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CLOSURE MEDICAL CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
March , 1997
XXXXXX BROTHERS INC.
XXXXXXXXXXX & CO., INC.
SANDS BROTHERS & CO., INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Closure Medical Corporation, a Delaware corporation (the
"Company"), and a stockholder of the Company named in Schedule 2 hereto (the
"Selling Stockholder"), propose to sell an aggregate of [ ] shares (the "Firm
Stock") of the Company's Common Stock, par value $.01 per share (the "Common
Stock"). Of the [ ] shares of the Firm Stock, [ ] are being sold by the Company
and [ ] by the Selling Stockholder. In addition, the Company proposes to grant
to the Underwriters named in Schedule 1 hereto (the "Underwriters") an option to
purchase up to an additional [ ] shares of the Common Stock on the terms and for
the purposes set forth in Section 3 (the "Option Stock"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "Stock."
This is to confirm the agreement concerning the purchase of the Stock from the
Company and the Selling Stockholder by the Underwriters.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
COMPANY. The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and amendments
thereto, with respect to the Stock have (i) been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act") and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and the
amendments thereto have been delivered by the Company to you as the
representatives (the "Representatives") of the Underwriters. As used in
this Agreement, "Effective Time" means the date and the time as of
which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time. The information,
if any, included in the prospectus filed by the Company in accordance
with Rule 430A and Rule 424(b) of the Rules and Regulations that was
omitted from the prospectus included in such registration statement at
the time it became effective but that is deemed, pursuant to paragraph
(b) of Rule 430A, to be part of such registration statement at the time
it becomes effective is referred to herein as the "Rule 430A
Information." Each prospectus used before the time such registration
statement became effective, and any prospectus that omits the Rule 430A
Information that is used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a
"Preliminary Prospectus." Such registration statement, as amended at
the time it became effective and including, if applicable, the Rule
430A Information, is herein called the "Original Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of
the Rules and Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and the Original Registration Statement and
any Rule 462(b) Registration Statement are herein referred to
collectively as the "Registration Statement." The prospectus included
in the Original Registration Statement at the time it became effective
is herein called the "Prospectus," except that, if the final prospectus
first furnished to the Underwriters after the execution of this
Agreement for use in connection with the offering of the Stock differs
from the prospectus included in the Original Registration Statement at
the time it became effective (whether or not such prospectus is
required to be filed pursuant to Rule 424(b)), the term "Prospectus"
shall refer to the final prospectus first furnished to the Underwriters
for such use. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become
effective or are filed with the Commission, as the case may be, conform
in all respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective
date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
PROVIDED that no representation or warranty is made as to information
contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the conduct of its business
requires such qualification (except where the failure to so qualify
would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company,
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taken as a whole), and has all power and authority necessary to own or
hold its properties and to conduct the business in which it is engaged.
The Company has no subsidiaries.
(d) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus.
(e) The unissued shares of the Stock to be issued and sold by
the Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and
non-assessable; and the Stock will conform to the description thereof
contained in the Prospectus.
(f) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and perform its
obligations hereunder; all corporate action required to be taken by the
Company for the due and proper authorization, issuance, sale and
delivery of the Stock has been duly and validly taken; and this
Agreement has been duly authorized, executed and delivered by the
Company and constitutes the valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as
enforcement of Section 10 of this Agreement may be limited by
applicable law.
(g) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is
subject, nor will such actions result in any violation of the
provisions of the restated certificate of incorporation or by-laws of
the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets; and except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
(h) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(i) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the
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Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock options plans or
other employee compensation plans or pursuant to outstanding options,
rights or warrants.
(j) The Company has not sustained, since the date of the
latest audited financial statements included in the Prospectus, any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and,
since such date, there has not been any change in the capital stock or
long-term debt of the Company or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, otherwise
than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(l) Price Waterhouse LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and
who have delivered the initial letter referred to in Section 9(i)
hereof, are independent public accountants with respect to the Company
as required by the Securities Act and the Rules and Regulations.
(m) The Company owns no real property and has good and
marketable title to all personal property owned by it, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect the
value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company; and all
real property and buildings held under lease by the Company is held by
it under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and proposed
to be made of such property and buildings by the Company.
(n) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is reasonable and customary for the
conduct of its business and the value of its properties and as is
customary for companies engaged in similar businesses in similar
industries, including but not limited to product liability insurance
and business disruption insurance.
(o) The Company owns or possesses adequate rights to use all
material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service xxxx registrations, copyrights
and licenses necessary for the conduct of its business and has no
reason to believe that the conduct of its business will conflict with,
and has not received any notice of any claim of conflict with, any such
rights of others.
(p) Except as described in the Prospectus, there are no legal
or governmental proceedings pending to which the Company is a party or
of which any property or assets of the Company is the subject which, if
determined adversely to the Company, might have a material adverse
effect on the financial position, stockholders' equity, results of
operations, business or prospects of the Company; and to the best of
the Company's knowledge, no
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such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(q) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(r) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(s) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company would have any liability that
is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would be expected to cause the loss
of such qualification.
(t) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof
and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company which has had (nor does the Company
have any knowledge of any tax deficiency which, if determined adversely
to the Company, might have) a material adverse effect on the financial
position, stockholders' equity, results of operations, business or
prospects of the Company.
(u) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, (iii) entered into any transaction
not in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(v) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing
assets at reasonable intervals.
(w) The Company is not (i) in violation of its restated
certificate of incorporation or by-laws, (ii) in default in any
material respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture,
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mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its properties or assets is subject or (iii) in violation in any
material respect of any law, ordinance, governmental rule, regulation
or court decree to which it or its property or assets may be subject or
has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary to
the ownership of its property or to the conduct of its business.
(x) Neither the Company nor any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(y) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company (or, to the knowledge of the Company, any of its predecessors
in interest) at, upon or from any of the property now or previously
owned or leased by the Company in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which
would require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except for any
violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release
of any kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or with
respect to which the Company has knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which
would not have or would not be reasonably likely to have, singularly or
in the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a material adverse effect
on the general affairs, management, financial position, stockholders'
equity or results of operations of the Company; and the terms
"hazardous wastes", "toxic wastes", "hazardous substances" and "medical
wastes" shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to
environmental protection.
(z) The Company is not an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
(aa) Except as described in the Registration Statement and the
Prospectus, (i) there are no outstanding warrants or options issued by
the Company to purchase any shares of the capital stock of the Company,
(ii) there are no statutory, contractual, preemptive or other rights to
subscribe for or to purchase any Common Stock, and (iii) there are no
restrictions upon transfer of Common Stock pursuant to the Company's
certificate of incorporation or by-laws.
(ab) The Company has not taken, directly or indirectly, any
action designed to cause or result in, or which has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate
the sale or resale of the Shares.
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(ac) The Company believes that it has satisfied all applicable
regulatory requirements for marketing TraumaSeal(TM) in Canada,
Australia, France and Italy.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE SELLING
STOCKHOLDER. The Selling Stockholder represents, warrants and agrees that:
(a) The Selling Stockholder has, and immediately
prior to the First Delivery Date (as defined in Section 5 hereof) the
Selling Stockholder will have, good and valid title to the shares of
Stock to be sold by the Selling Stockholder hereunder on such date,
free and clear of all liens, encumbrances, equities or claims; and upon
delivery of such shares and payment therefor pursuant hereto, good and
valid title to such shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has authorized the placement in
custody of certificates, in negotiable form, representing the shares of
Stock to be sold by the Selling Stockholder hereunder pursuant to a
custody agreement (the "Custody Agreement") with the Company, as
custodian (the "Custodian"), and has authorized the subsequent delivery
of such shares by the Custodian under this Agreement.
(c) The Selling Stockholder has duly and irrevocably executed
and delivered a power of attorney (the "Power of Attorney") appointing
the Custodian and one or more other persons, as attorneys-in-fact, with
full power of substitution, and with full authority (exercisable by any
one or more of them) to execute and deliver this Agreement and to take
such other action as may be necessary or desirable to carry out the
provisions hereof on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby and thereby will not conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling
Stockholder is subject, nor will such actions result, in the case of a
Selling Stockholder that is a partnership, in any violation of the
provisions of the partnership agreement of the Selling Stockholder or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and,
except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody
Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby and
thereby.
(e) The Registration Statement and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration Statement and any
amendment thereto) and
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as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
PROVIDED that representation or warranty is made only as to information
contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Selling Stockholder
specifically for inclusion therein.
(f) Without any independent investigation whatsoever, the
Selling Stockholder has no reason to believe that the representations
and warranties of the Company contained in Section 1 hereof are not
materially true and correct and is not prompted to sell shares of
Common Stock by any information concerning the Company which is not set
forth in the Registration Statement and the Prospectus.
(g) The Selling Stockholder has not taken and will
not take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the shares
of the Stock.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of
the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell [ ]
shares of the Firm Stock and the Selling Stockholder hereby agrees to
sell the number of shares of the Firm Stock set opposite its name in
Schedule 2 hereto to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number
of shares of the Firm Stock set opposite that Underwriter's name in
Schedule 1 hereto. Each Underwriter shall be obligated to purchase from
the Company, and from the Selling Stockholder, that number of shares of
the Firm Stock which represents the same proportion of the number of
shares of the Firm Stock to be sold by the Company, and by the Selling
Stockholder, as the number of shares of the Firm Stock set forth
opposite the name of such Underwriter in Schedule 1 represents of the
total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option
to purchase and agrees to sell up to [ ] shares of Option Stock. Such option is
granted solely for the purpose of covering over-allotments in the sale of Firm
Stock and is exercisable as provided in Section 5 hereof. Shares of Option Stock
shall be purchased severally for the account of the Underwriters in proportion
to the number of shares of Firm Stock set opposite the name of such Underwriters
in Schedule 1 hereto. The respective purchase obligations of each Underwriter
with respect to the Option Stock shall be adjusted by the Representatives so
that no Underwriter shall be obligated to purchase Option Stock other than in
100 share amounts. The price of both the Firm Stock and any Option Stock shall
be $[ ] per share.
The Company and the Selling Stockholder shall not be obligated
to deliver any of the Stock to be delivered on the First Delivery Date or the
Second Delivery Date (as hereinafter defined), as the case may be, except upon
payment for all the Stock to be purchased on such Delivery Date as provided
herein.
4. OFFERING OF STOCK BY THE UNDERWRITERS.
Upon authorization by the Representatives of the release of
the Firm Stock, the
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several Underwriters propose to offer the Firm Stock for sale upon the terms and
conditions set forth in the Prospectus.
5. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and
payment for the Firm Stock shall be made at the offices of Shearman & Sterling,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York City time, on
the third full business day following the date of this Agreement (fourth, if the
pricing occurs after 4:30 P.M. (New York City time) on any given day) or at such
other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company and the
Selling Stockholder shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Company and the Selling
Stockholder of the purchase price in immediately available funds. Time shall be
of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company and the Custodian shall make the certificates representing the Firm
Stock available for inspection by the Representatives in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
At any time on or before the thirtieth day after the date of
this Agreement the option granted in Section 3 may be exercised by written
notice being given by the Representatives to the Company. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; PROVIDED, HOWEVER, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as the "Second Delivery Date" and the First Delivery
Date and the Second Delivery Date are sometimes each referred to as a "Delivery
Date".
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company and the
Custodian shall make the certificates representing the Option Stock available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Second Delivery Date.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by
the Representatives and to file such
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Prospectus pursuant to Rule 424(b) under the Securities Act not later
than Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus except as
permitted herein; to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus,
of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to each of the
Representatives and to counsel for the Underwriters a signed copy of
the Registration Statement as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such
number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statement
as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and the
computation of per share earnings) and (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus;
and, if the delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the Stock or
any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus in order to comply with the Securities Act, to notify the
Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance.
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or any
supplement to the Prospectus that may, in the judgment of the Company
or the Representatives, be required by the Securities Act or requested
by the Commission;
(e) Prior to filing with the Commission (i) any
amendment to the Registration Statement (including any filing under
Rule 462(b)) or supplement to the Prospectus or (ii) any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and
obtain the consent of the Representatives to the filing;
(f) As soon as practicable after the Effective Date,
to make generally available to the Company's security holders and to
deliver to the Representatives an earnings statement of
10
the Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the
Effective Date, to furnish to the Representatives copies of all
materials furnished by the Company to its shareholders and all public
reports and all reports and financial statements furnished by the
Company to the Nasdaq National Market System or such other national
securities exchange upon which the Common Stock may be listed pursuant
to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(h) Promptly from time to time to take such action as
the Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation
or execute a general consent for service of process.
(i) For a period of 180 days from the date of the
Prospectus, not to, directly or indirectly, offer for sale, sell or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding
options, warrants or rights), or sell or grant options, rights or
warrants with respect to any shares of Common Stock (other than the
grant of options pursuant to option plans existing on the date hereof),
without the prior written consent of Xxxxxx Brothers Inc.; and to cause
each officer and director of the Company to furnish to the
Representatives, prior to the First Delivery Date, a letter or letters,
in form and substance satisfactory to counsel for the Underwriters,
pursuant to which each such person shall agree not to, directly or
indirectly, offer for sale, sell or otherwise dispose of (or enter into
any transaction or device which is designed to, or could be expected
to, result in the disposition by any person at any time in the future
of) any shares of Common Stock for a period of 180 days from the date
of the Prospectus, without the prior written consent of Xxxxxx Brothers
Inc.;
(j) Prior to the Effective Date, to qualify the Stock for
quotation and listing on the Nasdaq National Market System; and
(k) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus.
7. FURTHER AGREEMENTS OF THE SELLING STOCKHOLDER. The Selling
Stockholder agrees:
(a) To comply with the terms of the lock-up agreement it has
executed that places restrictions on sales of Common Stock in
accordance with the terms thereof.
(b) That the Stock to be sold by the Selling Stockholder
hereunder, which is represented by the certificates held in custody for
the Selling Stockholder immediately upon the issuance of such
certificates in connection with the Exchange, is subject to the
interest of the Underwriters, that the arrangements made by the Selling
Stockholder for such custody are to
11
that extent irrevocable, and that the obligations of the Selling
Stockholder hereunder shall not be terminated by any act of the Selling
Stockholder, by operation of law, by the death or incapacity of any
individual Selling Stockholder or, in the case of a trust, by the death
or incapacity of any executor or trustee or the termination of such
trust, or the occurrence of any other event.
(c) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States
person) or Form W-9 (if the Selling Stockholder is a United States
person.)
8. EXPENSES. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement and any other related documents in connection with the offering,
purchase, sale and delivery of the stock; (e) the fees and expenses, if any, of
the Custodian (and any other attorney-in-fact) and costs of delivering and
distributing the Custody Agreement and the Power of Attorney; (f) the filing
fees and expenses incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of sale of the Stock; (g)
any applicable listing or other fees; (h) the fees and expenses of qualifying
the Stock under the securities laws of the several jurisdictions as provided in
Section 6(h) and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); (j) all
costs and expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, incident to the offer and sale of shares of the
Stock by the Underwriters to employees and persons having business relationships
with the Company, as described in Section 4; and (k) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement; PROVIDED that, except as provided in this Section 8 and in
Section 14, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Stock which
they may sell and the expenses of advertising any offering of the Stock made by
the Underwriters, and the Selling Stockholder shall pay the fees and expenses of
its counsel and any transfer taxes payable in connection with its sale of Stock
to the Underwriters.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholder contained herein, to the performance by the Company
and the Selling Stockholder of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a) hereof; the Original
Registration Statement shall have become effective and the
Representatives shall have been informed thereof, not later than the
date of this Agreement, or such later date as shall be consented to in
writing by the Representatives; and if the Company has elected to rely
on Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective not later than the earlier of (i) 10:00 P.M. Eastern
Time on the date of this Agreement, and (ii) the time confirmations are
sent or given as specified in Rule 462(b)(2), or with respect to the
Original Registration Statement, or such later date as shall be
consented to in writing by the Representatives; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have
12
been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and
disclosed to the Company on or prior to such Delivery Date that the
Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact which, in the opinion of
Shearman & Sterling, counsel for the Underwriters, is material or omits
to state a fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Custody Agreements, the Powers of Attorney, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Stockholder shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Xxxxxx, Xxxxx & Xxxxxxx LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, is duly qualified
to do business and is in good standing as a foreign
corporation in North Carolina and has all power and authority
necessary to own or hold its properties and to conduct its
business as described in the Prospectus; and to such counsel's
knowledge the Company has no subsidiaries;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company (including the shares of Stock
being delivered on such Delivery Date pursuant to this
Agreement) have been duly and validly authorized and issued,
are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus;
(iii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the
Company's Restated Certificate of Incorporation or Bylaws or
any agreement or other instrument known to such counsel;
(iv) To such counsel's knowledge and other
than as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a
party or of which any property or assets of the Company is the
subject which, if determined adversely to the Company, might
have a material adverse effect on the financial position,
stockholders' equity, results of operations, business or
prospects of the Company; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(v) Such counsel has been orally advised by
the staff of the Commission that the Original Registration
Statement and the Rule 462(b) Registration Statement, if any,
were declared effective or automatically became effective, as
applicable, under the
13
Securities Act as of the date and time specified in such
opinion, and such counsel may assume for purposes of its
opinion that the Underwriters have complied with Rule
462(b)(2) under the Securities Act. The Prospectus was filed
with the Commission pursuant to the subparagraph of Rule
424(b) of the Rules and Regulations specified in such opinion
on the date specified therein, to such counsel's knowledge,
and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for
that purpose is pending or threatened by the Commission;
(vi) The Registration Statement (including
the Rule 430A Information, if applicable) and the Prospectus
and any further amendments or supplements thereto made by the
Company prior to such Delivery Date (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act
and the Rules and Regulations;
(vii) To such counsel's knowledge, there are
no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described or filed as
exhibits to the Registration Statement or incorporated therein
by reference as permitted by the Rules and Regulations;
(viii) This Agreement has been duly
authorized, executed and delivered by the Company;
(ix) The statements in the Registration
Statement and the Prospectus under the captions
"Business--Marketing Partners", "Description of Capital
Stock", and "Shares Eligible for Future Sale", insofar as such
statements describe statutes, regulations, legal or
governmental proceedings, contracts or other documents
referred to therein are accurate in all material respects and
fairly summarize the information called for with respect to
such documents and matters and, insofar as such statements
constitute matters of law or legal conclusions, have been
reviewed by such counsel and fairly present the information
disclosed therein in all material respects;
(x) The issue and sale of the shares of
Stock being delivered on such Delivery Date by the Company and
the compliance by the Company with all of the provisions of
this Agreement and the consummation by the Company of the
transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company is a
party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such
actions result in any violation of the provisions of the
Restated Certificate of Incorporation or Bylaws of the Company
or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties or
assets; and, except for the registration of such Stock under
the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of such Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and
14
performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby;
(xi) Except as described in the Prospectus,
to such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any
person granting such person the right to require the Company
to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Securities Act; and
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the Federal laws of the
United States of America, the laws of the State of New York, the
Commonwealth of Pennsylvania and the General Corporation Law of the
State of Delaware and that such counsel is not admitted in the State of
Delaware. Such counsel shall also have furnished to the Representatives
a written statement, addressed to the Underwriters and dated such
Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that such counsel has acted as counsel
to the Company in connection with the preparation of the Registration
Statement, and such counsel has participated in conferences with
officers and other representatives of the Company and representatives
of the independent accountants for the Company in which the contents of
the Registration Statement and the Prospectus and related matters were
discussed. While such counsel (i) has no particular expertise with
respect to the technical information contained in the Registration
Statement and Prospectus, (ii) does not represent the Company with
respect to intellectual property matters, (iii) relies as to judgment
in respect of materiality to the Company of any matter on, among other
things, the advice of the Chief Executive Officer and Chief Financial
Officer of the Company and (iv) is not passing upon and does not assume
responsibility for the factual accuracy, completeness or fairness of
the statements contained in the Registration Statement and Prospectus,
no facts have come to such counsel's attention that would cause it to
have reason to believe that the Registration Statement at the Effective
Date contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make any statements therein not misleading or that the Prospectus, as
of its issue date or on the date hereof, contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make statements therein, in light
of the circumstances under which they were made, not misleading; it
being understood that such counsel expresses no opinion or belief as to
the financial statements and other financial information contained
therein or omitted therefrom.
(e) The counsel for the Selling Stockholder shall
have furnished to the Representatives its written opinion, as counsel
to the Selling Stockholder, addressed to the Underwriters and dated the
First Delivery Date in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) The Selling Stockholder has full right,
power and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement; the execution, delivery
and performance of this Agreement, the Power of Attorney and
the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Selling Stockholder is a party or by which the Selling
Stockholder is bound or to
15
which any of the property or assets of the Selling Stockholder
is subject, nor will such actions result in any violation of
the articles of organization or operating agreement of the
Selling Stockholder or any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling
Stockholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement, the Power of Attorney or the Custody Agreement by
the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and
thereby;
(ii) This Agreement has been duly
authorized, executed and delivered by or on behalf of the
Selling Stockholder;
(iii) A Power-of-Attorney and a Custody
Agreement have been duly authorized, executed and delivered by
the Selling Stockholder and constitute valid and binding
agreements of the Selling Stockholder, enforceable in
accordance with their respective terms except as enforcement
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or in
law) and except as enforcement of Section 10 of this Agreement
may be limited by applicable law;
(iv) Immediately prior to such Delivery
Date, the Selling Stockholder had good and valid title to the
shares of Stock to be sold by the Selling Stockholder under
this Agreement, free and clear of all liens, encumbrances,
equities or claims, and full right, power and authority to
sell, assign, transfer and deliver such shares to be sold by
the Selling Stockholder hereunder;
(v) Good and valid title to the shares of
Stock to be sold by the Selling Stockholder under this
Agreement, free and clear of all liens, encumbrances,
equities or claims, has been transferred to each of the
several Underwriters; and
In rendering such opinion, counsel to the Selling Stockholder
may (i) state that its opinion is limited to matters governed by the
Federal laws of the United States of America, the laws of the State of
New York and the jurisdiction of the Selling Stockholder and the
limited partnership law of the State of Delaware and that such counsel
is not admitted in the State of Delaware, PROVIDED that if such counsel
is not admitted in the State of New York such counsel may assume that
the laws of the State of New York are the same as the laws of the
jurisdiction of the Selling Stockholder for purposes of its opinion and
(ii) in rendering the opinion in Section 9(e)(iv) above, rely upon a
certificate of the Selling Stockholder in respect of matters of fact as
to ownership of and liens, encumbrances, equities or claims on the
shares of Stock sold by the Selling Stockholder, PROVIDED that such
counsel shall furnish copies thereof to the Representatives and state
that it believes that both the Underwriters and it are justified in
relying upon such certificate.
(f) Oliff & Berridge shall have furnished to the
Representatives its written opinion, as special patent counsel for the
Company, addressed to the Underwriters (and stating that it may be
relied upon by counsel to the Underwriters) and dated such Delivery
Date to the effect that:
16
(i) Such counsel has reviewed the statements
set forth in the Registration Statement and the
Prospectus under the captions "Risk
Factors--Dependence on Patents, Trade Secrets and
Proprietary Rights" and "Business--Patents, Trade
Secrets and Proprietary Rights," such statements
accurately summarize the matters described therein
and nothing has come to the attention of such counsel
which leads them to believe that (A) the information
set forth in the Registration Statement, or in any
amendment thereto, under the captions referred to
above as of the time the Registration Statement
became effective under the Securities Act, and as of
Delivery Date, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading, and (B) the
information set forth in the Prospectus, or in any
supplement thereto, under the captions referred to
above as of its issue date and as of such Delivery
Date, contained an untrue statement of a material
fact or omitted to state a material fact, necessary
in order to make the statements therein, in the light
of the circumstances under which they are made, not
misleading;
(ii) Such counsel has no knowledge of any
facts that would form a basis for the belief that the
Company lacks any rights or licenses to use all
technology and know-how necessary to conduct its
business as described in the Prospectus;
(iii) No facts have come to the attention of
such counsel that would form a basis for the belief
that any of the patents owned by the Company is
unenforceable or invalid. Such counsel is not aware
of any valid patent held by others that is infringed
by the activities of the Company described in the
Prospectus or by the manufacture, use or sale of any
product, device, instrument or other material made
and used by the Company and such counsel is not aware
of any pending or threatened action, suit, proceeding
or claim by others that the Company is infringing or
otherwise violating any patents, trade secrets,
trademarks, service marks or other proprietary
information or materials of others; and
(iv) Such counsel has no knowledge of any
adversarial legal or governmental proceedings or
interference proceedings pending relating to patents,
foreign patents, applications, foreign applications,
trade secrets, trademarks, service marks or other
proprietary information or materials of the Company,
and to such counsel's knowledge no such proceedings
are threatened or contemplated by such governmental
authorities or others.
(g) The Representatives shall have received from
Xxxxx, Xxxxxx & XxXxxxxx, P.C., a written opinion, as Special
FDA Counsel to the Company, dated such Delivery Date, to the
effect that such counsel is not aware of any facts or
information which would lead such counsel to believe that:
(i) The statements set forth in the
Registration Statement and the Prospectus under the
captions "Risk Factors--Effects of FDA and Other
Government Regulation" and "Business--Government
Regulations" insofar as such statements relate to
requirements under the Federal Food, Drug and
Cosmetic Act (the "Act") and implementing regulations
(1) misstate the law in any material respects; or (2)
contain an untrue statement of a material fact or
omit to state a material fact necessary in order to
make such statements, in
17
light of the circumstances under which they are made,
not misleading; and
(ii) The Company is not in all material
respects in substantial compliance with the Act and
applicable implementing regulations.
(h) The Representatives shall have received from Shearman &
Sterling, counsel for the Underwriters, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of the Stock,
the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(i) At the time of execution of this Agreement, the
Representatives shall have received from Price Waterhouse LLP a letter,
in form and substance satisfactory to the Representatives, addressed to
the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection
with registered public offerings.
(j) With respect to the letter of Price Waterhouse
LLP referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the
Representatives a letter (the "bring-down letter") of such accountants,
addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(k) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its chief financial officer
stating that:
(i) The representations and warranties of
the Company in Section 1 are true and correct as of such
Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth in
Sections 9(a) and 9(m) have been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in their
opinion (A) as of the Effective Date, the Registration
Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the Effective
Date no event has occurred which should have been set forth in
a supplement or amendment to the Registration Statement or the
Prospectus.
18
(l) The Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholder) shall have
furnished to the Representatives on the First Delivery Date a
certificate, dated the First Delivery Date, signed by, or on behalf of,
the Selling Stockholder (or the Custodian or one or more attorneys-in
-fact) stating that the representations and warranties of the Selling
Stockholder contained herein are true and correct as of the First
Delivery Date and that the Selling Stockholder has complied with all
agreements contained herein to be performed by the Selling Stockholder
at or prior to the First Delivery Date.
(m) (i) The Company shall not have sustained since the date of
the latest audited financial statements included in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus that would, in the
Representatives' sole and exclusive judgment, make the offering or
delivery of the Stock impracticable or (ii) since such date there shall
not have been any change in the capital stock or long-term debt of the
Company or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company,
otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is,
in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(n) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as, in each case, to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(o) The Nasdaq National Market System shall have approved the
listing of the Stock.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any
19
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) in any blue sky application or other document prepared
or executed by the Company (or based upon any written information furnished by
the Company) specifically for the purpose of qualifying any or all of the Stock
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (PROVIDED that the Company shall not
be liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, or in any Blue Sky Application, in reliance upon and in conformity
with written information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of any Underwriter specifically for
inclusion therein; PROVIDED FURTHER, that the Company shall not be liable under
clauses (i), (ii) and (iii) above to the extent that any such loss, claim,
damage, or liability of such Underwriter results from the fact that a copy of
the Prospectus was not sent or given to such person by such Underwriter as
required and within the time required by the Securities Act and if the untrue
statement or omission shall have been corrected in the Prospectus, subject to
the following: (a) the burden of showing that a copy of the Prospectus was not
so sent or given shall be on the Company and (b) the failure to deliver a copy
of the Prospectus does not result from non-compliance by the Company with
Section 6(c)(ii) hereof. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) The Selling Stockholder shall indemnify and hold harmless
each Underwriter, its officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which that
Underwriter, officer, employee or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any breach of the Selling
Stockholder's representations and warranties made in Section 2 hereof or (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the Prospectus or in
any amendment or supplement thereto or the omission or alleged omission to state
in any Preliminary Prospectus, Registration Statement or the Prospectus, or in
any amendment or supplement thereto, any material fact required to be stated
20
therein or necessary to make the statements therein not misleading (PROVIDED,
HOWEVER, that such indemnification pursuant to Section 10(b)(ii) shall only
apply to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by the Selling Stockholder
specifically for inclusion therein), and shall reimburse each Underwriter, its
officers and employees and each such controlling person for any legal or other
expenses reasonably incurred by that Underwriter, its officers and employees or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; PROVIDED, HOWEVER, that the Selling Stockholder shall not
be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any such
amendment or supplement in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein; PROVIDED FURTHER, that the Selling Stockholder shall not be liable
under clauses (i) and (ii) above to the extent that any such loss, claim,
damage, or liability of such Underwriter results from the fact that a copy of
the Prospectus was not sent or given to such person by such Underwriter as
required and within the time required by the Securities Act and if the untrue
statement or omission shall have been corrected in the Prospectus, subject to
the following: (a) the burden of showing that a copy of the Prospectus was not
so sent or given shall be on the Selling Stockholder and (b) the failure to
deliver a copy of the Prospectus does not result from non-compliance by the
Company with Section 6(c)(ii) hereof and; PROVIDED STILL FURTHER, that the
liability of the Selling Stockholder shall be limited to the amount of the net
proceeds (after deducting the Underwriters' discount but before deducting
expenses) received by the Selling Stockholder from the sale of its Stock
pursuant to this Agreement. The foregoing indemnity agreement is in addition to
any liability which the Selling Stockholder may otherwise have to any
Underwriter or any officer, employee or controlling person of that Underwriter.
In making a claim for indemnification or contribution under
this Section 10 by the Company or the Selling Stockholder, the indemnified
parties may proceed against either (1) both the Company and the Selling
Stockholder jointly or (2) the Company only, but may not proceed solely against
the Selling Stockholder. The Selling Stockholder shall not be required to
provide indemnification or contribution under this Section 10 until the
indemnified parties shall have first made a demand on the Company with respect
to such loss, claim, damage, liability or expense, and the Company shall have
either rejected such demand or failed to make such requested payment within 60
days after receipt of such demand, PROVIDED that no such prior demand on the
Company need be made if (A) the Company files a petition for relief under the
United States Bankruptcy Code (the "Bankruptcy Code"), (B) an order for relief
is entered against the Company in an involuntary case under the Bankruptcy Code,
(C) the Company makes an assignment for the benefit of its creditors, or (D) any
court order or approves the appointment of a receiver or custodian for the
Company or a substantial portion of its assets. Notwithstanding anything to the
contrary contained herein, the provisions of this paragraph shall not apply to
any claim for indemnity against the Selling Stockholder if the indemnified
parties are entitled to seek indemnity against the Selling Stockholder with
respect to liability resulting from written information concerning the Selling
Stockholder furnished to the Company by or on behalf of the Selling Stockholder.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors, the Selling Stockholder, and each person, if any, who controls the
Company or the Selling Stockholder within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director, officer,
employee, Selling Stockholder or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue
21
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Company, or any such director, officer,
employee, Selling Stockholder or controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED,
HOWEVER, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 10 except to the extent
it has been materially prejudiced by such failure and, PROVIDED FURTHER that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that an
indemnified party shall have the right to employ counsel to represent jointly it
and those other indemnified parties who may be subject to liability arising out
of any claim in respect of which indemnity may be sought under this Section 10
if, in the reasonable judgment of such indemnified party, it is advisable for it
and those other indemnified parties be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel shall be paid
by the indemnifying parties. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, 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 such loss, claim,
22
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company
and the Selling Stockholder on the one hand and the Underwriters on the other
from the offering of the Stock or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Stockholder on the one
hand and the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Stock purchased under this Agreement (before deducting expenses) received
by the Company and the Selling Stockholder, on the one hand, and the total
underwriting discounts and commissions received by the Underwriters with respect
to the shares of the Stock purchased under this Agreement, on the other hand,
bear to the total gross proceeds from the offering of the shares of the Stock
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Stockholder or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Selling Stockholder and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 10(e), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 10(e), the Selling Stockholder
shall not be required to contribute any amount in excess of the amount by which
its total amount of the net proceeds (after deducting the Underwriters' discount
but before deducting expenses) received by the Selling Stockholder from the sale
of its Stock pursuant to this Agreement exceeds the amount of any damages which
the Selling Stockholder has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
10(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 10(e) are several in
proportion to their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm that the statements
with respect to the public offering of the Stock by the Underwriters set forth
on the cover page of, the legend concerning over-allotments on the inside front
cover page of and the concession and reallowance figures appearing under the
caption "Underwriting" in, the Prospectus are correct, and the Company
acknowledges that these statements constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
11. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the
performance of its
23
obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock which the defaulting Underwriter agreed
but failed to purchase on such Delivery Date in the respective proportions which
the number of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
shares of the Firm Stock set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; PROVIDED, HOWEVER, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on such Delivery Date if the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholder, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 14. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company and the Selling
Stockholder for damages caused by its default. If other underwriters are
obligated or agree to purchase the Stock of a defaulting or withdrawing
Underwriter, either the Representatives or the Company may postpone the Delivery
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement.
12. TERMINATION. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholder prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 9(m)
or 9(n), shall have occurred or if the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement.
13. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Company or
the Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholder 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 or the Selling Stockholder is
not fulfilled, the Company and the Selling Stockholder that so fails or is
responsible for such non-fulfillment will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company and such Selling Stockholder
shall pay the full amount thereof to the Representatives. If this Agreement is
terminated pursuant to Section 11 by reason of the default of one or more
Underwriters, neither the Company nor the Selling Stockholder shall be obligated
to reimburse any defaulting Underwriter on account of those expenses.
24
14. NOTICES, ETC. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to Xxxxxx Brothers Inc.,
Three World Financial Center, New York, New York 10285, Attention:
Syndicate Department (Fax: 000-000-0000), with copies to Xxxxxxxxxxx &
Co., Inc., [address][fax], and Sands Brothers & Co., Ltd., 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxx (Fax:
000-000-0000), and with a copy, in the case of any notice pursuant to
Section 10(d), to the Director of Litigation, Office of the General
Counsel, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Xxxxxx X. Xxxx (Fax:
000-000-0000);
(c) if to the Selling Stockholder, shall be delivered or sent
by mail, telex or facsimile transmission to the Selling Stockholder at
the address set forth on Schedule 2 hereto;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholder shall be entitled to act and rely upon any request, consent,
notice or agreement given or made on behalf of the Underwriters by Xxxxxx
Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholder by the
Custodian.
15. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholder and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Selling Stockholder contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 10(c) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement, any person
controlling the Company or the Selling Stockholder within the meaning of Section
15 of the Securities Act and the Selling Stockholder. Nothing in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 16, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
16. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholder and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY".
For purposes of this Agreement, (a) "business day" means any day on which the
New York Stock Exchange, Inc. is
25
open for trading and (b) "subsidiary" has the meaning set forth in Rule 405 of
the Rules and Regulations.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
Each party irrevocably agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City of New York or the
courts of the State of New York in each case located in the Borough of Manhattan
in the City of New York (collectively, the "Specified Courts"), and irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. The parties further agree that service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
19. COUNTERPARTS. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the
Company, the Selling Stockholder and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
CLOSURE MEDICAL CORPORATION
By
Title
The Selling Stockholder named in Schedule
2 to this Agreement
By
ATTORNEY-IN-FACT
Accepted:
26
XXXXXX BROTHERS INC.
XXXXXXXXXXX & CO., INC.
SANDS BROTHERS & CO., LTD.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By
AUTHORIZED REPRESENTATIVE
27
SCHEDULE 1
Underwriters Shares
Total
SCHEDULE 2
Number of Shares
Name and address of Selling Stockholder of Firm Stock
