Draft -- June 23, 1997
Vista Medical Technologies, Inc.
Common Stock
($.01 par value per share)
Underwriting Agreement
_________________, 1997
Xxxxxxx, Xxxxx & Co.,
Salomon Brothers Inc
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Vista Medical Technologies, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 3,500,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 525,000 additional shares (the "Optional Shares") of common
stock, $.01 par value per share (the "Common Stock"), of the Company (the Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof being collectively called the "Shares").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-22985) (the
"Initial Registration Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement") filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no
stop order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act, is hereinafter called
a "Preliminary Prospectus"; the various parts of the Initial Registration
Statement, and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial Registration
Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, is hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein;
(d) The Company has not sustained since the date of the latest audited
financial statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any change in the capital stock or long-term debt of the Company or any
of its subsidiaries, if any, material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, or any of its subsidiaries, if any, otherwise than as
set forth or contemplated in the Prospectus;
(e) The Company does not own any real property; the Company has good and
marketable title to all personal property owned thereby, 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 thereby 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;
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so qualified
in any such jurisdiction;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Common Stock contained in the Prospectus;
and the Company has no subsidiaries;
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(h) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Common Stock contained in the Prospectus;
(i) The issue and sale of the Shares by the Company and the compliance by
the Company with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated (x) will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, or loan agreement, (y)
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any other agreement or instrument
to which the Company is a party or by which the Company is bound or to which any
of the property or assets of the Company is subject, which breach, violation or
default could individually or in the aggregate have a material adverse effect on
the current or future financial position, stockholders' equity or results of
operations of the Company, and (z) will not result in any violation of the
provisions of the Second Restated Certificate of Incorporation (the "Certificate
of Incorporation") or the Restated Bylaws (the "Bylaws") of the Company or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties; and no
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Act of the
issuance of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(j) The Company is not in violation of its Certificate of Incorporation or
Bylaws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound;
(k) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the capital stock of the Company and under the caption
"Underwriting", insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate, complete and fair;
(l) Each of the License and Development Agreement by and between Xxxxx X.
XxXxxxxx ("XxXxxxxx"), XxXxxxxx Optics, Inc. ("MOI") and American Surgical
Technologies Corporation ("AST"), dated December 18, 1991, and the
Non-Competition, Non-Disclosure and Patent and Inventions Assignment Agreement
by and between XxXxxxxx, MOI and AST, dated December 18, 1991, in each case as
amended by that certain letter agreement between MOI and AST, dated June 28,
1994, as further amended by that certain Agreement to Amend License and
Development Agreement by and between MOI, XxXxxxxx and the Company, dated
September 15, 1995, relating to technology developed by MOI and XxXxxxxx for use
in endoscopes incorporating a stereo objective lens for medical purposes; the
Consulting Agreement by and between XxXxxxxx and the Company, dated September
15, 1995;the License Agreement by and between Xxxxx Xxxxxx and the Company,
dated September 2, 1994, as amended by that certain Amendment to License
Agreement by and between the Company and Xxxxx Xxxxxx, dated December 13, 1996,
relating to specific medical instruments employing advanced optical
technologies; the License Agreement by and between the Company and Kaiser
Aerospace and Electronics Corporation ("Kaiser"), dated July 19, 1995, relating
to the technology of an optical collimating apparatus; and the Non-Exclusive
License Agreement by and among the Company, Fuji Photo Film Co. Ltd. and Fuji
Photo Optical Co. Ltd., dated June 25, 1996, relating to an imaging system with
a varifocal lens for use in endoscopes (collectively, the "License Agreements");
is in full force and effect and constitutes a valid and binding agreement
between the parties thereto, enforceable in accordance with its terms, and there
has not occurred any default under any License Agreement or any event that with
the giving of notice or lapse of time would constitute a default thereunder;
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(m) Each of the Sales Agreement by and between the Company and Medtronic,
Inc. ("Medtronic"), dated November 27, 1996, relating to the sale and/or
distribution of the Company's Series 8000 in North America, Europe, the Middle
East and Africa; the License Agreement by and between the Company and Urohealth
Systems, Inc. ("Urohealth"), dated December 13, 1996, relating to the license by
the Company to Urohealth of visual instrument technology developed for the
gynecology field; the License Agreement (the "GDE License Agreement") between
the Company and GDE Systems, Inc., dated February 28, 1997, relating to the
granting to the Company of a worldwide exclusive license to certain software,
documentation and trademarks of GDE used in the medical field; and the Supply
and Services Agreement by and between the Company and Heartport, Inc.
("Heartport"), dated February 22, 1997, relating to the Company's sale and
subsequent maintenance of Series 8000 systems to Heartport (collectively, the
"Alliance Agreements"); is in full force and effect and constitutes a valid and
binding agreement between the parties thereto, enforceable in accordance with
its terms, and there has not occurred any default under any Alliance Agreement
or any event that with the giving of notice or lapse of time would constitute a
default thereunder; and the Company and Cogent Light Technologies, Inc.
("Cogent") entered into that certain Memorandum of Understanding, dated March
27, 1996, relating to the development and marketing of Company products which
incorporate Cogent's single fiber light technologies, and Cogent and the Company
have performed their respective obligations thereunder and there are no
outstanding disputes thereunder;
(n) The Company is conducting business in compliance with all applicable
statutes, rules, regulations and orders administered or issued by any
governmental or regulatory authority in the jurisdictions in which it is
conducting business, including, without limitation, the United States Food and
Drug Administration;
(o) Except as disclosed in the Prospectus, the Company is not in violation
of any statute, or any rule, regulation, decision or order of any governmental
agency or body or any court relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), does not own or operate any real property
contaminated with any substance that is subject to any environmental laws, has
not received notice of any claims with respect to, and to the best of its
knowledge is not liable for, any off-site disposal or contamination pursuant to
any environmental laws, and is not subject to any claim relating to any
environmental laws; and the Company is not aware of any pending investigation
which could reasonably be expected to lead to such a claim;
(p) Except as disclosed in the Prospectus, the Company owns or possesses
valid, binding, enforceable licenses or other rights to use any patents, patent
licenses, trademarks, service marks, trade names, service names, copyrights,
mask works, technology, know-how and other proprietary intellectual property
rights ("Intellectual Property") necessary to conduct the business as described
in the Prospectus and the Company has not received any notice of infringement of
or conflict with (and knows of no such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights, mask works, technology or know-how which could
result in any material adverse effect on the current or future financial
position, stockholders' equity or results of operations of the Company; the
Company or its assignor has duly and properly filed with the U.S. Patent and
Trademark Office the pending patent applications referred to in the Prospectus
(the "Patent Applications"); the information contained in the Registration
Statement and Prospectus concerning the Patent Applications and patents owned by
or licensed to the Company is accurate in all material respects; and the
discoveries, inventions, products or processes owned or licensed by the Company
referred to in the Prospectus do not, to the knowledge of the Company, infringe
or conflict, and the Company has not received any notice that its Intellectual
Property or activities infringe or conflict with any right or patent, or any
discovery, invention, product or process which is the subject of a patent
application known to the Company;
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(q) The Company holds all material licenses, certificates and permits from
state, federal and other regulatory authorities which are necessary for the
conduct of its business.
(r) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of which any
property of the Company is the subject which, if determined adversely to the
Company, would individually or in the aggregate have a material adverse effect
on the current or future financial position, stockholders' equity or results of
operations of the Company; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(s) The Company is not and, after giving effect to the offering and sale
of the Shares, 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 (the "Investment Company Act");
(t) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes; and
(u) Ernst & Young LLP, who have certified certain financial statements of
the Company, are independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $___________, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 525,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company shall be delivered by or on behalf of the Company to
Xxxxxxx, Sachs & Co., for the account of such Underwriter, against payment by or
on behalf of such Underwriter of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in
immediately available funds. The Company will cause the certificates
representing the
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Shares to be made available for checking and packaging at least twenty-four
hours prior to the Time of Delivery (as defined below) with respect thereto
at the offices of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City
time, on _______ 1997, or such other time and date as Xxxxxxx, Sachs & Co.
and the Company may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York City time, on the date specified by Xxxxxxx,
Xxxxx & Co. in the written notice given by Xxxxxxx, Sachs & Co. of the
Underwriters election to purchase such Optional Shares, or such other time
and date as Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the
"First Time of Delivery", such time and date for delivery of the Optional
Shares, if not the First Time of Delivery, is herein called the "Second Time
of Delivery", and each such time and date for delivery is herein called a
"Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(j) hereof, will be delivered at the offices of Xxxxxxx,
Phleger & Xxxxxxxx LLP, 000 Xxxx X Xxxxxx, Xxxxx 0000, Xxx Xxxxx, XX 00000 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at such Time of Delivery. A meeting will be held at the Closing Location at
3:00 p.m., Pacific time, on the New York Business Day (as such term is
hereinafter defined) next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement, and from time to time, to furnish
the Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a prospectus
is required at any time prior to the expiration of nine months after the time of
issue of the Prospectus in
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connection with the offering or sale of the Shares and if at such time any
event shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall
be necessary during such period to amend or supplement the Prospectus in
order to comply with the Act, to notify you and upon your request to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the time of issue of
the Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may request of
an amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 p.m. Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act.
(e) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Company, Rule 158);
(f) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the Shares,
including, but not limited, to, any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement, or
pursuant to Section 5.1 of the GDE License Agreement), without the prior written
consent of Xxxxxxx, Sachs & Co.;
(g) To furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and any of its
subsidiaries, if any, certified by independent public accountants) and, as soon
as practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company, and any of its subsidiaries, if any, for such quarter in reasonable
detail;
(h) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request;
(i) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(j) To use its best efforts to list for quotation the Shares on the Nasdaq
National Market ("NNM"); and
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(k) To file with the Commission such reports on Form SR as may be required
by Rule 463 under the Act.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the NNM; (v)
the filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
(vi) the cost of preparing stock certificates; (vii) the cost and charges of any
transfer agent or registrar; and (viii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
and disbursements of their counsel, stock transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may
make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m. Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) XxXxxxxxx, Will & Xxxxx, counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with respect to
the matters covered in paragraphs (i), (iii), (iv), (v) and (xiii) of subsection
(c) below as well as such other related matters as you may reasonably request,
and such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Xxxxxxx, Xxxxxxx and Xxxxxxxx LLP, counsel for the Company, shall have
furnished to you their written opinion (a draft of each such opinion is attached
as Annex II(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own or lease
its properties and conduct its business as described in the
Registration Statement and Prospectus;
-8-
(ii) The Company is duly qualified to do business as a
foreign corporation, and is in good standing, in each jurisdiction of
the United States, except where its failure to do so, individually or
in the aggregate, would not have a material adverse effect on the
properties, assets, business condition (financial or otherwise) or
results of operations of the Company;
(iii) The Company has an authorized capitalization as
set forth in the Prospectus, and the authorized capital stock of the
Company (including the Shares) conforms as to legal matters in all
material respects to the description thereof contained in the
Registration Statement and Prospectus;
(iv) The outstanding shares of capital stock of the Company,
including the Shares, have been duly and validly authorized and
issued, are non assessable and fully paid, and are not subject to any
preemptive or similar rights.
(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 (including,
without limitation, the issue and sale of the Shares at such Time of
Delivery by the Company) and the consummation of the transactions
herein contemplated will not contravene or result in any violation of
any provision of applicable law or the Second Restated Certificate of
Incorporation or Restated Bylaws of the Company or, to the knowledge
of such counsel, any rule, regulation, judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any of
-9-
its property, or constitute a breach or violation of any of the terms or
provisions of, or constitute a default under, any agreement or instrument
which is filed as an Exhibit to the Registration Statement under Item 601
of Regulation S-K, and no consent, approval, authorization or order of or
registration or qualification with any governmental body or agency is
required for the performance by the Company of its obligations under, or
the consummation by the Company of the transactions contemplated by, this
Agreement, except the registration under the Act of the Shares, and such
consents, approvals, authorizations, registrations or qualifications as
may be required under securities or Blue Sky laws of the various states
in connection with the purchase and distribution of the Shares by the
Underwriters;
(vii) We do not know of any legal or governmental
proceeding pending of threatened to which the Company is or may become
a party or to which any of the properties of the Company is or may
become subject that is required to be described in the Registration
Statement or the Prospectus and is not so described, of any amendment
to the Registration Statement required to be filed, or of any statute,
regulation, contract or other document that is required to be
described in the Registration Statement or the Prospectus or to be
filed as an Exhibit to the Registration Statement that is not
described or filed as required;
(viii) To our knowledge, the Company does not own any
real property. The real property and buildings held under lease by
the Company in California are held by the Company 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;
-10-
(ix) The statements in the Prospectus under the captions
"Risk Factors - Shares Eligible for Future Sale; Risk Factors -
Registration Rights", "Shares Eligible for Future Sale" and
"Underwriting", insofar as such statements purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair summaries thereof in all material
respects;
(x) The description of the License Agreements in the
Prospectus under the captions "Risk Factors - Uncertainty Regarding
Patents and Protection of Proprietary Technology; Risks of Future
Litigation," "Business - Strategic Alliances" and "Business -- Patents
and Proprietary Rights" are accurate and fairly present the
information with respect thereto required to be presented in such
contexts by the Act or Rules and Regulations under the Act;
(xi) The description of the Alliance Agreements in the
Prospectus under the captions "Risk Factors - Reliance on Strategic
Relationships," "Business - Strategic Alliances" and "Business -
Patents and Proprietary Rights" are accurate and fairly present the
information with respect thereto required to be presented in such
contexts by the Act or Rules and Regulations under the Act;
(xii) The Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act; and
(xiii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior to
such Time of Delivery (other than the financial statements,
financial schedules and other financial data derived therefrom and
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act and the rules and regulations thereunder; and although they do
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus, except for those referred to in the opinion in
subsections (iii), (ix), (x) and (xi) of this section 7(c), they have
no reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior
to such Time of Delivery (other than the financial statements,
financial schedules and other financial data derived therefrom and
contained therein, as to which such counsel need express no belief)
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, as of its date, the
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading or that, as of such Time of Delivery, either
the Registration Statement or the Prospectus or any further amendment
or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
-11-
(d) Each of Xxxxxxxxx & Xxxxxxxxx, Fish & Xxxxxxxxxx and Arant, Kleinberg,
Xxxxxx & Ram, patent and/or trademark counsel for the Company, shall have
furnished to you their written opinions (a draft of each such opinion is
attached hereto as Annex II(c), II(d), and II(e), respectively), and each of
Xxxxxx & Xxxxxx and Doherty, Wallace, Pillsbury and Xxxxxx, P.C., special
counsel for XxXxxxxx and MOI, shall have furnished to you their written opinions
(a draft of each such opinion is attached hereto as Annex II(f) and II(g),
respectively), dated such Time of Delivery, in form and substance satisfactory
to you;
(e) Xxxx and Xxxx, regulatory counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached
hereto as Annex II(h) hereto) dated such Time of Delivery, in form and substance
satisfactory to you to the effect that it has examined the Registration
Statement and;
(i) The statements under the caption "Risk Factors - No
Assurance of Regulatory Clearance or Approval; Significant Domestic
and International Regulation" and "Business - Government Regulation"
in the Prospectus, are, in all material respects, accurate and fair
statements or summaries of applicable federal law and regulation as
applied by the FDA, subject to the qualifications set forth therein;
(ii) No facts have come to the attention of such counsel that
lead it to believe that the information contained under the captions
"Risk Factors - No Assurance of Regulatory Clearance or Approval;
Significant Domestic and International Regulation" and "Business -
Government Regulation" (a) in the Registration Statement, at the time
the Registration Statement became effective, contained any untrue
statement of a material fact, or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (b) in the Prospectus, at the time the
Prospectus was issued or at the date hereof, contained any untrue
statement of a material fact, or omitted 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 were made, not
misleading; and
(iii) Such counsel has no actual knowledge of any action,
suit or proceeding pending or threatened by the FDA against the
Company seeking limitation, suspension, or revocation of any license,
permit, approval or authorization required by the Company to conduct
its business as described in the Registration Statement and the
Prospectus;
(f) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., [New York City time], on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Ernst_& Young, LLP,
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you (the executed copy
of the letter delivered prior to the execution of this Agreement is attached as
Annex I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration Statement and
as of each Time of Delivery is attached as Annex I(b) hereto);
(g) (i) The Company shall not have sustained since the date of the latest
audited financial statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity
-12-
or results of operations of the Company, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated in the Prospectus;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the NNM; (ii) a suspension or
material limitation in trading of the Company's securities on the NNM; (iii) a
general moratorium on commercial banking activities declared by either Federal,
New York or California State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (v) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(i) The Shares to be sold at such Time of Delivery shall have been duly
listed for quotation on the NNM; and
(j) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from each of the executive officers, directors,
stockholders, option holders and warrant holders listed on Schedule 7(j)
attached hereto, substantially to the effect set forth in Subsection 5(f) hereof
in form and substance satisfactory to you;
(k) The Company shall have complied with the provisions of Subsection 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement.
(l) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request; and
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the
-13-
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Xxxxxxx, Sachs & Co. expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party (i)
shall only relieve the indemnifying party from its obligations to indemnify
under subsections (a) or (b) above, as the case may be, to the extent the
indemnifying party is materially damaged by such failure and (ii) shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
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 from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), 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 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. The relative fault 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 on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and
-14-
equitable if contributions pursuant to this subsection (d) were determined by
PRO RATA allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include 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 subsection (d), 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 which 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notifies you that it
has so arranged for the purchase of such Shares, you or the Company shall have
the right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting
-15-
Underwriter or Underwriters, then this Agreement (or, with respect to the
Second Time of Delivery, the obligations of the Underwriters to purchase and
of the Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided
in Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
EX1 If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections_6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
-16-
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and each of the Representatives plus five for
each counsel] counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth
-17-
in a form of Agreement among Underwriters, the form of which shall be submitted
to the Company for examination upon request, but without warranty on your part
as to the authority of the signers thereof.
Very truly yours,
VISTA MEDICAL TECHNOLOGIES, INC.
By:_______________________________
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Salomon Brothers Inc
By: ________________________________
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
-38-
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ---------
Xxxxxxx, Sachs & Co.
Salomon Brothers Inc
Total
-19-
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included in the
Prospectus or the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the related
published rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim financial
statements, selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as indicated
in their reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to the
Representatives and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention that
cause them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company and its
subsidiaries for the three most recent fiscal years included in the Prospectus
agrees with the corresponding amounts (after restatements where applicable) in
the audited consolidated financial statements for such three fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company since the date
of the latest audited financial statements included in the Prospectus, inquiries
of officials of the Company responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) any unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items were
derived, and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included in the Prospectus;
(B) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause (A)
were not determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the Prospectus;
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(C) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of those
statements;
(D) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the capital stock (other than
issuances of capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the latest
financial statements included in the Prospectus) or any increase in the
long-term debt of the Company or any decreases in net current assets or
stockholders= equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; and
(E) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause (D) there
were any decreases in net revenues or operating profit or the total or per share
amounts of net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and with any other
period of corresponding length specified by the Representatives, except in each
case for decreases or increases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and (vi)
above, they have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified by
the Representatives, which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
-21-
ANNEX II(a)
[Form Of Opinion - XxXxxxxxx, Will & Xxxxx]
-1-
ANNEX II(b)
[Form Of Opinion - Xxxxxxx, Xxxxxxx & Xxxxxxxx]
ANNEX II(c)
[Letterhead of Xxxxxxxxx & Xxxxxxxxx]
ANNEX II(d)
[Letterhead of Fish & Xxxxxxxxxx]
ANNEX II(e)
[Letterhead of Xxxxx, Xxxxxxxx, Xxxxxx & Ram]
-2-
ANNEX II(f)
[Letterhead of Xxxxxx & Kosner]
March ___,1997
-3-
ANNEX II(g)
[Form of Opinion-Doherty, Wallace, Pillsbury and Xxxxxx, P.C.]
-4-
ANNEX II(h)
[Form of Opinion-"Company Regulatory Counsel"]
-1-
SCHEDULE 7(j)
LOCK-UP AGREEMENT
Xxxxxxx, Sachs & Co.
Salomon Brothers Inc.
As Representatives of the Several Underwriters
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you, as representatives of the several
underwriters (the "Representatives"), propose to enter into an Underwriting
Agreement with Vista Medical Technologies, Inc. (the "Company") providing for
the public offering (the "Public Offering") by the several underwriters,
including yourselves, of the common stock (the "Common Stock"), $.01 par value
per share, of the Company. The undersigned recognizes that the Public Offering
will benefit the Company by, among other things, raising additional capital for
product introduction, marketing and general corporate purposes.
In consideration of the underwriters' agreement to purchase shares of
Common Stock and conduct the Public Offering, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
undersigned irrevocably agrees that, without the prior written consent of the
Representatives, the undersigned will not, directly or indirectly, offer, sell,
contract to sell, grant any option to purchase, make any short sale, or
otherwise dispose of any Common Stock of the Company, or other securities of the
Company that are substantially similar to Common Stock (including, without
limitation, any securities that are convertible into or exchangeable for, or
that represent the right to receive upon exercise or otherwise, Common Stock or
any substantially similar securities), or any Common Stock of the Company which
may be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission, for a period of
180 days from and after the date of the final Prospectus covering the public
offering of shares of the Common Stock. The undersigned acknowledges that you
and the Company are relying on the agreements of the undersigned contained
herein in carrying out the Public Offering and in entering into underwriting
arrangements with respect thereto.
The foregoing restriction is expressly agreed to preclude the undersigned
from engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a sale or disposition of the shares
of Common Stock even if such shares of Common Stock would be disposed of by
someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the shares of Common Stock or with respect to any
security that includes, relates to, or derives any significant part of its value
from such shares.
-2-
The Company and _________________, the Company's Transfer Agent, are hereby
authorized to enforce this Lock-Up Agreement by refusing to permit transfers
which the Company believes may violate this agreement. The undersigned
understands that this Lock-Up Agreement is irrevocable and shall be binding upon
the undersigned's heirs, legal representatives, successors and assigns.
Sincerely,
__________________________
Signature
__________________________
Name (Print or Type)
__________________________
Date
-3-
