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FORM OF UNDERWRITING AGREEMENT
DRAFT 01/24/96
__________ Shares of Common Stock
KINETIC CONCEPTS, INC.
UNDERWRITING AGREEMENT
January ___, 1996
BEAR, XXXXXXX & CO. INC.
ALEX. XXXXX & SONS INCORPORATED
As Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned selling shareholders (the "Selling Shareholders") of
Kinetic Concepts, Inc., a Texas corporation (the "Company"), propose to sell to
the several Underwriters named in Schedule I hereto (the "Underwriters"),
__________ shares (the "Firm Shares") of Common Stock, par value $0.001 per
share (the "Common Stock"), of the Company. In addition, for the sole purpose
of over-allotments in connection with the sale of the Firm Shares, each of the
Selling Shareholders named in Schedule III hereto (together, the "Principal
Selling Shareholders"), propose to sell to the Underwriters, at the option of
the Underwriters, up to an additional __________ shares (the "Additional
Shares") of Common Stock. The Firm Shares and any Additional Shares purchased
by the Underwriters are herein referred to as the "Shares". The Shares are
more fully described in the Registration Statement referred to below.
1. Representations and Warranties of the Company and the Selling
Shareholders.
A. The Company represents and warrants to, and agrees
with, the several Underwriters that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and
may have filed an amendment or amendments thereto, on Form S-3 (No.
33-63957), for the registration of the Shares under the Securities Act
of 1933, as amended (the "Act"). Such registration statement,
including the prospectus, financial statements, and supporting
schedules thereto, exhibits and all other documents filed as a part
thereof, when it shall become effective pursuant to paragraph (b) of
Rule 430A of the Rules and Regulations under the Act (the
"Regulations"), is herein called the "Registration Statement"
and the prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the
Registration Statement at the time of effectiveness if no 424(b)
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filing is required, is herein called the "Prospectus". The term
"preliminary prospectus" as used herein means any preliminary
prospectus as described in Rule 430 of the Regulations. Any reference
herein to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on or before the effective date of the
Registration Statement, the date of such preliminary prospectus or the
date of the Prospectus, as the case may be, and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include (i) the filing of any document
under the Exchange Act after the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, which is incorporated therein by
reference, and (ii) any such document so filed.
(b) When the Registration Statement shall become
effective, when any amendment to the Registration Statement becomes
effective, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) of the Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission, and at the
Closing Date and the Additional Closing Date, if any (each as
hereinafter defined), the Registration Statement and the Prospectus,
and any amendments thereof and supplements thereto, will comply in all
material respects with the applicable provisions of the Act and the
Exchange Act and the respective rules and regulations thereunder and
does not or will not contain an untrue statement of a material fact
and does not or will not omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein: (i) in the case of the Registration Statement, not
misleading, and (ii) in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading. When any
related preliminary prospectus was first filed with the Commission
(whether filed as part of the Registration Statement for the
registration of the Shares or any amendment thereto or pursuant to
Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements
thereto complied in all material respects with the applicable
provisions of the Act and the Exchange Act and the respective rules
and regulations thereunder and did not contain an untrue statement of
a material fact and did not omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted
from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto
in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through you
as herein stated or by or on behalf of any Selling Shareholder insofar
as it relates to such Selling Shareholder, in each case expressly for
use in connection with the preparation thereof.
(c) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission under the Exchange Act, no
such document when it was or is filed, and, when read together with
the other information in the Prospectus, at the time the Registration
Statements and any amendments thereto became effective and at the
Closing Date and the Additional Closing Date, if any, did not and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
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the statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) KPMG Peat Marwick LLP, who have certified the
financial statements and supporting schedules thereto included in the
Registration Statement, and whose report is filed with the Commission
as a part of the Registration Statement, are independent public
accountants with regard to the Company as required by the Act and the
Regulations.
(e) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as set forth in the Registration Statement and the Prospectus,
there has not been any material adverse change or any development
involving a prospective material adverse change in the business,
prospects, properties, operations, condition (financial or otherwise)
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 the date of the latest balance sheet in
the Registration Statement and the Prospectus, none of the Company or
any of its subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, which are material to the Company
and its subsidiaries taken as a whole, except for liabilities or
obligations which were incurred or undertaken in the ordinary course
of business or are reflected in the Registration Statement and the
Prospectus. Subsequent to the dates as of which information is given
in the Registration Statement and the Prospectus, except as disclosed
therein, there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
capital stock or the long-term indebtedness of the Company, or any
material increase in short-term indebtedness of the Company or any of
its subsidiaries or any payment of or declaration to pay any dividends
or any other distribution with respect to the capital stock of the
Company.
(f) The Company has the requisite corporate power and
authority necessary to enter into and perform its obligations under
this Agreement. This Agreement and the transactions contemplated
hereby have been duly and validly authorized by the Company, and this
Agreement has been duly and validly executed and delivered by the
Company and, assuming the execution and delivery by the other parties
hereto, is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditor's rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and as limited by the unenforceability
under certain circumstances under law or court decisions of provisions
providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is
contrary to public policy.
(g) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby
will not (i) conflict with or result in a breach of any of the terms
and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) or
require consent under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to the terms of, any agreement,
instrument, franchise, license or permit to which the Company or any
of its subsidiaries is a party or by which any of such corporations or
their respective properties or assets may be bound, except for any
such conflict, breach, default, event, lien, charge or encumbrance
which, either individually or in the aggregate, could not reasonably
be expected to have a material adverse effect on the
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business, prospects, properties, operations, condition (financial or
otherwise) or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), (ii)
violate or conflict with any provision of any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental
or regulatory agency or body, including without limitation, the United
States Food and Drug Administration (the "FDA") and the United States
Health Care Financing Administration (the "HCFA"), having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties or assets, or (iii) violate or conflict with any provision
of the articles of incorporation or bylaws of the Company or the
articles or certificate of incorporation, bylaws or other
organizational document of any of its subsidiaries, except with
respect to any of the violations or conflicts listed in clauses (i)
and (ii) any such violation or conflict which, either individually or
in the aggregate, could not reasonably expected to result in a
Material Adverse Effect. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body
including, without limitation, the FDA and the HCFA, having
jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets is required for the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including the sale and delivery of
the Shares to be sold and delivered by the Selling Shareholders
hereunder, except (i) the registration under the Act of the Shares,
(ii) such consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters, and (iii) for those
failures to so obtain or make which could not reasonably be expected,
either individually or in the aggregate, to have a Material Adverse
Effect.
(h) All of the outstanding shares of Common Stock of the
Company are duly and validly authorized and issued, fully paid and
nonassessable and were not issued in violation of or subject to any
preemptive or similar rights. The Company had, at September 30, 1995,
an authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus. The Common Stock, the Firm
Shares and the Additional Shares conform to the descriptions thereof
contained in the Registration Statement and the Prospectus. Except as
set forth in the Prospectus, there are no outstanding rights, warrants
or options to acquire, or instruments convertible into or exchangeable
for, or agreements or understandings with respect to the sale or
issuance of, any shares of capital stock or other equity interest in
the Company or any of its subsidiaries.
(i) All of the Company's direct and indirect subsidiaries
are listed in Exhibit 21 to the Registration Statement. Each of the
Company and its subsidiaries has been duly organized and is validly
existing as a corporation or limited liability company, as the case
may be, in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries is duly
qualified and in good standing as a foreign corporation or limited
liability company, as the case may be, in each jurisdiction in which
the character or location of its properties (owned, leased or
licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified
or in good standing which are not, either individually or in the
aggregate, reasonably expected to have a Material Adverse Effect.
Each of the Company and its subsidiaries has all requisite power and
authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses and permits of and
from all public, regulatory or governmental agencies and bodies
including, without limitation, the FDA and the HCFA, to own, lease and
operate its properties and conduct its business as now being conducted
as described in the Registration Statement and the Prospectus,
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except for those failures to so obtain which could not reasonably be
expected, either individually or in the aggregate, to have a Material
Adverse Effect, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially
burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.
(j) Except as described in the Prospectus, there is no
litigation or governmental proceeding to which the Company or any of
its subsidiaries is a party or to which any property of the Company or
any of its subsidiaries is subject or which is pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries which, either individually or in the aggregate, is
reasonably expected to have a Material Adverse Effect or which is
required to be disclosed in the Registration Statement and the
Prospectus.
(k) The Company has not taken and will not take, directly
or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation (in each case as such terms are defined
in the Exchange Act and the rules and regulations promulgated
thereunder) of the price of the shares of Common Stock to facilitate
the sale or resale of the Shares. Except as permitted by the Act, the
Company has not distributed any Registration Statement, preliminary
prospectus, Prospectus or other offering material in connection with
the offering and sale of the Shares.
(l) The financial statements, including the notes
thereto, and supporting schedules included in or incorporated by
reference into the Registration Statement and the Prospectus present
fairly the consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the consolidated results of
operations for the periods specified; except as otherwise stated in
the Registration Statement, said financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis, and the supporting schedules included
in the Registration Statement present fairly the information required
to be stated therein.
(m) Except as described in the Prospectus, no holder of
securities of the Company has any rights to the registration of
securities of the Company because of the filing of the Registration
Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(n) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration
as an "investment company" under the Investment Company Act of 1940.
(o) Except for the delinquent filing of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1994, the conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied. The Company has contacted
the Commission with respect to such delinquent filing and, based upon
discussions with staff members of the Commission, the Company has no
reason to believe that, as a result of such delinquent filing, the
Commission would require the Company to use any form other than Form
S-3 in connection with the sale of the Shares pursuant to this
Agreement.
(p) No stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of any
preliminary prospectus or Prospectus has been issued and
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no proceedings for that purpose have been commenced or are pending
before or to the knowledge of the Company are contemplated by the
Commission. No stop order suspending the sale of the Shares in any
jurisdiction designated by the Underwriters has been issued and no
proceedings for that purpose have been commenced or are pending or to
the knowledge of the Company are contemplated.
(q) There are no contracts, indentures, mortgages, loan
agreements, leases or other instruments or documents of the Company or
any of its subsidiaries that are required to be described or referred
to in the Registration Statement or to be filed as exhibits thereto or
in or to any of the documents incorporated by reference therein by the
Act, the Exchange Act or by the rules and regulations thereunder,
other than those described or referred to therein or filed as exhibits
thereto.
(r) The financial information of the Company and its
subsidiaries set forth in the Prospectus under the captions
"Prospectus Summary -- Summary Historical and Pro Forma Consolidated
Financial Data", "Capitalization", "Selected Consolidated Financial
Data", and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" has been fairly stated in all
material respects in relation to the relevant financial statements of
the Company and its subsidiaries from which such information has been
derived.
(s) The pro forma financial information and the related
notes thereto included in the Registration Statement have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements, have been properly compiled
on the pro forma bases described therein and, in the opinion of the
Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are reasonable and
appropriate to give effect to the transactions and circumstances
referred to therein.
(t) All of the issued and outstanding shares of capital
stock of or other ownership interest in each subsidiary of the Company
have been duly authorized and validly issued are fully paid and
nonassessable and were not issued in violation of or subject to any
preemptive or similar rights and are owned by the Company directly or
through its subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or other restriction on
transferability or voting or other defects of title whatsoever and
except as set forth in the Prospectus there are no outstanding rights,
warrants or options to acquire, or instruments convertible into or
exchangeable for or agreements or understandings with respect to the
sale of or issuance of any shares of capital stock or other equity
interest in any such subsidiary.
(u) None of the Company or any of its subsidiaries is in
violation of its charter or bylaws or is in default in any respect in
the performance of any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or in
any indenture, mortgage, deed of trust or any other agreement or
instrument to which the Company or any of its subsidiaries or their
respective properties or assets are subject and which default, either
individually or in the aggregate, is reasonably expected to have a
Material Adverse Effect or which is required to be disclosed in the
Registration Statement and the Prospectus. There exists no condition
that with notice, the passage of time or otherwise, would constitute a
default under any such document or instrument and which, either
individually or in the aggregate, is reasonably expected to have a
Material Adverse Effect or which is required to be disclosed in the
Registration Statement and the Prospectus. Each of the Company and
its subsidiaries is in compliance with all local, state and federal
laws, ordinances and regulations (including
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environmental laws) applicable to its properties (whether owned or
leased) and its business including, without limitation, those relating
to reimbursement by government agencies and fraudulent or wrongful
xxxxxxxx, except for such instances of non-compliance which, either
individually or in the aggregate, are not reasonably expected to have
a Material Adverse Effect.
(v) Each of the Company and its subsidiaries possesses
such certificates, authorizations, licenses or permits issued by the
appropriate local, state, federal or foreign regulatory agencies or
bodies including, without limitation, the FDA and the HCFA, as are
material to, or legally required for, the operation of its business.
None the Company or any of its subsidiaries has received any notice of
proceedings relating to, or otherwise has knowledge that any
governmental body or agency, including, without limitation, the FDA
and the HCFA, is considering, limiting, suspending, modifying or
revoking any such certificate authority, license or permit. The
descriptions in the Registration Statement and the Prospectus of
local, state, federal or foreign statutes, laws, ordinances and
regulations governing the Company and its subsidiaries and their
businesses, including any proposed amendments or additions to any such
statutes, laws, ordinances or regulations including, without
limitation, those administered or promulgated by the FDA and the HCFA,
are accurate in all material respects and fairly present the
information required to be shown therein. None of the Company or any
of its subsidiaries has received any notice of or otherwise has
knowledge that any governmental body or agency is considering
enacting, amending or repealing any such statutes, laws, ordinances or
regulations required to be described in the Registration Statement and
the Prospectus that are not so described as required.
(w) Except as set forth in the Prospectus, each of the
Company and its subsidiaries is in compliance with, and has and will
have all necessary permits or authorizations to conduct is business as
required under, all applicable existing federal, state and local laws
and regulations relating to protection of human health or the
environment or imposing liability or standards of conduct concerning
any Hazardous Material ("Environmental Laws"), except for such
instances of noncompliance which, either individually or in the
aggregate, are not reasonably expected to have a Material Adverse
Effect. The term "Hazardous Material" means (a) any "hazardous
substance" as defined by the comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (b) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act, as
amended, (c) any petroleum or petroleum fraction or product, (d) any
polychlorinated biphenyl and (e) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any Environmental Law.
(x) Except as set forth in the Prospectus, there is no
alleged liability, or to the knowledge of the Company, potential
liability (including, without limitation, alleged or potential
liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal
injuries or penalties) of the Company or any of its subsidiaries
arising out of, based upon or resulting from (i) the presence or
release into the environment of any Hazardous Material at any
location, whether or not owned by the Company or any of its
subsidiaries, or (ii) any violation or alleged violation of any
Environmental Law (A) which alleged or potential liability is required
to be disclosed in the Registration Statement or the Prospectus, other
than as disclosed, therein, or (B) which alleged or potential
liability, either individually or in the aggregate, is reasonably
expected to have a Material Adverse Effect.
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(y) None of the Company or any of its subsidiaries is
involved in any material labor dispute or, to the knowledge of the
Company, is any such dispute threatened.
(z) Except as described in the Prospectus, each of the
Company and its subsidiaries own, have the right to use or possess the
material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
the "Intellectual Property") presently employed by them in connection
with the business now operated by them and none of the Company or any
of its subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to the foregoing
which, either individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected
to have a Material Adverse Effect. The use of such Intellectual
Property in connection with the business and operations of the Company
and its subsidiaries does not infringe on the rights of any person
which could in any such circumstance reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect.
(aa) There are no material Medicare, Medicaid or any other
managed care recoupment or recoupments of any third-party payor being
sought, requested, claimed or, to the knowledge of the Company,
threatened, against the Company or any of its subsidiaries.
(ab) The Common Stock currently outstanding is listed on
the National Association of Securities Dealers, Inc. Automated
Quotation National Market System ("NASDAQ").
B. Each Selling Shareholder severally represents and
warrants to, and agrees with, the several Underwriters that:
(a) Each Selling Shareholder has (i) caused a
certificate or certificates for the number of Shares to be sold by
each Selling Shareholder hereunder to be delivered to Xxxxxx X. Xxxx,
Esq. in his capacity as custodian (the "Custodian") under the Custody
Agreement (as defined below), endorsed in blank or with blank stock
powers duly executed and with signatures appropriately guaranteed by a
member firm of the New York Stock Exchange or commercial bank, such
certificate or certificates to be held in the custody of the Custodian
in accordance with the terms of the Custody Agreement for delivery
pursuant to the provisions hereof on the Closing Date or the
Additional Closing Date, if any, as the case may be, and (ii) granted
an irrevocable power of attorney to Xxxxx X. Xxxxxxxxx, M.D. and Xxxxx
X. Xxxxxxxxx, M.D., and either of them, as such Selling Shareholder's
attorney-in-fact (the "Attorney-In-Fact") in the form attached hereto
as Exhibit A (the "Power of Attorney", and together with the Power of
Attorney executed by each other Selling Shareholder and the Custody
Agreement in the form attached hereto as Exhibit B, the "Custody
Agreement").
(b) The execution, delivery and performance of this
Agreement and the Custody Agreement on behalf of each Selling
Shareholder and the consummation of the transactions contemplated
hereby and thereby will not (i) conflict with or result in the breach
of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a
default) or require consent under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of such Selling Shareholder pursuant to the terms of, any
agreement, instrument, franchise, license or permit to which such
Selling Shareholder is a party or by which such Selling Shareholder or
any of such
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Selling Shareholder's property or assets may be bound, including,
without limitation, the terms of any trust or similar agreement under
which any such Selling Shareholder was formed, or (ii) violate or
conflict with any judgment, decree, order, statute, rule or regulation
of any court or any public, governmental or regulatory agency or body
having jurisdiction over such Selling Shareholder or such Selling
Shareholder's properties or assets.
(c) Each Selling Shareholder has, and at the time of
delivery of the Shares to be sold by such Selling Shareholder such
Selling Shareholder will have, full legal right, power, authority and
capacity, and, except as required under the Act and state securities
and Blue Sky laws, all necessary consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses and permits
of and from all public, regulatory or governmental agencies and
bodies, as are required for the execution, delivery and performance of
this Agreement, the Custody Agreement, and the consummation of the
transactions contemplated hereby and thereby, including the sale,
assignment, transfer and delivery of the Shares to be sold, assigned,
transferred and delivered by such Selling Shareholder hereunder.
(d) This Agreement and the Custody Agreement have been
duly and validly authorized, executed and delivered by such Selling
Shareholder and, assuming the execution and delivery by the other
parties hereto and thereto, are valid and binding obligations of such
Selling Shareholder, enforceable against such Selling Shareholder in
accordance with its respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditor's rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
as limited by the unenforceability under certain circumstances under
law or court decisions of provisions providing for the indemnification
of or contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy.
(e) Each Selling Shareholder has good, valid and
marketable title to the Shares to be sold by such Selling Shareholder
pursuant to this Agreement, free and clear of all liens, encumbrances,
adverse claims, security interests, restrictions on transfer,
shareholders' agreements, voting trusts, options and other defects in
title whatsoever, with full power to deliver such Shares hereunder,
and, upon the delivery of and payment for such Shares as herein
contemplated, each of the Underwriters will receive good, valid and
marketable title to the Shares purchased by it from such Selling
Shareholder, free and clear of all liens, encumbrances, adverse
claims, security interests, restrictions on transfer, shareholders'
agreements, voting trusts, options and other defects in title
whatsoever.
(f) Each Selling Shareholder has not taken and will not
take, directly or indirectly, any action which has constituted or
which was designed to constitute or which might be reasonably expected
to cause or result in stabilization or manipulation (in each case as
such terms are defined in the Exchange Act and the rules and
regulations promulgated thereunder) of the price of the shares of
Common Stock.
(g) When the Registration Statement shall become
effective, when any amendment to the Registration Statement becomes
effective, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) of the Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission, and at the
Closing Date or the Additional Closing Date, if any, such parts of the
Registration Statement and the Prospectus and any amendments thereof
and supplements thereto as relate to such Selling Shareholder and are
based upon
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information furnished in writing to the Company by or on behalf of
such Selling Shareholder expressly for use therein will not contain an
untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein: (i) in the case of the Registration
Statement, not misleading, and (ii) in the case of the Prospectus, in
light of the circumstances under which they were made, not misleading.
When any related preliminary prospectus was first filed with the
Commission (whether filed as part of the Registration Statement for
the registration of the Shares or any amendment thereto or pursuant to
Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such parts of
such preliminary prospectus and any amendments thereof and supplements
thereto as relate to such Selling Shareholder and are based on
information furnished in writing to the Company by or on behalf of
such Selling Shareholder expressly for use therein did not contain an
untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(h) Except as described in the Registration Statement and
the Prospectus, each Selling Shareholder (i) does not have any
preemptive right, co-sale right or right of first refusal or other
similar right to purchase any of the Shares that are to be sold by any
of the other Selling Shareholders to the Underwriters pursuant to this
Agreement, and (ii) does not own any warrants, options or similar
rights to acquire, and does not have any right or arrangement to
acquire, any capital stock, rights, warrants, options or other
securities from the Company.
(i) Except as described in the Registration Statement and
the Prospectus, each Selling Shareholder does not possess any
registration rights with respect to any securities of the Company.
2. Purchase, Sale and Delivery of the Shares. On the basis of
the representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Selling Shareholders
agree to sell to the several Underwriters, and the Underwriters, severally and
not jointly, agree to purchase from the Selling Shareholders, at $___________
per share, the number of Firm Shares set forth opposite the respective names of
the Underwriters in Schedule I hereto. The number of Firm Shares to be sold by
each Selling Shareholder to each Underwriter shall be the number which bears
the same proportion to the total number of Firm Shares to be sold by such
Selling Shareholder, as specified in Schedule II hereto, as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I bears to
the total number of Firm Shares to be sold by the Selling Shareholders, subject
to such adjustments to eliminate any fractional shares as you in your sole
discretion shall make. The Selling Shareholders will have no obligation to
sell to the Underwriters any of the Firm Shares hereunder unless the
Underwriters purchase all of the Firm Shares hereunder. None of the Selling
Shareholders shall be obligated to deliver any of the Shares except upon
payment for all of the Shares then to be purchased hereunder or as hereinafter
provided.
Delivery of certificates and payment of the purchase price for the
Firm Shares shall be made at the offices of Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 10:00 A.M., New York
time, on the fourth full business day following the determination of the
purchase price pursuant to this Section 2 (unless such time and date are
postponed in accordance with the provisions of Section 9 hereof), or at such
other time as shall be agreed upon by you and the Company. The time and date
of such delivery and payment are herein called the "Closing Date". Delivery of
the certificates for the Firm
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Shares shall be made to you for the respective accounts of the several
Underwriters against payment by the several Underwriters through Bear, Xxxxxxx
& Co. Inc. ("Bear Xxxxxxx") and Xxxx. Xxxxx & Sons Incorporated, as
representatives for the several Underwriters (together, the "Representatives"),
of the purchase price for the Firm Shares to the order of the Custodian by
certified or official bank checks, payable in New York Clearing House funds or
similar next day funds.
Certificates for the Firm Shares shall be registered in such name or
names and in such authorized denominations as you may request in writing at
least two full business days prior to the Closing Date. The Selling
Shareholders shall permit you to examine and package such certificates for
delivery at least one full business day prior to the Closing Date.
In addition, the Principal Selling Shareholders hereby grant to the
several Underwriters the option to purchase up to __________ Additional Shares
at the same purchase price per share to be paid by the several Underwriters to
the Selling Shareholders for the Firm Shares as set forth in this Section 2,
for the sole purpose of covering over- allotments in the sale of Firm Shares by
the several Underwriters. This option may be exercised at any time (but not
more than once) on or before the thirtieth day following the effective date of
the Registration Statement, by written notice by you to the Custodian. Such
notice shall set forth the aggregate number of Additional Shares as to which
the option is being exercised and the date and time, as reasonably determined
by you, when the Additional Shares are to be delivered (such date and time
being herein sometimes referred to as the "Additional Closing Date"); provided,
however, that the Additional Closing Date shall not be earlier than the Closing
Date or earlier than the second full business day after the date on which the
option shall have been exercised nor later than the eighth full business day
after the date on which the option shall have been exercised (unless such time
and date are postponed in accordance with the provisions of Section 9 hereof).
Certificates for the Additional Shares shall be registered in such name or
names and in such authorized denominations as you may request in writing at
least two full business days prior to the Additional Closing Date. The
Principal Selling Shareholders will permit you to examine and package such
certificates for delivery at least one full business day prior to the
Additional Closing Date.
The number of Additional Shares to be sold by each Principal Selling
Shareholder to each Underwriter shall be the number which bears the same
proportion to the total number of Additional Shares being sold by such
Principal Selling Shareholder, as specified in Schedule III hereto, as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number increased as set forth in Section 9 hereof)
bears to the total number of Firm Shares to be sold by the Selling
Shareholders, subject to such adjustments to eliminate any fractional shares as
you in your sole discretion shall make.
Payment for the Additional Shares shall be made by certified or
official bank checks in New York Clearing House or similar next day funds,
payable to the order of the Custodian, at the offices of Bear, Xxxxxxx & Co.
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as may
be mutually acceptable, upon delivery of the certificates for the Additional
Shares to you for the respective accounts of the Underwriters.
3. Offering. It is understood that after the Registration
Statement becomes effective, the several Underwriters propose to offer the
Shares for sale to the public as set forth in the Prospectus.
4. Covenants of the Company and the Selling Shareholders.
A. The Company covenants and agrees with the several Underwriters
that:
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(a) If the Registration Statement has not yet been
declared effective, the Company will use its reasonable best efforts
to cause the Registration Statement and any amendment thereof to
become effective as promptly as possible, and if Rule 430A is used or
the filing of the Prospectus is otherwise required under Rule 424(b),
the Company will file the Prospectus (properly completed if Rule 430A
has been used) pursuant to Rule 424(b) within the prescribed time
period and will provide evidence satisfactory to you of such timely
filing. The Company will notify you promptly (i) when, prior to the
termination of the offering of the Shares, the Registration Statement
and any amendments thereto become effective, (ii) of any request by
the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for any additional information, (iii)
of the mailing or the delivery to the Commission for filing of any
amendment of or supplement to the Registration Statement or the
Prospectus, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, (v) of the receipt of any
comments from the Commission, and (vi) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or any
notification of the initiation or threatening of any proceeding for
that purpose. If the Commission shall propose or enter a stop order
at any time, the Company will make every reasonable effort to prevent
the issuance of any such stop order and, if issued, to obtain the
lifting of such order as soon as possible. The Company will not file
any amendment to the Registration Statement or any amendment of or
supplement to the Prospectus (including the prospectus required to be
filed pursuant to Rule 424(b)) before or after the effective date of
the Registration Statement or file any document under the Exchange Act
if such document would be deemed to be incorporated by reference into
the Prospectus to which you shall reasonably object in writing after
being timely furnished in advance a copy thereof; provided, however,
that if the Company is advised in writing by its counsel or its
independent auditors that, in the opinion of such advisor, such
amendment is required under applicable law, the Company may file such
amendment notwithstanding the reasonable objection of the
Underwriters.
(b) If at any time when a prospectus relating to the
Shares is required to be delivered under the Act any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be
necessary at any time to amend or supplement the Prospectus or
Registration Statement to comply with the Act or the Regulations, or
to file under the Exchange Act so as to comply therewith and the rules
and regulations thereunder any document incorporated by reference in
the Registration Statement or the Prospectus or in any amendment
thereof or supplement thereto, the Company will notify you promptly
and prepare and file with the Commission an appropriate amendment or
supplement (in form and substance satisfactory to you) which will
correct such statement or omission or which will effect such
compliance and the Company will use its reasonable best efforts to
have any amendment to the Registration Statement declared effective as
soon as possible.
(c) The Company will promptly deliver to you two signed
copies of the Registration Statement, including exhibits and all
documents incorporated by reference therein and all amendments
thereto, and the Company will promptly deliver to each of the several
Underwriters such number of copies of any preliminary prospectus, the
Prospectus, the Registration Statement, all amendments of and
supplements to such documents, if any, and all documents incorporated
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by reference in the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, without exhibits, as you may
reasonably request.
(d) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time the Registration
Statement becomes effective, to qualify the Shares for offering and
sale under the securities laws relating to the offering or sale of the
Shares of such jurisdictions as you may designate and to maintain such
qualification in effect for so long as required for the distribution
thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute
a general consent to service of process in any such jurisdiction.
(e) The Company will make generally available (within the
meaning of Section 11(a) of the Act) to its security holders and to
you as soon as practicable, but not later than 45 days after the end
of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs, an earnings
statement (which need not be audited but which shall satisfy the
provisions of Rule 158 of the Regulations) covering a period of at
least twelve consecutive months beginning after the effective date of
the Registration Statement.
(f) During a period of 180 days from the date of the
Prospectus, the Company will not, without your prior written consent,
issue, sell, offer or agree to sell, or otherwise dispose of, directly
or indirectly, any Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock), except for the
Company's issuance of Common Stock upon the exercise of presently
outstanding stock options or warrants, and the Company will obtain the
undertaking of each of its executive officers and directors (other
than executive officers and directors who are Selling Shareholders and
thus subject to the provisions of Section 4.B. below), not to engage
in any of the aforementioned transactions on their own behalf for a
period of 90 days after the date of the Prospectus, without your prior
written consent.
(g) During a period of three years from the effective
date of the Registration Statement, the Company will furnish to the
Representatives copies of (i) all reports to its shareholders and (ii)
all reports, financial statements and proxy or information statements
filed by the Company with the Commission, the National Association of
Securities Dealers, Inc. (the "NASD"), or any national securities
exchange.
(h) The Company, during the period when the Prospectus is
required to be delivered under the Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to
Sections 13, 14 and 15 of the Exchange Act and the rules and
regulations thereunder within the time periods required by the
Exchange Act and the rules and regulations thereunder.
B. Each Selling Shareholder covenants and agrees with the several
Underwriters that during a period of 180 days from the date of the Prospectus,
such Selling Shareholder will not, without your prior written consent, sell,
offer or agree to sell, or otherwise dispose of, directly or indirectly, any
Common Stock (or any securities convertible into, exercisable for or
exchangeable for Common Stock), except for the Shares offered pursuant to this
Agreement and the sale of Common Stock by Xxxxx X. Xxxxxxxxx, M.D. upon the
exercise of presently outstanding stock options granted by him.
5. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated:
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(a) The Company hereby agrees to pay all costs and expenses
hereunder in connection with (i) preparing, printing, duplicating,
filing (other than registration fees) and distributing the
Registration Statement, as originally filed and all amendments thereof
(including all exhibits thereto), any preliminary prospectus, the
Prospectus and any amendments thereof or supplements thereto, the
underwriting documents (including this Agreement, the Master Agreement
Among Underwriters by and among Bear Xxxxxxx and the other parties
thereto (the "Agreement Among Underwriters"), and the Master Selling
Agreement by and among Bear Xxxxxxx and the other Parties thereto (the
"Selling Agreement")) and all other documents related to the public
offering of the Shares (including those supplied to the Underwriters
in quantities as hereinabove stated), other than the fees and expenses
of counsel to the Company, the Underwriters and the Selling
Shareholders, (ii) the fees and expenses of accountants to the Company
and (iii) travel, lodging, meals and related road show expenses of the
Company and the Selling Shareholders, provided that clause (iii) of
this paragraph shall not obligate the Company to pay the travel,
lodging, meals and related road show expenses of the Underwriters.
(b) The Selling Shareholders, jointly and severally,
agree to pay all costs and expenses incident to the performance of the
obligations of the Selling Shareholders hereunder, and all expenses
incident to the performance of the obligations of the Company
hereunder, other than those set forth in Section 5(a) hereof,
including those in connection with (i) the fees and expenses of
counsel to the Company and the Selling Shareholders, (ii) the
issuance, transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the
qualification of the Shares under state or foreign securities or Blue
Sky laws, including the costs of printing and mailing a preliminary
and final "Blue Sky Survey" and the fees of counsel for the
Underwriters and such counsel's disbursements in relation thereto, and
(iv) the review of the terms of the public offering of the Shares by
the NASD and (v) registration fees in connection with filing the
Registration Statement with the Commission.
6. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Firm Shares and the
Additional Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
herein contained, as of the date hereof and as of the Closing Date (or in the
case of the Additional Shares as of the Additional Closing Date), to the
absence from any certificates, opinions, written statements or letters
furnished to you or to Xxxxxx & Xxxxxxx and Wolin, Fuller, Xxxxxx & Xxxxxx LLP
(together, "Underwriters' Counsel"), pursuant to this Section 6 of any
misstatement or omission, to the performance by the Company and the Selling
Shareholders of their respective obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:00 P.M., New York time, on the date of this
Agreement or at such later time and date as shall have been consented
to in writing by you, and, at or prior to the Closing Date and
Additional Closing Date, if any, as the case may be; if the Company
shall have elected to rely on Rule 430A of the Regulations, the
Prospectus shall have been filed with the Commission in a timely
fashion in accordance with Section 4(a) hereof; and no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the
Commission.
(b) At the Closing Date and the Additional Closing Date,
if any, as the case may be, you shall have received the opinion of Xxx
& Xxxxx Incorporated, counsel for the Company, or
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such other counsel as may be acceptable to the Representatives, dated
the Closing Date or the Additional Closing Date, as the case may be,
addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) Each of the Company, its significant
subsidiaries (as such term is defined in Rule 1- 02 of
Regulation S-X) and such other of its subsidiaries as
identified by the Underwriters has been duly organized and is
validly existing as a corporation or limited liability
company, as the case may be, in good standing under the laws
of its jurisdiction of incorporation or organization. Each of
the Company, its significant subsidiaries and such other of
its subsidiaries as identified by the Underwriters is duly
qualified and in good standing as a foreign corporation or
limited liability company, as the case may be, in each
jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary,
except for those failures to be so qualified or in good
standing which will not in the aggregate have a Material
Adverse Effect on the Company and its subsidiaries taken as a
whole. Each of the Company, its significant subsidiaries and
such other of its subsidiaries as identified by the
Underwriters has all requisite corporate authority to own,
lease and license its respective properties and conduct its
business as now being conducted and as described in the
Registration Statement and the Prospectus. All of the issued
and outstanding capital stock of each significant subsidiary
of the Company and such other of its subsidiaries as
identified by the Underwriters has been duly and validly
issued and is fully paid and nonassessable and free of
preemptive or similar rights and, to the best knowledge of
such counsel, is owned directly or indirectly by the Company,
free and clear of any lien, encumbrance, adverse claim,
security interest, restriction on transfer, shareholders'
agreement, voting trust or other defect of title whatsoever.
(ii) The Company has authorized capital stock as
set forth in the Registration Statement and the Prospectus.
All of the outstanding shares of Common Stock are duly and
validly authorized and issued, fully paid and nonassessable
and were not issued in violation of or subject to any
preemptive or similar rights. The Common Stock, the Firm
Shares and the Additional Shares conform to the descriptions
thereof contained in the Registration Statement and the
Prospectus.
(iii) The Common Stock currently outstanding,
including without limitation the Shares, is listed on NASDAQ.
(iv) This Agreement has been duly and validly
authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to
or affecting creditor's rights generally, by general equitable
principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and as limited
by the unenforceability under certain circumstances under law
or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to
a liability where such indemnification or contribution is
contrary to public policy.
(v) To the knowledge of such counsel, there is no
litigation or governmental or other action, suit, proceeding
or investigation before any court or before or by any
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public, regulatory or governmental agency or body including,
without limitation, the FDA and the HCFA, pending or
threatened against, or involving the properties or business
of, the Company or any of its subsidiaries, which, if resolved
against the Company or such subsidiary, individually or, to
the extent involving related claims or issues, in the
aggregate, is of a character required to be disclosed in the
Registration Statement and the Prospectus which has not been
properly disclosed therein.
(vi) The execution, delivery, and performance of
this Agreement and the consummation of the transactions
contemplated hereby by the Company will not (A) conflict with
or result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) or require
consent under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company, any of its significant subsidiaries or any of its
other subsidiaries as identified by the Underwriters pursuant
to the terms of, any agreement, instrument, franchise, license
or permit known to such counsel to which the Company, any of
its significant subsidiaries or any of its other subsidiaries
as identified by the Underwriters is a party or by which the
Company, any of its significant subsidiaries or any of its
other subsidiaries as identified by the Underwriters, or their
respective properties or assets may be bound or (B) violate or
conflict with any provision of the certificate of
incorporation or bylaws of the Company, any of its significant
subsidiaries or any of its other subsidiaries as identified by
the Underwriters, or, to the knowledge of such counsel, any
judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body
including, without limitation, the FDA and the HCFA, having
jurisdiction over the Company, any of its significant
subsidiaries or any of its other subsidiaries as identified by
the Underwriters, or any of their respective properties or
assets. To the knowledge of such counsel, no consent,
approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any
public, governmental, or regulatory agency or body including,
without limitation, the FDA and the HCFA, having jurisdiction
over the Company, any of its significant subsidiaries or any
of its other subsidiaries as identified by the Underwriters,
or any of their respective properties or assets is required
for the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby,
except for (1) such as may be required under state securities
or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which
such counsel need express no opinion) and (2) such as have
been made or obtained under the Act.
(vii) The Registration Statement and the Prospectus
and any amendments thereof or supplements thereto (other than
the financial statements and schedules and other financial and
statistical data included or incorporated by reference
therein, as to which no opinion need be rendered) when they
became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with
the requirements of the Act and the Regulations. The
documents filed under the Exchange Act and incorporated by
reference in the Registration Statement and the Prospectus and
in any amendment thereof or supplement thereto (other than the
financial statements and schedules and other financial and
statistical data included or incorporated by reference
therein, as to which no opinion need be rendered) when they
became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with
the Exchange Act and the rules and regulations thereunder.
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(viii) The Registration Statement is effective under
the Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or
any post-effective amendment thereof has been issued and no
proceedings therefor have been initiated or threatened by the
Commission and all filings required by Rule 424(b) of the
Regulations have been made.
(ix) The statements in the Prospectus under the
caption "Business -- Government Regulation" and "--
Reimbursement," insofar as such statements constitute a
summary of the matters referred to therein, fairly present the
information required to be presented by the Act or the
Regulations.
In addition, such opinion shall also contain a
statement that such counsel has participated in conferences
with officers and representatives of the Company,
representatives of the independent public accountants for the
Company and its subsidiaries, and the Underwriters at which
the contents of the Prospectus and related matters were
discussed and that, although such counsel is not passing upon
and does not assume any responsibility for the accuracy,
completeness or fairness of the Registration Statement and the
Prospectus, and any amendment thereof or supplement thereto
made prior to the Closing Date or the Additional Closing Date,
if any, as the case may be, except as specifically stated in
such counsel's opinion, on the basis of the foregoing (relying
as to materiality to a large extent upon the factual
information provided by the officers and other representatives
of the Company), no facts have come to the attention of such
counsel which would lead such counsel to believe that either
the Registration Statement at the time it became effective
(including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant
to Rule 430A(b), if applicable) (or any amendment thereof made
prior to the Closing Date or the Additional Closing Date, if
any, as the case may be, as of the date of such amendment)
contained an untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus as of the date thereof (or any amendment
thereof or supplement thereto made prior to the Closing Date
or the Additional Closing Date, as the case may be, as of the
date of such amendment or supplement) and of the Closing Date
and the Additional Closing Date, as the case may be, contained
an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion
with respect to the financial statements and schedules and
other financial and statistical data included or incorporated
by reference therein).
In rendering such opinion, such counsel may rely (A)
as to matters involving the application of laws other than the
laws of the United States and jurisdictions in which they are
admitted, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable
to Underwriters' Counsel, familiar with the applicable laws
and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and
certificates or other written statements of officers of
departments of various jurisdictions having custody of
documents respecting the corporate or limited liability
company existence, as the case may be, or good standing of the
Company and its subsidiaries,
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provided, that copies of any such statements or certificates
shall be delivered to Underwriters' Counsel. The opinion of
such counsel for the Company shall state that the opinion of
any such other counsel is in form satisfactory to such counsel
and, in their opinion, you and they are justified in relying
thereon.
(c) You shall have received, with respect to the Selling
Shareholders, at the Closing Date and, with respect to the Principal
Selling Shareholders, the Additional Closing Date, if any, as the case
may be, the opinion of Xxx & Xxxxx Incorporated, counsel for the
Selling Shareholders, dated the Closing Date or the Additional Closing
Date, as the case may be, addressed to the Underwriters and in form
and substance satisfactory to Underwriters' Counsel, to the effect
that:
(i) This Agreement and the Custody Agreement have
been duly and validly authorized, executed and delivered by or
on behalf of each Selling Shareholder or Principal Selling
Shareholder, as the case may be, and is a valid and binding
obligation of each Selling Shareholder or Principal Selling
Shareholder, as the case may be, enforceable against such
Selling Shareholder or Principal Selling Shareholder, as the
case may be, in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to
or affecting creditor's rights generally, by general equitable
principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and as limited
by the unenforceability under certain circumstances under law
or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to
a liability where such indemnification or contribution is
contrary to public policy.
(ii) To the knowledge of such counsel, each
Selling Shareholder or Principal Selling Shareholder, as the
case may be, has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits
of and from all courts and all public, governmental or
regulatory agencies and bodies as are required for the
execution, delivery and performance of this Agreement and the
Custody Agreement and the consummation of the transactions
contemplated hereby and thereby, except for (1) such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no
opinion) and (2) such as have been made or obtained under the
Act.
(iii) To the knowledge of such counsel, upon the
delivery of and payment for the Shares to be sold by the
Selling Shareholders or Principal Selling Shareholders, as the
case may be, pursuant to this Agreement as herein
contemplated, each of the Underwriters who is not aware of any
adverse claim with respect thereto and who is otherwise a bona
fide purchaser of the Shares subject to and within the meaning
of Section 8-306 of the [Texas] Uniform Commercial Code as in
effect on the date hereof, will receive all rights and
interests in and to the Shares purchased by it from the
Selling Shareholders or Principal Selling Shareholders, as the
case may be, free of any adverse claim.
(iv) The execution, delivery and performance of
this Agreement and the Custody Agreement by the Selling
Shareholders or Principal Selling Shareholders, as the case
may be, and the consummation of the transactions contemplated
hereby and thereby
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will not violate or conflict with, to the knowledge of such
counsel, any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over any of the
Selling Shareholders or Principal Selling Shareholders, as the
case may be, or any of their respective properties or assets.
(v) The statements in the Prospectus under the
caption "Principal and Selling Shareholders," insofar as such
statements constitute a summary of the matters referred to
therein, fairly present the information required to be
presented therein by the Act or the Regulations in all
material respects.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and jurisdictions in which they are admitted, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' Counsel) of other counsel
reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws and (B) as to matters of fact, to the extent they deem
proper, on certificates of, or certificates of responsible officers
of, the Selling Shareholders or Principal Selling Shareholders, as the
case may be, provided, that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel. The
opinions of such counsel for the Selling Shareholders or Principal
Selling Shareholders, as the case may be, shall state that the opinion
of any such other counsel is in form satisfactory to such counsel and,
in their opinion, you and they are justified in relying thereon.
(d) All proceedings taken in connection with the sale of
the Firm Shares and the Additional Shares as herein contemplated shall
be satisfactory in form and substance to you and to Underwriters'
Counsel, and the Underwriters shall have received from each
Underwriters' Counsel an opinion, dated as of the Closing Date and the
Additional Closing Date, if any, as the case may be, with respect to
the sale of the Shares, the Registration Statement and the Prospectus
and such other related matters as you may reasonably require, and the
Company and the Selling Shareholders or Principal Selling
Shareholders, as the case may be, shall have furnished to
Underwriters' Counsel such documents as they request for the purpose
of enabling them to pass upon such matters.
(e) At the Closing Date and Additional Closing Date, if
any, you shall have received a certificate of the President and Chief
Executive Officer, and the Senior Vice President and Chief Financial
Officer of the Company, dated the Closing Date or Additional Closing
Date, as the case may be, to the effect that the condition set forth
in subsection (a) of this Section 6 has been satisfied, that as of the
date hereof and as of the Closing Date or Additional Closing Date, as
the case may be, the representations and warranties of the Company set
forth in Section 1 hereof are accurate, and that as of the Closing
Date or the Additional Closing Date, as the case may be, the
obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and that subsequent to the respective
dates as to which information is given in the Registration Statement
and the Prospectus, the Company and its subsidiaries have not
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not
been any material adverse change, or any development involving a
material adverse change in the business, prospects, properties,
operations, condition (financial or otherwise), or results of
operations of
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the Company and its subsidiaries taken as a whole, or that is
reasonably expected to have a Material Adverse Effect, except in each
case as described in or contemplated by the Prospectus.
(f) At the Closing Date, you shall have received
certificates executed by each of the Selling Shareholders (or by the
Attorney-in-Fact on behalf of any such Selling Shareholder), dated the
Closing Date, to the effect that (i) if such certificate is executed
by the Selling Shareholder, the representations and warranties of such
Selling Shareholder set forth in Section 1 hereof are accurate, and
that as of the Closing Date, the obligations of such Selling
Shareholder to be performed hereunder on or prior thereto have been
duly performed and (ii) if such certificate is executed by the
Attoney-in-Fact, the best knowledge of the Attorney- in-Fact, the
representations and warranties of such Selling Shareholder set forth
in Section 1 hereof are accurate, and that as of the Closing Date, the
obligations of such Selling Shareholder to be performed hereunder on
or prior thereto have been duly performed.
(g) At the Additional Closing Date, if any, you shall
have received a certificate executed by each Principal Selling
Shareholder (or by the Attorney-in-Fact on behalf of any such
Principal Selling Shareholder), dated the Additional Closing Date, to
the effect that (i) if such certificate is executed by the Principal
Selling Shareholder, the representations and warranties of such
Principal Selling Shareholder set forth in Section 1 hereof are
accurate, and that as of the Additional Closing Date, the obligations
of such Principal Selling Shareholder to be performed hereunder on or
prior thereto have been duly performed and (ii) if such certificate is
executed by the Attoney-in-Fact, the best knowledge of the
Attorney-in-Fact, the representations and warranties of such Principal
Selling Shareholder set forth in Section 1 hereof are accurate, and
that as of the Additional Closing Date, the obligations of such
Principal Selling Shareholder to be performed hereunder on or prior
thereto have been duly performed.
(h) At the time this Agreement is executed and at the
Closing Date and Additional Closing Date, if any, as the case may be,
you shall have received a letter, from KPMG Peat Marwick LLP,
independent public accountants for the Company, dated, respectively,
as of the date of this Agreement and as of the Closing Date or
Additional Closing Date, as the case may be, or addressed to the
Underwriters and in form and substance satisfactory to you, to the
effect that: (i) they are independent certified public accountants
with respect to the Company within the meaning of the Act and the
Regulations and stating that the answer to Item 10 of the Registration
Statement is correct insofar as it relates to them; (ii) stating that,
in their opinion, the financial statements and schedules of the
Company included or incorporated by reference in the Registration
Statement, the preliminary prospectus and the Prospectus and covered
by their opinion therein comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Regulations, and the Exchange Act and the applicable published rules
and regulations thereunder; (iii) on the basis of procedures (but not
an examination made in accordance with generally accepted auditing
standards) consisting of a review of the latest available unaudited
interim consolidated financial statements of the Company and its
subsidiaries in accordance with professional standards for a review of
the unaudited consolidated financial statements of the Company, a
reading of the minutes of meetings and consents of the shareholders
and boards of directors of the Company and its subsidiaries and the
committees of such boards subsequent to December 31, 1994, to
inquiries of officers and other employees of the Company and its
subsidiaries who have responsibility for financial and accounting
matters of the Company and its subsidiaries with respect to
transactions and events subsequent to December 31, 1994, and other
specified procedures and inquiries to a date not more than five days
prior to the date of
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such letter, nothing has come to their attention that would cause them
to believe that (A) the unaudited consolidated financial statements
and schedules of the Company included or incorporated by reference in
the Registration Statement, the preliminary prospectus and the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Regulations, and
the Exchange Act and the applicable published rules and regulations
thereunder or that such unaudited consolidated financial statements
are not fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with
that of the audited consolidated financial statements included and
incorporated by reference in the Registration Statement, the
preliminary prospectus and the Prospectus, (B) with respect to the
period subsequent to December 31, 1994 there were, as of the date of
the most recent available monthly consolidated financial statements of
the Company and its subsidiaries, if any, and as of a specified date
not more than five days prior to the date of such letter, any changes
in the capital stock or long-term indebtedness of the Company or any
decrease in the net current assets or stockholders' equity of the
Company, in each case as compared with the amounts shown in the most
recent balance sheet included and incorporated by reference in the
Registration Statement, the preliminary prospectus and the Prospectus,
except for changes or decreases which the Registration Statement, the
preliminary prospectus and the Prospectus disclose have occurred or
may occur or which are set forth in such letter or (C) that during the
period from the date of the most recent balance sheet of the Company
included in the Registration Statement, the preliminary prospectus and
the Prospectus to the date of the most recent available monthly
consolidated financial statements of the Company and its subsidiaries,
if any, and to a specified date not more than five days prior to the
date of such letter, there was any decrease, as compared with the
corresponding period in the prior fiscal year, in total revenues, or
total or per share net income, except for decreases which the
Registration Statement, the preliminary prospectus and the Prospectus
disclose have occurred or may occur or which are set forth in such
letter; and (iv) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and earnings, and
other financial information pertaining to the Company and its
subsidiaries set forth in the Registration Statement, the preliminary
prospectus and the Prospectus, which have been specified by you prior
to the date of this Agreement, to the extent that such amounts,
numbers, percentages, and information may be derived from the general
accounting and financial records of the Company and its subsidiaries
or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings,
inquiries, and other appropriate procedures specified by you (which
procedures do not constitute an examination in accordance with
generally accepted auditing standards) set forth in such letter, and
found them to be in agreement.
(i) You shall have received from each person who is a
director or executive officer of the Company the "lock-up" agreements
described in Sections 4.A.(f) and 4.B hereof.
(j) Prior to the Closing Date and the Additional Closing
Date, if any, as the case may be, the Company and the Selling
Shareholders and the Principal Selling Shareholders, as the case may
be, shall have furnished to you such further information, certificates
and documents as you may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the
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Underwriters hereunder may be cancelled by you at, or at any time prior to, the
Closing Date and the obligations of the Underwriters to purchase the Additional
Shares may be cancelled by you at, or at any time prior to, the Additional
Closing Date, if any. Notice of such cancellation shall be given to the
Company and the Selling Shareholders and the Principal Selling Shareholders, as
the case may be, in writing, or by telephone and confirmed in writing.
7. Indemnification.
(a) The Company and Xxxxx X. Xxxxxxxxx, M.D. (the
"Indemnifying Selling Shareholder") jointly and severally agree to
indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter, within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, against any and all losses,
liabilities, claims and any and all expense whatsoever (including but
not limited to reasonable attorneys' fees and any and all expense
whatsoever as incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company and the Indemnifying
Selling Shareholder will not be liable in any such case to the extent,
but only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein
in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Underwriter through you
expressly for use therein; and provided, further, that with respect to
any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, the indemnity contained
in this Section 7(a) shall not inure to the benefit of any such
indemnified Underwriter, and the Company and the Indemnifying Selling
Shareholder shall not be liable to any such indemnified Underwriter,
from whom the person asserting any such losses, liabilities, claims,
damages or expenses purchased the Shares concerned to the extent that
any such losses, liabilities, claims, damages, or expenses of such
indemnified Underwriter results from the fact that there was not sent
or given to such person, at or prior to the written confirmation of
the sale of such Shares to such person, a copy of the Prospectus, as
the same may be amended or supplemented, within the time required by
the Act (if required thereby), and the untrue statements or the
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in such preliminary prospectus was
corrected in the Prospectus, unless such failure to deliver the
Prospectus was a result of noncompliance by the Company with its
obligations under Section 4.A(c) hereof. In addition, the Company and
each Selling Shareholder severally, and not jointly, agrees to
indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter, within the meaning of Section 15 under
the Act or Section 20(a) of the Exchange Act, as provided above, or
arise out of or are based in whole or in part on any inaccuracy in
their respective representations and warranties contained herein or
any failure of the Company or any of the Selling Shareholders to
perform their respective obligations hereunder or under applicable
law, but, in the case of any such loss, liability, claim, damage or
expense which arises out of or is based upon any such untrue statement
or alleged untrue statement or
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omission or alleged omission, only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance and in conformity with written information
furnished in writing to the Company by or on behalf of such Selling
Shareholder expressly for use in the Registration Statement, as
originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any supplement thereto or
amendment thereof. Notwithstanding any provisions in this Agreement
to the contrary, no Selling Shareholder shall be required to provide
indemnification hereunder for any losses, liabilities, claims, damages
or expenses arising solely out of, or based in whole or in part solely
on, any breach by the Company or any other Selling Shareholder of the
Company's or such other Selling Shareholder's representations,
warranties and covenants under this Agreement. This indemnification
obligation of the Indemnifying Selling Shareholder and the other
Selling Shareholders shall be limited to the net proceeds received by
the Indemnifying Selling Shareholder or other Selling Shareholder
(before deducting expenses) from the sale of the Indemnifying Selling
Shareholder's or other Selling Shareholders' Firm Shares and, in the
case of the Indemnifying Selling Shareholder, the Indemnifying Selling
Shareholder's Additional Shares. This indemnity agreement will be in
addition to any liability which the Company, the Indemnifying Selling
Shareholder and the other Selling Shareholders may otherwise have to
any Underwriter including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees
to indemnify and hold harmless the Company, each Selling Shareholder,
each of the directors of the Company, each of the officers of the
Company who shall have signed the Registration Statement, and each
other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any
claim or litigation), joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein;
provided, however, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discount
applicable to the Shares purchased by such Underwriter hereunder.
This indemnity will be in addition to any liability which any
Underwriter may otherwise have to the Company or any Selling
Shareholder including under this Agreement. The Company and each
Selling Shareholder acknowledge that the statements set forth in the
last paragraph of the cover page and in the first and third paragraphs
under the caption "Underwriting" in the Prospectus constitute the only
information furnished in writing by or on behalf of any Underwriter
expressly for use in the Registration Statement relating to the Shares
as originally filed or in any amendment thereof, any related
preliminary prospectus or the Prospectus or in any amendment
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thereof or supplement thereto, as the case may be, and the
Underwriters represent that such statements are true and correct in
all material respects as of the date hereof.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection,
notify each party against whom indemnification is to be sought in
writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it
may have under this Section 7 except to the extent that it has been
actually prejudiced in any material respect by such failure or from
any liability which it may have otherwise). In case any such action
is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent it may
elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own
counsel in any such case, provided, that the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties
unless (i) the employment of such counsel shall have been authorized
in writing by one of the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from
or additional to those available to one or all of the indemnifying
parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and
expenses of one such counsel and one local counsel for each
jurisdiction as considered necessary by the indemnified parties in
their reasonable judgment or as advised by counsel shall be borne by
the indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written
consent; provided, however, that such consent shall not be
unreasonably withheld.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7(a) hereof
is for any reason held to be unavailable from the Company or any Selling
Shareholder or is insufficient to hold harmless a party indemnified thereunder,
the Company, the Selling Shareholders and the Underwriters shall contribute to
the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provisions (including any investigation,
reasonable legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company and any Selling Shareholder any contribution
received by the Company or such Selling Shareholder from persons, other than
the Underwriters, who may also be liable for contribution, including persons
who control the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) to which the Company, one or more of
the Selling Shareholders and one or more of the Underwriters may be subject, in
such proportion as is appropriate to reflect the relative benefits received by
the Company, the Selling Shareholders and the Underwriters from the offering of
the Shares or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 7 hereof, in such proportion as
is appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company, the Selling Shareholders
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and the Underwriters in connection with the untrue or alleged untrue statements
or omissions or alleged omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Selling
Shareholders and the Underwriters shall be deemed to be in the same proportion
as (x) in the case of the Company and the Selling Shareholders, the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Selling Shareholders and (y) in the
case of the Underwriters, the underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault of the Company, the Selling Shareholders
and of the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Shareholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Shareholders and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above. The Company and the
Indemnifying Selling Shareholder shall be jointly and severally liable, and
each of the other Selling Shareholders shall be severally liable in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by such
Selling Shareholder bears to such total offering proceeds received by all
Selling Shareholders (other than the Indemnifying Selling Shareholder), for the
amounts to be contributed by any of them pursuant to the provisions of this
Section 8. Notwithstanding the provisions of this Section 8, (i) in no case
shall any Underwriter (except as may be provided in the Agreement Among
Underwriters) be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, and (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. For purposes of this Section 8,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, each person, if any, who controls a
Selling Shareholder within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as such
Selling Shareholder, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 8. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 8, notify such party or parties from whom contribution may
be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent shall not be
unreasonably withheld.
9. Default by an Underwriter.
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(a) If any Underwriter or Underwriters shall default in
its or their obligation to purchase Firm Shares or Additional Shares
hereunder, and if the Firm Shares or Additional Shares with respect to
which such default relates do not (after giving effect to
arrangements, if any, made by you pursuant to subsection (b) below)
exceed in the aggregate 10% of the number of shares of Firm Shares or
Additional Shares, as the case may be, which all Underwriters have
agreed to purchase hereunder, then such Firm Shares or Additional
Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their
respective names in Schedule I hereto bear to the aggregate number of
Firm Shares set forth opposite the names of the nondefaulting
Underwriters.
(b) In the event that such default relates to more than
10% of the Firm Shares or Additional Shares, as the case may be, you
may in your discretion arrange for yourself or for another party or
parties (including any non-defaulting Underwriter or Underwriters who
so agree) to purchase such Firm Shares or Additional Shares, as the
case may be, to which such default relates on the terms contained
herein. In the event that within 5 calendar days after such a default
you do not arrange for the purchase of the Firm Shares or Additional
Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with
respect to the Additional Shares, the obligations of the Underwriters
to purchase and of the Principal Selling Shareholders to sell the
Additional Shares shall, thereupon terminate, without liability on the
part of the Company or the Selling Shareholders with respect thereto
(except in each case as provided in Sections 5, 7(a) and (c) and 8
hereof) or the several Underwriters, but nothing in this Agreement
shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other several Underwriters, the Company and
the Selling Shareholders for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Shares or Additional
Shares to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party
or parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date or Additional Closing Date, if any, as the
case may be, for a period, not exceeding five business days, in order
to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in
the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall
include any party substituted under this Section 9 with like effect as
if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Underwriters,
the Selling Shareholders and the Company contained in this Agreement, including
the agreements contained in Section 5, the indemnity agreements contained in
Section 7 and the contribution agreements contained in Section 8, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or by or on
behalf of the Company, any of its officers and directors or any Selling
Shareholder or any controlling person thereof, and shall survive delivery of
and payment for the Shares to and by the several Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement
including pursuant to Sections 9 or 11 hereof.
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11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective at such time
after notification of the effectiveness of the Registration Statement
as you, the Company and the Selling Shareholders shall agree upon the
purchase price per Share. If the purchase price per Share has not
been agreed upon prior to 5:00 P.M., New York time, on the seventh
full business day after the Registration Statement shall have become
effective, this Agreement shall thereupon terminate without liability
to the Company, the Selling Shareholders or the Underwriters except as
herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you and
the Selling Shareholders or the Attorney-in-Fact, or by joint action
only of all the Selling Shareholders directly or the Attorney-in-Fact
on behalf of all the Selling Shareholders by notifying the Company and
you, or by you notifying the Company and the Selling Shareholders or
the Attorney-in- Fact. Notwithstanding the foregoing, the provisions
of this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all
times be in full force and effect.
(b) You shall have the right to terminate this Agreement
at any time prior to the Closing Date or the obligations of the
Underwriters to purchase the Additional Shares at any time prior to the
Additional Closing Date, if any, as the case may be, if any domestic or
international event or act or occurrence has materially disrupted, or
in your opinion will in the immediate future materially disrupt,
securities markets; or if trading on the New York or American Stock
Exchanges shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, on the New York or American Stock
Exchanges by the New York or American Stock Exchanges or by order of
the Commission or any other governmental authority having jurisdiction;
or if the United States shall have become involved in a war or major
hostilities; or there is an escalation of hostilities involving the
United States or there is a declaration of a national emergency or war
by the United States; or if any downgrading in the rating of the
Company's debt securities by any "nationally recognized statistical
rating-organization" (as defined for purposes of Rule 436(g) under the
Regulations); or if a banking moratorium has been declared by a state
or federal authority, or if a moratorium in foreign exchange trading by
major international banks or persons has been declared; or if any new
restriction materially adversely affecting the distribution of the Firm
Shares or the Additional Shares, as the case may be, shall have become
effective; or if there shall have been such change in the market for
the Company's securities or securities in general or in political,
financial or economic conditions as in your judgment makes it
impractical or inadvisable to proceed with the offering, sale and
delivery of the Firm Shares or the Additional Shares, as the case may
be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or facsimile transmission, confirmed in writing
by letter.
(d) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to (i) notification
by you as provided in Section 11(a) hereof or (ii) Sections 9(b) or
11(b) hereof), or if the sale of the Shares provided for herein is not
consummated because any condition to the obligations of the several
Underwriters set forth herein is not satisfied or because of any
refusal, inability or failure on the part of the Company or any
Selling Shareholder to perform any agreement herein or comply with any
provision hereof, the Company and the Selling Shareholders jointly and
severally agree subject to demand by you, to
27
28
reimburse the Underwriters for all out-of-pocket expenses (including
the fees and expenses of their counsel), incurred by the several
Underwriters in connection herewith.
12. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or facsimile transmission and
confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: _______________; if sent to the
Company or any Selling Shareholder, shall be mailed, delivered, or facsimile
transmission and confirmed in writing, in the case of the Company, to the
Company, 0000 Xxxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx X.
Xxxx, Esq., Senior Vice President and General Counsel, and in the case of any
Selling Shareholder, to the Attorney-in-Fact, 0000 Xxxxxxx Xxxxx, Xxx Xxxxxxx,
Xxxxx 00000, Attention: Xxxxx X. Xxxxxxxxx, M.D. and Xxxxx X. Xxxxxxxxx, M.D.
13. Parties. You represent that you are authorized to act on
behalf of the several Underwriters named in Schedule I hereto, and the Company
and the Selling Shareholders shall be entitled to act and rely on any request,
notice, consent, waiver or agreement purportedly given on behalf of the
Underwriters when the same shall have been given by you on such behalf. This
Agreement shall inure solely to the benefit of, and shall be binding upon, the
several Underwriters, the Selling Shareholders and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Sections 7 and 8, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from any of the Underwriters.
14. Construction. This Agreement shall be construed in accordance
with the internal laws of the State of New York.
[signature page follows]
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29
If the foregoing correctly sets forth the understanding among you, the
Company and the Selling Shareholders, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
KINETIC CONCEPTS, INC.
By:
------------------------------------
Xxxxxxx X. Xxxxxxxx, President
and Chief Executive Officer
THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE II HERETO
By:
------------------------------------
Name:
Attorney-in-Fact
AGREED and ACCEPTED as of the date
first above written.
BEAR, XXXXXXX & CO. INC.
ALEX. XXXXX & SONS INCORPORATED
On behalf of themselves and the other several
Underwriters named in Schedule I hereto.
By: Bear, Xxxxxxx & Co. Inc.
By:
-----------------------------------
Name:
Managing Director
30
SCHEDULE I
Number of Additional Shares
Number of Firm Shares to be which may be Purchased from
Purchased from the Selling the Principal Selling
Name of Underwriter Shareholders Shareholders
------------------- ------------ ------------------------------
Bear, Xxxxxxx & Co. Inc.
Alex. Xxxxx & Sons Incorporated
-------------------- --------------------
Total
==================== ====================
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31
SCHEDULE II
Number of Firm
Name of Selling Shareholder Shares To Be Sold
--------------------------- -----------------
Xxxxx X. Xxxxxxxxx, M.D.
Xxxxx X. Xxxxxxxxx, M.D.
Xxxxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx, O.D.
Covenant Foundation, Inc.
Kinetic Concepts Foundation
The PAL Foundation
Mercy International
The Miami Project
Xxxxx X. Xxxxxxxxx 1987 Family Trusts pursuant to the trust agreement dated
October 8, 1987 between Xxxxx X. Xxxxxxxxx and Xxxxxxx Xxxxxx Xxxxxxxxx (as
grantors) and Xxxxx X. Xxxxxxxxx (as trustee):
Xxxxxxxxx Xxxxx Xxxxxxxxx (January 30, 1981)
Xxxxx Xxxxx Xxxxxxxxx (April 27, 1969)
Xxxxxxx Xxxx Xxxxxxxxx (February 4, 1973)
Whitney Xxxx Xxxxxxxxx (March 29, 1987)
Xxxxx X. Xxxxxxxxx 1987 Family Trusts pursuant to the trust agreement dated
September 10, 1987 between Xxxxx X. Xxxxxxxxx and Xxxxxxx Xxxx Xxxxxxxxx
(as grantors) and Xxxxx X. Xxxxxxxxx (as trustee):
Xxxxx X. Xxxxxxxxx (July 27, 1975)
Xxxxx X. Xxxxxxxxx (April 19, 1987)
Xxxxx X. Xxxxxxxxx (September 25, 1979)
Xxxx X. Xxxxxxxxx Children's 1993 Trusts pursuant to the trust agreement
dated September 30, 1993 between Xxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxx
(as grantors) and Xxxxx X. Xxxxxxxxx (as trustee):
Xxxxxxx Xxxx Xxxxxxxxx (12/14/72)
Xxxx Xxxx Xxxxxxxxx (02/24/76)
Xxxxxxx Xxxxx Xxxxxxxxx (09/03/79)
Xxxxxxx Xxxxxxx Xxxxxxxxx (03/24/81)
Total
================
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SCHEDULE III TO THE
UNDERWRITING AGREEMENT
PRINCIPAL SELLING SHAREHOLDERS
NUMBER OF
ADDITIONAL
SHARES WHICH
NAME OF PRINCIPAL SELLING SHAREHOLDER MAY BE SOLD
------------------------------------- -----------
Xxxxx X. Xxxxxxxxx, M.D.
Xxxx X. Xxxxxxxxx, O.D.
Xxxxxx X. Xxxxxxxxx
Covenant Foundation, Inc.
Kinetic Concepts Foundation
The PAL Foundation
Mercy International
Xxxxx X. Xxxxxxxxx 1987 Family Trusts pursuant to the trust agreement
dated October 8, 1987 between Xxxxx X. Xxxxxxxxx and Xxxxxxx Xxxxxx
Xxxxxxxxx (as grantors) and Xxxxx X. Xxxxxxxxx (as trustee):
Xxxxxxxxx Xxxxx Xxxxxxxxx (January 30, 1981)
Xxxxx Xxxxx Xxxxxxxxx (April 27, 1969)
Xxxxxxx Xxxx Xxxxxxxxx (February 4, 1973)
Whitney Xxxx Xxxxxxxxx (March 29, 1987)
Xxxxx X. Xxxxxxxxx 1987 Family Trusts pursuant to the trust agreement
dated September 10, 1987 between Xxxxx X. Xxxxxxxxx and Xxxxxxx Xxxx
Xxxxxxxxx (as grantors) and Xxxxx X. Xxxxxxxxx (as trustee):
Xxxxx X. Xxxxxxxxx (July 27, 1975)
Xxxxx X. Xxxxxxxxx (April 19, 1987)
Xxxxx X. Xxxxxxxxx (September 25, 1979)
Xxxx X. Xxxxxxxxx Children's 1993 Trusts pursuant to the trust
agreement dated September 30, 1993 between Xxxx X. Xxxxxxxxx and Xxxxx
X. Xxxxxxxxx (as grantors) and Xxxxx X. Xxxxxxxxx (as trustee):
Xxxxxxx Xxxx Xxxxxxxxx (12/14/72)
Xxxx Xxxx Xxxxxxxxx (02/24/76)
Xxxxxxx Xxxxx Xxxxxxxxx (09/03/79)
Xxxxxxx Xxxxxxx Xxxxxxxxx (03/24/81)
---------
Total
=========
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EXHIBIT A
KINETIC CONCEPTS, INC.
POWER OF ATTORNEY
WHEREAS, the undersigned (the "Undersigned") owns shares of
Common Stock, $.001 par value (the "Common Stock"), of Kinetic Concepts, Inc.,
a Texas corporation (the "Company"); and
WHEREAS, the Undersigned, subject to the terms and conditions
stated herein, desires to sell the number of shares of Common Stock set forth
below the Undersigned's name on the signature page hereof (the "Shares"); and
WHEREAS, the Undersigned proposes to sell the Shares to the
several underwriters (the "Underwriters") named in Schedule I to the
Underwriting Agreement to be entered into by and among the Company, the
Undersigned, the other selling shareholders named therein (the "Other Selling
Shareholders", and together with the Undersigned, the "Selling Shareholders")
and the Underwriters, substantially in the form attached hereto as Exhibit A
with such changes, including additions, deletions and amendments thereto, as
the Attorneys-in-Fact (as defined below), or either of them, may deem necessary
or advisable (the "Underwriting Agreement");
NOW, THEREFORE, as an inducement to the Underwriters and the
Company to execute the Underwriting Agreement in such form as may be entered
into, executed and delivered by the Attorneys-in-Fact, or either of them, as
hereinafter provided, and in order to secure the performance of the
Underwriting Agreement upon its execution, the Undersigned agrees, for the
benefit of the Underwriters and the Company as follows:
1. Delivery of Certificates; Appointment of
Attorneys-in-Fact; Grant of Authority. The undersigned is delivering herewith,
for deposit with Xxxxxx X. Xxxx, Esq., in his capacity as custodian (the
"Custodian"), a certificate or certificates that represent the number of share
of issued and outstanding Common Stock set below the Undersigned's signature on
the signature page hereof, that are registered in the name of the Undersigned
or in the name of a nominee which holds such certificates for the account of
the Undersigned. The Undersigned hereby makes, constitutes and appoints,
irrevocably, subject to the terms hereof, Xxxxx X. Xxxxxxxxx, M.D., and Xxxxx
X. Xxxxxxxxx, M.D., and either of them, as the true and lawful
attorneys-in-fact (the "Attorneys-in-Fact") of the Undersigned, each with full
power and authority, for and in the name, place and stead of the Undersigned:
(a) To negotiate and agree with the Underwriters on
the per share price at which the Shares are to be sold by the
Undersigned to the Underwriters, which purchase price shall be the
same price per share to be paid by the Underwriters to the
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Other Selling Shareholders and to sell up to such number of Shares at
such price as shall be determined by the Attorney-in-Fact executing
the Underwriting Agreement, acting in his sole discretion, it being
understood and agreed that:
i. not more than the aggregate number of
Shares set forth below the Undersigned's name on the signature
page hereof shall be sold by the Undersigned to the
Underwriters pursuant to the Underwriting Agreement; and
ii. the reoffering of the Shares by the
Underwriters shall be by a public offering registered under
the Securities Act of 1933, as amended (the "Act").
(b) To make the representations and warranties and
enter into the agreements on behalf of the Undersigned contained in
the Underwriting Agreement, to execute and deliver the Underwriting
Agreement on behalf of the Undersigned with full power to make such
changes including additions, deletions and amendments thereto as the
Attorneys-in-Fact, or either of them, shall deem necessary or
advisable, in their sole discretion, and to consummate the
transactions contemplated thereby.
(c) To arrange for, prepare or cause to be prepared
a registration statement, and all amendments thereto, under the Act
covering the offering and sale of the Shares by the Undersigned and
the Other Selling Shareholders (collectively, the "Registration
Statement"), and to take all necessary action with respect to such
Registration Statement as the Attorneys-in-Fact, or either of them,
shall deem necessary or advisable, in their sole discretion, subject,
however, to the Undersigned's rights under the Underwriting Agreement.
(d) To take any and all steps that the
Attorneys-in-Fact, or either of them, shall deem necessary or
advisable, in their sole discretion, in connection with the
registration of the Shares under the Act and under the securities or
Blue Sky laws of any jurisdiction, including the preparation of the
Registration Statement, the making of any undertakings or
representations (but only to the extent contained in or consistent
with the representations of the Selling Shareholders set forth in the
Underwriting Agreement), the execution and filing of letters and other
communications to the Securities and Exchange Commission (the
"Commission") regarding the Registration Statement and the performance
of any such other acts as the Attorneys- in-Fact, or either of them,
shall deem necessary or advisable, in their sole discretion.
To the extent such actions, letters and communications relate
to the Undersigned, they will be based upon written information
furnished and provided by or on behalf of the Undersigned, provided
that the Attorneys-in-Fact reasonably believe that such information is
true and correct.
(e) To execute, acknowledge and deliver the Custody
Agreement, substantially in the form attached hereto as Exhibit B (the
"Custody Agreement"), with full power to make such changes, including
additions, deletions and amendments thereto, as the Attorneys-in-Fact,
or either of them, shall deem necessary or advisable, in their sole
discretion, pursuant to which the certificates representing the
Undersigned's Shares will be held by the Custodian
2
35
for sale as contemplated by the Underwriting Agreement, to deliver the
certificate or certificates representing the Shares to the Custodian,
to instruct the Custodian with respect to the number of Shares to be
sold, and to consummate the transactions contemplated by the Custody
Agreement.
(f) To do all things and to perform all acts
required to be performed on the part of the Undersigned in connection
with the sale by the Undersigned of the Undersigned's Shares,
including, but not limited to, (i) the transfer of the Shares of the
Undersigned on the books of the Company in order to effect their sale,
(ii) the endorsement and execution and delivery of all stock
certificates, stock powers, certificates, receipts, instructions to
transfer agents and registrars, and any other document and paper
required, contemplated by, or deemed necessary or advisable by the
Attorneys-in-Fact, or either of them, in their sole discretion, in
connection with, the performance of the Underwriting Agreement, the
Custody Agreement, the registration of the Shares pursuant to the Act,
and the exemption, qualification or registration of the Shares under
the securities or Blue Sky laws of any state or jurisdiction, (iii)
the authorization for payment by the Custodian out of the net proceeds
of any sale to the Underwriters, or the withholding by Bear, Xxxxxxx &
Co. Inc. and Alex. Xxxxx & Sons Incorporated, as representatives of
the Underwriters (the "Representatives") from such proceeds, of the
Undersigned's necessary transfer taxes in connection with the sale and
delivery to the Underwriters of the Shares sold by the Undersigned,
(iv) the retention of one legal counsel in connection with all matters
referred to herein (which counsel may, but need not be, counsel for
the Company), (v) the return to the Undersigned of certificates
representing the number of Shares (if any) received by the Custodian
but not sold by the Undersigned to the Underwriters, (vi) instructing
the Custodian as to the number of Shares to be sold by the Undersigned
and (vii) to otherwise act for, in the name of and on behalf of the
Undersigned with respect to the transactions described in the
Underwriting Agreement and the Custody Agreement, as fully as the
Undersigned could if then personally present and acting.
The Undersigned recognizes that the number of Shares that the
Underwriters will purchase from the Selling Shareholders (the "Underwritten
Shares") may be less than the number of Shares desired to be sold by any or all
Selling Shareholders. In the event the number of Underwritten Shares is less
than the aggregate number of Shares desired to be sold by any or all Selling
Shareholders, the Attorneys-in-Fact, or either of them, are authorized and
directed to determine that portion of the Shares that the Undersigned is
entitled to sell, if any, on a pro rata basis among each of the Other Selling
Shareholders and any such determination by the Attorneys-in-Fact, or either of
them, shall be final and binding upon the undersigned.
The Attorneys-in-Fact, and either of them, shall be entitled
to act and rely upon any statement, notice or instruction received by the
Undersigned in writing or by facsimile transmission.
2. Irrevocability. All authority conferred hereby shall be
deemed granted and conferred in contemplation and furtherance of the interests
of the Underwriters and the Company, and this Power of Attorney is irrevocable
and is coupled with an interest, subject to the provisions of Section 4 hereof.
The obligations and authorizations of the Undersigned hereunder shall not be
terminated by operation of law or the occurrence of any event whatsoever,
including, but not limited to, the merger, consolidation, reorganization,
liquidation, dissolution, bankruptcy, insolvency, death or incapacity of the
Undersigned or the occurrence of any other similar event; and if, after the
execution of this Power of Attorney and before the completion of the
transactions contemplated by the Underwriting Agreement,
3
36
the Undersigned merges, consolidates, liquidates, reorganizes, enters
bankruptcy, becomes insolvent, dissolves, dies or becomes incapacitated or any
other similar event occurs, the Attorneys-in-Fact, and each of them, are
nevertheless authorized and directed to complete all such transactions,
including the delivery of the certificates for the Shares to be sold to the
Underwriters, as if such merger, consolidation, reorganization, liquidation,
dissolution, bankruptcy, insolvency, death, incapacity or other similar event
had not occurred, regardless of whether or not the Attorneys-in- Fact shall
have received notice thereof.
3. Representations and Warranties.
(a) The Undersigned represents and warrants to the
Attorneys-in-Fact, to the Company, to each of the Underwriters and to legal
counsel for the Company and the Undersigned, that (i) the Undersigned has, and
at and as of the date the Underwriting Agreement is executed and at the Closing
Date and any Additional Closing Date (each as defined in the Underwriting
Agreement) will have, full right, power and authority and all authorizations
and approvals required by law or otherwise to enter into this Power of
Attorney, the Custody Agreement and Underwriting Agreement and (ii) the
consummation of the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not conflict with or
constitute a breach of, or default under, any bond, debenture, note or any
other evidence of indebtedness or in any indenture or other material agreement
to which the Undersigned is a party or by which it is bound or to which any of
its properties is subject, or any law, statute, rule, regulation, judgment or
court decree applicable to the Undersigned.
(b) The Undersigned hereby represents and warrants
to the Attorneys-in-Fact, the Company, the Underwriters and to legal counsel
for the Company and the Undersigned, that the Undersigned has carefully
reviewed the representations, warranties, statements and agreements to be made
by the Undersigned as a Selling Shareholder pursuant to the Underwriting
Agreement, including, without limitation, those contained in Section 1.B of the
Underwriting Agreement and the indemnity and contribution agreements contained
in Sections 7 and 8 of the Underwriting Agreement (and such representations and
warranties are incorporated herein by reference), and hereby certifies,
represents and warrants to the Attorneys-in-Fact, the Company, each of the
Underwriters and to legal counsel for the Company and the Undersigned, that the
representations and warranties to be made by the Undersigned in Section 1.B of
the Underwriting Agreement are true and correct on the date hereof and will be
true and correct at and as of the date such Underwriting Agreement is executed
and at and as of the Closing Date and any Additional Closing Date, and that
such agreements, insofar as they relate to the Undersigned, have been complied
with as of the date hereof and will be complied with on and after the Closing
Date and any Additional Closing Date.
(c) For purposes of delivering any certificate on
behalf of the Undersigned which may be required pursuant to the Underwriting
Agreement or by counsel to the Company and the Undersigned, the
Attorneys-in-Fact may rely on the representations and warranties of the
Undersigned set forth herein and in the Underwriting Agreement as if said
representations and warranties had been set forth in a separate certificate
directed to the Attorneys-in-Fact at and as of the Closing Date or any
Additional Closing Date, provided the Attorneys-in-Fact are not in receipt of
written notice from or on behalf of the Undersigned or otherwise do not
reasonably believe that any such representation or warranty is not true and
correct at and as of the Closing Date or any Additional Closing Date.
4
37
(d) The Undersigned will immediately notify the
Company, each of the Attorneys-in-Fact, each of the Underwriters and legal
counsel for the Company and the Undersigned of the occurrence of any event
which shall cause the representations and warranties set forth herein or
incorporated herein by reference not to be true and correct during the period
of the public offering of the Shares or at any time of delivery of the Shares
pursuant to the Underwriting Agreement.
(e) All of the information heretofore, now or
hereafter furnished by the Undersigned to the Company, each of the
Attorneys-in-Fact, each of the Underwriters and legal counsel for the Company
and the Undersigned in connection with the offering and sale of the Shares is
accurate and complete. The maximum number of shares of Common Stock to be sold
by the Undersigned to the Underwriters is accurately stated below the
Undersigned's name on the signature page hereof.
(f) If the Undersigned has a spouse, such spouse has
joined in the execution and delivery of this Power of Attorney for all
purposes, and all references to "the Undersigned" shall mean both the Selling
Shareholder who is a signatory to this Power of Attorney and to such spouse
just as if such spouse were also a Selling Shareholder. The joinder of such
spouse, however, has been made without regard to the ownership of the Shares to
which this Power of Attorney relates.
(g) If the Undersigned is a trust and the shares
held by such trust are held by a nominee which holds such shares for the
account of the Undersigned, such nominee has joined in the execution and
delivery of this Power of Attorney for all purposes and all references to "the
Undersigned" shall mean both the Undersigned and the nominee which holds the
Shares for the account of the Undersigned as if both the Undersigned and the
nominee which holds the Shares for the account of the Undersigned were Selling
Shareholders.
(h) If the Undersigned is a partnership,
corporation, limited liability company or trust, the person signing on behalf
of the Undersigned is duly authorized to execute and deliver these documents
for and on behalf of such partnership, corporation or trust.
(i) The Undersigned has received a copy of Amendment
No. 1 to the Registration Statement filed by the Company with the Commission on
December 28, 1995, and Amendment No. 2 to Registration Statement filed by the
Company with the Commission on January 24, 1995. The information relating to
the Undersigned set forth under the captions Principal and Selling Shareholders
commencing on page 45 of the preliminary prospectus forming a part of the
Registration Statement, is true and correct in all respects.
4. Expenses. In addition to the expenses, if any, to be paid
by the Undersigned as set forth in the Underwriting Agreement, the Undersigned
shall pay all reasonable out-of-pocket costs and expenses incurred by the
Attorneys-in-Fact in the discharge of their responsibilities hereunder,
provided that the Attorneys-in-Fact shall serve without compensation.
5. Termination. If the Underwriting Agreement shall not be
entered into on behalf of the Undersigned, or if it shall not become effective
pursuant to its terms, or if it shall be terminated pursuant to its terms, or
if the Closing Date shall not have occurred on or before February 28,
5
38
1996, or if no Additional Closing Date shall occur before March 31, 1996, then
after such date the Undersigned shall have the power, on written notice to the
Attorneys-in-Fact, to terminate this Power of Attorney, subject, however, (i)
to any action to be taken pursuant to the Custody Agreement and (ii) to all
lawful action of the Attorneys-in-Fact done or performed pursuant hereto prior
to actual receipt of such notice, and thereafter the Attorneys-in-Fact shall
have no further responsibilities or liabilities to the Undersigned.
6. Ownership of Stock. Subject to the terms of the Custody
Agreement, until payment of the purchase price for the Shares being sold by the
Undersigned pursuant to the Underwriting Agreement has been made by or for the
account of the Underwriters, the Undersigned shall remain the legal and
beneficial owner of the Shares deposited with the Custodian pursuant to the
Custody Agreement and shall have the right to vote such Shares and to receive
all dividends and distributions thereon. However, until such payment in full
has been made or until the Underwriting Agreement has been terminated, the
Undersigned agrees not to give, sell, pledge, hypothecate, grant any lien on or
security interest in, transfer, deal with or contract with respect to the
Shares to be sold by the Undersigned pursuant to the Underwriting Agreement or
any interest therein, except in accordance with the Underwriting Agreement, or
as otherwise agreed in writing by the Underwriters.
7. Indemnification. The Undersigned hereby agrees to
indemnify and hold harmless the Attorneys-in- Fact against any and all
expenses, losses, claims, damages or liabilities, joint or several, to which
the Attorneys-in- Fact may become subject insofar as such expenses, losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any action taken or omitted to be taken by the Attorneys-in-Fact
pursuant hereto, other than those expenses, losses, claims, damages or
liabilities which result from the negligence or bad faith of the
Attorneys-in-Fact. The Attorneys-in-Fact assume no responsibility or liability
to any person other than in the discharge of their responsibilities hereunder.
8. Power of Substitution. Each of the Attorneys-in-Fact is
hereby granted and shall have full power of substitution hereunder. Such
substitution shall be effected by notice thereof to the Undersigned, signed by
the Attorney-in-Fact who is being substituted for as well as by his successor
Attorney-in-Fact.
9. Governing Law. This Power of Attorney for all purposes
shall be governed by and construed in accordance with the internal laws of the
State of New York.
10. Notice. Any notice required to be given pursuant to this
Power of Attorney shall be deemed given if in writing and delivered in person,
or if given by telephone or facsimile if subsequently confirmed in writing, (i)
to the Attorneys-in-Fact, 0000 Xxxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxx 00000,
Attention: Xxxxx X. Xxxxxxxxx, M.D. and Xxxxx X. Xxxxxxxxx, M.D. (facsimile
no.: (000) 000-0000), or (ii) to the Undersigned at the address or facsimile
number set forth on the signature page
6
39
hereof. Each of the Attorneys-in-Fact agree to forward copies of any and all
notices received by him to the Undersigned at the address and facsimile number
set forth on the signature page hereof.
7
40
IN WITNESS WHEREOF, the Undersigned has executed this Power of
Attorney this ___ day of ______________, 199__.
(To be signed exactly as name appears
on Certificate(s) representing the
Shares)
----------------------------------------
Print name, address and facsimile
number:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
Number of Shares to be sold:
----------
NOTE: ALL SIGNATURES ON THIS POWER OF ATTORNEY MUST BE GUARANTEED BY A
PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM.
Signature(s) guaranteed by:
-----------------------------------
Name:
8
41
INDIVIDUAL ACKNOWLEDGMENT
STATE OF ____________ )
) ss.:
COUNTY OF ___________ )
On this __ day of _______________, 1996, before me personally
came ___________________, to me known to be the individual described in and who
executed the foregoing Power of Attorney and acknowledged that he executed the
same.
----------------------------------------
Notary Public
9
42
If the Selling Shareholder is an individual, check whether married [ ] or not
married [ ]. If married and spouse has not signed above as a Selling
Shareholder because spouse is not a registered owner of the deposited stock
certificates, spouse must consent by signing below and having signature
guaranteed:
Selling Shareholder Spouse
----------------------------------------
Name:
NOTE: ALL SIGNATURES ON THIS POWER OF ATTORNEY MUST BE GUARANTEED BY A
PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM.
Signature(s) guaranteed by:
----------------------------------------
Name:
10
43
Acceptance by the Attorneys-In-Fact
Xxxxx X. Xxxxxxxxx, M.D. and Xxxxx X. Xxxxxxxxx, M.D. each
hereby accepts his appointment as attorney- in-fact pursuant to the foregoing
Power of Attorney and agrees to abide by and act in accordance with the terms
of said agreement.
---------------------------------------
Xxxxx X. Xxxxxxxxx, M.D.
---------------------------------------
Xxxxx X. Xxxxxxxxx, M.D.
11
44
EXHIBIT A TO POWER OF ATTORNEY
FORM OF UNDERWRITING AGREEMENT
12
45
EXHIBIT B TO POWER OF ATTORNEY
KINETIC CONCEPTS, INC.
CUSTODY AGREEMENT
Xxxxxx X. Xxxx, Esq.
Kinetic Concepts, Inc.
0000 Xxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
The Undersigned have delivered to you certificates (the
"Certificates") in negotiable form representing ____________ shares of the
issued and outstanding common stock, par value $.001 per share (the "Common
Stock"), of Kinetic Concepts, Inc., a Texas corporation (the "Company"),
together with any executed stock powers required to transfer such certificates
in accordance with the terms hereof and the Underwriting Agreement (as defined
below). The Certificates are to be held by you as custodian hereunder for the
account of the selling shareholders listed in Exhibit I hereto (collectively,
the "Selling Shareholders") and are to be disposed of in accordance with the
following instructions:
1. The Undersigned has been appointed attorney-in-fact
("Attorney-in-Fact") for each of the Selling Shareholders pursuant to the power
of attorney executed by each such Selling Shareholder (collectively, the "Power
of Attorney"), and is authorized, subject to certain terms and conditions set
forth in the Power of Attorney, to execute and deliver on behalf of the Selling
Shareholders an Underwriting Agreement (the "Underwriting Agreement"),
substantially in the form attached hereto as Exhibit II, by and among the
Selling Shareholders, the Company, and the Underwriters named in Schedule I
thereof (the "Underwriters"), pursuant to which the Selling Shareholders will
agree to sell, and the Underwriters will severally agree to purchase, subject
to the terms and conditions therein set forth, an aggregate of __________
shares of Common Stock (the "Firm Shares") at the price set forth in the
Underwriting Agreement. In addition, the Selling Shareholders listed in
Exhibit II hereto (together, the "Principal Selling Shareholders") will grant
to Bear, Xxxxxxx & Co. Inc. and Alex. Xxxxx & Sons Incorporated, as
representatives of the Underwriters (the "Representatives"), solely for the
purpose of covering over-allotments, an option to purchase, subject to the
terms and conditions set forth in the Underwriting Agreement, up to an
additional __________ shares of Common Stock (the "Additional Shares" and,
together with the Firm Shares, the "Shares").
2. You are hereby authorized and directed to hold the
Certificates for the Shares and, subject to the Underwriters having
concurrently provided you with a counterpart of the Underwriting Agreement that
has been executed by or on behalf of the Selling Shareholders and all other
parties thereto (i) on the Closing Date and any Additional Closing Date (each
as defined in the Underwriting Agreement), to cause to be delivered to the
Underwriters for their respective accounts, against payment therefor in full of
the purchase price per Share determined in accordance with the terms of the
Underwriting Agreement, one or more certificates (each, an "Omnibus
Certificate") representing the number of Firm Shares to be sold on the Closing
Date or the number of Additional Shares to be sold on any Additional Closing
Date, as the case may be; (ii) to obtain an Omnibus Certificate upon
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transfer of or in exchange for the certificates deposited with you hereunder;
(iii) to have separate certificates for the aggregate number of shares
represented by any Omnibus Certificate registered in such names and
denominations as the Underwriters shall have requested at least two full
business days prior to the Closing Date, or any Additional Closing Date, as the
case may be, prepared and available for checking and packaging by the
Underwriters at a location in New York, New York at least one full business day
prior to the Closing Date, or any Additional Closing Date, as the case may be,
for delivery to the Underwriters upon cancellation of such Omnibus Certificate.
You shall not be regarded as making any representations as to the validity,
sufficiency, value or genuineness of any of the Certificates or of any other
documents surrendered to you or as to the validity or genuineness of any
signatures on any letters of transmittal, facsimiles or other documents
delivered to you in connection herewith. You may rely on the instructions of
the Undersigned, or any substitute Attorney-in-Fact under the Power of
Attorney, with respect to any discrepancies in the form of the Certificates or
accompanying documents.
3. You are authorized, for and on behalf of the Selling
Shareholders, to accept and acknowledge receipt from the Underwriters for their
respective accounts of payment for all Shares sold and delivered by the Selling
Shareholders to the respective Underwriters. The payment received by you for
the account of the Selling Shareholders shall, upon order, in accordance with
the instructions, of the Undersigned, be paid by you, in immediately available
funds, to the Selling Shareholders, less such amount, if any, as necessary to
provide for each Selling Shareholder's proportionate share of all expenses, if
any, of the Selling Shareholders as provided in the Underwriting Agreement,
including all necessary transfer taxes in connection with the sale and delivery
to the Underwriters of the Shares sold by the Selling Shareholders, such amount
to be delivered to the Company or as shall be specified by the Undersigned.
4. If the Underwriting Agreement shall not be executed,
or shall not become effective pursuant to its terms, or shall be terminated
pursuant to the provisions thereof, or the Closing Date shall not have occurred
on or before _________, 1996, or if the Additional Shares represented by the
certificates deposited with you hereunder are not taken up and paid for by the
respective Underwriters by __________, 1996 in accordance with the provisions
of the Underwriting Agreement, you are authorized and directed to exchange the
Omnibus Certificate obtained pursuant to paragraph 2 above, if any, for
certificates denominated as necessary to return to the Selling Shareholders
Shares equal to the Shares deposited with you hereunder, and to return to the
Selling Shareholders such certificates together with any stock powers, and you
shall have no further responsibility hereunder. The Undersigned shall notify
you promptly of the execution of the Underwriting Agreement. In addition, you
shall also, as instructed by the Attorney-in-Fact, return to each of the
Selling Shareholders certificates representing the number of Shares of such
Selling Shareholders that are held by you in excess of the number of Shares
sold by such Selling Shareholders pursuant to the Underwriting Agreement.
5. It is understood that until delivery by you of the
certificates deposited with you hereunder has been made in accordance with the
Underwriting Agreement and payment in full for the Shares represented by such
certificates has been made by or for the account of the respective
Underwriters, the Selling Shareholders shall remain the legal and beneficial
owners of such Shares and shall have the right to vote such Shares and to
receive all dividends and distributions thereon.
6. Under the terms of the Underwriting Agreement, the
Undersigned agrees that the Shares represented by the certificates held in
custody for the Selling Shareholders under this Custody Agreement are subject
to the interest of the respective Underwriters under the Underwriting
Agreement, that the arrangements made by the Selling Shareholders for such
custodianship are to that extent irrevocable and that the obligations of the
Selling Shareholders under the Underwriting
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Agreement shall not be terminated by operation of law or by the occurrence of
any event whatsoever, including, but not limited to, the merger, consolidation,
reorganization, liquidation, dissolution, bankruptcy, insolvency, death,
incapacity or similar event of one or more of the Selling Shareholders. If one
or more of the Selling Shareholders should merge, consolidate, reorganize,
liquidate, dissolve, enter bankruptcy, become insolvent, die or become
incapacitated, or if any other such similar event shall occur before the
termination of this Custody Agreement, you are nevertheless authorized and
directed to deal with the certificates deposited hereunder and with the terms
and conditions hereof as if such merger, consolidation, reorganization,
liquidation, dissolution, bankruptcy, insolvency, death, incapacity or similar
event had not occurred, regardless of whether or not you shall have received
notice of such merger, consolidation, reorganization, liquidation, dissolution,
bankruptcy, insolvency, death, incapacity or similar event.
7. It is understood that you are authorized to accept
this Custody Agreement and to take any and all actions hereunder as you shall,
in your discretion, determine to be necessary to consummate the transactions
contemplated hereby and by the Underwriting Agreement, and that you assume no
responsibility or liability to the Selling Shareholders or to any person other
than to deal with the certificates and the cash held and received by you
pursuant to the terms of this Custody Agreement in accordance with the
provisions hereof, and the Selling Shareholders agree to indemnify and hold you
harmless with respect to anything done by you in good faith in any and all
matters covered by this Custody Agreement in accordance with the foregoing
instructions.
8. In taking any of the actions described herein on
behalf of the Selling Shareholders, you are authorized and shall be entitled to
ask for and act and rely upon instructions, any request made, or notices,
information or assurances of fact given in writing to you by the Undersigned,
or any substitute attorney-in-fact appointed under the Power of Attorney;
provided, however, that you shall not be entitled to act on any statement or
notice to you with respect to the noneffectiveness or termination of the
Underwriting Agreement, or advice that the Underwriting Agreement has not been
executed and delivered, unless such statement, notice or advice shall have been
confirmed in writing to you by one of the Representatives.
9. It is agreed that your duties are only such as are
herein specifically provided, being purely ministerial in nature, and that you
shall incur no liability whatever except for liabilities resulting from your
actions taken or omitted to be taken by you in bad faith.
10. You shall be under no responsibility in respect of
any of the items deposited with you hereunder other than to follow in good
faith the instructions by the Attorney-in-Fact or otherwise herein contained.
You may consult with counsel (which may be counsel to the Company) and shall be
fully protected in any action taken in good faith, in accordance with such
advice. You shall not be required to defend any legal proceedings which may be
instituted unless requested to do so by the Selling Shareholders and unless you
are indemnified to your satisfaction against the cost and expense of such
defense. You shall not be required to institute legal proceedings of any kind.
You shall have no responsibility for the genuineness or validity of any
document or other item deposited with you hereunder and you shall be fully
protected in acting in accordance with any written instructions given to you
hereunder and believed by you to have been signed by the Undersigned.
11. The Undersigned hereby represents and warrants that
the Undersigned has full right, power and authority to enter into this Custody
Agreement and the Underwriting Agreement on behalf of the Selling Shareholders
to sell, assign, transfer and deliver the Shares deposited hereunder and to be
sold pursuant to the Underwriting Agreement and, upon delivery and payment for
said Shares
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pursuant to the Underwriting Agreement, unencumbered title to such Shares shall
be acquired by the respective Underwriters.
12. Your acceptance hereof by the execution of this
Custody Agreement shall constitute an acknowledgment by you of receipt of the
certificates hereinbefore referred to and the acceptance by you of the
authorizations herein conferred and shall evidence your agreement to carry out
and perform this Custody Agreement in accordance with its terms.
13. This Custody Agreement shall for all purposes be
governed by and construed in accordance with the internal laws of the State of
New York.
IN WITNESS WHEREOF, this Custody Agreement is executed this
___ day of ______________, 199__.
Very truly yours,
SELLING SHAREHOLDERS
[LIST ALL]
By:
------------------------------------
Name:
As Attorney-in-Fact for the
Selling Shareholders
AGREED and ACCEPTED as of this
__ day of ___________, 1996 by:
CUSTODIAN
Xxxxxx X. Xxxx, Esq., as Custodian
By:
----------------------------------------
Name: Xxxxxx X. Xxxx, Esq.
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EXHIBIT I TO CUSTODY AGREEMENT
SELLING SHAREHOLDERS
Number of Firm Number of Additional
Name Shares To Be Sold Shares Available for Sale
---- ----------------- -------------------------
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EXHIBIT II TO CUSTODY AGREEMENT
FORM OF UNDERWRITING AGREEMENT
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