representations and warranties
of the Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Godward LLP, outside counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power authority
to own its property 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 the conduct of its business or its ownership or leasing of
property requires such qualification, except where the failure to be
so qualified or be in good standing would not have a material
adverse effect on the Company;
(ii) the authorized, issued and outstanding capital stock of
the Company conforms as to legal matters to the description thereof
contained in the Prospectus under the caption "Description of
Capital Stock";
(iii) the shares of Common Stock outstanding prior to the
issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued, fully paid, and non-assessable;
(iv) the Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any preemptive or similar
rights contained in the Company's Certificate of Incorporation or
bylaws or to such counsel's knowledge, under any agreement to which
the Company is a party;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the Amended
and Restated Certificate of Incorporation, as amended, or bylaws of
the Company or any agreement or other instrument binding upon the
Company that is filed as an exhibit to the Registration Statement,
or, to the best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Company, and no consent, approval, authorization or order
of, or qualification with, any governmental body or governmental
agency is required for the performance by the Company of its
obligations under this Agreement, except such as may be required by
the NASD and securities or Blue Sky laws of the various states or
international jurisdiction in connection with the offer and sale of
the Shares;
(vii) the statements (A) in the Prospectus under the captions
"Management--Officers and Directors (except with respect to the
seventh and eighth sentences of the last paragraph thereof),
"Management--Employee Benefit Plans," "Management--Executive Officer
and Employment Arrangements," "Certain Transactions," "Description
of Capital Stock," "Shares Eligible for Future Sale," and
"Business--Intellectual Property--SRI INTERNATIONAL AGREEMENT"
(except with respect to the first paragraph) and "--IBM AGREEMENT
(except with respect to the first paragraph) and (B) in the
Registration Statement in Items 14 and 15, in each case insofar
as such statements constitute summaries of the legal matters,
documents or
7
proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein to
the extent required by the Act and the Rules;
(viii) to such counsel's knowledge, there are no legal or
governmental proceedings pending or overtly threatened to which the
Company is a party or to which any of the properties of the Company
is subject that are required by the Securities Act or the rules and
regulations thereunder (the "Act and Rules") to be described in the
Registration Statement or the Prospectus or any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or
contracts or other documents required to be filed as exhibits to the
Registration Statement, that are not described or filed as required
by the Act or the Rules;
(ix) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the net
proceeds therefrom as described in the Prospectus, will not be an
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended; and
(x) the Registration Statement and Prospectus (except for
the Regulatory Portion and Intellectual Property Portion (as defined
below) and the financial statements and schedules and other
financial and statistical data included therein as to which such
counsel need not express any opinion) comply as to form in all
material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder.
(xi) In addition, such counsel shall state that during the
course of the preparation of the Registration Statement, they have
participated in conferences with the Representatives and with
officers and other representatives of the Company, its counsel and
its independent public accountants at which the contents of the
Registration Statement and Prospectus and any supplements or
amendments thereto, and related matters were discussed. Such
counsel shall further state that although they have not
independently verified and are not passing upon the accuracy,
completeness or fairness of the statements made in the Registration
Statement and Prospectus and any supplements or amendments thereto
(other than as specified above in paragraphs (ii) and (vii)),
nothing has come to their attention that has caused them to believe
that the Registration Statement, as of the time it became effective,
contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus, as of
its date or the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except
that such counsel shall express no comment with respect to the
financial statements and schedules, related notes, other financial
data and statistical data derived therefrom included in the
Registration Statement and Prospectus or derived therefrom.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx & Hartsen LLP, outside regulatory counsel for the
Company, dated the Closing Date, to the effect that the statements under
the captions "Risk Factors--Need for Federal and State Regulatory
Clearance or Approval," "Risk Factors--Limited Manufacturing Experience;
Scale-Up Risk, "Business--Clinical Trials and Experience," and
"Business--Government Regulation" (together the "Regulatory Portion"), (i)
insofar as such statements purport to summarize applicable provisions of
the Federal Food, Drug, and Cosmetic Act and the regulations promulgated
thereunder, are accurate summaries in all material respects of the
provisions purported to be summarized under such captions in the
Prospectus and Registration Statement, and (ii) insofar as such statements
relate to FDA regulatory matters, such counsel has no reason to believe
that the information contained in the Regulatory Portion of the
Registration Statement and Prospectus at the time each became effective,
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are
made, not misleading.
8
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx, Xxxxxxxx & Crew LLP, outside intellectual property
counsel for the Company, dated the Closing Date, to the effect that (i)
such counsel is familiar with the technology used by the Company in its
business and the manner of its use, (ii) such counsel has read the
statements contained in the Registration Statement and Prospectus under
the captions "Risk Factors--Dependence on Patents and Proprietary and
Licensed Technology," "Risk Factors--Risks of Third-Party Claims of
Infringement," "and "Business--Intellectual Property--Patents" (together
the "Intellectual Property Portion"), (iii) the Intellectual Property
Portion contains accurate descriptions of the Company's patent
applications, issued and allowed patents, and, to the best of counsel's
knowledge, patents licensed to the Company, and fairly summarizes the
legal matters, documents and proceedings relating thereto, (iv) such
counsel is not aware of any valid United States or foreign patent that is
or would be infringed by the activities of the Company in the manufacture,
use or sale of any presently proposed product, as described in the
Prospectus, (v) such counsel has reviewed the Company's patent
applications filed in the U.S. and outside the U.S. (the "Applications"),
and the Applications have been properly prepared and filed on behalf of
the Company, and are being diligently pursued by the Company; the
inventions described in the Applications are assigned or licensed to the
Company to our knowledge, except for patents where the Company has
obtained a field of use license, no other entity or individual has any
right or claim in any of the inventions, Applications, or any patent to be
issued therefrom, and in such counsel's opinion based on presently
available information each of the Applications discloses patentable
subject matter, (vi) such counsel not aware of any pending or threatened
judicial or governmental proceedings relating to patents or proprietary
information to which the Company is a party or of which an property of the
Company is subject and such counsel is not aware of any pending or
threatened action, suit or claim by others that the Company is infringing
or otherwise violating any patent rights of others, nor is such counsel
aware of any rights of third parties to any of the Company's inventions
described in the Applications, issued, approved or licensed patents which
could reasonably be expected to materially affect the ability of the
Company to conduct its business as described in the Prospectus, including
the commercialization of the "surgeon's console," the "patient-side cart"
and the "resposable instruments" (each as described in the Prospectus) and
other products currently under development, and (vii) such counsel has no
reason to believe that the information contained in the Intellectual
Property Portion of the Registration Statement and the Prospectus at the
time each became effective, contained any untrue statement of a material
fact or omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading].
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP,
counsel for the Underwriters, dated the Closing Date, covering the matters
referred to in subparagraphs (c)(iv), (c)(v), (c)(vii) (but only as to the
statements in the Prospectus under "Description of Capital Stock" and
"Underwriters") and Section 5(c)(x)(i) above.
With respect to Section 5(c)(x)(i) above, Cooley Godward LLP and
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP, may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification,
except as specified.
The opinions of Cooley Godward LLP, Xxxxx & Hartsen LLP, and
Xxxxxxxx, Xxxxxxxx & Crew LLP described in paragraphs (c), (d) and (e)
above shall be rendered to the Underwriters at the request of the Company
and shall so state therein.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Ernst & Young LLP, independent certified public
accountants, 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
9
Registration Statement and the Prospectus; PROVIDED that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(h) The lock-up agreements (the "Lock-Up Agreements"), each
substantially in the form attached as EXHIBIT A hereto, between you and
certain stockholders, officers and directors of the Company relating to
sales and certain other dispositions of shares of Common Stock or certain
other securities, delivered to you on or before the date hereof, shall be
in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the Additional Shares.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, three (3) signed copies of
the Registration Statement (including exhibits thereto) and for delivery
to each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. local time on the second business day
following the date of this Agreement and during the period mentioned in
paragraph (c) below, as many copies of the Prospectus and any supplements
thereto or to the Registration Statement as you may reasonably request.
(b) Before amending the Registration Statement or supplementing
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to supplement the Prospectus in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you on behalf of the Underwriters and
to any other dealers upon request, either such supplements to the
Prospectus so that the statements in the Prospectus as so supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
supplemented, will comply with law.
(d) To the extent necessary to comply with applicable law, to
endeavor to qualify the Shares for offer and sale under the securities or
Blue Sky laws of such jurisdictions as you shall reasonably request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earnings statement of the Company
that satisfies Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to
10
any of the foregoing, including all printing costs associated therewith,
and the mailing and delivering of copies thereof to the Underwriters and
dealers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky memorandum in
connection with the offer and sale of the Shares under state securities
laws, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with the Blue Sky memorandum,
(iv) all filing fees and reasonable disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating
to the Common Stock and all costs and expenses incident to listing the
Shares on the Nasdaq National Market, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with
the road show presentations with the prior approval of the Company, travel
and lodging expenses of officers of the Company and any such consultants,
and the Company's pro rata cost of any aircraft chartered in connection
with the road show, (ix) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section, and (x) all fees and
disbursements of counsel incurred by the Underwriters in connection with
the Directed Share Program and stamp duties, similar taxes or duties or
other taxes, if any, incurred by the Underwriters in connection with the
Directed Share Program. It is understood, however, that except as provided
in this Section, Section 7 entitled "Indemnity and Contribution," and the
last paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
(g) To not release any shares of Common Stock from any
restrictions imposed upon such shares by the Lock-Up Agreements without
the prior written consent of Xxxxxx Xxxxxxx.
(h) That in connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the
extent required by the NASD or the NASD rules from sale, transfer,
assignment, pledge or hypothecation for a period of three months following
the date of the effectiveness of the Registration Statement. Xxxxxx
Xxxxxxx will notify the Company as to which Participants will need to be
so restricted. The Company will direct the transfer agent to place
stop-transfer restrictions upon such securities for such period of time.
(i) To comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
7. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from
and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
Company will not be liable in any such case to the extent that such
losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein; and
provided further that the foregoing indemnity agreement with respect to
any preliminary prospectus shall not inure to the benefit of any
Underwriter or any person controlling such Underwriter,
11
from whom the person asserting any such losses, claims, damages or
liabilities purchased Shares, if a copy of the Prospectus (as then
supplemented if the Company shall have furnished any amendment or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability,
unless such failure is the result of non-compliance by the Company with
Section 6(a) hereof.
(b) The Company agrees to indemnify and hold harmless Xxxxxx
Xxxxxxx and each person, if any, who controls Xxxxxx Xxxxxxx within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act ("Xxxxxx Xxxxxxx Entities"), from and against any and all
losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (i) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the prospectus wrapper material attached to the Prospectus or any
preliminary prospectus prepared by or with the consent of the Company for
distribution in foreign jurisdictions in connection with the Directed
Share Program, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statement therein, when considered in conjunction with the Prospectus
or any applicable preliminary prospectus and in light of the circumstances
in which they were made, not misleading; (ii) caused by the failure of any
Participant to pay for and accept delivery of the shares which,
immediately following the effectiveness of the Registration Statement,
were subject to a properly confirmed agreement to purchase; or
(iii) related to, arising out of, or in connection with the Directed Share
Program, provided that, the Company shall not be responsible under this
subparagraph (iii) for any losses, claim, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of Xxxxxx Xxxxxxx
Entities.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless, the Company, its directors and officers who
sign the Registration Statement, and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Underwriter furnished
to the Company in writing by or on behalf of such Underwriter through you
expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to paragraph (a), (b) or (c) of
this Section 7, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request
of the indemnified party, shall retain counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any others
the indemnifying party may reasonably designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for (i) all Underwriters
and all persons, if any, who control any Underwriter
12
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and (ii) the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section, and that
all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the Underwriters and such control
persons of the Underwriters, such firm shall be designated in writing by
Xxxxxx Xxxxxxx. In the case of any such separate firm for the Company,
and such directors, officers and control persons of the Company, such firm
shall be designated in writing by the Company. The indemnifying party
shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences of
this paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding 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 and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding. Notwithstanding anything contained herein to the
contrary, if indemnity may be sought pursuant to Section 7(b) hereof in
respect of such action or proceeding, then in addition to such separate
firm for the indemnified parties, the indemnifying party shall be liable
for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for Xxxxxx Xxxxxxx for the defense of
any losses, claims, damages and liabilities arising out of the Directed
Share Program, and all persons, if any, who control Xxxxxx Xxxxxxx within
the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act provided that (i) the indemnifying party and Xxxxxx Xxxxxxx shall have
mutually agreed to the retention of such counsel or (ii) the
representation of the indemnified parties and Xxxxxx Xxxxxxx by the same
counsel would be inappropriate due to actual or potential differing
interests between them.
(e) To the extent the indemnification provided for in
paragraph (a), (b) or (c) of this Section 7 is unavailable to an
indemnified party or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party or parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i)
above 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 indemnifying party or
parties on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand in connection with
the offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Company and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are
several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
13
(f) The Company and the Underwriters agree that it would not be
just or 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 that
does not take account of the equitable considerations referred to in
paragraph (e) of this Section 7. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of 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 Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
8. TERMINATION. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
9. EFFECTIVENESS: DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; PROVIDED that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares to be purchased, and arrangements satisfactory
to you and the Company for the purchase of such Firm Shares are not made within
36 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the
14
Prospectus or in any other documents or arrangements may be effected. If, on
the Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions placed upon it in this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement that are within its control, the Company will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering contemplated
hereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
15
Very truly yours,
INTUITIVE SURGICAL, INC.
By:
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
Accepted as of the date hereof:
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
BT ALEX. XXXXX INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
-----------------------------------------
Name:
Title:
SCHEDULE I
Number of
Firm Shares
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
BT Alex. Xxxxx Incorporated
Total:
