Exhibit 1.1
FORM OF
XXXXXX MEDICAL GROUP, INC.
7,500,000 SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
July ___, 2001
X. X. XXXXXX SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
U.S. BANCORP XXXXX XXXXXXX INC.
c/o X. X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx Medical Group, Inc., a Delaware corporation (herein called the
"Company", which term shall include its direct and indirect subsidiaries unless
the context otherwise requires), proposes to issue and sell 7,500,000 shares of
its authorized but unissued voting Common Stock, $.01 par value (herein called
the "Common Stock") (said 7,500,000 shares of Common Stock being herein called
the "Underwritten Stock"). Warburg, Xxxxxx Equity Partners, L.P., a Delaware
limited partnership ("Warburg Pincus") proposes to grant to the Underwriters (as
hereinafter defined) an option to purchase up to 1,250,000 additional shares of
Common Stock (herein called the "Option Stock" and with the Underwritten Stock
herein collectively called the "Stock"). The Common Stock is more fully
described in the Registration Statement and the Prospectus hereinafter
mentioned.
The Company and Warburg Pincus hereby confirm their agreements made with
respect to the purchase of the Stock by the several underwriters, for whom you
are acting, named in Schedule I hereto (herein collectively called the
"Underwriters", which term shall also include any underwriter purchasing Stock
pursuant to Section 3(b) hereof). You represent and warrant that you have been
authorized by each of the other Underwriters to enter into this Agreement on its
behalf and to act for it in the manner herein provided.
As part of the offering contemplated by this Agreement, U.S. Bancorp Xxxxx
Xxxxxxx Inc. (herein called the "Designated Underwriter") has agreed to reserve
out of the Underwritten Stock purchased by it under this Agreement, up to
375,000 shares, for sale to the Company's directors, officers, employees and
other parties associated with the Company (herein called "Participants"), as set
forth in the Prospectus (as defined herein) under the heading
"Underwriting" (herein referred to as the "Directed Share Program"). The
Underwritten Stock to be sold by the Designated Underwriter pursuant to the
Directed Share Program (herein referred to as "Directed Shares") will be sold by
the Designated Underwriter pursuant to this Agreement at the public offering
price. Any Directed Shares not orally confirmed by the end of the business day
following the day on which this Agreement is executed will be offered to the
public by the Underwriters as set forth in the Prospectus.
1. REGISTRATION STATEMENT. The Company has filed with the Securities
and Exchange Commission (herein called the "Commission") a registration
statement on Form S-1 (No. 333-59732), including the related preliminary
prospectus, for the registration under the Securities Act of 1933, as amended
(herein called the "Securities Act"), of the Stock. Copies of such registration
statement and of each amendment thereto, if any, including the related
preliminary prospectus (meeting the requirements of Rule 430A of the rules and
regulations of the Commission) heretofore filed by the Company with the
Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean such
registration statement, including all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission under the Securities Act (herein called the "Rules
and Regulations") with respect to the Stock (herein called a "Rule 462(b)
registration statement"), and, in the event of any amendment thereto after the
effective date of such registration statement (herein called the "Effective
Date"), shall also mean (from and after the effectiveness of such amendment)
such registration statement as so amended (including any Rule 462(b)
registration statement). The term Prospectus as used in this Agreement shall
mean the prospectus relating to the Stock first filed with the Commission
pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as
included in the Registration Statement) and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from and
after the filing with the Commission of such supplement or the effectiveness of
such amendment) such prospectus as so supplemented or amended. The term
Preliminary Prospectus as used in this Agreement shall mean each preliminary
prospectus included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND WARBURG PINCUS.
(a) The Company hereby represents and warrants as follows:
(i) Each of the Company and its Subsidiaries (as defined below) has
been duly incorporated and is validly existing as a corporation in good
standing under the laws
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of the jurisdiction of its organization, has full corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and as being
conducted, and is duly qualified as a foreign corporation and in good
standing in all jurisdictions in which the character of the property owned
or leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified would
not reasonably be expected to have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole (herein called a "Material
Adverse Effect")). The Company has no subsidiary (as defined in the Rules
and Regulations) and owns no capital stock or other ownership interest in
any entity other than entities listed on Schedule II hereto (herein called
the "Subsidiaries"). Other than the Subsidiaries, the Company does not
own, directly or indirectly, any shares of capital stock or any other
equity interest in any firm, partnership, joint venture, association or
other entity except as listed on Schedule III hereto.
(ii) The Registration Statement and the Prospectus comply, and on
the Closing Date (as hereinafter defined) and any later date on which
Option Stock is to be purchased, the Prospectus will comply, in all
materials respects, with the provisions of the Securities Act and the
Securities Exchange Act of 1934 (herein called the "Exchange Act"), and
the Rules and Regulations; on the Effective Date, the Registration
Statement did not contain any untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and on the date
hereof, the Prospectus does not, and on the Closing Date and any later
date on which Option Stock is to be purchased, will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that none of the representations and warranties in this
subparagraph (iii) shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information herein or otherwise furnished in writing to
the Company by or on behalf of the Underwriters for use in the
Registration Statement or the Prospectus.
(iii) The Stock, when issued and sold to the Underwriters as
provided herein, will be duly authorized and, when issued and paid for as
contemplated herein, will be validly issued, fully paid and non-assessable
and will conform to the description thereof in the Prospectus. The form of
certificates for the Stock conforms to the legal requirements of the State
of Delaware, all other applicable statutory requirements, any applicable
requirements of the certificate of incorporation and bylaws of the Company
and the requirements of the Nasdaq National Market. No preemptive right,
registration right, right of first refusal or other similar rights of
stockholders exists with respect to any Stock or the issue or sale
thereof, except as set forth in the Prospectus. No further approval or
authority of the stockholders or the Board of Directors of the Company
will be required for the issuance and sale of the Stock as contemplated
herein. Except as described in the Prospectus, neither the filing of the
Registration Statement nor the offering or sale of the Stock as
contemplated by this Agreement gives rise to any rights, other than those
which have been waived or satisfied, for or relating to the registration
of
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any shares of capital stock. 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. Except as described in the Prospectus,
there are no outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sales or liens related to or
entitling any person to purchase or otherwise acquire any shares of the
capital stock of, or other ownership interest in the Company. The
description of the Company's stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted thereunder,
set forth in the Prospectus accurately and fairly presents in all material
respects the information required to be shown with respect to such plans,
arrangements, options and rights.
(iv) Prior to the Closing Date the Stock to be issued and sold by
the Company will be authorized for listing by the Nasdaq National Market
upon official notice of issuance.
(v) The authorized, issued and outstanding capital stock of the
Company is (except for subsequent issuances, if any, pursuant to employee
benefit plans or pursuant to the exercise of options or warrants referred
to in the Prospectus) as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" in all material
respects.
(vi) The Commission has not issued an order preventing or suspending
the use of any Preliminary Prospectus or Prospectus relating to the
proposed offering of the Stock or suspending the Registration Statement
after the Effective Date, nor, to the knowledge of the Company after
reasonable inquiry, instituted proceedings for that purpose.
(vii) The consolidated financial statements of the Company, together
with the related notes and schedules as set forth in the Registration
Statement, present fairly the consolidated financial position and the
results of operations and cash flows of the Company at the indicated dates
and for the indicated periods. Such financial statements and related
schedules have been prepared in accordance with generally accepted
accounting principles, consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of results
for such periods have been made. The summary and selected financial data
included in the Registration Statement present fairly the information
shown therein and such data has been compiled on a basis consistent with
the audited financial statements presented therein and the books and
records of the Company. The pro forma consolidated financial information
of the Company and the related notes thereto set forth in the Prospectus
under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Unaudited Pro Forma Financial
Information" have been prepared on a basis
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consistent with the historical consolidated financial statements of the
Company, give effect to the assumptions used in the preparation thereof on
a reasonable basis and in good faith and present fairly in all material
respects the historical and proposed transactions contemplated by the
Registration Statement and the Prospectus. Such pro forma financial
information has been prepared in accordance with the applicable
requirements of the Securities Act and the Rules and Regulations. No other
financial statements, schedules or pro forma financial data are required
to be included in the Registration Statement and the Prospectus which are
not so included therein.
(viii) Each of Xxxxxx Xxxxxxxx LLP and BDO Xxxxxxx, LLP, who have
certified certain of the financial statements filed with the Commission as
part of the Registration Statement and the Prospectus, is an independent
public accountant as required by the Securities Act and the Rules and
Regulations.
(ix) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit, claim or proceeding pending, or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries before any court or administrative agency or otherwise, which
if determined adversely to the Company, such Subsidiary would reasonably
be expected to result in a Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby; and there are no
agreements, contracts, leases or documents of the Company or any of its
Subsidiaries of a character required by the Securities Act or the Rules
and Regulations to be described or referred to in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement which have not been accurately described in all material
respects or referred to in the Registration Statement or Prospectus or
filed as exhibits to the Registration Statement, as the case may be. [The
contracts so described in the Registration Statement and Prospectus are in
full force and effect on the date hereof, and neither the Company nor any
of its Subsidiaries nor, to the best of the Company's knowledge, any other
party, is in breach of or default under any of such contracts where such
breach or default would reasonably be expected to have a Material Adverse
Effect.]
(x) Each of the Company and its Subsidiaries has good and marketable
title to all of their owned properties and assets as described in the
Registration Statement or as reflected in the financial statements filed
with the Commission as part of the Registration Statement as being owned
by them, free and clear of any lien, mortgage, pledge, charge or
encumbrance except those reflected in such financial statements or as
described in the Registration Statement. All leases to which the Company
or any of its Subsidiaries is a party are valid and binding obligations of
the Company or such Subsidiary, as the case may be, and no default by the
Company or any such Subsidiary has occurred or is continuing thereunder
which would reasonably be expected to result in a Material Adverse Effect.
(xi) Each of the Company and its Subsidiaries has filed all federal,
state, local and foreign income tax returns required to be filed and has
paid all taxes indicated by such returns and all assessments received by
it to the extent that such taxes have become due and are not being
contested in good faith except where the failure to file or failure to
file on a timely basis such returns and pay such taxes would not
reasonably be expected
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to have a Material Adverse Effect. All tax liabilities (including those
being contested in good faith) for the periods covered by the consolidated
financial statements of the Company that are included in the Registration
Statement have been adequately provided for in such financial statements.
(xii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
change in the business, properties, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole, which
would reasonably be expected to result in a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, other than as set forth in the Registration Statement and the
Prospectus, and since such dates, except in the ordinary course of
business, neither the Company nor any of its Subsidiaries has entered into
any material transaction not referred to in the Registration Statement and
the Prospectus. The Company has no material contingent obligations which
are not disclosed in the Prospectus or provided for in the Company's
consolidated financial statements that are included in the Registration
Statement.
(xiii) The Company has full legal right, power and authority to
enter into this Agreement and to perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by
the Company and (assuming due authorization and delivery by the
Underwriters and Warburg Pincus) is a valid and binding agreement of the
Company, enforceable in accordance with its terms except insofar as
indemnification and contribution provisions hereunder may be limited by
Federal or state securities laws, principles of public policy or equitable
principles and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
(xiv) Neither the Company nor any of its Subsidiaries is, or with
the giving of notice or lapse of time or both will be, in violation of or
in default under its respective certificate or articles of incorporation,
bylaws or other constitutive document or under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a
party or by which it, or any of its properties, is bound and which default
would reasonably be expected to have a Material Adverse Effect. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein and the fulfillment of the terms hereof
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to, (A) any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or any of its Subsidiaries is a party, (B) the respective
certificate or articles of incorporation, bylaws or other constitutive
document of the Company or any of its Subsidiaries or (C) any foreign,
federal, state or local law, order, rule, regulation, injunction,
judgment, or decree applicable to the Company or any of its Subsidiaries
of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or any of its
Subsidiaries including, without limitation, under the U.S. Federal Food,
Drug and Cosmetic Act, as amended (the "FDC Act"), or any other similar
law, domestic or foreign, regulating
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human health and safety and medical devices, and the rules, regulations,
policies and guidelines promulgated by the U.S. Food and Drug
Administration (herein called the "FDA") thereunder or any governmental
agency or body, domestic or foreign, exercising similar functions to those
of the FDA under applicable law (such laws, orders, rules, regulations,
injunctions, orders or decrees are collectively referred to herein as
"Applicable Law"), which conflict, breach, default or imposition would
reasonably be expected to have a Material Adverse Effect.
(xv) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary under Applicable Law in connection with the
execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except as may be
required in connection with the registration of the Stock under the
Securities Act and such additional steps as may be required by the
National Association of Securities Dealers, Inc. (herein called the
"NASD") or such additional steps as may be necessary to qualify the Stock
for public offering by the Underwriters under state securities or blue sky
laws) has been duly obtained or made and is in full force and effect.
(xvi) Except as described in the Prospectus, the Company and each of
its Subsidiaries now holds and at the Closing Date and any later date on
which the Option Stock is purchased, as the case may be, will hold, all
licenses, consents, certificates, orders, approvals and permits from all
state, Federal, foreign and other governmental or regulatory authorities,
including, but not limited to, the FDA and any foreign, federal, state or
local governmental or regulatory authorities performing functions similar
to those performed by the FDA, that are required under Applicable Law for
the conduct of the business of the Company and its Subsidiaries as such
business is currently conducted and as proposed to be conducted as
described in the Prospectus, except for such licenses, consents,
certificates, orders, approvals and permits which the failure to hold
would not reasonably be expected to have a Material Adverse Effect. All of
such licenses, consents, certificates, orders, approvals and permits held
by the Company are valid and in full force and effect (and there is no
proceeding pending or, after due inquiry, to the knowledge of the Company,
threatened which may cause any such license, consent, certificate, order,
approval or permit to be withdrawn, cancelled, suspended or not renewed).
(xvii) To the Company's knowledge, no labor disturbance by or
dispute exists or is imminent with the employees of the Company or any or
its Subsidiaries, that would reasonably be expected to result in a
Material Adverse Effect. No collective bargaining agreement exists with
any of the Company's or its Subsidiaries' employees and, to the Company's
knowledge, no such agreement is imminent.
(xviii) Except as described in the Prospectus, each of the Company
and its Subsidiaries is in compliance with all provisions of Applicable
Law issued or administered by any foreign, federal, state or local
governmental agency or body or court having jurisdiction over the Company
or any of its Subsidiaries, including, without limitation, Applicable Law
relating to: (i) the pre-clinical and clinical testing, design,
manufacture, safety, efficiency, labeling, storage, record-keeping,
advertising and promotion of medical devices, including the laws, rules
and regulations, guidelines and
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policies administered or promulgated by the FDA or any foreign, federal,
state or local governmental or regulatory authorities performing functions
similar to those performed by the FDA and exercising comparable authority,
(ii) the procurement and transplantation of allograft and other tissue
based products, including laws, rules, regulations and orders adopted and
issued under the Natural Organ Transplant Act (NOTA) or other similar
foreign, federal, state or local laws, rules, regulations and orders,
(iii) discrimination in hiring, promotion or pay of, or to the wages or
hours of, employees and (iv) the import and export of the Company's or any
of its Subsidiaries' products, in each case except where any such failure
to be in compliance would not reasonably be expected to have a Material
Adverse Effect.
(xix) Each of the Company and its Subsidiaries is in compliance in
all material respects with all currently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (herein called
"ERISA"); no "reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) for which the Company
or any Subsidiary would have any liability; the Company and its
Subsidiaries have not incurred and do 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 (herein called the "Code"); and each "pension
plan" for which the Company or any Subsidiary 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, that would reasonably be expected to cause
the loss of such qualification.
(xx) Each of the Company and its Subsidiaries (i) is in compliance
with any and all foreign, federal, state or local laws, orders, rules,
regulations, injunctions, judgments, or decrees applicable to the Company
or any of its Subsidiaries of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction over
the Company or any of its Subsidiaries relating to the protection of the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants, including, without limitation, all Applicable Law relating
to biohazardous substances (herein called "Environmental Laws"), (ii) has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its respective business and (iii)
is in compliance with all terms and conditions of any such permit, license
or approvals, except where such noncompliance with Environmental Laws, the
failure to receive required permits, licenses or other approvals or the
failure to comply with the terms and conditions of such permits, licenses
or approvals would not reasonably be expected to have a Material Adverse
Effect.
(xxi) The Company and its Subsidiaries have not incurred any costs
or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which are ongoing and which
would reasonably be expected to have a Material Adverse Effect.
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(xxii) Except as described in the Registration Statement or the
Prospectus, each of the Company and its Subsidiaries owns or possesses
adequate rights to use all material inventions, designs, trade secrets,
know-how, trademarks, service marks, trade names, copyright works or other
information (herein collectively called "Intellectual Property") which are
necessary to conduct its businesses as described in the Registration
Statement and the Prospectus. Except as set forth in the Registration
Statement or the Prospectus, neither the Company nor any of its
Subsidiaries has received any notice of, or has any knowledge of, any
infringement of or conflict with any rights of the Company by others with
respect to any Intellectual Property which, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to
have a Material Adverse Effect. Except as set forth in the Registration
Statement or the Prospectus, neither the Company nor any of its
Subsidiaries has received any notice of, or has knowledge of, any
infringement of or conflict with any rights of others with respect to any
Intellectual Property which if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to have a Material Adverse
Effect. To the Company's knowledge none of the Intellectual Property
licensed to or by the Company or any of its Subsidiaries is unenforceable
or invalid; and the Company is not aware (without having made inquiry) of
the granting of any patent rights to third parties or the filing of any
patent applications by third parties or of any other rights of third
parties to, or conflicting with, any Intellectual Property owned by the
Company or any of its Subsidiaries. A true and complete list of patents
material to the Company's and its Subsidiaries' businesses is set forth on
Schedule III.
(xxiii) To the Company's knowledge, in connection with the filing of
all patent applications filed or caused to be filed by the Company and its
Subsidiaries with the United States Patent and Trademark Office (herein
called the "PTO"), each of the Company and its Subsidiaries has complied
with the PTO's duty of candor and disclosure for their patent and has made
no material misrepresentation in any such application or in any
application filed with any applicable foreign patent authorities. The
Company is unaware of any facts material to a determination of
patentability regarding the Company's and its Subsidiaries' patent
applications not called to the attention of the PTO and is unaware of any
facts not called to the attention of the PTO which would preclude the
grant of a patent for such applications. The Company has no knowledge of
any facts which would materially conflict with the Company's or any of its
Subsidiaries' ownership rights to its patent applications.
(xxiv) Neither the Company nor any of its Subsidiaries has taken,
directly or indirectly, any action designed to cause or result in, or
which has constituted or which would 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 Stock.
(xxv) Neither the Company nor any of its Subsidiaries is, and after
the offer and sale of the Stock will be, an "investment company" or an
entity "controlled" by an "investment company" within the meaning of such
terms under the Investment Company Act of 1940, as amended (herein called
the "Investment Company Act") and the Rules And Regulations of the
Commission.
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(xxvi) Each of the Company and its Subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxvii) Each of the Company and its Subsidiaries carries, or is
covered by, insurance with insurers of nationally recognized reputation in
such amounts and covering such risks as the Company believes is customary
for companies engaged in similar industries to protect it from material
liabilities.
(xxviii) None of the Company and its Subsidiaries has or will
distribute prior to the later of (i) the Closing Date, or any date on
which Option Stock is to be purchased, as the case may be, and (ii)
completion of the distribution of the Stock, any offering material
(including, without limitation, content on its website, if any, that may
be deemed to be offering material) in connection with the offering and
sale of the Stock other than any Preliminary Prospectus, the Prospectus,
the Registration Statement and other materials, if any, permitted by the
Securities Act.
(xxix) Neither the Company nor any of its Subsidiaries has incurred
any liability for any finder's fees or similar payments in connection with
the transactions contemplated hereby other than to the Underwriters.
(xxx) The Company has not offered, nor caused any Underwriter to
offer, Stock to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company or any such Subsidiary to alter the customer's or supplier's level
or type of business with the Company or any such Subsidiary or (ii) a
trade journalist or publication to write or publish favorable information
about the Company or any of its Subsidiaries or any of their respective
products.
(xxxi) Neither the Company nor any of its Subsidiaries nor any
director or officer associated with or acting on behalf of the Company or
any of its Subsidiaries has used any corporate funds for any unlawful
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 any analogous foreign law; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(xxxii) All sales of the Company's securities prior to the date
hereof were at all relevant times duly registered under the Securities Act
and applicable foreign securities laws and state securities or Blue Sky
laws or were exempt from the registration
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requirements of the Securities Act and applicable foreign and state
securities laws, or if such securities were not registered or exempt in
compliance with the Securities Act and applicable foreign and state
securities laws, any private rights of action for recission or damages
arising from the failure to register any such securities are time barred
by applicable statutes of limitations or equitable principles, including
laches.
(xxxiii) The Company has obtained the agreement of (A) each of its
directors and officers, (B) certain holders of the outstanding Common
Stock; and (C) certain holders of other securities convertible into or
exercisable or exchangeable for Common Stock or warrants or other rights
to purchase Common Stock (such that the aggregate of such securities that
are not subject to such agreement does not represent more than 1% of the
outstanding Common Stock), not to sell, contract to sell, transfer the
economic risk of ownership in, make any short sale, pledge or otherwise
dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common
Stock or warrants or other rights to purchase Common Stock for a period of
180 days after the date of the Prospectus.
(b) Warburg Pincus hereby represents and warrants as follows:
(i) Warburg Pincus is the record and beneficial owner of, and has,
and on the Closing Date and the Option Closing Date will have, valid and
marketable title to the Stock to be sold by it, free and clear of all
security interests, claims, liens, restrictions on transferability,
legends, proxies, equities or other encumbrances; and upon delivery of and
payment for such Stock hereunder, the several Underwriters will acquire
valid and marketable title thereto, free and clear of any security
interests, claims, liens, restrictions on transferability, legends,
proxies, equities or other encumbrances or adverse claims. Warburg Pincus
is selling the Stock to be sold by it for its own account and is not
selling such Stock, directly or indirectly, for the benefit of the
Company, and no part of the proceeds of such sale received by Warburg
Pincus will inure, either directly or indirectly, to the benefit of the
Company other than as described in the Registration Statement and
Prospectus.
(ii) The certificates representing the Stock to be sold by Warburg
Pincus have been or will be duly and properly endorsed in blank for
transfer, or are or will be at the Option Closing accompanied by all
documents duly and properly executed that are necessary to validate the
transfer of title thereto, to the Underwriters, free of any legend,
restriction on transferability, proxy, lien or claim, whatsoever.
(iii) Warburg Pincus has the power and authority to enter into this
Agreement and to perform transactions contemplated hereby, including to
sell, transfer and deliver the Stock to be sold by it.
(iv) This Agreement has been duly authorized, executed and delivered
by or on behalf of Warburg Pincus and (assuming due authorization and
delivery by the Underwriters and the Company) constitutes a valid and
binding agreement of Warburg Pincus, enforceable in accordance with its
terms, except insofar as indemnity and contribution hereunder may be
limited by Federal or state securities laws, principles of
11
public policy or equitable principles and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by general equitable
principles.
(v) The execution and delivery of this Agreement and the performance
of the terms hereof and the consummation of the transactions contemplated
herein and the fulfillment of the terms hereof will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the imposition of any lien, charge or
encumbrance upon any property or assets or property or assets of Warburg
Pincus pursuant to (A) any indenture, mortgage, deed of trust or other
agreement or instrument to which Warburg Pincus is a party or by which
Warburg Pincus is bound, (B) its partnership agreement or other
constitutive document pursuant to which Warburg Pincus is organized or (C)
any foreign, Federal, state or local law, order, rule, regulation,
injunction, judgment, or decree applicable to Warburg Pincus of any court
or of any regulatory body or administrative agency or other governmental
body having jurisdiction over Warburg Pincus.
(vi) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary under any foreign, Federal, state or local
law, order, rule, regulation, injunction, judgment or decree applicable to
Warburg Pincus of any court or any regulatory body or administrative
agency or other governmental body having jurisdiction over Warburg Pincus
in connection with the execution and delivery by Warburg Pincus of this
Agreement and the consummation of the transactions herein contemplated,
including the sale of the Stock being sold by Warburg Pincus, except such
as may be required under the Securities Act or state securities laws or
blue sky laws, has been duly obtained or made and is in full force and
effect.
(vii) Warburg Pincus has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and
sale of the Stock other than any Preliminary Prospectus or the Prospectus
or other materials permitted by the Securities Act to be distributed by
Warburg Pincus.
(viii) Warburg Pincus has reviewed those parts of the Registration
Statement and Prospectus under the captions "Certain Transactions--Sales
of Securities" and "Principal and Selling Stockholders" which contain
information about Warburg Pincus and its affiliated entities and with
regard to such information only (A) on the Effective Date, the
Registration Statement did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) on the
date hereof the Prospectus does not, and on the Closing Date and any later
date on which the Option Stock is exercised, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, in each case insofar as it relates to
Warburg Pincus or its affiliates.
(c) OFFICER'S CERTIFICATE. Any certificate signed by any officer of the
Company delivered to the Underwriters or to counsel for the Underwriters shall
be deemed a representation
12
and warranty by the Company to each Underwriter as to the matters covered
thereby. Any certificate signed by or on behalf of Warburg Pincus as such and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by Warburg Pincus to each Underwriters as to the
matters covered thereby.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
7,500,000 shares of the Underwritten Stock to the several Underwriters and each
of the Underwriters agrees to purchase from the Company the respective aggregate
number of shares of Underwritten Stock set forth opposite its name in Schedule
I. The price at which such shares of Underwritten Stock shall be sold by the
Company and purchased by the several Underwriters shall be $____ per share. In
making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraphs (b) and (c) of this Section 3, the
agreement of each Underwriter is to purchase only the respective number of
shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company shall immediately give notice thereof
to you, Warburg Pincus and the non-defaulting Underwriters shall have the right
within 24 hours after the receipt by you of such notice to purchase, or procure
one or more other Underwriters to purchase, in such proportions as may be agreed
upon between you and such purchasing Underwriter or Underwriters and upon the
terms herein set forth, all or any part of the shares of the Stock which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
PROVIDED, HOWEVER, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
reasonably satisfactory to you for purchase of such remaining shares and portion
on the terms herein set forth. In any such case, either you or the Company shall
have the right to postpone the Closing Date determined as provided in Section 5
hereof for not more than seven business days after the date originally fixed as
the Closing Date pursuant to said Section 5 in order that any necessary changes
in the Registration Statement, the Prospectus or any other documents or
arrangements may be made. If neither the non-defaulting Underwriters nor the
Company shall make arrangements within the 24-hour periods stated above for the
purchase of all the shares of the Stock which the defaulting Underwriter or
Underwriters agreed to purchase hereunder, this Agreement shall be terminated
without further act or deed and without any liability on the part of
13
the Company or Warburg Pincus to any non-defaulting Underwriter and without any
liability on the part of any non-defaulting Underwriter to the Company or
Warburg Pincus. Nothing in this paragraph (b), and no action taken hereunder,
shall relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, Warburg
Pincus grants an option to the several Underwriters to purchase, severally and
not jointly, up to 1,125,000 shares in the aggregate of the Option Stock from
the Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time (but not more than once) on or before the
thirtieth day after the date of this Agreement (such closing referred to as the
"Option Closing" and such date as the "Option Closing Date") upon written or
telegraphic notice by you to the Company and Warburg Pincus setting forth the
aggregate number of shares of the Option Stock as to which the several
Underwriters are exercising the option. Delivery of certificates for the shares
of Option Stock, and payment therefor, shall be made as provided in Section 5
hereof. The number of shares of the Option Stock to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Stock to be purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Stock, as adjusted by you in such manner as you
deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover
page and in paragraphs 5, 13, 14 and 15 under the caption "Underwriting" in the
Registration Statement, any Preliminary Prospectus and the Prospectus relating
to the Stock filed by the Company (insofar as such information relates to the
Underwriters) constitutes the only information furnished by the Underwriters to
the Company for inclusion in the Registration Statement, any Preliminary
Prospectus and the Prospectus.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock
and the Option Stock (if the option granted by Section 3(c) hereof shall have
been exercised not later than 10:00 A.M., New York City time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Milbank, Tweed, Xxxxxx & XxXxxx LLP, located at Xxx Xxxxx
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on
the fourth business day after the date of this Agreement, or at such time on
such other day, not later than seven full business days after such fourth
business day, as shall be agreed upon in writing by the Company and you. The
date and hour of such delivery and
14
payment (which may be postponed as provided in Section 3(b) hereof) are herein
called the "Closing Date".
(b) If the option granted by Section 3(c) hereof shall be exercised
after 10:00 a.m., New York City time, on the date two business days preceding
the Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Milbank, Tweed, Xxxxxx & XxXxxx
LLP, located at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx 00000, at 10:00 a.m., New
York City time, on the third business day after the exercise of such option,
unless otherwise agreed upon by the Company and you.
(c) Payment for the Stock purchased from the Company or Warburg Pincus,
as applicable, shall be made to the Company or Warburg Pincus, as applicable, or
to its order by wire transfer of Federal or other funds immediately available in
New York City. Such payment shall be made upon delivery of certificates for the
Stock to you for the respective accounts of the several Underwriters against
receipt therefor signed by you. Certificates for the Stock to be delivered to
you shall be registered in such name or names and shall be in such denominations
as you may request at least one business day before the Closing Date, in the
case of Underwritten Stock, and at least one business day prior to the purchase
thereof, in the case of the Option Stock. Such certificates will be made
available to the Underwriters for inspection, checking and packaging at the
offices of Lewco Securities Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on
the business day prior to the Closing Date or, in the case of the Option Stock,
by 3:00 p.m., New York time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Option Stock is
purchased for the account of such Underwriter. Any such payment by you shall not
relieve such Underwriter from any of its obligations hereunder. Nothing herein
contained shall constitute any of the Underwriters an unincorporated association
or partner with the Company or Warburg Pincus.
6. FURTHER AGREEMENTS OF THE COMPANY AND WARBURG Pincus.
(a) The Company covenants and agrees as follows:
(i) The Company will (A) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted
at the time of effectiveness of the Registration Statement in reliance on
Rule 430A and (B) not file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have been
advised and furnished with a copy or to which you shall have reasonably
objected in writing or which is not in compliance with the Securities Act
or the Rules and Regulations.
(ii) The Company will promptly notify each Underwriter in the event
of (A) the request by the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, (B) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement,
15
(C) the institution or notice of intended institution of any action or
proceeding for that purpose, (D) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (E) the receipt by it of notice of
the initiation or threatening of any proceeding for such purpose. The
Company will make every reasonable effort to prevent the issuance of such
a stop order and, if such an order shall at any time be issued, to obtain
the withdrawal thereof at the earliest possible moment.
(iii) The Company will (A) on or before the Closing Date, deliver to
you a signed copy of the Registration Statement as originally filed and of
each amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of
each post-effective amendment, if any, to the Registration Statement
(together with, in each case, all exhibits thereto unless previously
furnished to you) and will also deliver to you, for distribution to the
Underwriters, a sufficient number of additional conformed copies of each
of the foregoing (but without exhibits) so that one copy of each may be
distributed to each Underwriter, (B) as promptly as possible deliver to
you and send to the several Underwriters, at such office or offices as you
may designate, as many copies of the Prospectus as you may reasonably
request, and (C) thereafter from time to time during the period in which a
prospectus is required by law to be delivered by an Underwriter or dealer,
likewise send to the Underwriters as many additional copies of the
Prospectus and as many copies of any supplement to the Prospectus and of
any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities
Act. The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(iv) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any event
relating to or affecting the Company, or of which the Company shall be
advised in writing by you, shall occur as a result of which it is
necessary, in the opinion of counsel for the Company or of counsel for the
Underwriters, to supplement or amend the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser of the Stock, the Company will
forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus so that the Prospectus as so
supplemented or amended will not contain any 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 existing at
the time such Prospectus is delivered to such purchaser, not misleading.
If, after the initial public offering of the Stock by the Underwriters and
during such period, the Underwriters shall propose to vary the terms of
offering thereof by reason of changes in general market conditions or
otherwise, you will advise the Company in writing of the proposed
variation, and, if in the opinion either of counsel for the Company or of
counsel for the Underwriters such proposed variation requires that the
Prospectus be supplemented or amended, the Company will forthwith prepare
and file with the Commission a supplement to the Prospectus or an amended
prospectus setting
16
forth such variation. The Company authorizes the Underwriters and all
dealers to whom any of the Stock may be sold by the several Underwriters
to use the Prospectus, as from time to time amended or supplemented, in
connection with the sale of the Stock in accordance with the applicable
provisions of the Securities Act and the applicable rules and regulations
thereunder for such period.
(v) Prior to the filing thereof with the Commission, the Company
will submit to you, for your information, a copy of any post-effective
amendment to the Registration Statement and any supplement to the
Prospectus or any amended prospectus proposed to be filed.
(vi) The Company will cooperate, when and as requested by you, in
the qualification of the Stock for offer and sale under the securities or
blue sky laws of such jurisdictions, including under applicable state,
foreign and provincial securities laws, as you may designate and, during
the period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, in keeping such qualifications in good standing
under said securities or blue sky laws; PROVIDED, HOWEVER, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified. The Company will, from time to time, prepare
and file such statements, reports, and other documents as are or may be
required to continue such qualifications in effect for so long a period as
you may reasonably request for distribution of the Stock.
(vii) During a period of five years commencing with the date hereof,
the Company will furnish to you, and to each Underwriter who may so
request in writing, copies of all periodic and special reports furnished
to stockholders of the Company and of all information, documents and
reports filed with the Commission.
(viii) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective Date,
the Company will make generally available to its security holders an
earnings statement in accordance with Section 11(a) of the Securities Act
and Rule 158 thereunder.
(ix) The Company agrees to pay all costs and expenses incident to
the performance of its obligations under this Agreement, including all
costs and expenses incident to (A) the preparation, printing and filing
with the Commission and the NASD of the Registration Statement, any
Preliminary Prospectus and the Prospectus, (B) the furnishing to the
Underwriters of copies of any Preliminary Prospectus and of the several
documents required by Section 6(a)(iii) hereof to be so furnished, (C) the
printing of this Agreement and related documents delivered to the
Underwriters, (D) the preparation, printing and filing of all supplements
and amendments to the Prospectus referred to in Section 6(a)(iv) hereof,
(E) the furnishing to you and the Underwriters of the reports and
information referred to in Section 6(a)(vii) hereof and (F) the printing
and issuance of stock certificates, including the transfer agent's fees.
17
(x) The Company agrees to reimburse you, for the account of the
several Underwriters, for blue sky fees and related disbursements
(including counsel fees and disbursements and cost of printing memoranda
for the Underwriters) paid by or for the account of the Underwriters or
their counsel in qualifying the Stock under state securities or blue sky
laws and in the review of the offering by the NASD.
(xi) The Company hereby agrees that, without the prior written
consent of X. X. Xxxxxx Securities Inc. on behalf of the Underwriters, the
Company will not, for a period of 180 days following the commencement of
the public offering of the Stock by the Underwriters, directly or
indirectly, (A) sell, offer, contract to sell, make any short sale,
pledge, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any
rights to purchase or acquire Common Stock or (B) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (A) or (B) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (1) the Stock to be sold to the Underwriters
pursuant to this Agreement, (2) shares of Common Stock issued by the
Company upon the exercise of options granted under the stock incentive
plans of the Company (herein referred to as "Option Plans") or upon the
exercise of warrants outstanding as of the date hereof, all as described
in the section "Capitalization" in the Preliminary Prospectus, (3) the
issuance of Common Stock upon conversion of shares of the Company's
non-voting common stock, par value $.01 per share (referred to herein as
the "Non-Voting Common Stock"), into shares of Common Stock in accordance
with the Company's Certificate of Incorporation and (4) shares of Common
Stock, cash awards or options, warrants or like securities to purchase
Common Stock issued or granted under the Option Plans.
(xii) The Company agrees to use its commercially reasonable efforts
to cause all directors, officers and beneficial holders of the outstanding
Common Stock identified on Schedule IV to agree, pursuant to a "lock-up"
letter substantially in the form of Annex A hereto, that, without the
prior written consent of X. X. Xxxxxx Securities Inc., such person or
entity will not, for a period of 180 days following the commencement of
the public offering of the Stock by the Underwriters, directly or
indirectly, sell, offer, contract to sell, transfer the economic risk of
ownership in, make any short sale, pledge or otherwise dispose of any
shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any other rights to purchase or acquire Common
Stock. The foregoing sentence shall not apply to (1) shares of Common
Stock issued by the Company upon the exercise of options granted under the
Stock Option Plans as in effect at the date of the Preliminary Prospectus
and as described in the Preliminary Prospectus or (2) shares of Common
Stock issued upon conversion of shares of Non-Voting Common Stock into
shares of Common Stock.
(xiii) If at any time during the 25-day period after the
Registration Statement becomes effective any rumor, publication or event
relating to or affecting the Company
18
shall occur as a result of which in your opinion the market price for the
Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after written notice from
you advising the Company to the effect set forth above, forthwith prepare,
consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(xiv) The Company is familiar with the Investment Company Act of
1940, as amended, and has in the past conducted its affairs, and will in
the future conduct its affairs, in such a manner to ensure that the
Company was not and will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.
(xv) The Company will use the net proceeds received by it from the
sale of the Stock in the manner specified in the Prospectus under "Use of
Proceeds."
(xvi) The Company (A) will comply with all applicable securities and
other applicable laws, rules and regulations in each jurisdiction in which
the Directed Shares are offered and (B) will pay all reasonable fees and
disbursements of counsel incurred by the Underwriters in connection with
the Directed Share Program and any stamp duties, similar taxes or duties
or other taxes, if any, incurred by the Underwriters in connection with
the Directed Share Program.
(b) Warburg Pincus covenants and agrees as follows:
(i) Except as otherwise agreed to by the Company and Warburg Pincus,
Warburg Pincus will pay all taxes, if any, on the transfer and sale,
respectively, of the Stock being sold by Warburg Pincus, and the fees of
counsel to Warburg Pincus, provided, however, that Warburg Pincus
severally will reimburse the Company for any reimbursement made by the
Company to the Underwriters pursuant to Section 9 hereof to the extent
such reimbursement resulted from the willful failure or refusal on the
part of Warburg Pincus to comply with the terms or fulfill any of the
conditions of this Agreement.
(ii) If this Agreement is terminated by the Underwriters because of
any willful failure, refusal or inability on the part of Warburg Pincus to
perform any agreement to be performed hereunder by Warburg Pincus, or
because any other condition of the Underwriters' obligations hereunder
required to be fulfilled by Warburg Pincus is not fulfilled, Warburg
Pincus will reimburse the several Underwriters for all out-of-pocket
disbursements (including fees and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Stock or in
contemplation of performing their obligations hereunder. Warburg Pincus
will not in any event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement.
19
(iii) The Stock to be sold by Warburg Pincus is subject to the
interest of the several Underwriters, and the obligations of Warburg
Pincus hereunder are irrevocable and shall not be terminated, except as
provided in this Agreement, by any act of Warburg Pincus, by operation of
law, whether by the liquidation, dissolution or merger of Warburg Pincus,
or by the occurrence of any other event. If Warburg Pincus should
liquidate, dissolve, be a party to a merger or if any other such event
should occur before the delivery of the Stock hereunder, certificates for
the Stock will be delivered in accordance with the terms and conditions of
this Agreement as if such liquidation, dissolution, merger, death or other
event had not occurred.
(iv) Warburg Pincus has not taken, directly or indirectly, any
action designed to cause or result in, or which has constituted or which
would 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 Stock.
(v) Warburg Pincus will immediately notify you if any event occurs,
or of any change in information relating to Warburg Pincus, which makes it
necessary to supplement or amend the Prospectus such that the Prospectus
does not or will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless Warburg Pincus,
each Underwriter and each person (including each partner or officer thereof) who
controls Warburg Pincus or any Underwriter within the meaning of Section 15 of
the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, or the common law
or otherwise, and the Company agrees to reimburse Warburg Pincus and each such
Underwriter and controlling person for any legal or other expenses (including,
except as otherwise hereinafter provided, reasonable fees and disbursements of
counsel) incurred by the respective indemnified parties in connection with
defending against any such losses, claims, damages or liabilities or in
connection with any investigation or inquiry of, or other proceeding which may
be brought against, the respective indemnified parties, in each case arising out
of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any Rule 462(b) registration
statement), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that (1) the indemnity agreements of the Company
contained in this paragraph (a) shall not apply to any such losses, claims,
damages, liabilities or expenses if such statement or
20
omission was made in reliance upon and in conformity with information furnished
as herein stated or otherwise furnished in writing to the Company by or on
behalf of any Underwriter (or in the case of the Company's indemnification
obligation in favor of Warburg Pincus, by Warburg Pincus) for use in any
Preliminary Prospectus or the Registration Statement or the Prospectus or any
such amendment thereof or supplement thereto and (2) the indemnity agreement
contained in this paragraph (a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages, liabilities or expenses purchased the Stock which
is the subject thereof (or to the benefit of any person controlling such
Underwriter) if at or prior to the written confirmation of the sale of such
Stock a copy of the Prospectus (or the Prospectus as amended or supplemented)
was not sent or delivered to such person and the untrue statement or omission of
a material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented) unless the failure is
the result of noncompliance by the Company with Section 6(a)(iii) hereof. The
indemnity agreements of the Company contained in this paragraph (a) and the
representations and warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
The Company agrees to indemnify and hold harmless the Designated
Underwriter and each person, if any, who controls the Designated Underwriter
within the meaning of Section 15 of the Securities Act (herein called the
"Designated Entities"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) (i) caused by any untrue statement or alleged untrue statement
of a material fact contained in any material prepared by or with the express
consent of the Company for distribution to Participants in connection with the
Directed Share Program or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) caused by the failure of any Participant
to pay for and accept delivery of Directed Shares that the Participant agreed to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of the Designated Entities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
Warburg Pincus, the Company, each of the Company's officers who signs the
Registration Statement on his own behalf or pursuant to a power of attorney,
each of the Company's directors, each other Underwriter and each person
(including each partner or officer thereof) who controls the Company or Warburg
Pincus or any such other Underwriter within the meaning of Section 15 of the
Securities Act, from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, or the common law
or otherwise and to reimburse each of them for any legal or other expenses
(including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any
21
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by or on behalf of such indemnifying
Underwriter for use in the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(c) Warburg Pincus agrees to indemnify and hold harmless the Company and
each Underwriter and each person (including each partner or officer thereof) who
controls the Company or any Underwriter within the meaning of Section 15 of the
Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, or the common law
or otherwise, and Warburg Pincus agrees to reimburse the Company and each such
Underwriter and controlling person for any legal or other expenses (including,
except as otherwise hereinafter provided, reasonable fees and disbursements of
counsel) incurred by the respective indemnified parties in connection with
defending against any such losses, claims, damages or liabilities or in
connection with any investigation or inquiry of, or other proceeding which may
be brought against, the respective indemnified parties, in each case arising out
of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any Rule 462(b) registration
statement), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that (1) the indemnity agreements of Warburg
Pincus contained in this paragraph (a) shall not apply to any such losses,
claims, damages, liabilities or expenses if such statement or omission was made
in reliance upon and in conformity with information furnished as herein stated
or otherwise furnished in writing to Warburg Pincus by or on behalf of any
Underwriter (or in the case of Warburg Pincus' indemnification obligation in
favor of the Company, by the Company) for use in any Preliminary Prospectus or
the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto and (2) the indemnity agreement contained in this paragraph
(c) with respect to any Preliminary Prospectus shall not inure to the
22
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages, liabilities or expenses purchased the Stock which is the
subject thereof (or to the benefit of any person controlling such Underwriter)
if at or prior to the written confirmation of the sale of such Stock a copy of
the Prospectus (or the Prospectus as amended or supplemented) was not sent or
delivered to such person and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented). The indemnity agreements of the Company
and Warburg Pincus contained in this paragraph (c) and the representations and
warranties of the Company and Warburg Pincus contained in Section 2 hereof shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Stock.
(d) Each party indemnified under the provision of paragraphs (a), (b)
and (c) of this Section 7 or Section 14 agrees that, upon the service of a
summons or other initial legal process upon it in any action or suit instituted
against it or upon its receipt of written notification of the commencement of
any investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs or Section 14, it will promptly give written notice (herein called
the "Notice") of such service or notification to the party or parties from whom
indemnification may be sought hereunder. No indemnification provided for in such
paragraphs of this Section 7 or Section 14 shall be available to any party who
shall fail so to give the Notice if the party to whom such Notice was not given
was unaware of the action, suit, investigation, inquiry or proceeding to which
the Notice would have related and was prejudiced by the failure to give the
Notice, but the omission so to notify such indemnifying party or parties of any
such service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of such indemnity agreement. Any
indemnifying party shall be entitled at its own expense to participate in the
defense of any action, suit or proceeding against, or investigation or inquiry
of, an indemnified party. Any indemnifying party shall be entitled, if it so
elects within a reasonable time after receipt of the Notice by giving written
notice (herein called the "Notice of Defense") to the indemnified party, to
assume (alone or in conjunction with any other indemnifying party or parties)
the entire defense of such action, suit, investigation, inquiry or proceeding,
in which event such defense shall be conducted, at the expense of the
indemnifying party or parties, by counsel chosen by such indemnifying party or
parties and reasonably satisfactory to the indemnified party or parties;
PROVIDED, HOWEVER, that (i) if the indemnified party or parties reasonably
determine that there may be a conflict between the positions of the indemnifying
party or parties and of the indemnified party or parties in conducting the
defense of such action, suit, investigation, inquiry or proceeding or that there
may be legal defenses available to such indemnified party or parties different
from or in addition to those available to the indemnifying party or parties,
then counsel for the indemnified party or parties shall be entitled to conduct
the defense to the extent reasonably determined by such counsel to be necessary
to protect the interests of the indemnified party or parties, (ii) in any event,
the indemnified party or parties shall be entitled to have counsel chosen by
such indemnified party or parties participate in, but not conduct, the defense,
(iii) if the indemnified parties under this Section 7 or Section 14 consist of
the Underwriters or any of their officers, employees or controlling persons,
then any such counsel chosen for such indemnified parties shall be designated in
writing by X.X. Xxxxxx Securities Inc., and (iv) if the indemnified parties
under this Section 7 consist of the Company or any of its officers, employees
23
or controlling persons, then any such counsel chosen for such indemnified
parties shall be designated in writing by the Company. If, within a reasonable
time after receipt of the Notice, an indemnifying party gives a Notice of
Defense and the counsel chosen by the indemnifying party or parties is
reasonably satisfactory to the indemnified party or parties, the indemnifying
party or parties will not be liable under paragraphs (a) through (d) of this
Section 7 or Section 14 for any legal or other expenses subsequently incurred by
the indemnified party or parties in connection with the defense of the action,
suit, investigation, inquiry or proceeding, except that (A) the indemnifying
party or parties shall bear the legal and other expenses incurred in connection
with the conduct of the defense as referred to in clause (i) of the proviso to
the preceding sentence and (B) the indemnifying party or parties shall bear such
other expenses as it or they have authorized to be incurred by the indemnified
party or parties. If, within a reasonable time after receipt of the Notice, no
Notice of Defense has been given, the indemnifying party or parties shall be
responsible for any legal or other expenses incurred by the indemnified party or
parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding.
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to the last paragraph in Section 7 (a) hereof in respect
of such action or proceeding, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for the reasonable
fees and expenses of not more than one separate firm (in addition to any local
counsel) for the Designated Underwriter for the defense of any losses, claims,
damages and liabilities arising out of the Directed Share Program, and all
persons, if any, who control the Designated Underwriter within the meaning of
either Section 15 of the Securities Act.
(e) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under paragraph (a), (b)
or (c) of this Section 7, then each indemnifying party, shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in paragraph (a), (b) or (c) of this
Section 7, (i) in such proportion as is appropriate to reflect the relative
benefits received by each indemnifying party 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
each indemnifying party in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, or actions in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company and Warburg Pincus, on the one hand, and the
Underwriters, on the other hand, shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Stock received by
the Company and Warburg Pincus and the total underwriting discount received by
the Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Stock. Relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (e) were to be determined by pro rata allocation
(even if the Underwriters were treated
24
as one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to in the first
sentence of this paragraph (e). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities, or actions in respect
thereof, referred to in the first sentence of this paragraph (e) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigation, preparing to defend or defending against
any action or claim which is the subject of this paragraph (e). Notwithstanding
the provisions of this paragraph (e), (i) 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 that such Underwriter has otherwise
been required to pay by reason of such untrue statement or omission or alleged
omission and (ii) Warburg Pincus' contribution obligation hereunder shall not
exceed the net proceeds received by Warburg Pincus from the sale of Common Stock
hereunder. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this paragraph (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (d) of this Section 7).
(f) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the
Securities Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and Warburg
Pincus if after the date of this Agreement trading in the Common Stock shall
have been suspended, or if there shall have occurred (i) the engagement in
hostilities or an escalation of major hostilities by the United States or the
declaration of war or a national emergency by the United States on or after the
date hereof, (ii) any outbreak of hostilities or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, calamity, crisis or change in economic or political conditions
in the financial markets of the United States would, in the Underwriters'
reasonable judgment, make the offering or delivery of the Stock impracticable,
(iii) suspension of trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, The Nasdaq National Market, or
limitations on prices (other than
25
limitations on hours or numbers of days of trading) for securities on either
such exchange or system, (iv) the enactment, publication, decree or other
promulgation of any Federal or state statute, regulation, rule or order of, or
commencement of any proceeding or investigation by, any court, legislative body,
agency or other governmental authority which in the Underwriters' opinion
materially and adversely affects or will materially or adversely affect the
business or operations of the Company, (v) declaration of a banking moratorium
by either Federal or New York State authorities, or (vi) the taking of any
action by any Federal, state or local government or agency in respect of its
monetary or fiscal affairs which in the Underwriters' opinion has a material
adverse effect on the securities markets in the United States. If this Agreement
shall be terminated pursuant to this Section 8, there shall be no liability of
the Company or Warburg Pincus to the Underwriters and no liability of the
Underwriters to the Company or Warburg Pincus; PROVIDED, HOWEVER, that in the
event of any such termination the Company agrees to indemnify and hold harmless
the Underwriters from all costs or expenses incident to the performance of the
obligations of the Company under this Agreement, including all costs and
expenses referred to in paragraphs (ix) and (x) of Section 6(a) hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and Warburg Pincus of all of their respective
obligations to be performed hereunder at or prior to the Closing Date or the
Option Closing Date, as the case may be, and to the following further
conditions:
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings therefor shall be pending or
threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing,
and the form of the Registration Statement and of the Prospectus (except
as to the financial statements contained therein), shall have been
approved at or prior to the Closing Date by Milbank, Tweed, Xxxxxx &
XxXxxx LLP, counsel for the Underwriters.
(c) You shall have received from (i) Xxxxxxx Xxxx & Xxxxxxxxx, New
York counsel for the Company, (ii) Xxxxx X. Xxxx, Esq., General Counsel
and Secretary of the Company, (iii) Xxxxxxx Xxxx & Xxxxxxxxx, special
French Counsel for the Company, (iv) Xxxxx, Xxxxxx & XxXxxxxx, special FDA
regulatory counsel for the Company, (v) Xxxxxxx, Edell, Shapiro, Xxxxxx &
Xxxxx, LLC, patent counsel for the Company and (vi) Xxxxxxx Xxxx &
Xxxxxxxxx, special counsel for Warburg Pincus, opinions, addressed to the
Underwriters and dated the Closing Date (or Option Closing Date if
applicable), covering the matters set forth in Annex B, Annex C, Annex D,
Annex E, Annex F and Annex G hereto, respectively, and if Option Stock is
purchased at any date after the Closing Date, additional opinions from
each such counsel, addressed to the Underwriters and dated such later
date, confirming that the statements expressed as of the Closing Date in
such opinions remain valid as of such later date.
26
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true
and correct and neither the Registration Statement nor the Prospectus
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, respectively, not
misleading, (ii) since the Effective Date, no event has occurred which
should have been set forth in a supplement or amendment to the Prospectus
which has not been set forth in such a supplement or amendment, (iii)
since the respective dates as of which information is given in the
Registration Statement in the form in which it originally became effective
and the Prospectus contained therein, there has not been any material
adverse change or any development involving a prospective material adverse
change in or affecting the business, properties, financial condition or
results of operations of the Company and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, and, since such dates, except in the ordinary course of
business, neither the Company nor any of its Subsidiaries has entered into
any material transaction not referred to in the Registration Statement in
the form in which it originally became effective and the Prospectus
contained therein, (iv) neither the Company nor any of its Subsidiaries
has any material contingent obligations which are not disclosed in the
Registration Statement and the Prospectus, (v) there are not any pending
or known threatened legal proceedings to which the Company or any of its
Subsidiaries is a party or of which property of the Company or any of its
Subsidiaries is the subject which are material and which are not disclosed
in the Registration Statement and the Prospectus, (vi) there are no
franchises, contracts, leases or other documents which are required to be
filed as exhibits to the Registration Statement which have not been filed
as required, (vii) the representations and warranties of the Company
herein are true and correct in all material respects as of the Closing
Date or any later date on which Option Stock is to be purchased, as the
case may be and (viii) there has not been any material change in the
market for securities in general or in political, financial or economic
conditions from those reasonably foreseeable as to render it impracticable
in your judgment to make a public offering of the Stock, or a material
adverse change in market levels for securities in general (or those of
companies in particular) or financial or economic conditions which render
it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later
date on which Option Stock is purchased a certificate, dated the Closing
Date or such later date, as the case may be, and signed by the President
and the Chief Financial Officer of the Company, stating that the
respective signers of said certificate have carefully examined the
Registration Statement in the form in which it originally became effective
and the Prospectus contained therein and any supplements or amendments
thereto, and that the statements included in clauses (i) through (vii) of
Section 9(d) hereof are true and correct.
(f) You shall have received from each of Xxxxxx Xxxxxxxx LLP and BDO
Xxxxxxx, LLP, a letter or letters, addressed to you and dated the Closing
Date and any later date on which Option Stock is purchased, confirming
that they are independent public accountants with respect to the Company
within the meaning of the Securities Act and the Rules and Regulations and
are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
27
Commission and based upon the procedures described in their letter
delivered to you concurrently with the execution of this Agreement (herein
called the "Original Letter"), but carried out to a date not more than
three business days prior to the Closing Date or such later date on which
Option Stock is purchased (i) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate
as of the Closing Date or such later date, as the case may be, and (ii)
setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter which are necessary to
reflect any changes in the facts described in the Original Letter since
the date of the Original Letter or to reflect the availability of more
recent financial statements, data or information.
(g) On the Closing Date and, if applicable, the Option Closing Date,
there shall have been furnished to you a certificate or certificates,
dated such date and addressed to you, signed by Warburg Pincus to the
effect that the representations and warranties of Warburg Pincus contained
in this Agreement are true and correct as if made at and as of such date,
and that Warburg Pincus has complied with all the agreements and satisfied
all the conditions on Warburg Pincus' part to be performed or satisfied at
or prior to such date.
(h) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the qualification
referred to in paragraph (vi) of Section 6(a) hereof.
(i) Prior to the Closing Date, the Stock to be issued and sold by
the Company shall have been duly authorized for listing by the Nasdaq
National Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received from
all directors, officers and beneficial holders of the outstanding Common
Stock identified on Schedule IV hereto, agreements, in the form attached
hereto as Annex A.
(k) The NASD shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(l) On or prior to the Closing Date, the conversion of $13.1 million
principal amount of the Company's subordinated notes held by Warburg
Pincus into 1,125,000 shares of the Company's non-voting common stock
shall have occurred in the manner described in the Prospectus.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Milbank, Tweed, Xxxxxx & XxXxxx LLP, counsel for the
Underwriters, shall be reasonably satisfied that they comply in form and scope.
28
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and Warburg Pincus. Any such termination shall be without liability of
the Company or Warburg Pincus to the Underwriters and without liability of the
Underwriters to the Company; PROVIDED, HOWEVER, that (i) in the event of such
termination, the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to in
Sections 6(a)(ix) and (x) hereof and (ii) if this Agreement is terminated by you
because of any refusal, inability or failure on the part of the Company or
Warburg Pincus to perform any agreement herein, to fulfill any of the conditions
herein, or to comply with any provision hereof other than by reason of a default
by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the transactions contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by the Company by giving notice to
you. Any such termination shall be without liability of the Company or Warburg
Pincus to the Underwriters and without liability of the Underwriters to the
Company or Warburg Pincus; PROVIDED, HOWEVER, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to in
Sections 6(a)(ix) and (x) hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7 and Section 14 of this Agreement, the Company hereby
agrees to reimburse on a quarterly basis the Underwriters for all reasonable
legal and other expenses incurred in connection with investigating or defending
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in Section 7(a) hereof, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 11 and the possibility that such payments might later be held to be
improper; PROVIDED, HOWEVER, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company, Warburg Pincus and the several Underwriters and,
with respect to the provisions of Section 7 and Section 14 hereof, the several
parties (in addition to the Company, Warburg Pincus and the several
Underwriters) indemnified under the provisions of said Section 7 and Section 14,
and their respective personal representatives, successors and assigns. Nothing
in this Agreement is intended or shall be construed to give to any other person,
firm or
29
corporation any legal or equitable remedy or claim under or in respect of this
Agreement or any provision herein contained. The term "successors and assigns"
as herein used shall not include any purchaser, as such purchaser, of any of the
Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to X. X. Xxxxxx Securities Inc., 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; if to Warburg Pincus, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 Attention: General Counsel; and if to the Company,
shall be mailed, telegraphed or delivered to it at its office, 0000 Xxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: F. Xxxxx Xxxx, President and Chief
Executive Officer. All notices given by telegraph shall be promptly confirmed by
letter.
14. QUALIFIED INDEPENDENT UNDERWRITER. The Company and Warburg Pincus
hereby confirm that at their request Credit Suisse First Boston Corporation has
without compensation acted as "qualified independent underwriter" (referred to
as the "QIU") within the meaning of Rule 2720 of the Conduct Rules of the NASD
in connection with the offering of the Stock. The Company will indemnify and
hold harmless the QIU against any losses, claims, damages or liabilities, joint
or several, to which the QIU may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon the QIU's acting (or alleged
failing to act) as such "qualified independent underwriter" and will reimburse
the QIU for any legal or other expenses reasonably incurred by the QIU in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.
15. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or their respective directors or officers, and (c) delivery and
payment for the Stock under this Agreement; PROVIDED, HOWEVER, that if this
Agreement is terminated prior to the Closing Date, the provisions of Section
6(a)(xi) and (xii) hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
30
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company, Warburg Pincus and the several Underwriters in accordance with its
terms.
Very truly yours,
XXXXXX MEDICAL GROUP, INC.
By
--------------------------
Name:
Title:
WARBURG, XXXXXX EQUITY PARTNERS,
L.P.
By: Warburg, Xxxxxx & Co., its General
Partner
By
--------------------------
Name:
Title:
31
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
X. X. XXXXXX SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
U.S. BANCORP XXXXX XXXXXXX INC.
By X. X. Xxxxxx Securities Inc.
By __________________________
Name:
Title:
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
32
SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES
TO BE
UNDERWRITERS PURCHASED
------------ ---------
X. X. Xxxxxx Securities Inc. . . . . . . . . . . . . . . . . . .
Credit Suisse First Boston Corporation . . . . . . . . . . . . .
U.S. Bancorp Xxxxx Xxxxxxx Inc. . . . . . . . . . . . . . . . . .
---------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500,000
=========
SCHEDULE II
SUBSIDIARIES
Xxxxxx Medical Technology, Inc.
Xxxxxx Medical Technology Canada Ltd.
Xxxxxx Cremascoli Orthotechnique SA
2 Hip Holdings SAS
Xxxxxx Cremascoli Ortho Trading Snc
Xxxxxx Medical Europe XX
Xxxxxxxxxx Ortho XX
Xxxxxx Cremascoli Ortho SpA
Cremascoli Thema Ortho X.X.
Xxxxxx Cremascoli Ortho Limited
Cremascoli Ortho GmbH
Cremascoli Ortho SA
SCHEDULE III
EQUITY INVESTMENTS
SCHEDULE IV
INTELLECTUAL PROPERTY
SCHEDULE V
PERSONS SUBJECT TO LOCK-UPS
Warburg, Xxxxxx Equity Partners, L.P.
California Public Employees' Retirement System
Vertical Fund Associates, L.P.
Princess Gate Investors, L.P.
F. Xxxxx Xxxx
Xxxx X. Xxxxxxxx
Xxxx X. Xxxx, Ph.D.
Xxxxxx X. Xxxxxxxxx
R. Xxxx Xxxxxxx
Xxxxxx X. Xxxxxxx, Ph.D.
Xxxxx X. Xxxxxx
Xxxxx X. Xxxx
Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Stamp
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxxxx X. Xxxxxxxxxx
ANNEX A
FORM OF LOCK-UP LETTER
LOCK-UP AGREEMENT
July [ ], 2001
X. X. Xxxxxx Securities Inc.
Credit Suisse First Boston Corporation
U.S. Bancorp Xxxxx Xxxxxxx Inc.
As Representatives of the
Several Underwriters
c/o X. X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned is either a holder of shares of voting common stock, $.01 par
value ("COMMON STOCK") or non-voting common stock, $.01 par value ("Non-Voting
Common Stock"), of Xxxxxx Medical Group, Inc. (the "COMPANY") or has a
contractual right to acquire the Company's Common Stock and wishes to facilitate
the public offering (the "OFFERING") of the Company's Common Stock pursuant to a
Registration Statement on Form S-1 (the "REGISTRATION STATEMENT") filed with the
Securities and Exchange Commission on April 27, 2001.
In consideration of the foregoing, and in order to induce you to act as
underwriters in the Offering, the undersigned hereby irrevocably agrees that it
will not, directly or indirectly, sell, offer, contract to sell, transfer the
economic risk of ownership in, make any short sale, pledge or otherwise dispose
of any shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any other rights to purchase or acquire Common Stock,
without the prior written consent of X. X. Xxxxxx Securities Inc. acting alone
or of each of the Representatives of the Underwriters acting jointly, for a
period of 180 days from the effective date of the Registration Statement.
Notwithstanding the foregoing, if the undersigned is an individual, he or she
may transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock (i) either during his or her
lifetime or on death by will or intestacy to his or her immediate family or to a
trust the beneficiaries of which are exclusively the undersigned and/or a member
or members of his or her immediate family; PROVIDED, HOWEVER, that prior to any
such transfer each transferee shall execute an agreement, satisfactory to X. X.
Xxxxxx Securities Inc., pursuant to which each transferee shall agree to receive
and hold such shares of Common Stock, or securities convertible into or
exchangeable or exercisable for the Common Xxxxx,
X-0
subject to the provisions hereof, or (ii) acquired in the public market on or
after the date of the Underwriting Agreement and there shall be no further
transfer except in accordance with the provisions hereof. For the purposes of
this paragraph, "immediate family" shall mean spouse, lineal descendant, father,
mother, brother or sister of the transferor.
The undersigned hereby waives any rights of the undersigned to sell shares of
Common Stock or any other security issued by the Company pursuant to the
Registration Statement, and acknowledges and agrees that for a period of 180
days from the effective date of the Registration Statement the undersigned has
no right to require the Company to register under the Securities Act of 1933, as
amended, such Common Stock or other securities issued by the Company and
beneficially owned by the undersigned.
The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of Common Stock or other securities of the Company held by
the undersigned except in compliance with this agreement. If the Offering does
not close by September 1, 2001, this Lock-Up Agreement shall terminate
immediately upon such date and you will release the undersigned from its
obligations under this Lock-Up Agreement.
A-2
Very truly yours,
Dated:
---------------------- ------------------------------------
Signature
------------------------------------
Printed Name and Title
A-3
ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXX XXXX & XXXXXXXXX
NEW YORK COUNSEL FOR THE COMPANY
(i) Each of the Company and Xxxxxx Medical Technology, Inc. has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of Delaware.
(ii) All of the outstanding shares of capital stock (including the
Underwritten Stock and Option Stock, if any) of the Company conform in all
material respects to the description thereof contained in the Prospectus
under the caption "Description of Capital Stock." All of the outstanding
shares of such capital stock (including the Underwritten Stock and the
shares of Option Stock issued, if any) have been duly and validly
authorized and when issued and delivered to the Underwriters against
payment therefor, will be validly issued, fully paid and nonassessable. To
such counsel's knowledge, no preemptive rights of, or rights of refusal in
favor of, securityholders exist with respect to the Stock, pursuant to the
Company's amended and restated certificate of incorporation or bylaws. To
such counsel's knowledge, there are no contractual preemptive rights,
rights of first refusal or rights of co-sale which exist with respect to
the issue and sale of the Stock that have not been waived.
(iii) The Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or are pending. Any
required filing of the Prospectus pursuant to Rule 424(b) under the
Securities Act has been made within the time period required by Rule
424(b). The Prospectus may lawfully be used for the purposes specified in
the Securities Act in connection with the offer and sale of the Stock in
the manner specified therein.
(iv) The Registration Statement, as of the Effective Date, and the
Prospectus as of its date (except as to the financial statements, notes
thereto and schedules included 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 with the Rules and Regulations.
(v) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
(vi) The issue and sale by the Company of the shares of Stock sold
by the Company as contemplated by the Underwriting Agreement will not
conflict with, or result in a breach of, or constitute a default under,
the amended and restated certificate of incorporation or bylaws of the
Company or any of its domestic Subsidiaries or any agreement or instrument
to which the Company is a party filed as an exhibit to the Registration
Statement or any Federal or New York State law or regulation having
application generally to transactions involving issues and sales of the
type contemplated by the Underwriting Agreement or the General Corporation
Law of the State of
B-1
Delaware, except that such counsel need not express any opinion as to
securities or blue sky laws of the various states and the rules and
regulations of the National Association of Securities Dealers, Inc.
(vii) To such counsel's knowledge, all holders of securities of the
Company having rights to the registration of shares of Common stock, or
other securities, have waived such rights or such rights have expired by
reason of lapse of time following notification of the Company's intent to
file the Registration Statement.
(viii) No consent, approval, authorization or order of any Federal
or New York State court or governmental agency or body is required for the
consummation of the transactions contemplated in the Underwriting
Agreement, except such as have been obtained under the Securities Act and
such as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Stock by the
Underwriters.
(ix) The Stock issued and sold by the Company has been duly
authorized for listing by the Nasdaq National Market upon official notice
of issuance.
(x) To such counsel's knowledge, there are no franchises, contracts,
leases, documents, or legal, governmental or administrative proceedings,
pending or threatened, or laws, rules, regulations, orders or decrees
which in the opinion of such counsel are of a character required to be
described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement, which are not described or
filed as required.
(xi) Neither the Company nor Xxxxxx Medical Technology, Inc. is, nor
after giving effect to the offering and the sale of the Stock and the
application of the proceeds thereof as described in the Prospectus, will
be, an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(xii) The statements made in the Prospectus under the captions
"Business--Legal Proceedings, "Management--Employment Agreements,"
"Certain Transactions," "Description of Capital Stock" and "Shares
Eligible for Future Sale" insofar as such statements constitute a summary
of statutes, regulations, rules, legal matters, documents or proceedings
referred to therein, are accurate in all material respects and present
fairly the information required to be shown.
(xiii) The information required to be set forth in the Registration
Statement in answer to Items 9, 10 (insofar as it relates to such
counsel), 11(c) and 15 of Form S-1 is, to such counsel's knowledge,
accurately and adequately set forth therein in all material respects or no
response is required with respect to such Items and the description of the
Company's stock option plans and the options granted and which may be
granted thereunder and the options granted otherwise than under such plans
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to said plans and options to the extent
required by the Securities Act and the Rules and Regulations.
B-2
Such counsel shall state that no facts have come to their attention to
cause such counsel to believe that the Registration Statement, at the Effective
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, or that the Prospectus (except as to the financial
statements, related notes and schedules contained therein, as to which such
counsel need not express any opinion or belief) as of its date and as of the
Closing Date (or any later date on which Option Stock is purchased), contained
or contains any untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
The foregoing opinions shall be limited to matters involving the Federal
laws of the United States, the General Corporation Law of the State of Delaware
and the laws of the State of New York. Counsel rendering the foregoing opinion
may rely as to questions of law not involving the laws of the United States, the
State of New York or the General Corporation Law of the State of Delaware, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters.
B-3
ANNEX C
MATTERS TO BE COVERED IN THE OPINION OF XXXXX X. XXXX, ESQ.
GENERAL COUNSEL AND SECRETARY OF THE COMPANY
(i) Each of the Company and its domestic subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of Delaware, is duly qualified as a foreign corporation and
in good standing in each state of the United States of America in which
its ownership or leasing of property requires such qualification (except
where the failure to be so qualified would not have a Material Adverse
Effect), and has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement (except where the failure to have such power and authority would
not have a Material Adverse Effect). All the issued and outstanding
capital stock of the Company's domestic subsidiaries has been duly
authorized and validly issued and is fully paid and nonassessable, and is
owned by the Company free and clear of all liens, encumbrances and
security interests, and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in such
subsidiaries are outstanding.
(ii) The authorized capital stock of the Company consists of
shares of Preferred Stock, $.01 par value, of which there are
outstanding shares, and shares of Common Stock, $.01 par
value, of which there are outstanding shares (including the
Underwritten Stock plus the number of shares of Option Stock, if any,
issued on the date hereof); proper corporate proceedings have been taken
validly to authorize such authorized capital stock. All of the outstanding
shares of capital stock conform in all material respects to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock." All of the outstanding shares of such
capital stock (including the Underwritten Stock and the shares of Option
Stock issued, if any) have been duly and validly authorized and when
issued and delivered to the Underwriters against payment therefor, will be
validly issued, fully paid and nonassessable. No preemptive rights of, or
rights of refusal in favor of, securityholders exist with respect to the
Stock, pursuant to the Company's amended and restated certificate of
incorporation or bylaws. There are no contractual preemptive rights,
rights of first refusal or rights of co-sale which exist with respect to
the issue and sale of the Stock that have not been waived.
(iii) There are no franchises, contracts, leases, documents, or
governmental or administrative proceedings, pending or threatened, which
in the opinion of such counsel are of a character required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement, which are not described or filed as
required.
(iv) The issue and sale by the Company of the shares of Stock as
contemplated by the Underwriting Agreement will not conflict with, or
result in a breach of, or
C-1
constitute a default under, the Company's amended and restated certificate
of incorporation or bylaws or any of its subsidiaries or any agreement or
instrument to which the Company or any of its Subsidiaries is a party or
any applicable statute, law, rule or regulation, order, writ, injunction
or decree of any court or governmental agency or body, except where such
breach or default would not have a Material Adverse Effect.
(v) All holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, have waived
such rights or such rights have expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement.
(vi) Neither the Company nor any of its Subsidiaries is presently
(a) in violation of its respective certificate of incorporation or bylaws
and no default by the Company or any of its Subsidiaries exists in the due
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is described
or referred to in the Registration Statement or the Prospectus or filed as
an exhibit to the Registration Statement, or (b) in breach of any
applicable statute, rule or regulation known to such counsel or any order,
writ or decree of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries, or over any of
its properties or operations, except for any such violation, default or
breach, which would not result in a Material Adverse Effect.
(vii) The Company has adequate corporate power and authority to
enter into the Underwriting Agreement and to issue, sell and deliver to
the Underwriters the Stock to be issued and sold by it under the
Underwriting Agreement.
(viii) Other than as disclosed in the Registration Statement and the
Prospectus, there is no pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any of its
Subsidiaries is a party, or to which the property of the Company or any of
its Subsidiaries is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the properties
or assets thereof or the consummation of the transactions contemplated in
the Underwriting Agreement or the performance by the Company of its
obligations thereunder.
(ix) To the best of such counsel's knowledge, neither the Company
nor any of its Subsidiaries is infringing or otherwise violating any
intellectual property rights of others, and, to the best of such counsel's
knowledge, there are no infringements by others of the Company's or any of
its Subsidiaries' Intellectual Property rights.
Such counsel shall state that no facts have come to their attention to
cause such counsel to believe that the Registration Statement, at the Effective
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, or that the Prospectus (except as to the financial
C-2
statements, related notes and schedules contained therein, as to which such
counsel need not express any opinion or belief) as of its date and as of the
Closing Date (or any later date on which Option Stock is purchased), contained
or contains any untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
The foregoing opinions shall be limited to matters involving the Federal
laws of the United States, the General Corporation Law of the State of Delaware
and the laws of the State of Tennessee.
C-3
ANNEX D
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXX XXXX & XXXXXXXXX
FRENCH COUNSEL FOR THE COMPANY
(i) Each of 2Hip Holdings SAS, Xxxxxx Medical Europe SA, Xxxxxx
Cremascoli Orthotechnique SA and Cremascoli Ortho SA (collectively, the
"French Subsidiaries") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of France, is duly
qualified as a foreign corporation and in good standing in each
jurisdiction in which its ownership or leasing of property requires such
qualification (except where the failure to be so qualified would not have
a Material Adverse Effect), and has full corporate power and authority to
own or lease its properties and conduct its business as described in the
Prospectus and the Registration Statement; all the issued and outstanding
capital stock of each of the French Subsidiaries has been duly authorized
and validly issued and is fully paid and nonassessable, and is, to such
counsel's knowledge, owned, directly or indirectly, by the Company free
and clear of all liens, encumbrances and security interests, except that
shares of Xxxxxx Medical Europe SA and Cremascoli Ortho SA are pledged to
the Lenders under that certain Credit Agreement [dated as of December 7,
1999 among Xxxxxx Acquisition Holdings, Inc., Xxxxxx Medical Technolgy,
Inc., the Lenders party thereto, The Chase Manhattan Bank, Chase Manhattan
Bank, Paris Branch and Bank of America, N.A.] and to such counsel's
knowledge, no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in such Subsidiaries are
outstanding.
(ii) The issue and sale by the Company of the shares of Stock sold
by the Company as contemplated by the Underwriting Agreement will not
conflict with, or result in a breach of, the organizational documents of
any French Subsidiary or any agreement or instrument known to such counsel
to which any French Subsidiary is a party or any applicable French
statute, law, rule or regulation, or so far as is known to such counsel,
any order, writ, injunction or decree, of any jurisdiction in France, or
any French court or governmental agency or body.
(iii) No consent, approval, authorization or order of any French
court or governmental agency or body is required for the consummation of
the transactions contemplated in the Underwriting Agreement.
(iv) To such counsel's knowledge, there is not pending any action,
suit, proceeding, inquiry or investigation, to which or any French
Subsidiary is a party, except as disclosed in the Prospectus or to which
the property of any French Subsidiary is subject, before or brought by any
court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in the
D-1
Underwriting Agreement or the performance by the Company of its
obligations thereunder.
D-2
ANNEX E
MATTERS TO BE COVERED IN THE OPINION OF XXXXX, XXXXXX & XXXXXXXX
SPECIAL FDA REGULATORY COUNSEL FOR THE COMPANY
(i) To the best of such counsel's knowledge, the Company and each of its
Subsidiaries has made all material filings, applications and submissions
required as they relate to FDA approvals, clearances and authorizations, except
as described in the Registration statement and the Prospectus.
(ii) No consent, approval, authorization, clearance or order of the FDA is
required to be obtained by the Company or any of its Subsidiaries in connection
with the offer and sale by the Company of Stock as contemplated by the
Underwriting Agreement.
(iii) The offer and sale by the Company of the Stock as contemplated by
the Underwriting Agreement will not conflict with, or result in a breach of, the
U.S. Federal Food, Drug and Cosmetic Act (the "FDC Act"), the rules,
regulations, policies and guidelines promulgated by the FDA under the FDC Act.
(iv) To the best of such counsel's knowledge (except with respect to the
warning letter described in the Prospectus) there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any of its Subsidiaries is a party, or to which the property of the Company or
any of its Subsidiaries is subject, before or brought by the FDA or any U.S.
federal court or other governmental agency or body, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in the Underwriting Agreement
or the performance by the Company of its obligations thereunder.
Such counsel shall state that no facts have come to their attention
to cause such counsel to believe that the statements in the Prospectus under the
captions "Risk Factors - We are subject to substantial government regulation
that could have a material adverse effect on our business," "Risk Factors -
Modifications to our marketed devices may require FDA regulatory clearances or
approvals or require us to cease marketing or recall the modified devices until
such clearances or approvals are obtained," "Risk Factors - Our bio-orthopedics
business is subject to emerging government regulations that can significantly
impact our business, and the regulatory status of our ALLOMATRIX(TM) products is
uncertain," and "Business - Government Regulations," insofar as such statements
relate to FDA regulatory matters as of the date of the Prospective and as of the
date hereof (or as of any later date on which Option Stock is purchased)
contained or contains an untrue statement of a material fact omitted or omits to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
E-1
ANNEX F
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXX, EDELL, SHAPIRO, XXXXXX &
XXXXX, LLC
PATENT COUNSEL FOR THE COMPANY
(i) To such counsel's knowledge, the statements in the Registration
Statement and the Prospectus under the captions "Risk Factors--If our patents
and other intellectual property rights do not adequately protect our products,
we may lose market share to our competitors and may be unable to operate our
business properly" and "-- If we lose any existing or future intellectual
property lawsuits, a court counsel require us to pay significant damages or
prevent us from selling our products" and "Business--Intellectual Property" are
accurate and complete summaries of the matters set forth therein;
(ii) To such counsel's knowledge, except as set forth in the Prospectus,
there are no legal or governmental proceedings pending relating to patent
rights, trade secrets, trademarks, service marks or other proprietary
information or materials (collectively, "Intellectual Property") of the Company
or any of its Subsidiaries, and to such counsel's knowledge no such proceedings
are threatened or contemplated by governmental authorities or others;
(iii) Such counsel do not know of any contracts or other documents,
relating to governmental regulation affecting the Company or any of its
Subsidiaries or the Company's or any Subsidiary's, Intellectual Property of a
character required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the Prospectus that
are not filed or described as required;
(iv) To such counsel's knowledge, neither the Company nor any of its
Subsidiaries are infringing or otherwise violating any Intellectual Property
rights of others, and to such counsel's knowledge there are no infringements by
others of any of the Company's or any of its Subsidiaries Intellectual Property
rights which in the judgment of such counsel could affect materially the use
thereof by the Company or any such Subsidiary and to the best of such counsel's
knowledge, neither the Company nor any of its Subsidiaries has received any
written notice challenging the validity or enforceability of any patents which
in the judgment of such counsel could affect materially the use thereof by the
Company or any Subsidiary, except as described in the Prospectus;
(v) The Company and its Subsidiaries own the Intellectual
Property described in Schedule IV.
(vi) To such counsel's knowledge, the Company and its Subsidiaries own or
possess sufficient licenses or other rights to use all necessary to conduct the
business now being or proposed to be conducted by the Company and its
Subsidiaries as described in the Prospectus;
(vii) No security interest has been recorded in the Patent and Trademark
Office and, to such counsel's knowledge, is still extant (other than a security
interest granted to the Chase Manhattan Bank under the Company's U.S.
dollar-denominated Senior Credit facility).
F-1
(viii) To such counsel's knowledge, no interference has been declared with
respect to any of the U.S. patents and patent applications necessary to conduct
the business now being or proposed to be conducted by the Company and its
Subsidiaries as described in the Prospectus;
(ix) Such counsel is not aware of any facts that would lead such counsel
to conclude that any of the patents or patents for which applications have been
filed which are necessary to conduct the business now being or proposed to be
conducted by the Company and its Subsidiaries as described in the Prospectus
would be invalid;
(x) Such counsel is not aware of any material defects of form in the
preparation or filing of applications for patents which are necessary to conduct
the business now being or proposed to be conducted by the Company and its
Subsidiaries as described in the Prospectus and such applications are being
diligently pursued by the Company and its Subsidiaries; and
Such counsel shall also state that no facts have come to their attention
that cause such counsel to believe that the Registration Statement or the
Prospectus (i) contained or contains any untrue statement of a material fact
with respect to the Intellectual Property owned or used by the Company and its
Subsidiaries, or the manner of its use thereof, or any allegation on the part of
any person that the Company or any of its Subsidiaries is infringing any
Intellectual Property rights of any such person or (ii) omitted or omits to
state any material fact relating to Intellectual Property rights owned or used
by the Company or any of its Subsidiaries, or the manner of its use thereof, or
any allegation of which such counsel have knowledge, that is required to be
stated in the Registration Statement or the Prospectus or is necessary to make
the statements therein not misleading.
F-2
ANNEX G
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXX XXXX & XXXXXXXXX
SPECIAL COUNSEL FOR WARBURG PINCUS
(i) Warburg Pincus is the sole record owner of the Stock to be sold by it;
and delivery of the certificates for the Stock to be sold by Warburg Pincus
pursuant to the Underwriting Agreement, upon payment therefor by the
Underwriters, will pass good and valid title to such Stock to the Underwriters
and the Underwriters will acquire all the rights of Warburg Pincus in the Stock
(assuming the Underwriters have no knowledge of an adverse claim), free and
clear of any security interests, claims, liens or other encumbrances and
assuming that each Underwriter is otherwise a protected purchaser for purposes
of the Uniform Commercial Code. The Stock to be sold by Warburg Pincus has been
duly and validly authorized, validly issued, fully paid and nonassessable.
(ii) Warburg Pincus has adequate power and authority to enter into the
Underwriting Agreement and to sell and deliver to the Underwriters the Stock to
be sold by it under the Underwriting Agreement and to perform and discharge its
other obligations thereunder; and the Underwriting Agreement has been duly
authorized, executed and delivered by Warburg Pincus and (assuming due
authorization and delivery by the Underwriters and the Company) is a valid and
binding agreement of Warburg Pincus, enforceable in accordance with its terms
except insofar as indemnification and contribution provisions hereunder may be
limited by Federal or state securities laws, principles of public policy or
equitable principles and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(iii) The execution and delivery of the Underwriting Agreement and the
performance of the terms hereof and the consummation of the transactions herein
contemplated will not , to our knowledge, conflict with, or result in a breach
of, or constitute a default under, Warburg Pincus' Amended and Restated
Agreement of Limited Partnership dated as of June 11, 1998 among Warburg, Xxxxxx
& Co., a New York general partnership, as general partner, Xxxxxx X. Xxxxxxxxx
as the initial partner and the individuals and entities listed on Exhibit A
thereto, the Management Agreement dated as of June 11, 1998, between Warburg
Pincus and X.X. Xxxxxxx, Xxxxxx & Co., LLC or any applicable statute, law, rule
or regulation, order, writ, injunction or decree of any court or governmental
agency or body, except where such breach or default would not have a material
adverse effect or the ability of Warburg Pincus to perform its obligations under
the Underwriting Agreement.
G-1
