2,000,000 Shares
IMPATH INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
____________ __, 1998
UBS Securities LLC
Xxxxx Xxxxx Xxxxxx & Company, LLC
As Representatives of the Several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
IMPATH INC., a Delaware corporation (the "Company"), proposes to issue and
sell 2,000,000 shares (the "Firm Shares") of its authorized but unissued Common
Stock, $.005 par value per share (the "Common Stock"), to the several
underwriters listed on Schedule A to this Agreement (collectively, the
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"Underwriters"). The Company also proposes to grant to the Underwriters an
option to purchase up to 300,000 additional shares (the "Option Shares") of
Common Stock on the terms and for the purposes set forth in Section 3(c). The
Firm Shares and the Option Shares are hereinafter collectively referred to as
the "Shares."
The Company wishes to confirm as follows its agreements with you (the
"Representatives") and the other Underwriters on whose behalf you are acting in
connection with the several purchases by the Underwriters of the Shares.
1. REGISTRATION STATEMENT. A registration statement on Form S-3 (File No.
333-[ ]) including a prospectus relating to the Shares and each amendment
thereto has been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, and has been filed with the
Commission. There have been delivered to you three signed copies of such
registration statement and amendments, together with three copies of each
exhibit filed therewith. Copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested for each of
the Underwriters. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of
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final prospectus, necessary to permit such registration statement to become
effective will be filed promptly by the Company with the Commission. If such
registration statement has become effective, a final prospectus containing all
Rule 430A Information (as hereinafter defined) will be filed by the Company with
the Commission in accordance with Rule 424(b) of the Rules and Regulations on or
before the second business day after the date hereof (or such earlier time as
may be required by the Rules and Regulations).
The term "Registration Statement" as used in this Agreement shall mean such
registration statement (including all exhibits and financial statements and all
documents incorporated by reference therein) at the time such registration
statement becomes or became effective and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended; provided,
however, that such term shall include all Rule 430A Information deemed to be
included in such registration statement at the time such registration statement
becomes effective as provided by Rule 430A of the Rules and Regulations and
shall also mean any registration statement filed pursuant to Rule 462(b) of the
Rules and Regulations with respect to the Shares. The term "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in the preceding
paragraph and any preliminary prospectus included in the Registration Statement
at the time it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean the prospectus relating to the
Shares in the form in which it is first filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations or, if no filing pursuant to Rule
424(b) of the Rules and Regulations is required, shall mean the form of final
prospectus included in the Registration Statement at the time such registration
statement becomes effective. The term "Rule 430A Information" means information
with respect to the Shares and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule 430A of
the Rules and Regulations. The term "Offering Memorandum" as used in this
Agreement shall mean the Offering Memorandum consisting of the Prospectus and a
Canadian wrap-around used in connection with the offering of the Shares in
Canada. In this Agreement, any documents, descriptions or statements described,
included, set forth, referred to or contained in the Registration Statement, the
Offering Memorandum or the Prospectus shall include any such documents,
descriptions and statements incorporated therein by reference.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants as follows:
(a) The Company has met all the requirements for filing the Registration
Statement on Form S-3. The Commission has not issued, and the Company has no
notice of, any order of the Commission preventing or suspending the use of
any Preliminary Prospectus, nor has the Commission instituted proceedings for
that purpose, 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. When the Registration Statement became or becomes, as
the case may be, effective
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(the "Effective Date") and at all times subsequent thereto up to and at the
Closing Date (as hereinafter defined), any later date on which any Option
Shares are to be purchased (the "Option Closing Date") and when any post-
effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, (i)
the Registration Statement and the Prospectus, and any amendments or
supplements thereto, contained and will contain all statements which are
required to be stated therein by, and complied and will comply with the
requirements of, the Act and the Rules and Regulations, and (ii) neither
the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a
material fact or omitted or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
The foregoing representations and warranties in this section 2(a) do not
apply to any statements or omissions made in reliance on and in conformity
with the information contained in the section of the Prospectus entitled
"Underwriting" (except for the _____ paragraphs thereof) and the
information in the last paragraph on the front cover page of the
Prospectus. The Company has not distributed, and will not distribute, any
offering material in connection with the offering or sale of the Shares
other than the Registration Statement, the Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act.
(b) 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 power and authority (corporate and otherwise) to own, lease and
operate its properties and conduct its business as described in the
Registration Statement. The Company is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, including, but not limited to [New York,
California, Arizona, Florida and New Jersey], except where the failure to
so qualify would not, individually or in the aggregate, have a material
adverse effect on the business, properties, financial condition or results
of operations of the Company and its Subsidiaries (as hereinafter defined)
taken as a whole (a "Material Adverse Effect"); and no proceedings have
been instituted or, to the best knowledge of the Company, threatened in any
such jurisdiction revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification, which if
successful would, individually or in the aggregate, have a Material Adverse
Effect. The Company has no subsidiaries (as defined in the Rules and
Regulations) other than IMPATH-HDC, Inc., a Delaware corporation, wholly
owned by the Company, IMPATH Information Services, Inc., a Delaware
corporation, wholly owned by the Company and IMPATH Registry L.L.C., a
Delaware limited liability company, 50% owned by the Company (collectively,
the "Subsidiaries"). Other than the Subsidiaries, the Company does not own,
directly or indirectly, any shares of stock or any other equity or long-
term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity. Complete
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and correct copies of the certificates of incorporation and of the
bylaws of the Company and the Subsidiaries and all amendments thereto have
been delivered to the Representatives, and except as set forth in the
exhibits to the Registration Statement no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or the Option
Closing Date. Each Subsidiary has been duly organized and is validly
existing as a corporation or a limited liability company, as the case may
be, in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and otherwise) to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement. Each Subsidiary is duly qualified
to do business as a foreign corporation or a foreign limited liability
company, as the case may be, in good standing in each jurisdiction where
the ownership or leasing of the properties or the conduct of its business
requires such qualification, except where the failure to so qualify would
not have a Material Adverse Effect. All of the outstanding shares of
capital stock of each Subsidiary which is a corporation or all of the
outstanding limited liability company interests of each Subsidiary which is
a limited liability company, as the case may be, (i) have been duly
authorized and validly issued, (ii) in the case of each Subsidiary which is
a corporation, are fully paid and non-assessable and (iii) except as
otherwise described in this Section 1(b), are owned by the Company subject
to no security interest, other encumbrance or adverse claims. No options,
warrants or other rights to purchase, agreements or other obligation to
issue or other rights to convert any obligation into shares of capital
stock or ownership interests in the Subsidiaries are outstanding.
(c) The Company has full power and authority (corporate and otherwise) to
enter into this Agreement and to perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement on the part of the
Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity and contribution hereunder may be limited by
applicable laws or equitable principles and except as enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting creditors' rights generally or
by general equitable principles. The performance of this Agreement by the
Company and the consummation by the Company of the transactions herein
contemplated will not result in a breach or violation of, or imposition of
any lien, charge or encumbrance upon any assets or property of the Company
or any Subsidiary pursuant to, any of the terms and provisions of, or
constitute a default under, (i) any indenture, mortgage, deed of trust,
loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to
which the Company or any Subsidiary is a party or by which its properties
are bound, or (ii) the certificate of incorporation or bylaws or other
organization documents, as applicable, of the Company or any Subsidiary or
(iii) any law, order, rule, regulation, writ, injunction or decree of any
court or governmental agency or body to which the Company or any Subsidiary
is subject.
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The Company is not required to obtain or make (as the case may be) any
consent, approval, authorization, order, designation or filing by or with
any court or regulatory, administrative or other governmental agency or
body as a requirement for the execution and delivery of this Agreement or
the consummation by the Company of the transactions herein contemplated,
except such as may be required under the Act, the Securities Exchange Act
of 1934, as amended (the "Exchange Act") or under state securities or blue
sky ("Blue Sky") laws or under the rules and regulations of the National
Association of Securities Dealers, Inc. ("NASD") or under applicable
Canadian securities law.
(d) There is not pending or, to the best of the Company's knowledge,
threatened, any action, suit, claim, proceeding or investigation against
the Company or its Subsidiaries or any of their respective officers or any
of their respective properties, assets or rights before any court or
governmental agency or body or otherwise which might, individually or in
the aggregate, result in a Material Adverse Effect or have a material
adverse effect on the properties, assets or rights of the Company or any
Subsidiary, or materially adversely affect or prevent consummation of the
transactions contemplated hereby. There are no statutes, rules,
regulations, agreements, contracts, leases or documents that are required
to be described in the Prospectus, or to be filed or incorporated by
reference as exhibits to the Registration Statement by the Act or by the
Rules and Regulations that have not been accurately described in all
material respects in the Prospectus or filed or incorporated by reference
as exhibits to the Registration Statement.
(e) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws,
were not issued in violation of any preemptive right, resale right, right
of first refusal or similar right. The authorized and outstanding capital
stock of the Company conforms in all material respects to the description
thereof contained (including, such description incorporated by reference)
in the Registration Statement, the Offering Memorandum and the Prospectus
(and such description correctly states the substance of the provisions of
the instruments defining the capital stock of the Company). The Shares have
been duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Company against
payment therefor in accordance with the terms of this Agreement, will be
duly and validly issued and fully paid and nonassessable. Except as set
forth in the Prospectus and the Offering Memorandum, no preemptive right,
co-sale right, right of first refusal or other similar rights of
securityholders exists with respect to any of the Shares or the issue and
sale thereof other than those that have been expressly waived prior to the
date hereof. No holder of securities of the Company has the right to cause
the Company to include such holder's securities in the Registration
Statement[, except for any such rights which have been effectively waived].
No further approval or authorization of any security holder, the Board of
Directors of the Company or any duly appointed committee
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thereof or others is required for the issuance and sale or transfer of the
Shares, except as may be required under the Act, the Exchange Act or under
state securities or Blue Sky laws. Except as disclosed in or contemplated
by the Prospectus, the Offering Memorandum and the financial statements of
the Company and the related notes thereto, included in the Prospectus and
the Offering Memorandum, the Company does not have outstanding any options
or warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock options, warrants and
other plans or arrangements, and the options, warrants or other rights
granted and exercised thereunder, set forth in the Prospectus and the
Offering Memorandum accurately and fairly presents, in all material
respects, the information required to be shown with respect to such plans,
arrangements, options, warrants and rights.
(f) KPMG Peat Marwick LLP (the "Accountants") who have examined the
financial statements, together with the related schedules and notes, of the
Company filed with the Commission as a part of the Registration Statement,
which are included in the Prospectus and the Offering Memorandum, are
independent public accountants within the meaning of the Act and the Rules
and Regulations. The financial statements of the Company, together with the
related schedules and notes, forming part of the Registration Statement,
Offering Memorandum and the Prospectus, fairly present the financial
position and the results of operations of the Company at the respective
dates and for the respective periods to which they apply. All financial
statements, together with the related schedules and notes, filed with the
Commission as part of the Registration Statement have been prepared in
accordance with generally accepted accounting principles as in effect in
the United States consistently applied throughout the periods involved
except as may be otherwise stated in the Registration Statement. The
selected and summary financial and statistical data included in the
Registration Statement present fairly the information shown therein and
have been compiled on a basis consistent with the financial statements
presented therein. No other financial statements or schedules are required
by the Act or the Rules and Regulations to be included in the Registration
Statement.
(g) Subsequent to the respective dates as of which information is given
in the Registration Statement, the Offering Memorandum and the Prospectus,
there has not been (i) any material adverse change, or any development
which, in the Company's reasonable judgment, is likely to cause a material
adverse change, in the business, properties or assets described or referred
to in the Registration Statement, or the results of operations, condition
(financial or otherwise), business or operations of the Company and its
Subsidiaries taken as a whole, (ii) any transaction which is material to
the Company or its
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Subsidiaries, except transactions in the ordinary course of business, (iii)
any obligation, direct or contingent, which is material to the Company and
its Subsidiaries taken as a whole, incurred by the Company or its
Subsidiaries, except obligations incurred in the ordinary course of
business, (iv) any change in the capital stock or outstanding indebtedness
of the Company or its Subsidiaries or (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company.
Neither the Company nor its Subsidiaries has any material contingent
obligation which is not disclosed in the Registration Statement.
(h) Except as set forth in the Prospectus and the Offering Memorandum,
(i) the Company and each Subsidiary have good and marketable title to all
material properties and assets described in the Prospectus and the Offering
Memorandum as owned by them, free and clear of any pledge, lien, security
interest, charge, encumbrance, claim, equitable interest, or restriction,
(ii) the agreements to which the Company or any Subsidiary is a party
described in the Prospectus and the Offering Memorandum are valid
agreements in full force and effect on the date hereof, enforceable against
the Company or such Subsidiary in accordance with their terms, except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles, and, to the
best of the Company's knowledge, the other contracting party or parties
thereto are not in material breach or default under any of such agreements
and (iii) the Company and each Subsidiary have valid and enforceable leases
for the properties described in the Prospectus and the Offering Memorandum
as leased by it, and such leases conform in all material respects to the
description thereof, if any, set forth in the Registration Statement.
(i) [TO BE REVIEWED FOR REFERENCE TO RELEVANT GOVERNMENT AGENCIES AND
CERTIFICATES/LICENSES] The Company and each Subsidiary now hold and at the
Closing Date and any later Option Closing Date, as the case may be, will
hold, all licenses, certificates, approvals and permits from all state,
United States, foreign and other regulatory authorities, including, but not
limited to, the United States Health Care Financing Administration (the
"HFCA"), the United States Food and Drug Administration (the "FDA") and any
foreign regulatory authorities performing functions similar to their
respective functions, that are material to the conduct of the business of
the Company (as such business is currently conducted), including but not
limited to, the certification or license under the federal Medicare
program, the Clinical Laboratories Improvement Act of 1967, as amended, and
the College of American Pathologist, except for such licenses,
certificates, approvals and permits the failure of which to hold would not
have a Material Adverse Effect), all of which are valid and in full force
and effect (and there is no proceeding pending or, to the knowledge of the
Company, threatened which may cause any such license, certificate, approval
or permit to be withdrawn, cancelled, suspended or not renewed). Neither
the Company nor any Subsidiary is in violation of its certificate of
incorporation or bylaws or other organization documents, or, except for
defaults or violations which would not, individually or in the aggregate,
have a Material Adverse Effect, in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any bond,
debenture, note or other evidence of indebtedness or in any
8
contract, indenture, mortgage, loan agreement, joint venture or other
agreement or instrument to which it is a party or by which it or any of its
properties are bound, or in violation of any law, order, rule, regulation,
writ, injunction or decree of any court or governmental agency or body,
including, but not limited to, the HFCA or the FDA. All of the descriptions
set forth in the Registration Statement, the Offering Memorandum and
Prospectus of the legal and governmental proceedings by or before the HFCA,
the FDA or any other federal, foreign, state or local government body
exercising comparable authority are true, complete and accurate in all
material respects.
(j) The Company and each Subsidiary have filed on a timely basis all
necessary federal, state and foreign income, franchise and other tax
returns and has paid all taxes shown thereon as due, and the Company has no
knowledge of any tax deficiency which has been or might be asserted against
the Company or any Subsidiary which might have a Material Adverse Effect.
All material tax liabilities are adequately provided for within the
financial statements of the Company.
(k) The Company and its Subsidiaries maintain insurance by insurers of
recognized financial responsibility of the types and in the amounts
adequate for their business and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but not
limited to, insurance covering clinical trial liability, product liability
and real and personal property owned or leased against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect. Neither the
Company nor any Subsidiary has been refused any insurance coverage sought
or applied for, and neither the Company nor any Subsidiary has reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect.
(l) Neither the Company nor its Subsidiaries are involved in any labor
dispute or disturbance nor, to the knowledge of the Company, is any such
dispute or disturbance threatened.
(m) Except as described in the Prospectus and the Offering Memorandum,
the Company and each Subsidiary own or possess adequate licenses or other
rights to use all patents, patent applications, trademarks, trademark
applications, service marks, service xxxx applications, tradenames,
copyrights, manufacturing processes, formulae, trade secrets, know-how,
franchises, and other material intangible property and assets
(collectively, "Intellectual Property") necessary to the conduct of their
businesses as conducted and as proposed to be conducted as described in the
Prospectus and the Offering Memorandum. [The Company has no knowledge of
any facts which would preclude it from having rights to its patent
applications referenced in the Prospectus and the Offering Memorandum.] The
Company has no knowledge
9
that it or any Subsidiary lacks or will be unable to obtain any rights or
licenses to use any of the Intellectual Property necessary to conduct the
business now conducted or proposed to be conducted by it as described in
the Prospectus and the Offering Memorandum, except as described in the
Prospectus and the Offering Memorandum. The Prospectus and the Offering
Memorandum fairly and accurately describe the Company's rights with respect
to the Intellectual Property. The Company has not received any notice of
infringement or of conflict with rights or claims of others with respect to
any Intellectual Property. The Company is not aware of any patents of
others which are infringed upon by potential products or processes referred
to in the Prospectus and the Offering Memorandum in such a manner as to
materially and adversely affect the Company and its Subsidiaries taken as a
whole, except as described in the Prospectus and the Offering Memorandum.
(n) The Company and each Subsidiary are conducting their businesses in
compliance with all of the laws, rules and regulations of the jurisdictions
in which it is conducting business, including, but not limited to, the
laws, rules and regulations administered or promulgated by the HFCA or the
FDA.
(o) The Company is not an "investment company," or a "promoter" or
"principal underwriter" for a registered investment company, as such terms
are defined in the Investment Company Act of 1940, as amended.
(p) Neither the Company nor any of its Subsidiaries has incurred any
liability for a fee, commission, or other compensation on account of the
employment of a broker or finder in connection with the transactions
contemplated by this Agreement other than the underwriting discounts and
commissions contemplated hereby.
(q) The Company and each of its Subsidiaries is (i) in compliance with
any and all applicable United States, state and local environmental laws,
rules, regulations, treaties, statutes and codes promulgated by any and all
governmental authorities relating to the protection of human health and
safety, the environment or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received all permits,
licenses or other approvals required of it under applicable Environmental
Laws to conduct its business as currently conducted, and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permit licenses or other approvals would not,
individually or in the aggregate, have a Material Adverse Effect. No
action, proceeding, revocation proceeding, writ, injunction or claim is
pending or threatened relating to the Environmental Laws or to the
Company's or its Subsidiaries' activities involving Hazardous Materials.
"Hazardous Materials" means any material or substance (i) that is
prohibited or regulated by any environmental law, rule, regulation, order,
treaty, statute or code promulgated by any governmental authority, or any
amendment or
10
modification thereto, or (ii) that has been designated or
regulated by any governmental authority as radioactive, toxic, hazardous or
otherwise a danger to health, reproduction or the environment.
(r) Neither the Company nor any of its Subsidiaries has engaged in the
generation, use, manufacture, transportation or storage of any Hazardous
Materials on any of the Company's or its Subsidiaries' properties or former
properties, except where such use, manufacture, transportation or storage
is in compliance with Environmental Laws. No Hazardous Materials have been
treated or disposed of on any of the Company's or its Subsidiaries
properties or on properties formerly owned or leased by the Company or any
Subsidiary during the time of such ownership or lease, except in compliance
with Environmental Laws. No spills, discharges, releases, deposits,
emplacements, leaks or disposal of any Hazardous Materials have occurred on
or under or have emanated from any of the Company's or its Subsidiaries'
properties or former properties.
(s) Neither the Company nor any of its Subsidiaries has at any time
during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution
in violation of law, or (ii) made any payment to any foreign, United States
or state governmental officer or official, or other person charged with
similar public of quasi-public duties, other than payments required or
permitted by the laws of the United States.
(t) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act. The Shares have been duly authorized for quotation on the
National Association of Securities Dealers, Inc. Automated Quotation System
National Market System ("Nasdaq National Market"). The Company has taken no
action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the
Common Stock from the Nasdaq National Market, nor has the Company received
any notification that the Commission or the Nasdaq National Market is
contemplating terminating such registration or listing.
(u) 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 Shares.
(v) The Company has timely and properly filed with the Commission and the
NASD all reports and other documents required to have been filed by it with
the Commission or the NASD, and such reports and documents, when they were
filed with the Commission or the NASD, conformed in all material respects
to the requirements of the Act, the Rules and Regulations, the Exchange
Act, the rules and
11
regulations of the Commission thereunder, and the rules
and regulations of the NASD, as applicable, and none of such reports or
documents 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. True and complete copies of all such
reports and other documents have been delivered to you.
(w) There are no transfer taxes or other similar fees or charges under
federal law or the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery of this
Agreement or the issuance and sale of the Shares by the Company.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters ("Underwriters' Counsel") in
connection with the offering of the Shares shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
3. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell the
Firm Shares to the several Underwriters, and each of the Underwriters agrees to
purchase from the Company the respective aggregate number of Firm Shares set
forth opposite its name on Schedule A, plus such additional number of
----------
Firm Shares which such Underwriter may become obligated to purchase pursuant to
Section 3(b) hereof. The price at which such Firm Shares shall be sold by the
Company and purchased by the several Underwriters shall be $_____ per share. In
making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraphs (b) and (c) of this Section 3, the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares specified on Schedule A.
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(b) If for any reason one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 10 hereof) to purchase and pay for the
number of Shares agreed to be purchased by such Underwriter or Underwriters, the
non-defaulting Underwriters shall have the right within twenty-four (24) hours
after such default to purchase, or procure one or more other Underwriters to
purchase, in such proportions as may be agreed upon between you and such
purchasing Underwriter or Underwriters and upon the terms herein set forth, all
or any part of the Shares which such defaulting Underwriter or Underwriters
agreed to purchase. If the non-defaulting Underwriters fail so to make such
arrangements with respect to all such Shares and portion, the number of Shares
which each non-defaulting Underwriter is otherwise obligated to purchase under
this Agreement shall be automatically increased on a pro rata basis (as adjusted
by you in such manner as you deem advisable to avoid fractional shares) to
absorb the remaining shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase; provided, however, that the non-defaulting
Underwriters
12
shall not be obligated to purchase the Shares and portion which the defaulting
Underwriter or Underwriters agreed to purchase if the aggregate number of such
Shares exceeds 10% of the total number of Shares which all Underwriters agreed
to purchase hereunder. If the total number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase shall not be purchased or
absorbed in accordance with the two preceding sentences, the Company shall have
the right, within twenty-four (24) hours next succeeding the 24-hour period
referred to above, to make arrangements with other underwriters or purchasers
reasonably satisfactory to you for purchase of such Shares and portion on the
terms herein set forth. In any such case, either you or the Company shall have
the right to postpone the Closing Date determined as provided in Section 5
hereof for not more than seven business days after the date originally fixed as
the Closing Date pursuant to said Section 5 in order that any necessary changes
in the Registration Statement, the Offering Memorandum and the Prospectus or any
other documents or arrangements may be made. If the aggregate number of Shares
which the defaulting Underwriter or Underwriters agreed to purchase exceeds 10%
of the total number of Shares which all Underwriters agreed to purchase
hereunder, and if neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the Shares which the defaulting Underwriter or Underwriters agreed to
purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the Company
grants an option to the several Underwriters to purchase all or any portion of
the Option Shares from the Company at the same price per share as the
Underwriters shall pay for the Firm Shares. Said option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement upon written or telegraphic
notice by you to the Company setting forth the aggregate number of shares of the
Option Shares as to which the several Underwriters are exercising the option.
Delivery of certificates for the shares of Option Shares, and payment therefor,
shall be made as provided in Section 5 hereof. Each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, the exact number of shares to be
adjusted by you in such manner as you deem advisable to avoid fractional shares.
13
4. OFFERING BY UNDERWRITERS.
(a) The terms of the public offering of the Shares in the United States by the
Underwriters shall be as set forth in the Prospectus. The terms of the private
placement of the Shares in Canada by the Underwriters shall be as set forth in
the Offering Memorandum. The Underwriters may from time to time change the
public offering and private placement prices after the closing of the public
offering and the private placement, respectively, and increase or decrease the
concessions and discounts to dealers as they may determine.
(b) You, on behalf of the Underwriters, represent and warrant that (i) the
information set forth in the last paragraph on the front cover page and
paragraph __ under the caption "Underwriting" in the Registration Statement, the
Offering Memorandum any Preliminary Prospectus and the Prospectus relating to
the Shares (insofar as such information relates to the Underwriters) constitutes
the only information furnished by the Underwriters to the Company for inclusion
in the Registration Statement, the Offering Memorandum any Preliminary
Prospectus, and the Prospectus, and that the statements made therein are correct
and do not omit to state any material fact required to be stated therein or
necessary to make the statements made therein in light of the circumstances
under which they were made not misleading, and (ii) the Underwriters have not
distributed and will not distribute prior to the Closing Date or on any Option
Closing Date, as the case may be, any of offering material in connection with
the offering and sale of the shares other than the Preliminary Prospectus, the
Prospectus, the Registration Statement, the Offering Memorandum and other
materials permitted by the Act and applicable Canadian securities law.
5. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) Delivery of certificates for the Firm Shares and the Option Shares (if the
option granted pursuant to Section 3(c) hereof shall have been exercised not
later than 1:00 p.m., New York City time, on the date at least two business days
preceding the Closing Date), and payment therefor, shall be made at the office
of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:00
a.m., New York City time, on the [third] business day after the date of this
Agreement, or at such time on such other day, not later than seven full business
days after such [third] business day, as shall be agreed upon in writing by the
Company and you (the "Closing Date").
(b) If the option granted pursuant to Section 3(c) hereof shall be exercised
after 1:00 p.m., New York City time, on the date two business days preceding the
Closing Date, and on or before the 30th day after the date of this Agreement,
delivery of certificates for the Option Shares, and payment therefor, shall be
made at the office of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 at 9:00 a.m., New York City time, on the third business day after the
exercise of such option.
14
(c) Payment for the Shares purchased from the Company shall be made to the
Company or its order, by [either a same day funds check or] Federal Funds [or
other immediately available funds] wire transfer. Such payment shall be made
upon delivery of certificates for the Shares to you for the respective accounts
of the several Underwriters against receipt therefor signed by you. Certificates
for the Shares to be delivered to you shall be registered in such name or names
and shall be in such denominations as you may request at least three business
days before the Closing Date, in the case of the Firm Shares, and at least two
business days prior to the Option Closing Date, in the case of the Option
Shares. Such certificates will be made available to the Underwriters for
inspection, checking and packaging at a location in New York, New York,
designated by the Underwriters not less than one full business day prior to the
Closing Date or, in the case of the Option Shares, by 3:00 p.m., New York time,
on the business day preceding the Option Closing Date.
[It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for the Shares to be purchased by any Underwriter whose [check] [payment] shall
not have been received by you on the Closing Date or any later Option Closing
Date. Any such payment by you shall not relieve such Underwriter from any of
its obligations hereunder.]
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees as
follows:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date
that this Agreement is executed and delivered by the parties hereto, to
become effective as promptly as possible; it will notify you, promptly
after it shall receive notice thereof, of the time when the Registration
Statement or any subsequent amendment to the Registration Statement has
become effective or any supplement to the Prospectus has been filed. If the
Company omitted information from the Registration Statement at the time it
was originally declared effective in reliance upon Rule 430A(a), the
Company will provide evidence satisfactory to you that the Prospectus
contains such information and has been filed, within the time period
prescribed, with the Commission pursuant to subparagraph (1) or (4) of Rule
424(b) of the Rules and Regulations or as part of a post-effective
amendment to such Registration Statement as originally declared effective
which is declared effective by the Commission. If for any reason the filing
of the final form of Prospectus is required under Rule 424(b)(3) of the
Rules and Regulations, it will provide evidence satisfactory to you that
the Prospectus contains such information and has been filed with the
Commission within the time period prescribed. The Company will notify you
promptly of any request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for additional
information. Promptly upon your request, it will prepare and file with the
Commission any amendments or supplements to the Registration Statement or
the Prospectus which, in the reasonable opinion of Underwriters' Counsel,
may be necessary or advisable in connection with the
15
distribution of the Shares by the Underwriters. The Company will promptly
prepare and file with the Commission, and promptly notify you of the filing
of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions,
if, at any time when a prospectus relating to the Shares is required to be
delivered under the Act, any event shall have occurred as a result of which
the Prospectus or any other prospectus relating to the Shares as then in
effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. In case
any Underwriter is required to deliver a prospectus within the nine-month
period referred to in Section 10(a)(3) of the Act in connection with the
sale of the Shares, the Company will prepare promptly upon request, but at
the expense of such Underwriter, such amendment or amendments to the
Registration Statement and such prospectus or prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act. The Company will file no amendment or supplement to the
Registration Statement or the Prospectus that shall not previously have
been submitted to you a reasonable time prior to the proposed filing
thereof or to which you shall reasonably object in writing or which is not
in compliance with the Act and Rules and Regulations or the provisions of
this Agreement.
(b) The Company will advise you, promptly after it shall receive notice
or obtain knowledge thereof of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or
the use of the Prospectus or of the initiation or threat of any proceeding
for that purpose; and it will promptly use its best efforts to prevent the
issuance of any such stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued.
(c) The Company will cooperate with you in endeavoring to qualify the
Shares for offering and sale under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in
effect for so long as may be required for purposes of the distribution of
the Shares, except that the Company shall not be required in connection
therewith or as a condition thereof to qualify as a foreign corporation, or
to execute a general consent to service of process in any jurisdiction, or
to make any undertaking with respect to the conduct of its business. In
each jurisdiction in which the Shares shall have been qualified, the
Company will make and file such statements, reports and other documents in
each year as are or may be reasonably required by the laws of such
jurisdictions so as to continue such qualifications in effect for so long a
period as you may reasonably request for distribution of the Shares, or as
otherwise may be required by law.
(d) The Company will furnish to you, as soon as available, copies of the
Registration Statement (three of which will be signed and which will
include all exhibits), each Preliminary Prospectus, the Prospectus, the
Offering Memorandum and any amendments or supplements to such documents,
including any prospectus
16
prepared to permit compliance with Section 10(a)(3) of the Act, all in such
quantities as you may from time to time reasonably request.
(e) The Company will make generally available to its stockholders as soon
as practicable, but in any event not later than the 45th day following the
end of the fiscal quarter first occurring after the first anniversary of
the effective date of the Registration Statement, an earnings statement
(which will be in reasonable detail but need not be audited) complying with
the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and covering a twelve-month period beginning after the
effective date of the Registration Statement, and will advise you in
writing when such statement has been made available.
(f) During a period of five years after the date hereof, the Company, as
soon as practicable after the end of each respective period, will furnish
to its stockholders annual reports (including financial statements audited
by independent certified public accountants) and will furnish to its
stockholders unaudited quarterly reports of operations for each of the
first three quarters of the fiscal year, and will, upon request, furnish to
you and the other several Underwriters hereunder (i) concurrently with
making such reports available to its stockholders, statements of operations
of the Company for each of the first three quarters in the form made
available to the Company's stockholders; (ii) concurrently with the
furnishing thereof to its stockholders, a balance sheet of the Company as
of the end of such fiscal year, together with statements of operations, of
stockholders' equity and of cash flow of the Company for such fiscal year,
accompanied by a copy of the certificate or report thereon of nationally
recognized independent certified public accountants; (iii) concurrently
with the furnishing of such reports to its stockholders, copies of all
reports (financial or other) mailed to stockholders; (iv) as soon as they
are available, copies of all reports and financial statements furnished to
or filed with the Commission, any securities exchange or the Nasdaq
National Market by the Company (except for documents for which confidential
treatment is requested); and (v) every material press release and every
material news item or article in respect of the Company or its affairs
which was generally released to stockholders or prepared for general
release by the Company. During such five-year period, if the Company shall
have any active subsidiaries, the foregoing financial statements shall be
on a consolidated basis to the extent that the accounts of the Company are
consolidated with any subsidiaries, and shall be accompanied by similar
financial statements for any significant subsidiary that is not so
consolidated.
(g) Prior to or simultaneously with the execution and delivery of this
Agreement, the Company will obtain agreement substantially in the form
provided on Appendix A hereto from each officer and director of the Company
----------
and each beneficial owner of the Company's Common Stock listed on
Schedule B hereto, providing that such person will not, for a period of 90
----------
days after the date of the Prospectus, without the prior written consent of
UBS Securities LLC, directly or indirectly, offer to sell,
17
sell, hypothecate, contract to sell, grant any option to purchase, or
otherwise dispose of, any shares of Common Stock beneficially owned as of
the date such lockup agreement is executed (including, without limitation,
shares of Common Stock which may be deemed to be beneficially owned in
accordance with the Rules and Regulations and shares of Common Stock which
may be issued upon exercise of a stock option or warrant) or any securities
convertible into or exercisable or exchangeable for such Common Stock,
except (a) by operation of law or (b) pursuant to a bona fide gift to any
person or other entity which agrees in writing to be bound by this
restriction. Each such person or entity shall also agree and consent to the
entry of stop transfer instructions with the Company's transfer agent
against the transfer of shares of Common Stock held by such person or
entity, except in compliance with the foregoing restriction.
(h) The Company shall not, during the 180 days following the effective
date of the Registration Statement, except with the prior written consent
of UBS Securities LLC, file a registration statement covering any of its
shares of capital stock, except that one or more registration statements on
Form S-8 may be filed at any time following the effective date of the
Registration Statement.
(i) The Company shall not, during the 90 days following the effective
date of the Registration Statement, except with the prior written consent
of UBS Securities LLC, issue, sell, offer or agree to sell, grant,
distribute or otherwise dispose of, directly or indirectly, any shares of
Common Stock, or any options, rights or warrants with respect to shares of
Common Stock, or any securities convertible into or exchangeable for Common
Stock, other than (i) the sale of Shares hereunder, (ii) the grant of
options or the issuance of shares of Common Stock under the 1989 Stock
Option Plan dated as of _______ and 1997 Long Term Incentive Plan dated
as of _____________, (iii) the issuance of shares of Common Stock upon
exercise of the currently outstanding options or warrants described in the
Registration Statement.
(j) The Company will apply the net proceeds from the sale of the Shares
being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(k) The Company will maintain a Transfer Agent and, if necessary under
the jurisdiction of incorporation of the Company, a Registrar (which may be
the same entity as the Transfer Agent) for its Common Stock.
(l) The Company will use its best efforts to maintain listing of its
shares of Common Stock on the Nasdaq National Market.
(m) The Company is familiar with the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder, and has in the past
conducted its affairs, and will in the future conduct its affairs, in such
a manner so as to ensure that
18
the Company was not and will not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and the rules
and regulations thereunder.
(n) If at any time during the 180-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your reasonable
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the Company
will, after written notice from you advising the Company to the effect set
forth above consult with you in good faith regarding the necessity of
disseminating a press release or other public statement responding to or
commenting on such rumor, publication or event and, if the Company in its
reasonable judgment determines that such a press release or other public
statement is appropriate, the substance of any press release or other
public statement.
7. EXPENSES. The Company agrees with each Underwriter that:
(a) The Company will pay and bear all costs, fees and expenses in
connection with the preparation, printing and filing of the Registration
Statement (including financial statements, schedules and exhibits), the
Offering Memorandum (including fees relating to the filing of reports in
Canada), Preliminary Prospectuses and the Prospectus and any amendments or
supplements thereto; the reproduction of this Agreement, the Preliminary
Blue Sky Memoranda and any Supplemental Blue Sky Memoranda and any
instruments related to any of the foregoing; the issuance and delivery of
the Shares hereunder to the several Underwriters, including transfer taxes,
if any; the cost of all stock certificates representing the Shares and
Transfer Agents' and Registrars' fees; the fees and disbursements of
counsel for the Company; all fees and other charges of the Company's
independent public accountants; the cost of furnishing to the several
Underwriters copies of the Registration Statement (including appropriate
exhibits), the Offering Memorandum, Preliminary Prospectuses and the
Prospectus, and any amendments or supplements to any of the foregoing; NASD
filing fees and expenses incident to securing any required review and the
cost of qualifying the Shares under the laws of such jurisdictions within
the United States as you may designate (including filing fees and fees and
disbursements of Underwriters' Counsel in connection with such NASD filings
and Blue Sky qualifications); listing application fees of the Nasdaq
National Market; and all other expenses directly incurred by the Company in
connection with the performance of its obligations hereunder.
(b) If the transactions contemplated hereby are not consummated by reason
of any failure, refusal or inability on the part of the Company to perform
any agreement on its part to be performed hereunder or to fulfill any
condition of the
19
Underwriters' obligations hereunder, the Company will, in addition to
paying the expenses described in clause (a) above, reimburse the several
Underwriters for all out-of-pocket expenses (including reasonable fees and
disbursements of Underwriters' Counsel) incurred by the Underwriters in
reviewing the Registration Statement and the Prospectus and in preparing
the Offering Memorandum and in otherwise investigating, preparing to market
or marketing the Shares. The Company will in no event be liable to any of
the several Underwriters for any loss of anticipated profits from the sale
by them of the Shares.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters to purchase and pay for the Shares, as provided herein, shall be
subject to the accuracy, as of the date hereof and the Closing Date and any
later Option Closing Date, as the case may be, of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
9:00 a.m., New York City time, on the date following the date of this
Agreement, or such later time or date as shall be consented to in writing
by you. If the filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b) and Rule 430A of the Rules and
Regulations, the Prospectus shall have been filed in the manner and within
the time period required by Rule 424(b) and Rule 430A of the Rules and
Regulations. No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in connection with
this Agreement, the form of Registration Statement, the Offering Memorandum
and the Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares shall have been reasonably satisfactory to
Underwriters' Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them
to pass upon the matters referred to in this subsection.
(c) You shall have received, at no cost to you, on the Closing Date and
on any later Option Closing Date, as the case may be, the opinions of
Xxxxxx & Xxxxxx, counsel to the Company, dated the Closing Date or such
later Option Closing Date, in the forms attached hereto on Appendix B,
----------
addressed to the Underwriters and with reproduced copies of signed
counterparts thereof for each of the Representatives.
20
(d) You shall have received from Shearman & Sterling, Underwriters'
Counsel, an opinion or opinions, dated the Closing Date or on any later
Option Closing Date, as the case may be, in form and substance reasonably
satisfactory to you, with respect to the sufficiency of all corporate
proceedings undertaken by the Company and other legal matters relating to
this Agreement and the transactions contemplated hereby as you may reasonably
require, and the Company shall have furnished to such counsel such documents
as it may have reasonably requested for the purpose of enabling it to pass
upon such matters.
(e) You have received, concurrently with the execution of this Agreement, a
"comfort" letter (herein called the "Original Letter") from the Accountants
addressed to the Company and the Underwriters confirming that it is an
independent certified public accountant with respect to the Company within
the meaning of the Act and the Rules and Regulations thereunder and in form
and substance satisfactory to you, 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, and
shall have received on the Closing Date and on any later Option Closing Date,
as the case may be, a bring-down "comfort" letter from the Accountants
addressed to the Company and the Underwriters, dated the Closing Date or such
later Option Closing Date, as the case may be, confirming that it is an
independent certified public accountant with respect to the Company within
the meaning of the Act and the Rules and Regulations thereunder and based
upon the procedures described in the Original Letter, but carried out to a
date not more than three days prior to the Closing Date or any such later
Option Closing Date, as the case may be, (i) confirming that the statements
and conclusions set forth in the Original Letter are accurate as of the
Closing Date or such later Option Closing Date, as the case may be; and (ii)
setting forth any revisions and additions to the statements and conclusions
set forth in the Original Letter that are necessary to reflect any changes in
the facts described in the Original Letter since the date of such letter, or
to reflect the availability of more recent financial statements, data or
information. The bring-down comfort letter shall not disclose any change, or
any development involving a prospective change, in or affecting the business
or properties of the Company or any Subsidiary which, in your reasonable
judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Prospectus and the Offering
Memorandum. In addition, you shall have received from the Accountants a
letter addressed to the Company and made available to you for the use of the
Underwriters stating that its review of the Company's system of internal
accounting controls, to the extent it deemed necessary in establishing the
scope of its latest examination of the Company's financial statements, did
not disclose any weaknesses in internal controls that it considered to be
material weaknesses. All such letters shall be in a form reasonably
satisfactory to the Representatives and Underwriters' Counsel.
21
(f) You shall have received on the Closing Date and on any later Option
Closing Date, as the case may be, a certificate of the President and the
Chief Financial Officer of the Company, dated the Closing Date or such later
date, as the case may be, to the effect that as of such date (and you shall
be satisfied that as of such date):
(i) The representations and warranties of the Company in this Agreement
are true and correct, as if made on and as of the Closing Date or any
later Option Closing Date, as the case may be; and the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied at or prior to the Closing Date or
any later Option Closing Date, as the case may be;
(ii) The Registration Statement has become effective under the Act and
no stop order suspending the effectiveness of the Registration Statement
or preventing or suspending the use of the Prospectus has been issued, and
no proceedings for that purpose have been instituted or are pending or, to
the best of their knowledge, threatened under the Act;
(iii) They have carefully reviewed the Registration Statement and the
Prospectus; and, when the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such certificate, the
Registration Statement and the Prospectus and any amendments or
supplements thereto contained all statements and information required to
be included therein or necessary to make the statements therein not
misleading; and when the Registration Statement became effective, and at
all times subsequent thereto up to the delivery of such certificate, none
of the Registration Statement, the Prospectus or the Offering Memorandum
or any amendment or supplement thereto included 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; and,
since the effective date of the Registration Statement, there has occurred
no event required to be set forth in an amended or supplemented Prospectus
or the Offering Memorandum that has not been so set forth; and
(iv) Subsequent to the respective dates as of which information is given
in the Registration Statement, the Offering Memorandum and the Prospectus,
there has not been (A) any material adverse change in the properties or
assets described or referred to in the Registration Statement, the
Offering Memorandum and the Prospectus or in the condition (financial or
otherwise), operations, business or prospects of the Company and its
Subsidiaries, (B) any transaction which is material to the Company and its
Subsidiaries, except transactions entered into in the ordinary course of
business, (C) any obligation, direct or contingent, incurred by the
Company or
22
its Subsidiaries, which is material to the Company and its Subsidiaries
taken as a whole, (D) any change in the capital stock or outstanding
indebtedness of the Company or its Subsidiaries which is material to the
Company and its Subsidiaries taken as a whole or (E) any dividend or
distribution of any kind declared, paid or made on the capital stock of
the Company.
(g) The Company shall have furnished to you such further certificates and
documents as you shall reasonably request as to the accuracy of the
representations and warranties of the Company herein, as to the performance
by the Company of its obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Underwriters hereunder.
(h) The Firm Shares and the Option Shares, if any, shall have been approved
for designation upon notice of issuance on the Nasdaq National Market.
All such opinions, certificates, letters and documents will be in compliance
with the provisions hereof only if they are reasonably satisfactory to
Underwriters' Counsel. The Company will furnish you with such number of
conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) below, the Company agrees to
indemnify and hold harmless each Underwriter and each person (including each
partner or officer thereof) who controls any Underwriter within the meaning of
Section 15 of the Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Act, the Exchange Act, or the common law or
otherwise, and the Company agrees to reimburse each such Underwriter and
controlling person for any legal or other out-of-pocket expenses (including,
except as otherwise hereinafter provided, reasonable fees and disbursements of
counsel) incurred by the respective indemnified parties in connection with
defending against any such losses, claims, damages or liabilities or in
connection with any investigation or inquiry of, or other proceeding which may
be brought against, the respective indemnified parties, in each case arising out
of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the Prospectus
as part thereof and any 462(b) registration statement) or in the Offering
Memorandum or any post-effective amendment thereto (including any 462(b)
registration statement), or 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, or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or in the Offering Memorandum or
the omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
23
(1) the indemnity agreements of the Company contained in this paragraph (a)
shall not apply to any such losses, claims, damages, liabilities or expenses if
such statement or omission is contained in the section of the Prospectus
entitled "Underwriting" (except for the ____ paragraphs thereof) or the last
paragraph of text on the cover page of the Prospectus, and (2) the indemnity
agreement contained in this paragraph (a) with respect to any Preliminary
Prospectus or Offering Memorandum shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Shares which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented or, in the case of purchasers resident in
Ontario, Canada, the revised Offering Memorandum) was not sent or delivered to
such person [(excluding any documents incorporated therein by reference)] and
the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented or, in the case of purchasers resident in Ontario,
Canada, the revised Offering Memorandum) unless the failure is the result of
noncompliance by the Company with paragraph (a) of Section 6 hereof. The
indemnity agreements of the Company contained in this paragraph (a) and the
representations and warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of any payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its executive officers, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Act, from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Act, the Exchange Act, or the common law or
otherwise and to reimburse each of them for any legal or other expenses
including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or in the Offering Memorandum or any post-effective amendment thereto
(including any 462(b) registration statement) or 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 or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or in the Offering Memorandum or the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that in the cases of clauses (i) and (ii) above, such
24
statement or omission is contained in the Section of the Prospectus entitled
"Underwriting" (except for the ____ paragraph thereof) or the last paragraph on
the cover page of the Prospectus or in the section of the Offering Memorandum
entitled "Representations by Purchasers". The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Shares.
(c) Each party indemnified under the provision of paragraphs (a) and (b) of
this Section 9 agrees that, upon the service of a summons or other initial legal
process upon it in any action or suit instituted against it or upon its receipt
of written notification of the commencement of any investigation or inquiry of,
or proceeding against it, in respect of which indemnity may be sought on account
of any indemnity agreement contained in such paragraphs, it will promptly give
written notice (a "Notice") of such service or notification to the party or
parties from whom indemnification may be sought hereunder. No indemnification
provided for in such paragraphs shall be available to any party who shall fail
so to give the Notice if the party to whom such Notice was not given was unaware
of the action, suit, investigation, inquiry or proceeding to which the Notice
would have related and was prejudiced by the failure to give the Notice, but the
omission so to notify such indemnifying party or parties of any such service or
notification shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of such indemnity agreement. Any indemnifying party
shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, an
indemnified party. Any indemnifying party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(the "Notice of Defense") to the indemnified party, to assume (alone or in
conjunction with any other indemnifying party or parties) the entire defense of
such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or parties,
by counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; provided, however, that (i) if
the indemnified party or parties reasonably determine that there may be a
conflict between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled, at its or their own expense to
have counsel chosen by such indemnified party or parties participate in, but not
conduct, the defense. It is understood that the indemnifying parties shall not,
in respect of the legal defenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all of the Underwriters and each person, if any, who
25
controls any Underwriter within the meaning of Section 15 of the Act, and (b)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act. If, within a reasonable time after receipt of the
Notice, an indemnifying party gives a Notice of Defense and the counsel chosen
by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 9 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding. The
indemnifying party or parties shall not be liable for any settlement of any
proceeding effected without its or their written consent, provided such consent
has not been unreasonably withheld.
(d) If the indemnification provided for in this Section 9 is unavailable or
insufficient to hold harmless an indemnified party under paragraph (a) or (b) of
this Section 9, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities referred to in
paragraph (a) or (b) of this Section 9 (i) in such proportion as is appropriate
to reflect the relative benefits received by each indemnifying party from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of each indemnifying party in connection with the statements or
omissions that 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 respective
proportions as the total net proceeds from the offering of the Shares received
by the Company and the total underwriting discount received by the Underwriters,
as set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Shares. 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 each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation
(even if the
26
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparation to defend or defense against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this paragraph
(d), no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter.
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 paragraph (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a summons
or other initial legal process upon it in any action instituted against it in
respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 9).
(e) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of such Underwriter and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including without limitation the
provisions of this Section 9 and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 9 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act, or in the Offering Memorandum as required by Canadian securities law.
27
10. TERMINATION. This Agreement may be terminated by you at any time on or
prior to the Closing Date or on or prior to any later Option Closing Date, as
the case may be, (i) if the Company shall have failed, refused or been unable,
at or prior to the Closing Date, or on or prior to any later Option Closing
Date, as the case may be, to perform any agreement on its part to be performed,
or because any other condition of the Underwriters' obligations hereunder
required to be fulfilled by the Company is not fulfilled, or (ii) if trading on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been
required on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market, by such trading exchanges or by order of the Commission
or any other governmental authority having jurisdiction, or if a banking
moratorium shall have been declared by federal or New York authorities, or (iii)
if the Company shall have sustained a loss by strike, fire, flood, accident or
other calamity of such character as to have a Material Adverse Effect,
=
regardless of whether or not such loss shall have been insured, or (iv) if there
shall have been a material adverse change in the general political or economic
conditions or financial markets in the United States as in the judgment of the
Representatives makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have occurred
an outbreak or escalation of hostilities between the United States and any
foreign power or of any other insurrection or armed conflict involving the
United States or other national or international calamity, hostilities or crisis
or the declaration by the United States of a national emergency which, in the
judgment of the Representatives, adversely affects the marketability of the
Shares, or (vi) if since the respective dates as of which information is given
in the Registration Statement , the Offering Memorandum and the Prospectus,
there shall have occurred any material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, of the Company or the business affairs, management, or
business prospects of the Company, whether or not arising in the ordinary course
of business, or (vii) if any foreign, federal or state statute, regulation, rule
or order of any court or other governmental authority shall have been enacted,
published, decreed or otherwise promulgated which in the judgment of the
Representatives materially and adversely affects or will materially and
adversely affect the business or operations of the Company, or trading in the
Common Stock shall have been suspended, or (viii) there shall have occurred a
material adverse decline in the value of securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market or
(ix) action shall be taken by any foreign, federal, state or local government or
agency in respect of its monetary or fiscal affairs which, in the judgment of
the Representatives, has a material adverse effect on the securities markets in
the United States. If this Agreement shall be terminated in accordance with
this Section 10, there shall be no liability of the Company to the Underwriters
and no liability of the Underwriters to the Company; provided, however, that in
the event of any such termination the Company agrees to indemnify and hold
harmless the Underwriters from all costs or expenses incident to the performance
of the obligations of the Company under this Agreement, including all costs and
expenses referred to in Section 7.
28
If you elect to terminate this Agreement as provided in this Section 10, the
Company shall be notified promptly by you by telephone, telecopy or telegram,
confirmed by letter.
11. REIMBURSEMENT OF CERTAIN EXPENSES.
(a) In addition to their other obligations under Section 9 of this Agreement,
the Company hereby agrees to reimburse on a quarterly basis the Underwriters for
all reasonable legal and other expenses incurred in connection with
investigating or defending any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (a) of Section 9 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper; provided,
however, that (i) to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them and
(ii) such persons shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
(b) In addition to their other obligations under Section 9 of this Agreement,
the Underwriters hereby agree to reimburse on a quarterly basis the Company for
all reasonable legal and other expenses incurred in connection with
investigating or defending any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (b) of Section 9 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper; provided,
however, that (i) to the extent any such payment is ultimately held to be
improper, the Company shall promptly refund it and (ii) the Company shall
provide to the Underwriter, upon request, reasonable assurances of its ability
to effect any refund, when and if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
the benefit of the Company and the several Underwriters and, with respect to the
provisions of Section 9 hereof, the several parties (in addition to the Company
and the several Underwriters) indemnified under the provisions of said Section
9, and their respective personal representatives, successors and assigns.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The term
"successors and assigns" as herein used shall not include any purchaser, as such
purchaser, of any of the Shares from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or
29
delivered to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
Xx. Xxxxxxx Xxxxxxx; and if to the Company, shall be mailed, telegraphed or
delivered to it at its office, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: President. All notices given by telegraph shall be promptly confirmed
by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(i) any investigation made by or on behalf of any Underwriter or controlling
person thereof, or by or on behalf of the Company or its respective directors of
officers, and (ii) delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
You will act as Representatives of the several Underwriters in all dealings
with the Company under this Agreement, and any action under or in respect of
this Agreement taken by you jointly or by UBS Securities LLC, as
Representatives, will be binding upon all of the Underwriters.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
Please sign and return to the Company the enclosed duplicates of this letter,
whereupon this letter will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
IMPATH INC.
By: ______________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
UBS SECURITIES LLC
XXXXX XXXXX XXXXXX & COMPANY, LLC
By: UBS SECURITIES LLC
By: ______________________________
Name:
Title:
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
----------
SCHEDULE A
UNDERWRITERS
Number of
Shares
to be
Underwriters Purchased
------------ ---------
UBS Securities LLC.................................
Xxxxx Xxxxx Xxxxxx & Company, LLC..................
Total
---------
=========
SCHEDULE B
List of Stockholders
APPENDIX A
----------
FORM OF LOCK-UP AGREEMENT
-------------------------
____________ , 1998
UBS Securities LLC
Xxxxx Xxxxx Xxxxxx & Company, LLC
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among IMPATH INC., a
Delaware corporation (the "Company"), and each of the Representatives, on behalf
of themselves and a group of the Underwriters named therein, relating to an
underwritten public offering of Common Stock, $.005 par value per share (the
"Common Stock"), of the Company. Capitalized terms used but not defined herein
have the meanings given to them in the Underwriting Agreement.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned agrees not to offer, sell or otherwise
dispose of any shares of Common Stock of the Company beneficially owned by the
undersigned, any options, warrants or any rights to acquire shares of Common
Stock or any securities exchangeable for or convertible into shares of Common
Stock for a period of 90 days following the day on which the Underwriting
Agreement is executed without the prior written consent of UBS Securities LLC.
A-1
If for any reason the Underwriting Agreement shall be terminated prior to the
Closing Date, the agreement set forth above shall likewise be terminated.
Very truly yours,
By: _________________________________
Name:
Address:
A-2
APPENDIX B
----------
Opinion of Counsel to the Company
---------------------------------
Xxxxxx & Xxxxxx shall opine to the effect that:
(A) The Company has been duly organized and is validly existing as a
corporation, and is in good standing under, the laws of the State of Delaware;
(B) The Company has the power and authority (corporate and otherwise)
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus, except where the
failure to have such power and authority would not have a Material Adverse
Effect; the Company is duly qualified to do business as a foreign corporation
and is in good standing in all jurisdictions in which the ownership or leasing
of its properties or the conduct of its business requires such qualification,
including, but not limited to, the State[s] of New York, [California, Arizona,
Florida and New Jersey], except where the failure to so qualify would not,
individually or in the aggregate, have a Material Adverse Effect; and no
proceedings have been instituted or, to the best knowledge of the Company,
threatened in any such jurisdiction revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or qualification, which if
successful would, individually or in the aggregate, have a Material Adverse
Effect.
(C) Other than the Subsidiaries, the Company does not own or control,
directly or indirectly, any corporation, partnership, joint venture, association
or other entity. Each Subsidiary has been duly organized and is validly
existing as a corporation or a limited liability company, as the case may be, in
good standing under the laws of the jurisdiction of its organization, with full
power and authority (corporate and otherwise) to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement. Each Subsidiary is duly qualified to do business as a foreign
corporation or a foreign limited liability company, as the case may be, in good
standing in each jurisdiction where the ownership or leasing of the properties
or the conduct of its business requires such qualification, except where the
failure to so qualify would not have a Material Adverse Effect. All of the
outstanding shares of capital stock of each Subsidiary which is a corporation or
all of the outstanding limited liability company interests of each Subsidiary
which is a limited liability company, as the case may be, (i) have been duly
authorized and validly issued, (ii) in the case of each Subsidiary which is a
corporation, are fully paid and non-assessable and (iii) except as otherwise
described in this Section 1(b), are owned by the Company, in each case subject
to no security interest, other encumbrance or adverse claim; to the best of such
counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding;
(D) The authorized capital stock of the Company consists of __ shares
of Common Stock, of which there are outstanding __ shares (including the Firm
Shares plus the
B-1
number of Option Shares issued on the date hereof); the authorized shares of the
Company's capital stock have been duly authorized; the issued and outstanding
shares of the Company's capital stock have been duly authorized and validly
issued and are fully paid and nonassessable, and have not been issued in
violation of any preemptive right, co-sale right, registration right, right of
first refusal or other similar right known to such counsel;
(E) The Shares to be issued by the Company pursuant to the
Underwriting Agreement have been duly authorized and will be, upon issuance and
delivery against payment therefor in accordance with the terms hereof, validly
issued, fully paid and nonassessable, and, to the knowledge of such counsel, the
shareholders of the Company do not have any preemptive right, co-sale right,
registration right, right of first refusal or other similar right, which rights
have not previously been waived, in connection with the purchase or sale of any
of the Shares;
(F) The Company has full power and authority (corporate and
otherwise)to enter into the Underwriting Agreement and to issue, sell and
deliver to the Underwriters the Firm Shares or the Option Shares, as the case
may be, to be issued and sold by it hereunder;
(G) The Underwriting Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been duly executed
and delivered by the Company and is a valid and binding agreement of the
Company, enforceable in accordance with its terms (standard exceptions
permitted);
(H) The Company has met all the requirements for filing the
Registration Statement on Form S-3. The Registration Statement has become
effective under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the Act; any
required filing of the Prospectus and any supplement thereto pursuant to Rule
424(b) of the Rules and Regulations has been made in the manner and within the
time period required by such Rule 424(b);
(I) The Registration Statement, all Preliminary Prospectuses, the
Prospectus, and each amendment or supplement thereto (other than the financial
statements and financial data included 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 applicable Rules and Regulations and to such
counsel's knowledge, there are no agreements, contracts, leases or documents of
a character required to be described in, or filed as an exhibit to, the
Registration Statement which are not described or filed as required by the Act
and the applicable Rules and Regulations;
(J) The terms and provisions of the capital stock of the Company
conform to the description thereof contained (including, such description
incorporated by reference) in
B-2
the Registration Statement and the Prospectus and the form of certificate
evidencing the Common Stock complies with the applicable provisions of Delaware
law;
(K) The statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations, including the Delaware General
Corporation Law and the description of the certificate of incorporation and
bylaws are accurate and fairly and correctly present the information required to
be presented by the Act or the Rules and Regulations in all material respects;
and such counsel does not know of any statutes, rules or regulations required to
be described in the Registration Statement or the Prospectus that are not
described or referred to therein as required;
(L) The statements (i) under the caption "Description of Capital
Stock" in the Registration Statement on Form 8-A filed with the Commission, as
amended on February 10, 1998, and incorporated in the Prospectus by reference
(ii) under the caption [reference to Description of 1989 Stock Option Plans and
1997 Long Term Incentive Plan] [in the Annual Report on Form 10-K for the fiscal
year ended December 31, 1997] and incorporated in the Prospectus by reference],
(iii) under the caption "Management - Committees of the Board of Directors" in
the Prospectus and (iv) ["Certain Transactions"], insofar as such statements
constitute a summary of documents referred to therein or matters of law, are
accurate summaries and fairly and correctly present, in all material respects,
the information called for with respect to such documents and matters; provided
that such counsel shall be entitled to rely on representations of the Company
with respect to certain factual matters contained in such statements, and
provided further that such counsel shall state that nothing has come to the
attention of such counsel which leads them to believe that such representations
are not true and correct in all material respects;
(M) Such counsel has read the description of the Company's business in
the Prospectus and the statements in the Prospectus under the captions "Risk
Factors - Reimbursement," "Risk Factors - Government Regulation," "Business -
Reimbursement," "Business - Quality Assuarance" and "Business - Government
Regulation" [other regulatory sections] (the "Regulatory Portion") and, to the
best of such counsel's knowledge, (i) the statements included in the Regulatory
Portion, insofar as such statements summarize provisions of applicable
Regulatory statutes and regulations, are accurate in all material respects and
(ii) the Regulatory statutes and regulations summarized in the Regulatory
Portion are the Regulatory statutes and regulations that are material to the
Company's business as described in the Prospectus;
(N) The information required to be set forth in the Registration
Statement in answer to Item 10 (insofar as it relates to such counsel) of Form
S-3 is to the best of such counsel's knowledge accurately and adequately set
forth therein in all material respects or no response is required with respect
to such Item;
(O) The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions therein contemplated do not
and will
B-3
not (a) conflict with or result in a breach of any of the terms or provisions of
or, constitute a default under, the certificate of incorporation or bylaws of
the Company or any Subsidiary, any agreement or document filed as an exhibit to
the Registration Statement, or any statute, rule or regulation applicable to the
Company (except that no opinion need to be expressed with respect to compliance
with federal and state securities laws) or (b) to the knowledge of such counsel,
result in the creation or imposition of any lien or encumbrance upon any of the
assets of the Company or any Subsidiary pursuant to the terms or provisions of,
or result in a breach or violation of any of the terms or provisions of, or
constitute a default or result in the acceleration of any obligation under, any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement, other evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company is a party or by which its property is bound or
(c) to the knowledge of such counsel, conflict with or result in a violation or
breach of, or constitute a default under, any applicable license, authorization,
approval, permit, judgment, franchise, order, writ or decree of any court or
governmental agency or body;
(P) The Company has all licenses, permits, consents, orders, approvals
and authorizations of any federal, state or foreign government authority or
other regulatory authority that are necessary to conduct its business as
described in the Registration Statement and the Prospectus, including, without
limitation, FDA and HFCA, except where failure to have such licenses, permits,
consents, orders, approvals and authorizations would not have a Material Adverse
Effect;
(Q) No authorization, approval, consent, order, designation or
declaration of or filing by or with any governmental authority or agency is
necessary in connection with the execution and delivery of the Underwriting
Agreement by the Company and the consummation of the transactions therein
contemplated, except such as may have been obtained under the Act, the Exchange
Act, and the Rules and Regulations or such as may be required under state
securities or Blue Sky laws or by the bylaws and rules of the NASD in connection
with the purchase and distribution of the Shares by the Underwriters;
(R) Each of the Company and its Subsidiaries is not in violation of
its respective certificate of incorporation or bylaws or other organization
documents, and to the best of such counsel's knowledge, neither the Company nor
any Subsidiary is in breach of or default with respect to any provision of any
agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument by which it or any of its properties may be bound or
affected, except where such default would not, individually or in the aggregate,
have a Material Adverse Effect, and, to the best of such counsel's knowledge,
each of the Company and its Subsidiaries is in compliance with all laws, rules,
regulations, judgments, decrees, orders and statutes of any court or
jurisdiction to which it is subject, except where noncompliance would not have a
Material Adverse Effect;
(S) To the best of such counsel's knowledge, there are no pending or
threatened actions, suits, claims, proceedings or investigations that, if
successful, would have
B-4
a Material Adverse Effect or would limit, revoke, cancel, suspend, or cause not
to be renewed any existing license, certificate, registration, approval or
permit, known to such counsel, from any state, federal, or regulatory authority
that is material to the conduct of the business of the Company or any Subsidiary
as presently conducted, or that is of a character otherwise required to be
disclosed in the Registration Statement or the Prospectus under the Act or the
applicable Rules and Regulations;
(T) To the best of such counsel's knowledge, except as set forth in
the Registration Statement and Prospectus, no holders of shares of Common Stock
or other securities of the Company have registration rights with respect to
securities of the Company and, except as set forth in the Registration Statement
and Prospectus, all holders of securities of the Company having registration
rights with respect to shares of Common Stock or other securities have, with
respect to the offering contemplated hereby, waived such rights or such rights
have otherwise been waived or such rights have expired by reason of lapse of
time following notification of the Company's intent to file the Registration
Statement;
(U) No transfer taxes are required to be paid in connection with the
sale or delivery to the Underwriters of the Firm Shares or the Option Shares;
and
(V) The Company is not and will not, upon consummation of the
transactions contemplated by the Underwriting Agreement, be an "investment
company," or a "promoter" or "principal underwriter" for, a "registered
investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
In addition, such counsel shall include a statement to the effect that
such counsel has participated in conferences with officials and other
representatives of the Company, the Representatives, Underwriters' Counsel and
the independent public accountants of the Company, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed, and although they have not verified the accuracy or completeness
of the statements contained in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel which caused them to believe
that, at the time the Registration Statement became effective the Registration
Statement (except as to financial statements and financial data contained
therein, as to which such counsel need express no opinion) contained any 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 at
the Closing Date or any later Option Closing Date, as the case may be, the
Registration Statement or the Prospectus (except as aforesaid) contained any
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, in light of
the circumstances under,which they were made, not misleading.
Counsel rendering the foregoing may rely [(i) as to questions of law
not involving the laws of the State of New York, the United States or the
General Corporation Law of the State of Delaware upon opinions of local counsel,
and (ii)] as to questions of fact
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upon representations or certificates of officers of the Company and of
governmental officials, as the case may be, in which case its opinion is to
state that it is so doing and that it has no actual knowledge of any material
misstatement or inaccuracy in such opinions, representations or certificates,
and that they believe that they and the Underwriters are justified in relying on
such opinions or certificates. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of the
Underwriters, and to Underwriters' Counsel.
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