EXHIBIT 1.1
SonoSite, Inc.
2,700,000 Shares
Common Stock
($0.01 Par Value)
FORM OF UNDERWRITING AGREEMENT
________ __, 2002
UNDERWRITING AGREEMENT
________ __, 2002
UBS Warburg LLC
Deutsche Bank Securities Inc.
As Representatives of the several Underwriters
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
SonoSite, Inc., a Washington corporation (the "Company"), proposes to
issue and sell to the Underwriters named in Schedule A annexed hereto (the
"Underwriters") an aggregate of 2,700,000 shares of common stock, $0.01 par
value per share (the "Common Stock"), of the Company (the "Firm Shares"). In
addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company up
to an additional 405,000 shares of Common Stock (the "Additional Shares"). The
Firm Shares and the Additional Shares are hereinafter collectively referred to
as the Shares. The Shares are described in the Prospectus which is referred to
below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-83278)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective,
including all documents filed as a part thereof, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430(A) under the Act, and also
including any registration statement filed pursuant to Rule 462(b) under the
Act, is herein called the "Registration Statement," and the prospectus, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act) or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the time it
became effective, is herein called the "Prospectus." Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include (i) the documents incorporated by reference
therein pursuant to Form S-3 (the "Incorporated Documents") and (ii) the copy of
the Registration Statement, Preliminary Prospectus or Prospectus or Incorporated
Documents filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX"). 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 the filing of any document under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively, the "Exchange
Act") after the effective date of the Registration Statement, or the Prospectus,
as the case may be, deemed to be incorporated therein by reference.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
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warranties and subject to the terms and conditions herein set forth, the Company
agrees to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the respective
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A annexed hereto, in each case at a purchase price of $____ per Share.
The Company is advised by you that the Underwriters intend (i) to make a public
offering of their respective portions of the Firm Shares as soon after the
effective date of the Registration Statement as in your judgment is advisable
and (ii) initially to offer the Firm Shares upon the terms set forth in the
Prospectus. You may from time to time increase or decrease the public offering
price after the initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company all or a
portion of the Additional Shares as may be necessary to cover over-allotments
made in connection with the offering of the Firm Shares, at the same purchase
price per share to be paid by the Underwriters for the Firm Shares. This option
may be exercised by you on behalf of the several Underwriters at any time and
from time to time on or before the 30th day following the date hereof by written
notice to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the "additional time of purchase"); provided, however,
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that the additional time of purchase shall not be earlier than the time of
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purchase (as defined below) nor earlier than the second business day/1/ after
the date on which the option shall have been exercised nor later than the tenth
business day after the date on which the option shall have been exercised.
Subject to the terms and conditions hereof, if the option is exercised, each
Underwriter agrees, severally but not jointly, to purchase the number of
Additional Shares that bears the same proportion to the aggregate number of
Additional Shares to be purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine solely to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm
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Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on _________ __, 2002 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are actually made is
hereinafter called the "time of purchase." Electronic transfer of the Firm
Shares shall be made to you at the time of purchase in such names and in such
denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 6 below with respect
to the purchase of the Shares shall be made at the offices of Xxxxx Xxxxxxxxxx
LLP, 1301 Avenue of the Americas, New York, New York at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
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represents and warrants to each of the Underwriters that:
(a) The Company has not received notice of any order of the Commission
preventing or suspending the use of any Preliminary Prospectus, or
instituting proceedings for that purpose, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act; and when
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1 As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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the Registration Statement becomes effective, the Registration Statement
and the Prospectus will conform in all material respects with the
requirements of the Act, and the Registration Statement 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 the statements therein
not misleading, and the Prospectus 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 the statements therein, in light of the
circumstances under which they were made, not misleading, provided,
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however, that the Company makes no representation or warranty with respect
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to any statement contained in the Registration Statement or the Prospectus
in reliance upon and in conformity with information concerning the
Underwriters and furnished in writing by or on behalf of any Underwriter
through you to the Company expressly for use in the Registration Statement
or the Prospectus; and neither the Company nor any of its affiliates has
distributed any offering material in connection with the offer or sale of
the Shares other than the Registration Statement, the Preliminary
Prospectus, the Prospectus or any other materials, if any, permitted by the
Act;
(b) as of the date of this Agreement, the Company's capitalization is
as set forth under the heading entitled "Actual" in the section of the
Registration Statement and the Prospectus entitled "Capitalization" and, as
of the time of purchase and the additional time of purchase, as the case
may be, the Company's capitalization shall be as set forth under the
heading entitled "As Adjusted" in the section of the Registration Statement
and the Prospectus entitled "Capitalization" (subject, in each case, to the
issuance of shares of Common Stock upon exercise of stock options disclosed
as outstanding in the Registration Statement and the Prospectus); the
issuance of all outstanding shares of capital stock of the Company has been
duly and validly authorized, and such shares of common stock are validly
issued, fully paid and non-assessable, have been issued in compliance with
all federal and state securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or similar
right;
(c) the Company has been duly organized and is validly existing as a
corporation under the laws of the State of Washington, with the requisite
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify could
not reasonably be expected to have a material adverse effect on the
business, operations, prospects, properties, condition (financial or
otherwise) or
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results of operation of the Company and the Subsidiaries (as hereinafter
defined) taken as a whole (a "Material Adverse Effect"). The Company has no
subsidiaries (as defined in the Act) other than as listed in Schedule B
annexed hereto (the "Subsidiaries"); except as described in the
Registration Statement and the Prospectus, the Company owns 100% of the
outstanding capital stock of the Subsidiaries; except for the Subsidiaries
or as described in the Registration Statement and the Prospectus, the
Company does not own, directly or indirectly, any long-term debt or any
equity interest in any firm, corporation, partnership, joint venture,
association or other entity; complete and correct copies of the charter and
bylaws or other organization documents of the Company and each of the
Subsidiaries and all amendments thereto have been made available to you;
each of the Subsidiaries has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, with the requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus; each of the Subsidiaries
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the ownership or leasing of the
properties or the conduct of its business requires such qualification,
except where the failure to so qualify could not reasonably be expected to
have a Material Adverse Effect; all of the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable, have been issued in compliance
with all applicable securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar right,
except where the failure to so comply, or any such failure, could not
reasonably be expected to have a Material Adverse Effect;
(e) neither the Company nor any of the Subsidiaries is in breach or
violation of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach or violation of,
or constitute a default under) (each such breach, violation, default or
event, a "Default Event"), (i) its articles of incorporation, bylaws or
other organizational documents, (ii) any obligation, agreement, covenant or
condition contained in any license, permit, indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of
their properties is bound or affected, (iii) any federal, state, local or
foreign law, regulation or rule or (iv) any decree, judgment or order
applicable to the Company, any of the Subsidiaries or any of their
respective properties, other than, in the case of clauses (ii) and (iii),
such Default Events as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, including the
issuance and sale of the Shares and the consummation of the other
transactions contemplated hereby, does not constitute and
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will not result in a Default Event under (w) any provisions of the articles
of incorporation, bylaws or other organizational documents of the Company
or any of the Subsidiaries, (x) under any provision of any license, permit,
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries or by which any
of them or their respective properties may be bound or affected, (y) under
any federal, state, local or foreign law, regulation or rule or (z) under
any decree, judgment or order applicable to the Company, any of the
Subsidiaries or any of their respective properties, except, in the case of
clause (x) for such Default Events as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(f) this Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company;
(g) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus;
(h) the Shares have been duly and validly authorized by the Company
and, when issued and delivered by the Company against payment therefor as
provided herein, will be validly issued, fully paid and non-assessable;
(i) no approval, authorization, consent or order of or filing with any
national, state, local or other governmental or regulatory commission,
board, body, authority or agency having jurisdiction over the Company is
required to be obtained or made by the Company or any of the Subsidiaries
in connection with the issuance and sale of the Shares or the consummation
by the Company of the other transactions contemplated hereby, other than
registration of the offer and sale of the Shares under the Act, the listing
of the Shares on a securities exchange or qualification of the Shares for
quotation on the Nasdaq National Market, each of which has been or will be
effected, and any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by
the Underwriters;
(j) except as set forth in the Registration Statement and the
Prospectus (i) no person has the right, contractual or otherwise, to cause
the Company to issue or sell to it any shares of Common Stock or shares of
any other capital stock or other equity interests of the Company, (ii) no
person has any preemptive rights, resale rights, rights of first refusal or
other rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, and (iii) no person
has the right to act as an underwriter, or as a financial advisor to the
Company, in connection with the offer and sale of the Shares, in the case
of each of the foregoing
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clauses (i), (ii) and (iii), whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Shares as
contemplated thereby or otherwise; no person has the right, contractual or
otherwise, to cause the Company to register under the Act any shares of
Common Stock or shares of any other capital stock or other equity interests
of the Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby whether as a
result of the filing or effectiveness of the Registration Statement or the
sale of the Shares as contemplated thereby or otherwise, except for such
rights as have been complied with or waived;
(k) KPMG LLP, whose report on the consolidated financial statements of
the Company and the Subsidiaries is filed with the Commission as part of
the Registration Statement and the Prospectus, are independent public
accountants with respect to the Company as required by the Act;
(l) the Company and each of the Subsidiaries has all necessary
licenses, permits, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule (collectively, "Permits"), and has obtained all
necessary authorizations, consents and approvals from other persons
(collectively, "Approvals"), in order to conduct its business as currently
conducted as described in the Registration Statement and the Prospectus,
other than such Permits and Approvals the failure of which to obtain could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; neither the Company nor any of the Subsidiaries is
in violation of, or in default under, any such Permit or Approval the
effect of which could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(m) all contracts, leases or documents of a character required to be
described in the Registration Statement or the Prospectus or any document
incorporated by reference therein or to be filed as an exhibit to the
Registration Statement or any document incorporated by reference therein
have been so described or filed as required;
(n) except as disclosed in the Registration Statement and the
Prospectus, there are no actions, suits, claims or proceedings pending or,
to the Company's knowledge, threatened or, to the Company's knowledge, any
investigations, pending or threatened, to which the Company or any of the
Subsidiaries or any of their respective directors or officers is a party or
of which any of their respective properties is subject at law or in equity,
or before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which (i) is of a
character required to be described in the Registration Statement or the
Prospectus or (ii), if adversely decided, could reasonably be expected to
result in a judgment, decree or
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order having a Material Adverse Effect or prevent consummation of the
transactions contemplated hereby;
(o) the financial statements, together with the related schedules and
notes, included in the Registration Statement and the Prospectus present
fairly the consolidated financial position of the Company and the
Subsidiaries as of the dates indicated and the consolidated results of
operations and cash flows of the Company and the Subsidiaries at the
respective dates and for the respective periods to which they apply,
subject, in the case of any interim financial statements, to normal
year-end adjustments, and have been prepared in compliance with the
requirements of the Act and in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved; any pro forma financial statements or data included in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X of
the Act, and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements; the other
financial and statistical data set forth in the Registration Statement and
the Prospectus are accurately presented and prepared on a basis consistent
with such financial statements and books and records of the Company; and
there are no financial statements (historical or pro forma) that are
required to be included in the Registration Statement and the Prospectus
that are not included as required;
(p) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development involving a prospective
material adverse change, in the business, operations, properties, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is material to
the Company and the Subsidiaries taken as a whole, (iii) any obligation,
direct or contingent, which is material to the Company and the Subsidiaries
taken as a whole, incurred by the Company or any of the Subsidiaries, (iv)
any change in the capital stock or outstanding indebtedness of the Company
or any of the Subsidiaries (other than pursuant to the exercise of stock
options described in the Registration Statement and the Prospectus as
outstanding or the grant of stock options under stock option plans
described in the Registration Statement and the Prospectus) or (v) any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company; neither the Company nor any of the Subsidiaries has
any material contingent obligation which is not disclosed in the
Registration Statement and the Prospectus;
(q) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A
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hereto, of each
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of its officers and directors; the Company will not purport to release any
person from any Lock-Up Agreement without the prior written consent of UBS
Warburg LLC;
(r) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(s) any statistical and market-related data included in the Prospectus
are published by sources that the Company believes to be reliable and
accurate, and the Company has obtained the written consent to the use of
such data from such sources to the extent required;
(t) neither the Company nor any of the Subsidiaries nor any of their
respective affiliates has taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares;
(u) the Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act, and none of such documents, when they were filed with the
Commission, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Registration
Statement and/or the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of
the Exchange Act, as applicable, and will not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading;
(v) the Company and each of the Subsidiaries maintain insurance of the
types and in amounts reasonably adequate for their respective businesses,
including, but not limited to, insurance covering real and personal
property owned or leased by the Company and each of the Subsidiaries
against theft, damage, destruction, acts of vandalism and other risks
customarily insured against, all of which insurance is in full force and
effect, except where the lack of insurance could not reasonably be expected
to have a Material Adverse Effect;
(w) the Company and each of the Subsidiaries have good title to all
real and personal property owned by them as described in the Registration
Statement and the
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Prospectus, free and clear of all liens, encumbrances and defects except
such as are described in the Registration Statement and the Prospectus or
such as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; except as described in the Registration
Statement and the Prospectus, any real property and buildings held under
lease by the Company or any of the Subsidiaries are held by it under valid,
subsisting and enforceable leases with such exceptions as do not interfere
with the use made and proposed to be made of such property and buildings by
the Company or any of the Subsidiaries, as the case may be, except such as
are described in the Registration Statement and the Prospectus or such as
could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect;
(x) neither the Company nor any of the Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, nor any federal or
state law relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which could, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect;
(y) the Company, for itself and for each of the Subsidiaries,
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences;
(z) all material tax returns required to be filed by the Company and
each of the Subsidiaries have been filed, other than those filings being
contested in good faith, and all taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due pursuant to
such returns or pursuant to any assessment received by the Company or any
of the Subsidiaries have been paid, other than those being contested in
good faith and for which adequate reserves have been provided;
(aa) other than as disclosed in the Registration Statement and the
Prospectus, or as would not individually or in the aggregate have a
Material Adverse Effect, to the Company's knowledge the Company and the
Subsidiaries own, possess, license or have other rights to use, all
patents, trademarks, servicemarks, trade names,
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copyrights, trade secrets, information, proprietary rights and processes
(collectively, "Intellectual Property") necessary for their business as
described in the Registration Statement and the Prospectus and necessary in
connection with the commercialization of the existing products of the
Company and the Subsidiaries and the products described in the Prospectus
as being under development, without any conflict with or infringement or
violation of the rights of others, and the Company and the Subsidiaries
have taken reasonable steps necessary to secure interests in such
Intellectual Property; except as described in the Registration Statement
and the Prospectus, the Company is not aware of any options, licenses or
agreements of any kind relating to the Intellectual Property of the Company
or the Subsidiaries that are outstanding and which are required to be
described in the Registration Statement and the Prospectus, and, except as
described in the Registration Statement and the Prospectus, neither the
Company nor either of the Subsidiaries is a party to or bound by any
options, licenses or agreements with respect to the Intellectual Property
of any other person or entity which are required to be described in the
Registration Statement and the Prospectus; except as described in the
Registration Statement and the Prospectus, to the Company's knowledge the
products currently being sold by the Company and its Subsidiaries do not
infringe or conflict with any of the Intellectual Property of any other
person or entity other than any such violation, infringement or conflict
which could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;
(bb) except to the extent disclosed in the Registration Statement and the
Prospectus, the Company and each Subsidiary has operated and currently is
in compliance in all material respects with all applicable rules,
regulations and policies of the U.S. Food and Drug Administration and
comparable drug regulatory agencies outside of the United States
(collectively, the "Regulatory Authorities");
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(cc) neither the Company nor any of the Subsidiaries has sent or
received any notice of termination of any of the contracts or agreements
referred to or described in, or filed as an exhibit to, the Registration
Statement, and no such termination has been threatened by the Company or
any of the Subsidiaries or any other party to any such contract or
agreement.
4. Certain Covenants of the Company. The Company hereby agrees:
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(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect so long as required for the
distribution of the Shares; provided that the Company shall not be required
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to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except service of process with respect to
the
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offering and sale of the Shares); and to promptly advise you 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 the initiation
or threat of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon as
practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
reasonably request for the purposes contemplated by the Act; in case any
Underwriter is required to deliver a prospectus after the nine-month period
referred to in Section 10(a)(3) of the Act in connection with the sale of
the Shares, the Company will prepare promptly upon request such amendment
or amendments to the Registration Statement and such prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective and (ii) if
Rule 430A under the Act is used, when the Prospectus is filed with the
Commission pursuant to Rule 424(b) under the Act (which the Company agrees
to file in a timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing (if
requested by you), of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order suspending the effectiveness
of the Registration Statement and, if the Commission should enter a stop
order suspending the effectiveness of the Registration Statement, to make
every reasonable effort to obtain the lifting or removal of such order as
soon as possible; to advise you promptly of any proposal to amend or
supplement the Registration Statement or Prospectus and to file no such
amendment or supplement to which you shall reasonably object in writing;
(e) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(f) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send
to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and
12
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or
such other similar forms, as may be designated by the Commission, (iii)
copies of documents or reports filed with any national securities exchange
on which any class of securities of the Company is listed, and (iv) such
other information as you may reasonably request regarding the Company or
any of the Subsidiaries, in each case as soon as reasonably practicable
after such reports, communications, documents or information become
available; provided, however, that in no case shall the Company be required
-------- -------
to furnish materials pursuant to this paragraph which are filed and
publicly accessible via XXXXX;
(g) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to
the Shares is required to be delivered under the Act which would require
the making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading, and,
during such time, to prepare and furnish, at the Company's expense, to the
Underwriters promptly such amendments or supplements to such Prospectus as
may be necessary to reflect any such change and to furnish you a copy of
such proposed amendment or supplement before filing any such amendment or
supplement with the Commission;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of twelve
months beginning after the effective date of the Registration Statement (as
defined in Rule 158(c) of the Act) and ending not later than 15 months
thereafter;
(i) to furnish to you three conformed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and sufficient additional
conformed copies (other than exhibits) for distribution of a copy to each
of the other Underwriters;
(j) to furnish to you as early as reasonably practicable prior to the
time of purchase and the additional time of purchase, as the case may be,
but not later than two business days prior thereto, a copy of the latest
available unaudited interim consolidated financial statements, if any, of
the Company and the Subsidiaries which have been read by the Company's
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 6(e) hereof;
(k) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of proceeds" in the Prospectus;
13
(l) to pay all costs, expenses, fees and taxes in connection with (i)
the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and
the printing and furnishing of copies of each thereof to the Underwriters
and to dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares, (iii) the
reproduction and furnishing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Powers of Attorney and any closing
documents (including compilations thereof) to the Underwriters and (except
closing documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under state laws
and the determination of their eligibility for investment under state law
as aforesaid (including associated filing fees and the reasonable legal
fees and disbursements of counsel for the Underwriters) and the printing
and furnishing of copies of any blue sky surveys or legal investment
surveys to the Underwriters and to dealers, (v) any listing of the Shares
on any securities exchange or qualification of the Shares for quotation on
the Nasdaq National Market ("Nasdaq") and any necessary registration
thereof under the Exchange Act, (vi) review of the public offering of the
Shares by NASD Regulation, Inc. (including associated filing fees and the
reasonable legal fees and disbursements of counsel for the Underwriters),
(vii) the costs and expenses of the Company relating to presentations or
meetings undertaken in connection with the marketing of the offer and sale
of the Shares to prospective investors and the Representatives' sales
forces, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations, travel,
lodging and other expenses incurred by the officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with
the road show and (viii) the performance of the other obligations of the
Company hereunder;
(m) for so long as the delivery of the Prospectus is required in
connection with the offer or sale of the Shares, to furnish to you a
reasonable period of time before filing with the Commission, a copy of any
document proposed to be filed pursuant to Section 13, 14 or 15(d) of the
Exchange Act and to not make any filing to which you reasonably object;
(n) to not take, directly or indirectly, any action designed to or
which may constitute or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(o) not to sell, offer or agree to sell, contract to sell,
hypothecate, pledge, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of
14
Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock or warrants or other rights to purchase Common Stock or
any such securities or any other securities of the Company that are
substantially similar to Common Stock, or file or cause to be declared
effective a registration statement under the Act relating to the offer and
sale of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or other rights to purchase
Common Stock or any other securities of the Company that are substantially
similar to Common Stock, for a period of 90 days after the date hereof (the
"Lock-up Period"), without the prior written consent of UBS Warburg LLC,
except for (i) the registration of the Shares and the sales to the
Underwriters pursuant to this Agreement, (ii) issuances of Common Stock
upon the exercise of options or warrants disclosed as outstanding in the
Registration Statement and the Prospectus and (iii) the issuance of
employee stock options not exercisable during the Lock-up Period pursuant
to stock option plans described in the Registration Statement and the
Prospectus; and
(p) subject to Section 4(m) hereof, to file promptly all reports and
any definitive proxy or information statement required to be filed by the
Company with the Commission in order to comply with the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of
a prospectus is required in connection with the offering or sale of the
Shares, and to promptly notify you of such filing.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
---------------------------------------
delivered for any reason other than the termination of this Agreement pursuant
to the last paragraph of Section 8 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
agrees, in addition to paying the amounts described in Section 4(l) hereof, to
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of their counsel. It is understood that
except as provided in this Agreement, each Underwriter will pay all of its own
costs and expenses incurred in connection with this Agreement, including fees
and disbursements of its counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) You shall have received, at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of
15
purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in the form set
forth in Exhibit B hereto.
(b) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxxxxx
and Xxxxxxxx and
16
Crew LLP, patent counsel to the Company, dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies for
each of the other Underwriters and in form reasonably satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) to the best of such counsel's knowledge, except as described
in the Prospectus, (A) the Company (either directly or through the
Subsidiary) has valid license rights or clear title to the
Intellectual Property referenced in the Prospectus, and there are no
rights of third parties to any such Intellectual Property; (B) there
is no infringement or other violation by third parties of any of the
Intellectual Property of the Company referenced in the Prospectus; (C)
there is no infringement or other violation by the Company or the
Subsidiary of any Intellectual Property of others nor would there be
any such infringement upon commercialization of the Company's products
described as under development in the Registration Statement and the
Prospectus; (D) there is no pending or threatened action, suit
proceeding or claim by governmental authorities or others that the
Company or the Subsidiary infringes or otherwise violates any
Intellectual Property of others, and such counsel is unaware of any
facts which would form a reasonable basis for any such claim; (E)
there is no pending or threatened action, suit, proceeding or claim by
governmental authorities or others challenging the rights of the
Company or the Subsidiary in or to, or challenging the scope of, any
Intellectual Property of the Company referenced in the Prospectus, and
such counsel is unaware of any facts which would form a reasonable
basis for any such claim; and (F) there is no prior art or other facts
that may render any patent held by the Company or unenforceable;
(ii) to the best of such counsel's knowledge, the patent
applications of the Company and the Subsidiary presently on file
disclose patentable subject matter, and such counsel is not aware of
any inventorship challenges, any interference which has been declared
or provoked, or any other material fact with respect to the patent
applications of the Company presently on file that (A) would preclude
the issuance of patents with respect to such applications, or (B)
would lead such counsel to conclude that such patents, when issued,
would not be valid and enforceable in accordance with applicable
regulations;
(iii) the statements in the Registration Statement and the
Prospectus and the Incorporated Documents referencing Intellectual
Property matters, insofar as such statements constitute summaries of
legal matters, contracts, agreements, documents or proceedings
referred to therein, or refer to
17
statements of law or legal conclusions, are in all material respects
accurate and complete statements or summaries of the matters therein
set forth; and
(iv) nothing has come to such counsel's attention that causes
such counsel to believe that such above described portions of the
Registration Statement, at the time such Registration Statement became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that such above
described portions of the Prospectus and at the date of the Prospectus
and at all times leading up to and including the time of purchase and
the additional time of purchase, as the case may be, contained an
untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, dated the time of purchase or
the additional time of purchase, as the case may be, with respect to the
issuance and sale of the Shares by the Company, the Registration Statement,
the Prospectus (together with any supplement thereto) and other related
matters as the Underwriters may require.
(d) You shall have received from KPMG LLP letters dated, respectively,
the date of this Agreement and the time of purchase and additional time of
purchase, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore
approved Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters.
(e) No amendment or supplement to the Registration Statement or
Prospectus, or document which upon filing with the Commission would be
incorporated by reference therein, shall at any time have been filed to
which you have reasonably objected in writing.
(f) The Registration Statement shall have become effective not later
than 5:30 P.M. New York City time on the date of this Agreement and, if
Rule 430A under the Act is used, the Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) under the Act at or before 5:30 P.M.
New York City time on the second full business day after the date of this
Agreement.
(g) Prior to the time of purchase or the additional time of purchase,
as the case may be, (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section
18
8(d) or 8(e) of the Act; (ii) the Registration Statement and all amendments
thereto, or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading.
(h) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no
material and adverse change or any development involving a prospective
material and adverse change (other than as specifically described in the
Registration Statement and Prospectus), in the business, properties,
condition (financial or otherwise) or results of operations of the Company
and the Subsidiaries, taken as a whole, shall occur or become known and
(ii) no transaction which is material and adverse to the Company shall have
been entered into by the Company or any of the Subsidiaries.
(i) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate signed by two of
the Company's executive officers to the effect that the representations and
warranties of the Company as set forth in this Agreement are true and
correct as of each such date, that the Company has performed such of its
obligations under this Agreement as are to be performed at or before the
time of purchase and at or before the additional time of purchase, as the
case may be, and the conditions set forth in paragraphs (g) and (h) of this
Section 6 have been met.
(j) You shall have received the letters referred to in Section 3(q).
(k) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and
the additional time of purchase, as the case may be, as you may reasonably
request.
7. Effective Date of Agreement; Termination. This Agreement shall
----------------------------------------
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, (i) if,
19
since the time of execution of this Agreement or the respective dates as of
which information is given in the Registration Statement and Prospectus, there
has been any material adverse change, or any development involving a prospective
material adverse change, in the business, operations, properties, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries taken as a whole, which would, in your judgment or in the judgment
of such group of Underwriters, make it impracticable to market the Shares or
(ii) if, at any time prior to the time of purchase or, with respect to the
purchase of any Additional Shares, the additional time of purchase, as the case
may be, trading in securities on the New York Stock Exchange, the American Stock
Exchange or Nasdaq shall have been suspended or limitations or minimum prices
shall have been established on the New York Stock Exchange, the American Stock
Exchange or Nasdaq, or if a banking moratorium shall have been declared either
by the United States or New York State authorities, or if the United States
shall have declared war in accordance with its constitutional processes or there
shall have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its effect on
the financial markets of the United States as, in your judgment or in the
judgment of such group of Underwriters, to make it impracticable to market the
Shares.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Company and each other Underwriter shall be
notified promptly by letter or telegram from such terminating Underwriter.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(1), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7,
-------------------------------------
if any Underwriter shall default in its obligation to purchase and pay for the
Firm Shares to be purchased by it hereunder (otherwise than for a reason
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to purchase and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
purchase and pay for (in addition to the aggregate number of Firm Shares they
are obligated to purchase pursuant to Section 1 hereof) the number of Firm
Shares agreed to be purchased by all such defaulting Underwriters, as
hereinafter provided. Such Shares shall be purchased and paid for by such
non-defaulting Underwriter or Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no
such
20
designation is made, such Shares shall be purchased and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
terminate without further act or deed and without any liability on the part of
the Company to any Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
--------------------------
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by
21
any post-effective amendment thereof by the Company) or in a Prospectus (the
term Prospectus for the purpose of this Section 9 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of any Underwriter through you
to the Company expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading or (ii) any
untrue statement or alleged untrue statement of any material fact contained in
any audio or visual materials provided by the Company or based upon written
information furnished by or on behalf of the Company including, without
limitation, slides, videos, films, tape recordings, used in connection with the
marketing of the Shares.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
-------- -------
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise. Such Underwriter or such person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the Company shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in conflict
with those available to the Company (in which case the Company shall not have
the right to direct the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company shall not be liable for any
settlement of any Proceeding effected without the written
22
consent of the Company, but if settled with the written consent of the Company,
the Company agrees to indemnify and hold harmless any Underwriter and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without the Company's written consent if
(i) such settlement is entered into more than 60 business days after receipt by
the indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or on
behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold\
harmless the Company, its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and the successors and assigns of all of the foregoing persons from
and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which the Company or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or such Prospectus or necessary to make
such information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
-------- -------
notify
23
such Underwriter shall not relieve such Underwriter from any liability which
such Underwriter may have to the Company or any such person or otherwise. The
Company or such person shall have the right to employ their or its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of the Company or such person unless the employment of such counsel
shall have been authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
defend such Proceeding or 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 or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or
24
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the
same respective proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the total underwriting discounts and commissions received by
the Underwriters, bear to the aggregate public offering price of the Shares. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to Section 9(c) 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 that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of Section 9(c), in no case shall any Underwriter be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damage which such Underwriter
has otherwise been required to pay by reason of such untrue statement or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its partners,
directors or officers or any person (including each
25
partner, officer or director of such person) who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or
on behalf of the Company, its directors or officers or any person who controls
any of the foregoing within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company and each Underwriter agree
promptly to notify each other of the commencement of any Proceeding against it
and against any of the officers or directors of the Company in connection with
the issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
10. Notices. Except as otherwise herein provided, all statements,
-------
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Syndicate
Department; and if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 00000 - 00xx
Xxxxx XX, Xxxxxxx, XX 00000-0000, Attention: Xxxxx X. Xxxxxxx, President and
Chief Executive Officer.
11. Information Furnished by the Underwriters. The statements set
-----------------------------------------
forth in the last paragraph on the cover page of the Prospectus and the
statements set forth in the fifth, seventh and eighth paragraphs under the
caption "Underwriting" in the Prospectus constitute the only information
furnished by or on behalf of the Underwriters as such information is referred to
in Sections 3 and 9 hereof.
12. Governing Law; Construction. This Agreement and any claim,
---------------------------
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim
--------------------------
may be commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and you and the
Company consent to the jurisdiction of such courts and personal service with
respect thereto. The Company hereby consents to personal jurisdiction, service
and venue in any court in which any Claim arising out of or in any way relating
to this Agreement is brought by any third party against an Underwriter or any
indemnified party. Each Underwriter and the Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way
26
arising out of or relating to this Agreement. The Company agrees that a final
judgment in any such action, proceeding or counterclaim brought in any such
court shall be conclusive and binding thereupon, and may be enforced in any
other courts in the jurisdiction to which the Company is or may be subject, by
suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and
-------------------
is made solely for the benefit of the Underwriters, the Company and, to the
extent provided in Section 9 hereof, the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one
------------
or more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned
-------------
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS Warburg LLC. Because UBS Warburg LLC
is a separately incorporated entity, it is solely responsible for its own
contractual obligations and commitments, including obligations with respect to
sales and purchases of securities. Securities sold, offered or recommended by
UBS Warburg LLC are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending relationships
with issuers of securities underwritten or privately placed by UBS Warburg LLC.
To the extent required under the securities laws, prospectuses and other
disclosure documents for securities underwritten or privately placed by UBS
Warburg LLC will disclose the existence of any such lending relationships and
whether the proceeds of the issue will be used to repay debts owed to affiliates
of UBS Warburg LLC.
27
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the several Underwriters.
Very truly yours,
SONOSITE, INC.
By: ____________________________________
Name:
Title:
Accepted and agreed to as of the date
first above written:
UBS WARBURG LLC
DEUTSCHE BANK SECURITIES INC.
As Representatives of the several Underwriters
By: UBS WARBURG LLC
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
SCHEDULE A
Underwriter Number of Firm Shares
----------- ---------------------
UBS Warburg LLC ..................................
Deutsche Bank Securities Inc. ....................
---------------------
Total ..................................... 2,700,000
=====================
1
SCHEDULE B
Subsidiaries
------------
Name Jurisdiction of Incorporation
---- -----------------------------
SonoSite France SARL France
SonoSite GmbH Germany
SonoSite, Ltd. United Kingdom
1
EXHIBIT A
SONOSITE, INC.
Common Stock
($0.01 Par Value)
____________, 2002
UBS Warburg LLC
Deutsche Bank Securities Inc.
As Representatives of the several Underwriters
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed Underwriting Agreement (the "Underwriting Agreement") to be
entered into by and among SonoSite, Inc. (the "Company") and you, as
Representatives of the several Underwriters, with respect to the public offering
(the "Offering") of common stock of the Company (the "Common Stock").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that from the date hereof through and including the 90th day
after the date of the final prospectus relating to the Offering, the undersigned
will not, directly or indirectly, without the prior written consent of UBS
Warburg LLC, (i) sell, offer to sell, contract to sell, hypothecate, pledge,
grant any option to purchase or otherwise dispose of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder
with respect to, any Common Stock of the Company or any securities convertible
into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock or any such security, except for the exercise of
any stock option by the undersigned, (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock or any securities convertible into or
exercisable or
1
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, whether any such transaction is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii). The
foregoing sentence shall not apply to (a) the sale of any Common Stock to the
Underwriters pursuant to the Underwriting Agreement, (b) bona fide gifts,
provided the recipient or recipients thereof agree in writing to be bound by the
terms of this Lock-Up Letter Agreement or (c) dispositions to any trust for the
direct or indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that such trust agrees in writing to be bound by the terms
of this Lock-Up Letter Agreement. For purposes of this paragraph, "immediate
family" shall mean the undersigned and the spouse, any lineal descendant,
father, mother, brother or sister of the undersigned.
In addition, the undersigned hereby waives any rights the undersigned
may have to require registration of Common Stock in connection with the filing
of a registration statement relating to the Offering. The undersigned further
agrees that, from the date hereof through and including the 90th day after the
date of the final prospectus relating to the Offering, the undersigned will not,
directly or indirectly, without the prior written consent of UBS Warburg LLC,
make any demand for, or exercise any right with respect to, the registration of
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock.
This Lock-Up Letter Agreement shall be terminated and the undersigned
shall be released from the undersigned's obligations hereunder (i) upon the date
the Company notifies you in writing that it does not intend to proceed with the
Offering, (ii) upon the date the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) upon the date the Underwriting Agreement is terminated, for any reason,
prior to the time of purchase (as defined in the Underwriting Agreement).
Yours very truly,
______________________________
Name:
2
EXHIBIT B
Legal Opinion of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, counsel for the Company
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