EXHIBIT 1.1
2,500,000 Shares
SONOSITE, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
________ ___, 1999
VECTOR SECURITIES INTERNATIONAL, INC.
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the Several Underwriters
c/o VECTOR SECURITIES INTERNATIONAL, INC.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SonoSite Inc., a Washington corporation (the "Company"), proposes to
issue and sell an aggregate of 2,500,000 shares of its common stock, par value
$0.01 per share, (the "Initial Securities") to the several Underwriters named in
Schedule I hereto (the "Underwriters") for whom Vector Securities International,
Inc. ("Vector") and Prudential Securities Incorporated are acting as
representatives (collectively, the "Representatives"). In addition, solely for
the purpose of covering over-allotments, the Company proposes to grant to the
several Underwriters, upon the terms and conditions set forth in Section 2
hereof, an option to purchase up to an additional 375,000 shares of Common Stock
of the Company (the "Option Securities"). The Initial Securities and the Option
Securities are hereinafter collectively referred to as the "Securities." The
Company's common stock, par value $0.01 per share, including the Securities, is
hereinafter referred to as the "Common Stock." The Company wishes to confirm as
follows its agreements with you and the other Underwriters on whose behalf you
are acting in connection with the several purchases by the Underwriters of the
Securities:
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-1 (No. 333-74157) covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus, or prospectuses, and either (A)
has prepared and filed, prior to the effective date of such registration
statement, an amendment to such registration statement, including a final
prospectus or (B) if the Company has elected to rely upon Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"), will prepare and file a prospectus, in accordance with
the provisions of Rule 430A and Rule 424(b) ("Rule 424(b)") of the 1933 Act
Regulations, promptly after execution and delivery of this Agreement.
Additionally, if the Company has elected to rely upon Rule 434 ("Rule 434") of
the 1933 Act Regulations, the Company will prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b),
promptly after execution and delivery of this Agreement. The information, if
any, included in such prospectus or in such Term Sheet, 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 becomes effective (a)
pursuant to paragraph (b) of Rule 430A, is referred to herein as the "Rule 430A
Information," or (b)pursuant to paragraph (d) of Rule 434, is referred to herein
as the "Rule 434 Information." Each prospectus used before the time such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information that was used
after effectiveness and prior to the execution and delivery of this Agreement is
herein called a "preliminary prospectus." Such registration statement, including
the exhibits and schedules thereto, at the time it became effective and
including, if applicable, the Rule 430A Information or the Rule 434 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 referred to as the
"Prospectus." If Rule 434 is relied upon, the term "Prospectus" shall refer to
the preliminary prospectus last furnished to the Underwriters in connection with
the offering of the Securities, together with the Term Sheet, and all references
to the date of the Prospectus shall mean the date of the Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any Term Sheet 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").
2. AGREEMENTS TO SELL AND PURCHASE. Upon the basis of the
representations, warranties and agreements contained herein and subject to all
the terms and conditions set forth herein, the Company hereby agrees to issue
and sell to each Underwriter and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $___ per share
(the "Purchase Price Per Share"), the number of Initial Securities set forth in
Schedule I opposite the name of such Underwriter under the column "Number of
Initial Securities to be Purchased from the Company" (or such number of Initial
Securities increased as set forth in Section 10 hereof).
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein,
the Company hereby grants an option (the "Over-Allotment Option") to the
Underwriters to purchase from the Company, at the Purchase Price Per Share, up
to an aggregate of 375,000 Option Securities. Option Securities may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Securities. Such option shall expire at 5:00 P.M., Chicago time,
on the 30th day after the date of this Agreement (or, if such 30th day shall be
a Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading). Such over-allotment option may be
exercised at any time or from time to time until its expiration. Upon any
exercise of the Over-Allotment Option, each Underwriter, severally and not
jointly, agrees to purchase from the Company that proportion of the total number
of Option Securities as is equal to the percentage of Initial Securities that
such Underwriter is purchasing from the Company (or such number of Initial
Securities increased as set forth in Section 10 hereof), subject to such
adjustments as you may determine to avoid fractional shares.
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you that the
Underwriters propose to make a public offering of the Securities as soon after
the Registration Statement and this Agreement have become effective as in your
judgment is advisable and initially to offer the Securities upon the terms set
forth in the Prospectus.
4. DELIVERY OF THE SECURITIES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Initial Securities shall be made at the
office of Xxxxxxx Coie LLP, 0000 Xxxxx Xxxxxx, 00/xx/ Xxxxx, Xxxxxxx, Xxxxxxxxxx
00000 at 7:00
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A.M., Seattle time, on the third (or fourth, if the pricing occurs after
4:30p.m. (Eastern Time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10 hereof) (the
"Closing Date"). The place of closing for the Initial Securities and the Closing
Date may be varied by agreement among you and the Company.
Delivery to the Underwriters of and payment for any Option Securities
to be purchased by the Underwriters shall be made at the aforementioned office
of Xxxxxxx Coie LLP at such time on such date (an "Option Closing Date"), which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Option Securities. The place of closing for any Option Securities and the Option
Closing Date for such Option Securities may be varied by agreement between you
and the Company.
Certificates for the Initial Securities and for any Option Securities
to be purchased hereunder shall be registered in such names and in such
denominations as you shall request by written notice (it being understood that a
facsimile transmission shall be deemed written notice) prior to 9:30 A.M.,
Chicago time, on the second business day preceding the Closing Date or any
Option Closing Date, as the case may be. Such certificates shall be made
available to you in Chicago, Illinois or New York, New York, as requested by you
in the aforesaid notice, for inspection and packaging not later than 9:30 A.M.,
Chicago time, on the business day next preceding the Closing Date or any Option
Closing Date, as the case may be. The certificates evidencing the Initial
Securities and any Option Securities to be purchased hereunder shall be
delivered to you on the Closing Date or the Option Closing Date, as the case may
be, against payment of the purchase price therefor by wire transfer in same day
funds to the order of the Company. It is understood that each Underwriter has
authorized you, for its account, to accept delivery of, acknowledge receipt of,
and make payment of the purchase price for, the Initial Securities and the
Option Securities, if any, which it has agreed to purchase. Vector, 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 check has not been
received by the Closing Date or the Option Closing Date, as the case may be, but
such payment shall not relieve such Underwriter from its obligations hereunder.
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5. AGREEMENTS OF THE COMPANY. The Company covenants and agrees with the
several Underwriters as follows:
a. The Company will notify the Representatives immediately, and
confirm the notice in writing, (i) of the effectiveness of the Registration
Statement and any amendment thereto, (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 the suspension of
qualification of the Securities for offering or sale in any jurisdiction or the
initiation of any proceedings for such purpose and (v) during the period when
the Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), of any change, or any event
or occurrence which could result in such a change, in the Company's condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company or the happening of any event, including the filing of any
information, documents or reports pursuant to the 1934 Act, that makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
in order to state a material fact required by the 1933 Act or the 1933 Act
Regulations to be stated therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or supplement the
Prospectus to comply with the 1933 Act, the 1933 Act Regulations or any other
law. The Company shall use its best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption of the Securities under
any state securities or Blue Sky laws, and, if at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration Statement,
or any state securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption of the Securities under any
state securities or Blue Sky laws, the Company shall use every reasonable effort
to obtain the withdrawal or lifting of such order at the earliest possible time.
b. The Company will give the Underwriters notice of its intention to
prepare or file any amendment to the Registration Statement (including any post-
effective amendment), any Rule 462(b) Registration Statement, any Term Sheet or
any amendment or supplement to the Prospectus (including any revised prospectus
or Term Sheet and preliminary prospectus which the Company proposes for use by
the Underwriters in connection with the offering of the Securities which differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes
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effective, whether or not such revised prospectus or Term Sheet and preliminary
prospectus is required to be filed pursuant to Rule 424(b)), whether pursuant to
the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriters with
copies of any Rule 462(b) Registration Statement, Term Sheet, amendment or
supplement a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such Rule 462(b) Registration Statement,
Term Sheet, amendment or supplement or use any such prospectus to which the
Underwriters or counsel for the Underwriters shall object.
c. The Company has furnished or will deliver to the Underwriters and
their counsel, without charge, two signed and as many conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) as the
Underwriters may reasonably request.
d. The Company will furnish to each Underwriter, without charge,
from time to time during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request for the purposes contemplated by the 1933 Act, the 1934 Act, the 1933
Act Regulations or the rules and regulations of the Commission under the 1934
Act (the "1934 Act Regulations").
e. 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, the 1934 Act, the 1933 Act Regulations
or the 1934 Act Regulations 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
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 5(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
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Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
f. During the period of five years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to shareholders or filed with the Commission or the Nasdaq National
Market ("NASDAQ"), and (ii) from time to time such other information concerning
the Company as you may request.
g. The Company will use its best efforts, in cooperation with
counsel to the Underwriters, to qualify the Securities for offering and sale
under the applicable securities or Blue Sky laws of such states and other
jurisdictions of the United States 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 Company shall not be
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obligated to qualify as a foreign corporation in any jurisdiction in which it is
not so qualified. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification 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.
h. The Company will make generally available to its security holders
as soon as practicable, but not later than 45 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve-month period beginning
not later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
i. The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under "Use of
Proceeds."
j. If, at the time that the Registration Statement becomes
effective, any Rule 430A Information or Rule 434 Information shall have been
omitted therefrom, then immediately following the execution of this Agreement,
the Company will prepare, and file or transmit for filing with the Commission in
accordance with Rule 430A or Rule 434 and Rule 424(b), copies of a Prospectus or
Term Sheet containing such Rule 430A Information and Rule 434 Information,
respectively, or, if required by Rule 430A,
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a post-effective amendment to the Registration Statement (including an amended
Prospectus), containing such Rule 430A Information.
k. If the Company elects to rely upon Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the
1933 Act Regulations by the earlier of (i) 10:00 P.M. Eastern Time on the date
hereof and (ii) the time confirmations are sent or given, as specified by Rule
462(b)(2).
l. The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
m. During a period of 180 days from the date of the Prospectus, the
Company will not, without the prior written consent of Vector, (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 or otherwise transfer or dispose of, directly or indirectly, 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 or options to purchase
Common Stock granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus or (C) any shares of Common Stock issued or
options to purchase Common Stock granted pursuant to any non-employee director
stock plan.
n. The Company has furnished to you "lock-up" letters, in form and
substance satisfactory to you, signed by each of its current executive officers
and directors.
o. The Company will supply the Underwriters with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Securities under the 1933 Act.
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p. Prior to the Closing Date, the Company shall furnish to the
Underwriters, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing in the
Registration Statement and the Prospectus.
q. Prior to the Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no press
conference with respect to the Company, condition, financial or otherwise, or
its earnings, business affairs or business prospects, or the offering of the
Securities, without the prior written consent of the Representatives unless in
the judgment of the Company and its counsel, and after notification to the
Representatives, such press release or communication is required by law.
r. The Company has not taken, nor will it take, directly or
indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Securities.
s. The Company will use its best efforts to maintain the quotation
of the Common Stock (including the Securities) on NASDAQ and will file with
NASDAQ all documents and notices required by NASDAQ of companies that have
securities that are traded in the over-the-counter market and quotations for
which are reported by NASDAQ.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Underwriter that:
a. When the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto becomes effective, at the
date of the Prospectus, if different, and at the Closing Date and the Option
Closing Date, as the case may be, (i) the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied or will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and did not and 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.
The Prospectus and any supplements or amendments thereto will not at the date of
the Prospectus, at the date of any such supplements or amendments, or at the
Closing Date or the Option Closing Date, if any, include an untrue statement of
a
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material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially different,"
as such term is used in Rule 434, from the Prospectus included in the
Registration Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus relating to any Underwriter made in
reliance upon and in conformity with information furnished to the Company in
writing by any Underwriter, through Vector expressly for use in the Registration
Statement or Prospectus. The Company has not distributed any offering materials
in connection with the offering or sale of the Securities other than the
Registration Statement, the preliminary prospectus, the Prospectus, the Term
Sheet, if applicable, or any other materials, if any, permitted by the 1933 Act
or the 1933 Act Regulations.
b. Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations.
c. The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
d. The financial statements included in the Registration Statement
and the Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis; and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The financial and
statistical data set forth in the Prospectus are prepared on an accounting basis
consistent with such financial statements.
e. Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (i) there has been no material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business, (ii) there have been no transactions entered into by
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the Company other than those in the ordinary course of business, which are
material with respect to the Company, and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock. The Company has no material contingent obligations which are
not disclosed in the Registration Statement.
f. The Company has not distributed and, prior to the later of (i)
the Closing Date and (ii) the completion of the distribution of the Securities,
will not distribute any offering material in connection with the offering and
sale of the Securities other than the Registration Statement or any amendment
thereto, any preliminary prospectus or the Prospectus or any amendment or
supplement thereto, or other materials, if any, permitted by the Act.
g. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Washington with
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 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 to so qualify would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company. The Company has no
subsidiaries.
h. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement or pursuant to
reservations, agreements, employee or director benefit plans or the exercise of
convertible securities referred to in the Prospectus); the shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable and have not been issued in
violation of or are not otherwise subject to any preemptive or other similar
rights; the Securities 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 and fully paid and nonassessable; the
certificates evidencing the Securities are in due and proper form under
Washington law; the authorized capital stock of the Company, including the
Securities, conforms to all statements relating thereto contained in the
Prospectus; and the issuance of the
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Securities is not subject to preemptive or other similar rights. There are no
outstanding subscriptions, options, warrants, convertible or exchangeable
securities or other rights granted to or by the Company to purchase shares of
Common Stock or other securities of the Company and there are no commitments,
plans or arrangements to issue any shares of Common Stock or any security
convertible into or exchangeable for Common Stock, in each case other than as
described in the Prospectus.
i. Except as disclosed in the Registration Statement and except as
would not, singly or in the aggregate, reasonably be expected to have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company, (A) the Company is in
compliance with all applicable Environmental Laws (as defined below), (B) the
Company has all permits, authorizations and approvals required under any
applicable Environmental Laws and is in compliance with the requirements of such
permits authorizations and approvals, (C) there are no pending or, to the best
knowledge of the Company, threatened Environmental Claims against the Company
and (D) under applicable law, there are no circumstances with respect to any
property or operations of the Company that are reasonably likely to form the
basis of an Environmental Claim against the Company.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) Federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgement, relating to the environment,
health, safety or any chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority. "Environmental
Claims" means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental Law.
j. The Company is not in violation of its charter or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any material contract, indenture, mortgage, loan
agreement, deed, trust, note, lease, sublease, voting agreement, voting trust,
or other instrument or agreement to which the Company is a party or by which it
may be bound, or to which any of the property or assets of the Company is
subject; and the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and the fulfillment of the
terms hereof have been duly authorized by all necessary
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corporate action and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, any
contract, indenture, mortgage, loan agreement, deed, trust, note, lease,
sublease, voting agreement, voting trust or other instrument or agreement to
which the Company 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 is subject, nor will such
action result in any violation of the provisions of the charter or bylaws of the
Company or any applicable statute, law, rule, regulation, ordinance, decision,
directive or order.
k. No labor dispute with the employees of the Company exists or, to
the best knowledge of the Company, is imminent.
l. There is no action, suit or proceeding before or 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, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which, singly or in the aggregate, might result in any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, or which, singly or in
the aggregate, might materially and adversely affect the properties or assets
thereof or which might materially and adversely affect the consummation of this
Agreement; all pending legal or governmental proceedings to which the Company 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, are, considered in the aggregate,
not material; and there are no contracts or documents of the Company which are
required to be filed as exhibits to the Registration Statement by the 1933 Act
or by the 1933 Act Regulations which have not been so filed.
m. Except as otherwise specifically disclosed in the Prospectus,
the Company, to the best of its knowledge, owns or is licensed to use all
patents, patent applications, inventions, trademarks, trade names, applications
for registration of trade marks, service marks, service xxxx applications,
copyrights, know-how, manufacturing processes, formulae, trade secrets, licenses
and rights in any thereof and any other intangible property and assets (herein
called the "Proprietary Rights") which are material to the business of the
Company as now conducted and as proposed to be conducted, in each case as
described in the Prospectus. The description of the Proprietary Rights in the
Prospectus is correct in all material respects and fairly and correctly
describes the Company's rights with respect thereto. The Company does not
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have any knowledge of, and the Company has not given or received any notice of,
any pending conflicts with or infringement of the rights of others with respect
to any Proprietary Rights or with respect to any license of Proprietary Rights
which are material to the business of the Company. No action, suit, arbitration,
or legal, administrative or other proceeding, or investigation is pending, or,
to the best knowledge of the Company, threatened, which involves any Proprietary
Rights. The Company is not subject to any judgment, order, writ, injunction or
decree of any court or any Federal, state, local, foreign or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or any arbitrator, and has not entered into or is not a party to any
contract which restricts or impairs the use of any such Proprietary Rights in a
manner which would have a material adverse effect on the use of any of the
Proprietary Rights. Except as otherwise specifically disclosed in the
Prospectus, to the best knowledge of the Company, no Proprietary Rights used by
the Company, and no services or products sold by the Company, conflict with or
infringe upon any proprietary rights of any third party. The Company has not
received written notice of any pending conflict with or infringement upon such
third-party proprietary rights. The Company has not entered into any consent,
indemnification, forbearance to xxx or settlement agreement with respect to
Proprietary Rights other than in the ordinary course of business. No claims
have been asserted by any person with respect to the validity of the Company's
ownership or right to use the Proprietary Rights and, to the best knowledge of
the Company, there is no reasonable basis for any such claim to be successful.
The Proprietary Rights which are material to the business of the Company are
valid and enforceable and no registration relating thereto has lapsed, expired
or been abandoned or cancelled or is the subject of cancellation or other
adversarial proceedings, and all applications therefor are pending and are in
good standing. To the best of its knowledge, the Company has complied, in all
material respects, with its obligations relating to the protection of the
Proprietary Rights which are material to the business of the Company used
pursuant to licenses. To the best knowledge of the Company, no person is
infringing on or violating the Proprietary Rights which are material to the
business of the Company and owned or used by the Company.
n. No registration, authorization, approval, qualification or
consent of any court or governmental authority or agency is necessary in
connection with the offering, issuance or sale of the Securities hereunder,
except such as may be required under the 1933 Act or the 1933 Act Regulations or
state securities or Blue Sky laws (or such as may be required by the National
Association of Securities Dealers, Inc. ("NASD")).
14
o. The Company possesses and is operating in compliance with all
material licenses, certificates, consents, authorities, approvals and permits
(collectively, "permits") from all state, Federal, foreign and other regulatory
agencies or bodies necessary to conduct the businesses now operated by them, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such permit or any circumstance which would
lead it to believe that such proceedings are reasonably likely which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would materially and adversely affect the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company.
p. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by Federal or state
securities laws or the public policy underlying such laws.
q. Except as described in the Prospectus, there are no persons with
registration or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under the
1933 Act.
r. No order preventing or suspending the use of any preliminary
prospectus has been issued and no proceedings for that purpose are pending,
threatened or, to the knowledge of the Company, contemplated by the Commission;
and to the best knowledge of the Company, no order suspending the offering of
the Securities in any jurisdiction designated by the Underwriters pursuant to
Section 5(g) of this Agreement has been issued and, to the best knowledge of the
Company, no proceedings for that purpose have been instituted or threatened or
are contemplated.
s. The Company has good and marketable title to its properties, free
and clear of all material security interests, mortgages, pledges, liens,
charges, encumbrances and claims of record. The properties of the Company are,
in the aggregate, in good repair (reasonable wear and tear excepted), and
suitable for their respective uses. Any real properties held under lease by the
Company are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the conduct of the
business of the Company.
t. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization, (ii)
transactions are
15
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
u. The Company has conducted and is conducting its business in
compliance with all applicable Federal, state, local and foreign statutes, laws,
rules, regulations, ordinances, codes, decisions, decrees, directives and
orders, except where the failure to do so would not, singly or in the aggregate,
have a material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company.
v. The Company takes security measures designed to enable the
Company to assert trade secret protection in their non-patented technology.
w. To the best of the Company's knowledge, neither the Company nor
any employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
x. The Company is not now, and after sale of the Securities to be
sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds" will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
y. All offers and sales of capital stock of the Company prior to the
date hereof were at all relevant times duly registered or exempt from the
registration requirements of the 1933 Act and were duly registered or subject to
an available exemption from the registration requirements of the applicable
state securities or Blue Sky laws.
z. The Common Stock is registered pursuant to Section 12(g) of the
1934 Act. The Securities have been duly authorized for quotation on NASDAQ.
The Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the 1934 Act or delisting
the Common Stock
16
from NASDAQ, nor has the Company received any notification that the Commission
or NASDAQ is contemplating terminating such registration or listing.
aa. Neither the Company nor, to its knowledge, any of its officers,
directors or affiliates has taken, and at the Closing Date and at any later
Option Closing Date, neither the Company nor, to its knowledge, any of its
officers, directors or affiliates will have taken, directly or indirectly, any
action which has constituted, or might reasonably be expected to constitute, the
stabilization or manipulation of the price of sale or resale of the Securities.
bb. The Company has filed all material tax returns required to be
filed, which returns are true and correct in all material respects, and the
Company is not in default in the payment of any taxes, including penalties and
interest, assessments, fees and other charges, shown thereon due or otherwise
assessed, other than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without interest which
were payable pursuant to said returns or any assessments with respect thereto.
cc. Except as described in the Prospectus, there are no rulemaking or
similar proceedings before The United States Food and Drug Administration or
comparable Federal, state, local or foreign government bodies which involve or
affect the Company, which, if the subject of an action unfavorable to the
Company, could involve a prospective material adverse change in or effect on the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company.
dd. The Company has not received any communication (whether
written or oral) relating to the termination or threatened termination or
modification or threatened modification of any agreements entered into with ATL
Ultrasound listed under the section of the Prospectus entitled "Certain
Transactions--Relationship with ATL Ultrasound." Each such agreement is in
effect substantially as described in such section of the Prospectus.
ee. To the knowledge of the Company, if any full-time employee
identified in the Prospectus has entered into any non-competition, non-
disclosure, confidentiality or other similar agreement with any party other than
the Company, such employee is neither in violation thereof nor is expected to be
in violation thereof as a result of the business conducted or expected to be
conducted by the Company as described in the Prospectus or such person's
performance of his obligations to the Company; and the Company has not received
written notice that any consultant or
17
scientific advisor of the Company is in violation of any non-competition, non-
disclosure, confidentiality or similar agreement.
7. INDEMNIFICATION AND CONTRIBUTION.
a. The Company agrees to indemnify and hold harmless (i)each
Underwriter and (ii) each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act (any of the persons referred to in
this clause (ii) being hereinafter referred to as a "controlling person") and
(iii)the respective directors, officers, partners and employees of any of the
Underwriters or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Person") to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities and expenses whatsoever (including, without limitation, all
reasonable costs of pursuing, investigating and defending any claim, suit or
action or any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of counsel
to any Indemnified Person), directly or indirectly, caused by, related to, based
upon or arising out of or in connection with any untrue statement or alleged
untrue statement made by the Company in Section 6 of this Agreement or caused
by, related to, based upon, arising out of or in connection with 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 and Rule 434 Information, if applicable, or 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 or caused by, related
to, based upon, arising out of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such Underwriter furnished in writing to the
Company by or on behalf of any Underwriter through you expressly for use in
connection therewith; provided, however, that the indemnification contained in
-------- -------
this paragraph a. with respect to any preliminary prospectus shall not inure to
the benefit of any Underwriter (or related Indemnified Person) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Securities by such Underwriter to any person if a copy of the Prospectus shall
not have been delivered or sent to such person within the
18
time required by the 1933 Act or the 1933 Act Regulations, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such preliminary prospectus was corrected in the
Prospectus (or any amendment or supplement thereto), provided that the Company
has delivered the Prospectus to the several Underwriters in requisite quantity
on a timely basis to permit such delivery or sending.
b. If any action, suit or proceeding shall be brought against any
Indemnified Person in respect of which indemnity may be sought against the
Company, such Indemnified Person shall promptly notify in writing the parties
against whom indemnification is being sought (the "indemnifying parties"), and
such indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Indemnified
Person shall have the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel or (iii) the named parties to any such action, suit,
investigation or proceeding (including any impleaded parties) include both such
Indemnified Person and the indemnifying parties and representation of such
Indemnified Person and any indemnifying party by the same counsel would, in the
reasonable judgment of the Indemnified Person, be inappropriate due to actual or
potential differing interests between them (in which case the indemnifying party
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Indemnified Person). It is understood, however,
that the indemnifying parties shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Indemnified Persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by Vector, and that all such fees and expenses shall be reimbursed as
they are incurred. The indemnifying parties shall not be liable for any
settlement of any such action, suit or proceeding effected without their written
consent, which consent shall not be unreasonably withheld, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless any Indemnified Person, to the extent provided in the preceding
paragraph, from and against any loss, claim, damage, liability or expense by
reason of such settlement or judgment.
19
c. Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person who controls the Company within the meaning
of Section 15 of the 1933 Act, to the same extent as the foregoing indemnity
from the Company to each Indemnified Person, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf of
such Underwriter through Vector expressly for use in the Registration Statement,
the Prospectus or any preliminary prospectus, or any amendment or supplement
thereto. If any action, suit, investigation or proceeding shall be brought
against the Company, any of its directors, any such officer or any such
controlling person based on the Registration Statement, the Prospectus or any
preliminary prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any Underwriter pursuant to this
paragraph (c), such Underwriter shall have the rights and duties given to the
Company by paragraph (b) above, and the Company, its directors, any such officer
and any such controlling person shall have the rights and duties given to the
Indemnified Persons by paragraph (a) above.
d. If the indemnification provided for in this Section 7 is
unavailable to, or insufficient to hold harmless, an indemnified party under
paragraphs (a) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law
or judicial determination, 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 on the one hand and the Underwriters on the other hand, 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
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus or, if Rule
434 is used, the corresponding location on the Term Sheet. The relative fault
of the Company on the one hand and the Underwriters on the other hand 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
20
information supplied by the Company on the one hand or by the Underwriters on
the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The indemnity and contribution obligations of the Company set forth herein shall
be in addition to any liability or obligation the Company may otherwise have to
any Indemnified Person.
e. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by a
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 the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses 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 any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 7, no
Underwriter (or any of its related Indemnified Persons) shall be required to
contribute (whether pursuant to subsection (a) or (c) or otherwise) any amount
in excess of the underwriting discount applicable to the Securities underwritten
by such Underwriter. 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. The
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective numbers of Securities set forth opposite their
names in Schedule I hereto (or such numbers of Securities increased as set forth
in Section 10 hereof) and not joint.
f. No indemnifying party shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any Indemnified Person is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such action, suit or proceeding.
g. Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect,
21
regardless of (i) any investigation made by or on behalf of any Indemnified
Person, the Company, its directors or officers or any person controlling the
Company, (ii) acceptance of any Securities and payment therefor hereunder and
(iii) any termination of this Agreement.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Initial Securities hereunder are subject to the
following conditions:
a. The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective on the date hereof, or with
the consent of the Representatives, at a later date and 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. If the Company has elected to rely upon Rule 430A, Rule 430A
Information previously omitted from the effective Registration Statement
pursuant to Rule 430A shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) within the prescribed time period and the Company shall
have provided evidence satisfactory to the Underwriters of such timely filing,
or a post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the requirements of
Rule 430A. If the Company has elected to rely upon Rule 434, a Term Sheet shall
have been transmitted to the Commission for filing pursuant to Rule 424(b)
within the prescribed time period.
b. The Underwriters shall have received:
(i) The favorable opinion, dated as of the
Closing Date, of Xxxxxxx Coie, counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters, to
the effect set forth in Exhibit A hereto.
(ii) The favorable opinion, dated as of the
Closing Date, of Xxxxxxxx & Xxxxxxxx, patent counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, to the effect set forth in Exhibit B hereto.
(iii) The favorable opinion, dated as of the
Closing Date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois),
counsel for the Underwriters with respect to the issuance and
sale of the
22
Securities, the Registration Statement and the Prospectus and
such other related matters as the Underwriters shall reasonably
request.
(vi) In giving their opinions required by subsections
(b)(i) and (b)(iii), respectively, of this Section 8, Xxxxxxx
Coie and Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois) shall
each additionally state that nothing has come to their attention
that leads them to believe that the Registration Statement
(except for financial statements and schedules and other
financial information included therein, as to which counsel need
make no statement), at 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
(except for financial statements and schedules and other
financial information included therein, as to which counsel need
make no statement), as of its date (unless the term "Prospectus"
refers to a prospectus which has been provided to the
Underwriters by the Company for use in connection with the
offering of the Securities which differs from the Prospectus on
file at the Commission at the time the Registration Statement
becomes effective, in which case at the time it is first
provided to the Underwriters for such use) or at the Closing
Date or the Option Closing Date, as the case may be, included or
includes 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.
c. (i) There shall not have been, since the date hereof or since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business, (ii) the representations and warranties of the Company in Section 6
hereof shall be true and correct with the same force and effect as though
expressly made at and as of the Closing Date, except to the extent that any such
representation or warranty relates to a specific date, (iii) the Company shall
have complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date, (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission and (v) the Representatives shall have
received a certificate, dated the Closing Date and
23
signed by the President or any Vice President and the chief financial or
accounting officer of the Company to the effect set forth in clauses (i), (ii),
(iii) and (iv) above.
d. At the time of the execution of this Agreement, the Underwriters
shall have received from KPMG LLP a letter dated such date, in form and
substance satisfactory to the Underwriters, 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.
e. The Underwriters shall have received from KPMG LLP a letter,
dated as of the Closing Date, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (d) of this Section, except
that the specified date referred to shall be a date not more than three business
days prior to the Closing Date.
f. The Securities shall have been approved for quotation on NASDAQ.
g. In the event that the Underwriters exercise their option provided
in Section 2 hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of the Option Closing Date and, at the relevant Option Closing
Date, the Underwriters shall have received:
(1) A certificate, dated such Option
Closing Date, of the President or any Vice President of the
Company and of the chief financial or accounting officer of the
Company confirming that the certificate delivered at the Closing
Date pursuant to Section 8 (c) hereof remains true and correct
as of such Option Closing Date.
(2) The favorable opinion of Xxxxxxx Coie,
in form and substance satisfactory to counsel for the
Underwriters, dated such Option Closing Date, relating to the
Option Securities to be purchased on such Option Closing Date
and otherwise to the same effect as the opinion required by
Sections 8 (b)(i) and 8 (b)(iv) hereof.
(3) The favorable opinion of Xxxxxxxx &
Xxxxxxxx in form and substance satisfactory to counsel for the
24
Underwriters, dated such Option Closing Date to the same effect
as the opinion required by Section 8(b)(ii) hereof.
(4) The favorable opinion of Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois), counsel for the Underwriters,
dated such Option Closing Date, relating to the Option
Securities to be purchased on such Option Closing Date and
otherwise to the same effect as the opinion required by Sections
8 (b)(iii) and 8 (b)(iv) hereof.
(5) A letter from KPMG LLP in form and
substance satisfactory to the Underwriters and dated such Option
Closing Date, substantially the same in form and substance as
the letter furnished to the Underwriters pursuant to Section
8(e) hereof, except that the "specified date" in the letter
furnished pursuant to this Section 8(g)(5) shall be a date not
more than three business days prior to such Option Closing Date.
h. At the date of this Agreement, the Underwriters shall have
received lock-up agreements in form and substance satisfactory to the
Underwriters by the persons listed on Schedule B hereto.
i. Counsel for the Underwriters shall have been furnished with
such 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 and
related proceedings, 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 in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the Underwriters and counsel for the Underwriters.
j. The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
k. Any certificate or document signed by any officer of the
Company and delivered to you, as Representatives of the Underwriters, or to
counsel for the Underwriters, shall be deemed a representation and warranty by
the Company to each Underwriter as to the statements made therein.
l. If any condition specified in this Section 8 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any
25
condition to the purchase of Option Securities, on an Option Closing Date which
is after the Closing Date, the obligations of the several Underwriters to
purchase the relevant Option Securities, may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing Date
or such an Option Closing Date as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section
9 and except that Sections 6 and 7 shall survive any such termination and remain
in full force and effect.
9. EXPENSES. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each preliminary prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight and charges for
counting and packaging) of such copies of the Registration Statement, each
preliminary prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any stamp
taxes in connection with the original issuance and sale of the Securities; (iv)
the printing (or reproduction) and delivery of this Agreement, the preliminary
and supplemental Blue Sky Memoranda and all other agreements or documents
printed (or reproduced) and delivered in connection with the original issuance
and sale of the Securities; (v) the quotation of the Securities on NASDAQ; (vi)
the registration or qualification of the Securities for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees incident to securing any
required review by the NASD; and (viii) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company.
If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 or pursuant to clauses (ii), (iii), (iv) and (v)
of Section 11 hereof) or if this Agreement shall be terminated by the
Underwriters because of any failure or refusal on the part of the Company to
comply, in any material respect, with the terms or fulfill, in any material
respect, any of the conditions of this Agreement, the Company agrees to
reimburse the Representatives for all reasonable out-of-pocket expenses
(including
26
reasonable fees and expenses of counsel for the Underwriters) incurred by you in
connection herewith.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by or on behalf of the parties
hereto; or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Securities may commence,
when notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company, by notifying you, or by you, as Representatives of the several
Underwriters, by notifying the Company.
If one or more of the Underwriters shall fail on the Closing Date to
purchase the Initial 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:
a. if the number of Defaulted Securities does not exceed 10% of the
number of Initial Securities, the non-defaulting Underwriters shall be obligated
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
b. if the number of Defaulted Securities exceeds 10% of the number
of Initial Securities, this Agreement 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, either the Representatives or the Company shall
have the right to postpone the Closing Date 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
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or arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. a. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Date
or Option Closing Date, as the case may be, (i) if there has been, since the
date of this Agreement or since the respective dates as of which information is
given in the Registration Statement, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, whether or not arising in the ordinary course
of business, (ii) if there has occurred any change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which is such as to make it,
in your judgement, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, (iii) if trading in the Common
Stock has been suspended by the Commission, or if trading generally on the
American Stock Exchange, the New York Stock Exchange or in the over-the-counter
markets has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by such
exchange or markets or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal, New
York or Illinois authorities, (iv) the enactment, publication, decree or other
promulgation of any Federal or state statute, regulation, rule or order of any
court or other governmental authority which in your judgement materially and
adversely affects or may materially or adversely affect the business or
operations of the Company or (v) the taking of any action by any Federal, state
or local government or agency in respect of its monetary or fiscal affairs which
in your judgement has a material adverse effect on the securities markets in the
United States, and would in your judgement make it impracticable or inadvisable
to market the Securities or to enforce any contract for the sale thereof. Notice
of such termination may be given by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
b. If this Agreement is terminated pursuant to this Section 11, such
termination shall be without liability of any party to any other party except as
provided in Section 9 and provided further that Sections 6 and 7 shall survive
such termination and remain in full force and effect.
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12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the last paragraph on the cover page, the stabilization legend on the inside
front cover page, and the statements under the caption "Underwriting" in any
preliminary prospectus and in the Prospectus constitute the only information
furnished by or on behalf of the Underwriters through you as such information is
referred to in Sections 5(a) and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company at the office of the
Company, 00000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000-0000,
Attention: [Name], [Title]; or (ii) if to you, as Representatives of the several
Underwriters, care of Vector Securities International, Inc., 0000 Xxxx Xxxx
Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Syndicate Department.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois applicable to
contracts made and to be performed within the State of Illinois. This Agreement
may be signed in various counterparts which together constitute one and the same
instrument. If signed in counterparts, this Agreement shall not become
effective unless at least one counterpart hereof shall have been executed and
delivered on behalf of each party hereto.
15. SUCCESSORS. This Agreement has been and is made solely for the
benefit of the several Underwriters, the Company, its directors and officers,
the other persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the
term "successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Securities in his
status as such purchaser.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
SONOSITE, INC.
By:________________________________
[Title]
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
VECTOR SECURITIES INTERNATIONAL, INC.
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the Several Underwriters
By: VECTOR SECURITIES INTERNATIONAL, INC.
By:________________________________
Vice President
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SCHEDULE I
SONOSITE, INC.
Number of Initial
Securities Purchased
Underwriter from the Company
----------- ----------------
Vector Securities International, Inc. ...................
Prudential Securities Incorporated........................
Total.....................................................
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