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EXHIBIT 1.1
2,500,000 Shares
DIGENE CORPORATION
Common Stock
UNDERWRITING AGREEMENT
September [ ], 1997
UBS Securities LLC
NationsBanc Xxxxxxxxxx Securities, Inc.
As Representatives of the Several Underwriters
named in Schedule A hereto
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Digene Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell 2,000,000 shares of its authorized but unissued
common stock, $0.01 par value per share (the "Common Stock"), to the several
underwriters listed on Schedule A hereto (collectively, the "Underwriters").
In addition, Armonk Partners, a Connecticut partnership and a stockholder of
the Company (the "Selling Securityholder"), proposes to sell an aggregate of
500,000 shares of the Company's authorized and outstanding Common Stock to the
Underwriters. The 2,000,000 shares of Common Stock of the Company to be sold
by the Company are hereinafter called the "Company Shares" and the 500,000
shares of Common Stock to be sold by the Selling Securityholder are hereinafter
called the "Selling Securityholder Shares." The Company Shares and the Selling
Securityholder Shares are hereinafter collectively referred to as the "Firm
Shares." The Selling Securityholder also proposes to grant to the Underwriters
an option to purchase up to 375,000 additional shares of the Company's Common
Stock (the "Option Shares") on the terms and for the purposes set forth in
Section 2(c). The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares."
The Company and the Selling Securityholder wish to confirm as
follows their agreements with you (the "Representatives") and the other
Underwriters on whose behalf you are acting in connection with the several
purchases by the Underwriters of the Shares.
I. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDER.
A. The Company and the Selling Securityholder hereby represents
and warrants to and agrees with each Underwriter as follows:
1. A registration statement on Form S-3 (File No.
333-35463) including a prospectus relating to the Shares, and each amendment
thereto, has been prepared by the Company in conformity in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has been
filed with the Commission; and such abbreviated registration statements
pursuant to Rule 462(b) of the Rules and Regulations as may have been required
prior to the date hereof (each an "Abbreviated Registration Statement") have
been similarly prepared and filed with the Commission; and the Company will
file such additional amendments to such registration statement including a
prospectus relating to the Shares and such Abbreviated Registration Statements
as may hereinafter be required. Copies of such registration statement
including a prospectus relating to the Shares, and each amendment thereto, and
of any Abbreviated Registration Statements have been delivered to you in such
quantities as you have requested for each of the Underwriters. If such
registration statement has not been declared effective, a further amendment to
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such registration statement, including a form of final prospectus, necessary to
permit such registration statement to be declared effective will be filed
promptly by the Company with the Commission. If such registration statement
has been declared effective, a final prospectus containing all Rule 430A
Information (as hereinafter defined), or, if UBS Securities LLC, on behalf of
the several Underwriters, shall agree to the utilization of Rule 434 of the
Rules and Regulations, a term sheet including the information required pursuant
to Rule 434 of the Rules and Regulations will be filed by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations on or
before the time prescribed by the Rules and Regulations.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement (including all exhibits, schedules and
consolidated financial statements and all documents incorporated by reference
therein) at the time such registration statement becomes or became effective
and, in the event any post-effective amendment thereto becomes effective prior
to the Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term shall include all
Rule 430A Information deemed to be included in such registration statement at
the time such registration statement becomes effective as provided by Rule 430A
of the Rules and Regulations, shall include the information deemed to be a part
of the Registration Statement as of the time it became effective pursuant to
Rule 434(d) of the Rules and Regulations, and shall also mean any Abbreviated
Registration Statement filed with respect to the Shares. The term "Preliminary
Prospectus" shall mean any prospectus referred to in the preceding paragraph
and any preliminary prospectus included in the Registration Statement at the
time it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean the prospectus relating to
the Shares in the form in which it is first filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations or, if no filing is required, shall
mean the form of final prospectus included in the Registration Statement at the
time such registration statement becomes effective. The term "Rule 430A
Information" means information with respect to the Shares and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules and Regulations. The term
"Offering Memorandum" as used in this Agreement shall mean the Offering
Memorandum consisting of the Prospectus and a Canadian wrap-around used in
connection with the offering of the Shares in Canada.
2. The Company has not received, and has no notice of,
any stop order suspending the effectiveness of the Registration Statement or
any order preventing or suspending the use of any Preliminary Prospectus, or
instituted proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act and the Rules and Regulations and, as of its date, did
not include any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. When the
Registration Statement became or becomes, as the case may be, effective (the
"Effective Date") and at all times subsequent thereto up to and at the Closing
Date, any later date on which Option Shares are to be purchased (the "Option
Closing Date") and when any post-effective amendment to the Registration
Statement becomes effective or any amendment or supplement to the Prospectus is
filed with the Commission, (i) the Registration Statement and Prospectus, and
any amendments or supplements thereto, contained and will contain all material
information required to be included therein by, and will comply in all material
respects with the requirements of, the Act and the Rules and Regulations, and
(ii) neither the Registration Statement nor the Prospectus, nor any amendment
or supplement thereto, will include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The foregoing representations and
warranties in this Section I.A.2 do not apply to any statements or omissions
made in reliance on and in conformity with the information contained in the
first, third, fifth, seventh, eighth or ninth paragraphs of the section of the
Prospectus entitled "Underwriting" and the information in the last paragraph on
the front cover page of the Prospectus or to statements in or omissions from
the Registration Statement, the Offering Memorandum or the Prospectus made in
reliance upon and in conformity with information furnished to the Company in
writing by any Underwriter through the Representatives expressly for use in the
Registration Statement, the Offering Memorandum or the Prospectus. The Company
has not distributed any offering material in connection with the offering or
sale of the Shares other than the Registration
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Statement, the Preliminary Prospectus, the Prospectus, the Offering Memorandum
or any other materials, if any, permitted by the Act or the Rules and
Regulations.
3. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and the Offering Memorandum. 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 or be in good
standing would not have a material adverse effect on the business, business
prospects, properties, operations, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries (as hereinafter
defined) taken as a whole (a "Material Adverse Effect"). The Company has no
Subsidiaries (as defined in the Rules and Regulations) other than Digene do
Brasil Ltda, a corporation organized under the laws of Brazil ("Digene
Brasil"), and Digene Europe, Inc., a Delaware corporation (collectively, the
"Subsidiaries"). The Company owns sixty percent (60%) of the outstanding
capital stock of Digene Brasil and one hundred percent (100%) of the
outstanding capital stock of Digene Europe, Inc. Other than the Subsidiaries,
the Company does not own, directly or indirectly, any shares of stock or any
other equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity.
Complete and correct copies of the certificates of incorporation and of the
bylaws (or similar organizational documents) of the Company and the
Subsidiaries and all amendments thereto have been delivered to the
Representatives, and except as set forth in the exhibits to the Registration
Statement no changes therein will be made subsequent to the date hereof and
prior to the Closing Date or, if later, the Option Closing Date. Each
Subsidiary has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, with
full corporate power and authority to own, lease and operate its properties and
to conduct its business described in the Registration Statement. Each
Subsidiary 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 would not 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 and are fully paid and non-assessable,
and have been issued in compliance with all federal and state securities laws,
were not issued in violation of or subject to any preemptive right, co-sale
right, registration right, resale right, right of first refusal or similar
right. All shares of capital stock of each of the Subsidiaries which are owned
by the Company or another of the Subsidiaries are free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest. No options
or warrants to purchase, or any preemptive rights or other rights to subscribe
for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or any
such options, rights, convertible securities or obligations in any of the
Subsidiaries are outstanding.
4. The Company has full power and authority (corporate
and otherwise) to enter into this Agreement and to perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of
the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable
laws, equitable principles or public policy and except as enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or
by general equitable principles. Neither the Company nor any Subsidiary is (i)
in violation of its certificate of incorporation or bylaws (or similar
organizational documents), or (ii) in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any bond,
debenture, note or other evidence of indebtedness, which default would have a
Material Adverse Effect, or (iii) in default in the performance or observance
of any contract, indenture, mortgage, loan agreement, joint venture or other
agreement or instrument to which it is a party or by which it or any of its
properties are bound, which default would have a Material Adverse Effect, or
(iv) in violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court or governmental agency or body to which the
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Company or the Subsidiaries are subject, including, but not limited to, the
United States Food and Drug Administration (the "FDA"). The performance of
this Agreement by the Company and the consummation by the Company of the
transactions herein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, (i) the
certificate of incorporation or bylaws (or similar organizational documents) of
the Company or any Subsidiary, or (ii) any indenture, mortgage, deed of trust,
loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company's or any of
the Subsidiaries' properties are bound, which default would have a Material
Adverse Effect, or (iii) any law, order, rule, regulation, writ, injunction,
judgment or decree of any court or governmental agency or body to which the
Company or any Subsidiary is subject. The Company is not required to obtain or
make (as the case may be) any consent, approval, authorization, order,
designation or declaration of or filing by or with any court or regulatory,
administrative or other governmental agency or body as a requirement for the
consummation by the Company of the transactions herein contemplated, except
such as may be required under the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), state securities or blue sky ("Blue Sky") laws,
the rules and regulations of the National Association of Securities Dealers,
Inc. (the "NASD") or under applicable Canadian securities laws.
5. All outstanding shares of capital stock of the
Company (including the Selling Securityholder Shares) have been duly authorized
and validly issued and are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and were not issued in
violation of or subject to any preemptive right, resale right, right of first
refusal or similar right. The authorized and outstanding capital stock of the
Company conforms in all material respects to the description thereof contained
in the Registration Statement, the Offering Memorandum and the Prospectus (and
such description correctly states the substance of the provisions of the
instruments defining the capital stock of the Company). The Company Shares to
be purchased from the Company hereunder have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company against payment therefor in accordance with the terms
of this Agreement, will be duly and validly issued and fully paid and
nonassessable, and will be sold free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest. Except as set forth in the
Prospectus, no preemptive right, co-sale right, registration right, right of
first refusal or other similar rights of securityholders exists with respect to
any of the Shares, the issue and sale of the Shares to be issued and sold by
the Company, or the sale of the Selling Securityholder Shares other than those
that have been expressly waived prior to the date hereof. With the exception
of the Selling Securityholder, no holder of securities of the Company has the
right to cause the Company to include such holder's securities in the
Registration Statement. No further approval or authorization of any
securityholder, the Board of Directors or any duly appointed committee thereof
or others is required for the issuance and sale or transfer of the Shares,
except as may be required under the Act, the Exchange Act or foreign or state
securities or Blue Sky laws. Except as disclosed in or contemplated by the
Prospectus and the Offering Memorandum, and the consolidated financial
statements and the related notes thereto included in the Prospectus and the
Offering Memorandum, the Company does not have outstanding any options or
warrants to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or any
such options, rights, convertible securities or obligations. The description
of the Company's stock option and other plans or arrangements, and the options
or other rights granted and exercised thereunder, set forth in the Prospectus
and the Offering Memorandum accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
6. There is not pending or, to the best of the Company's
knowledge, threatened, any action, suit, claim, proceeding or investigation
against the Company or any Subsidiary or any of their respective officers or
any of their respective properties, assets or rights before any court or
governmental agency or body or otherwise which might result in a Material
Adverse Effect, have a material adverse effect on the Company's or any
Subsidiary's properties, assets or rights of the Company and its Subsidiaries
taken as a whole, prevent
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consummation of the transactions contemplated hereby, or which is required to
be disclosed in the Registration Statement, the Offering Memorandum or
Prospectus and is not so disclosed. There are no statutes, rules, regulations,
agreements, contracts, leases or documents that are required to be described in
the Prospectus and the Offering Memorandum, or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations that have not
been accurately described in the Prospectus and the Offering Memorandum or
filed as exhibits to the Registration Statement.
7. Ernst & Young LLP (the "Accountants"), who have
examined the consolidated financial statements of the Company, together with
the related schedules and notes thereto filed with the Commission as a part of
the Registration Statement, are independent public accountants within the
meaning of the Act and the Rules and Regulations. The consolidated financial
statements of the Company, together with the related schedules and notes
thereto forming part of the Registration Statement, the Offering Memorandum and
the Prospectus, fairly present the financial position and the results of
operations of the Company at the respective dates and for the respective
periods to which they apply. All consolidated financial statements, together
with the related schedules and notes, filed with the Commission as part of the
Registration Statement, the Offering Memorandum and the Prospectus have been
prepared in accordance with generally accepted accounting principles as in
effect in the United States consistently applied throughout the periods
involved ("GAAP") except as may be otherwise stated in the Registration
Statement, the Offering Memorandum and the Prospectus. The selected and
summary consolidated financial and statistical data included in the
Registration Statement, the Offering Memorandum and the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with the consolidated financial statements presented therein. No
other consolidated financial statements or schedules are required by the Act or
the Rules and Regulations to be included in the Registration Statement and the
Offering Memorandum.
8. Subsequent to the respective dates as of which
information is given in the Registration Statement, the Offering Memorandum and
the Prospectus, there has not been (i) any material adverse change in the
business, business prospects, properties, operations, condition (financial or
otherwise) or results of operations or any development which is likely to have
a Material Adverse Effect, (ii) any transaction which is material to the
Company and its Subsidiaries taken as a whole, except transactions in the
ordinary course of business, (iii) any obligation, direct or contingent, which
is material to the Company and its Subsidiaries taken as a whole, incurred by
the Company or its Subsidiaries, except obligations incurred in the ordinary
course of business, (iv) any change in the capital stock or outstanding
indebtedness of the Company or its Subsidiaries other than the exercise of
options which were outstanding prior to the date of the Prospectus, or (v) any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company or its Subsidiaries. Neither the Company nor its
Subsidiaries has any material contingent obligation which is not disclosed in
the Registration Statement and the Offering Memorandum.
9. Except as set forth in the Prospectus and the
Offering Memorandum, (i) the Company and each Subsidiary have good and
marketable title to all material properties and assets described in the
Prospectus and the Offering Memorandum as owned by them, free and clear of any
pledge, lien, security interest, charge, encumbrance, claim, equitable
interest, or restriction, (ii) the agreements described in the Prospectus and
the Offering Memorandum to which the Company or any Subsidiary is a party are
valid agreements, enforceable by and against the Company or such Subsidiary in
accordance with their terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles, and, to the best of the Company's knowledge, the other contracting
party or parties thereto are not in material breach or default under any of
such agreements, and (iii) the Company and each Subsidiary have valid and
enforceable leases for the properties described in the Prospectus and the
Offering Memorandum as leased by them, and such leases conform in all material
respects to the description thereof, if any, set forth in the Registration
Statement. Except as set forth in the Registration Statement, the Offering
Memorandum and Prospectus, the Company and
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the Subsidiaries own or lease all such properties as are necessary to their
operations as now conducted or as proposed to be conducted in the foreseeable
future.
10. The Company and each Subsidiary now hold and at the
Closing Date and any later Option Closing Date, as the case may be, will hold,
all licenses, certificates, approvals and permits from all state, United
States, foreign and other regulatory authorities, including, but not limited
to, the FDA and any foreign regulatory authorities performing functions similar
to those performed by the FDA, that are material to the conduct of the business
of the Company and the Subsidiaries taken as a whole, except for such licenses,
consents, certificates, orders, approvals and permits the failure of which to
hold would not have a Material Adverse Effect, all of which are valid and in
full force and effect (and there is no proceeding pending or, to the best
knowledge of the Company, threatened which may cause any such license, consent,
certificate, order, approval or permit to be withdrawn, cancelled, suspended or
not renewed). All of the descriptions in the Registration Statement, the
Offering Memorandum and Prospectus of the legal and governmental proceedings by
or before the FDA or any foreign, state or local government body exercising
comparable authority are true, complete and accurate in all material respects.
The Company and each of its Subsidiaries is in compliance in all material
respects will all applicable FDA, state and local, rules, regulations,
guidelines and policies, including, without limitation, applicable FDA, state
and local rules, regulations and policies relating to Quality Systems
Regulations.
11. The Company and each Subsidiary have filed on a
timely basis all necessary federal, state and foreign income, franchise and
other tax returns and has paid all taxes shown thereon as due, and the Company
has no knowledge of any tax deficiency which has been or might be asserted
against the Company or any Subsidiary which might have a Material Adverse
Effect. All tax liabilities are adequately provided for within the
consolidated financial statements of the Company.
12. The Company and its Subsidiaries maintain insurance
with insurers of recognized financial responsibility of the types and in the
amounts adequate for their businesses and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but not
limited to, insurance covering clinical trial liability, product liability and
real and personal property owned or leased against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
13. Neither the Company nor its Subsidiaries are involved
in any labor dispute or disturbance nor, to the best knowledge of the Company,
is any such dispute or disturbance threatened. No collective bargaining
agreement exists with any employees of the Company or any Subsidiary and, to
the best knowledge of the Company, no such agreement is imminent.
14. The Company and each Subsidiary own or possess valid
and enforceable licenses or other rights to use all patents, patent
applications, patent rights, inventions, trademarks, trademark applications,
service marks, service xxxx applications, tradenames, copyrights, manufacturing
processes, formulae, trade secrets, know-how, franchises, and other material
intangible property and assets (collectively, "Intellectual Property") used in
the conduct of their businesses as currently conducted and as proposed to be
conducted as described in the Prospectus and the Offering Memorandum, except as
set forth therein. Neither the Company nor any Subsidiary has any knowledge
that it lacks or will be unable to obtain or retain any rights or licenses to
use any of the Intellectual Property necessary to conduct the business now
conducted or proposed to be conducted by it as described in the Prospectus,
except as described in the Prospectus and the Offering Memorandum. To the best
knowledge of the Company, none of the patents owned by the Company or any
Subsidiary are unenforceable or invalid except where such unenforceability or
invalidity would not have a Material Adverse Effect. Neither the Company nor
any Subsidiary has received any notice of, and the Company has no knowledge of,
any infringement or conflict with asserted rights or claims of others with
respect to any Intellectual Property or any of the Company's or any
Subsidiary's products, processes or
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technologies which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a Material Adverse Effect.
Neither the Company nor any Subsidiary has received any notice of, and the
Company has no knowledge of, any infringement of or conflict with asserted
rights of the Company by others with respect to any Intellectual Property.
The Company and each Subsidiary have duly and properly filed or caused to be
filed with the United States Patent and Trademark Office (the "PTO") and
applicable foreign and international patent authorities all patent applications
described or referred to in the Prospectus, and the Company believes it has
complied in all material respects with the PTO's duty of candor and disclosure
for each of the United States patent applications described or referred to in
the Prospectus and the Offering Memorandum. The Company has no knowledge of
any facts which would preclude the grant of a patent from each of the patent
applications described or referred to in the Prospectus and the Offering
Memorandum. The Company and each Subsidiary have clear title to their patents
and patent applications described or referred to in the Prospectus and the
Offering Memorandum, free and clear of any pledges, liens, security interests,
charges, encumbrances, claims, equitable interests, or restrictions. The
Prospectus fairly and accurately describes in all material respects the
Company's and each Subsidiary's rights with respect to the Intellectual
Property.
15. The Company has in the past conducted, is not and
will not invest the proceeds in a manner which will result in the Company being
required to be qualified as, an "investment company," or a "promoter" or
"principal underwriter" for a registered investment company, as such terms are
defined in the Investment Company Act of 1940, as amended.
16. Neither the Company nor any of its Subsidiaries have
incurred any liability for a fee, commission, or other compensation on account
of the employment of a broker or finder in connection with the transactions
contemplated by this Agreement other than the underwriting discounts and
commissions contemplated hereby.
17. The Company and each of its Subsidiaries is (i) in
compliance with any and all applicable United States, state and local
environmental laws, rules, regulations, treaties, statutes and codes
promulgated by any and all governmental authorities relating to the protection
of human health and safety, the environment or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) has received all
permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business as currently conducted, and (iii) is
in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permit licenses or other approvals would not, singly or in the
aggregate, have a Material Adverse Effect. No action, proceeding, revocation
proceeding, writ, injunction or claim is pending or threatened relating to the
Environmental Laws or to the Company's or its Subsidiaries' activities
involving Hazardous Materials. "Hazardous Materials" means any material or
substance (i) that is prohibited or regulated by any environmental law, rule,
regulation, order, treaty, statute or code promulgated by any governmental
authority, or any amendment or modification thereto, or (ii) that has been
designated or regulated by any governmental authority as radioactive, toxic,
hazardous or otherwise a danger to health, reproduction or the environment.
The Company and the Subsidiaries have not engaged in the generation, use,
manufacture, transportation or storage of any Hazardous Materials on any of the
Company's or its Subsidiaries' properties or former properties, except where
such use, manufacture, transportation or storage is in compliance with
Environmental Laws. No Hazardous Materials have been treated or disposed of on
any of the Company's or its Subsidiaries' properties or on properties formerly
owned or leased by the Company or its Subsidiaries during the time of such
ownership or lease, except in compliance with Environmental Laws. No spills,
discharges, releases, deposits, emplacements, leaks or disposal of any
Hazardous Materials have occurred on or under or have emanated from any of the
Company's or its Subsidiaries' properties or former properties during the time
of the Company's or its Subsidiaries' ownership or lease thereof and the
Company is not aware of any spills, discharges, releases, deposits,
emplacements, leaks or disposal of any Hazardous Materials that have occurred
on or under or have emanated from any of the Company's or its Subsidiaries'
properties or former properties prior to the Company's or its Subsidiaries'
ownership or lease thereof.
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18. Neither the Company nor any of its Subsidiaries has
at any time during the last five years (i) made any unlawful contribution to
any candidate for foreign office, or failed to disclose fully any contribution
in violation of law, or (ii) made any payment to any foreign, United States or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or not prohibited
by the laws of the United States.
19. The Common Stock is registered pursuant to Section
12(g) of the Exchange Act. The Shares (including the Selling Securityholder
Shares) have been duly authorized for quotation on The Nasdaq Stock Market,
Inc. Automated Quotation National Market System (the "Nasdaq National Market").
The Company has taken no action designed to terminate, or likely to have the
effect of terminating, the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq National Market, nor has the
Company received any notification that the Commission or the Nasdaq National
Market is contemplating terminating such registration or quotation.
20. Neither the Company nor any of its Subsidiaries nor,
to the Company's best knowledge, any of their respective officers, directors or
affiliates has taken, and at the Closing Date and at any later Option Closing
Date, neither the Company nor any of its Subsidiaries nor, to the Company's
best knowledge, any of their respective officers, directors or affiliates will
have taken, directly or indirectly, any action which has constituted, or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of sale or resale of the Shares.
21. The Company has obtained agreements from each officer
and director, the Selling Securityholder and each other beneficial owner of the
Company's Common Stock listed on Schedule B to this Agreement providing that
such person will not, for a period of 90 days after the date of the Prospectus
(the "Lock-up Period"), without the prior written consent of UBS Securities
LLC, directly or indirectly, offer to sell, sell, hypothecate, contract to
sell, grant any option to purchase, or otherwise dispose of or transfer
(collectively, a "Disposition") any shares of Common Stock beneficially owned
as of the date such lockup agreement was executed (including, without
limitation, shares of Common Stock which may be deemed to be beneficially owned
in accordance with the Rules and Regulations and shares of Common Stock which
may be issued upon exercise of a stock option or warrant) or any securities
convertible into or exercisable or exchangeable for such Common Stock except,
(a) by operation of law, or (b) pursuant to a bona fide gift to any person or
other entity which agrees in writing to be bound by this restriction.
Furthermore, such person has also agreed and consented to the entry of stop
transfer instructions with the Company's transfer agent against the transfer of
the shares of Common Stock held by such person except in compliance with this
restriction. The Company has provided to counsel for the Underwriters a
complete and accurate list of all securityholders of the Company and the number
and type of securities held by each securityholder. The Company has provided
to counsel for the Underwriters true, accurate and complete copies of all of
the agreements pursuant to which its officers, directors and securityholders
have agreed to such or similar restrictions (the "Lock-up Agreements")
presently in effect or effected hereby. The Company hereby represents and
warrants that it will not release any of its officers, directors or other
securityholders from any Lock-up Agreements currently existing or hereafter
effected without the prior written consent of UBS Securities LLC.
22. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
consolidated financial statements in conformity with GAAP and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
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23. There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company or any of its Subsidiaries to or for
the benefit of any of the officers or directors of the Company or any of its
Subsidiaries or any of the members of the families of any of them that are
required to be disclosed in the Registration Statement, the Offering Memorandum
and the Prospectus that are not so disclosed.
24. The Company and its Subsidiaries have complied with
all provisions of Section 517.075, Florida Statutes relating to doing business
with the Government of Cuba or with any person or affiliate located in Cuba.
25. The Company has timely and properly filed with the
Commission all reports and other documents required to have been filed by it
with the Commission pursuant to the Act, the Exchange Act and the Rules and
Regulations. True and complete copies of all such reports and other documents
have been delivered to you or your counsel.
B. The Selling Securityholder represents and warrants to and
agrees with each Underwriter and the Company that:
1. The Selling Securityholder now has and on the Closing
Date and the Option Closing Date, if applicable, will have valid marketable
title to the shares of Common Stock to be sold by the Selling Securityholder on
such date, free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest other than pursuant to this Agreement; the Selling
Securityholder has full right, power and authority to sell, assign, transfer
and deliver the Shares to be sold by the Selling Securityholder hereunder; and
upon delivery of such Shares hereunder and payment of the purchase price as
herein contemplated, each of the Underwriters will obtain valid marketable
title to the Shares purchased by it from the Selling Securityholder, free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest pertaining to the Selling Securityholder or the Selling
Securityholder's property, including any liability for estate or inheritance
taxes, or any liability to or claims of any creditor, devisee, legatee or
beneficiary of the Selling Securityholder.
2. All consents, approvals, authorizations and orders
required for the execution and delivery by the Selling Securityholder of this
Agreement and the sale and delivery of the Selling Securityholder Shares and
any Option Shares to be sold by the Selling Securityholder under this Agreement
(other than, at the time of the execution hereof (if the Registration Statement
has not yet been declared effective by the Commission), the issuance of the
order of the Commission declaring the Registration Statement effective and such
consents, approvals, authorizations or orders as may be necessary under state
or other securities or Blue Sky laws) have been obtained and are in full force
and effect; the Selling Securityholder has been duly organized and is validly
existing in good standing under the laws of the jurisdiction of its
organization as the type of entity that it purports to be; and the Selling
Securityholder has full legal right, power and authority to enter into and
perform its obligations under this Agreement, and to sell, assign, transfer and
deliver the Shares to be sold by the Selling Securityholder under this
Agreement.
3. The Selling Securityholder will not, during the
Lock-up Period, effect the Disposition of any Common Stock now owned or
hereafter acquired by the Selling Securityholder or with respect to which the
Selling Securityholder has or hereafter acquires the power of disposition,
otherwise than (a) by operation of law, (b) pursuant to a bona fide gift to any
person or other entity which agrees in writing to be bound by this restriction,
or (c) with the prior written consent of UBS Securities LLC. The foregoing
restriction is expressly agreed to preclude the holder of the Common Stock from
engaging in any hedging, equity swap or other transaction which is designed to
or reasonably expected to lead to or result in a Disposition during the Lock-up
Period, even if such Common Stock would be disposed of by someone other than
the Selling Securityholder. Such prohibited hedging, equity swap, or other
transactions would include, without limitation, any short sale (whether or not
against the box), or any purchase, sale or grant of any right (including,
without limitation, any
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put or call option) with respect to any Common Stock or with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from the Common Stock.
The Selling Securityholder also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent against the transfer of
the securities held by the Selling Securityholder except in compliance with
this restriction.
4. Certificates in negotiable form for all Shares to be
sold by the Selling Securityholder under this Agreement will be delivered per
the instructions of the Representatives, together with a stock power or powers
duly endorsed in blank by the Selling Securityholder, signature guaranteed by
an eligible guarantor institution (bank, stockbroker, savings and loan
association or credit union with membership in an approved Medallion Program)
pursuant to rule 17Ad-15 of the Exchange Act.
5. The Agreement has been duly authorized by the Selling
Securityholder and has been duly executed and delivered by or on behalf of the
Selling Securityholder and is a valid and binding agreement of the Selling
Securityholder, enforceable against the Selling Securityholder in accordance
with its terms, except as rights to indemnification hereunder may be limited by
applicable laws, equitable principles or public policy and except as the
enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; and the
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) the partnership agreement (or
similar organizational documents) of the Selling Securityholder, or (ii) any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Selling Securityholder is a party or by
which the Selling Securityholder's properties are bound, or (iii) any law,
order, rule, regulation, writ, injunction, judgment or decree of any court or
governmental agency or body to which the Selling Securityholder is subject.
6. The Selling Securityholder has not taken, and at the
Closing Date and at any later Option Closing Date, will not have taken,
directly or indirectly, any action that has constituted, or might reasonably be
expected to constitute, the stabilization or manipulation of the price of sale
or resale of the Shares.
7. The Selling Securityholder has not distributed and
will not distribute offering material in connection with the offering and sale
of the Shares.
8. All information furnished by or on behalf of the
Selling Securityholder relating to the Selling Securityholder and the Shares to
be sold by the Selling Securityholder that is set forth in the Registration
Statement or the Prospectus is, and at the time the Registration Statement
became or becomes, as the case may be, effective and at all times subsequent
thereto up to and on the Closing Date, and on any later date on which Option
Shares are to be purchased, was or will be, true, correct and complete, and
does not, and at the time the Registration Statement became or becomes, as the
case may be, effective and at all times subsequent thereto up to and on the
Closing Date, and on any later date on which Option Shares are to be purchased,
and will not, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make such
information not misleading.
9. The Selling Securityholder will review the Prospectus
and will comply with all agreements and satisfy all conditions on its part to
be complied with or satisfied pursuant to this Agreement on or prior to the
Closing Date, or any later date on which Option Shares are to be purchased, as
the case may be, and will advise UBS Securities LLC prior to the Closing Date
or such later date on which Option Shares are to be purchased, as the case may
be, if any statement to be made on behalf of the Selling Securityholder in the
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certificate contemplated by Section VII.G. would be inaccurate if made as of
the Closing Date or such later date on which Option Shares are to be purchased,
as the case may be.
10. The Selling Securityholder does not have, or has
waived prior to the date hereof, 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 the Company to the Underwriters pursuant to this Agreement; the
Selling Securityholder does not have, or has waived prior to the date hereof,
any registration right or other similar right to participate in the offering
made by the Prospectus, other than such rights of participation as have been
satisfied by the participation of the Selling Securityholder in the
transactions to which this Agreement relates in accordance with the terms of
this Agreement; and the Selling Securityholder 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, other than those described in the Registration
Statement and the Prospectus.
11. The Selling Securityholder has no reason to believe
that the representations and warranties of the Company contained in Section I.A.
are not true and correct, has reviewed and is familiar with the Registration
Statement and the Offering Memorandum and has no knowledge of any material fact,
condition or information required to be disclosed in the Registration Statement
or the Offering Memorandum and which has not been disclosed in the Registration
Statement and the Offering Memorandum, and the sale of the Selling
Securityholder Shares pursuant hereto is not prompted by any information
concerning the Company or any of the Subsidiaries which is not set forth in the
Registration Statement and the Offering Memorandum.
12. The Selling Securityholder has reviewed the Prospectus
and is not aware that the Prospectus, as of its date or as of the Closing Date
or any later date on which Option Shares are to be purchased, contains any
untrue statement of a material fact or omits 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, however,
that the Selling Securityholder will have no responsibility for the statements
and omissions made in reliance on and in conformity with the information
contained in the first, third, fifth, seventh, eighth or ninth paragraphs of the
section of the Prospectus entitled "Underwriting" or the information in the last
paragraph on the front cover page of the Prospectus or to statements in or
omissions from the Registration Statement, the Offering Memorandum or the
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by any Underwriter through the Representatives expressly
for use in the Registration Statement, the Offering Memorandum or the
Prospectus.
II. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
A. On the basis of the representations and warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company shall issue and sell the Company Shares to the several
Underwriters, the Selling Securityholder shall sell to the several Underwriters
the Selling Securityholder Shares, and each of the Underwriters shall purchase
from the Company and the Selling Securityholder the respective aggregate number
of Firm Shares set forth opposite its name on Schedule A, plus such additional
number of Firm Shares which such Underwriter may become obligated to purchase
pursuant to Section 2(b) hereof. The price at which such Firm Shares shall be
sold by the Company and the Selling Securityholder and purchased by the several
Underwriters shall be [ ] per share. The obligation of each Underwriter to
the Company and the Selling Securityholder shall be to purchase from the
Company and the Selling Securityholder that number of the Firm Shares which
represents the same proportion of the total number of the Firm Shares to be
sold by each of the Company and the Selling Securityholder pursuant to this
Agreement as the number of the Firm Shares set forth opposite the name of such
Underwriter in Schedule A hereto represents of the total number of the Firm
Shares to be purchased by all Underwriters pursuant to this Agreement, as
adjusted by you in such manner as you deem advisable to avoid fractional
shares. In making this Agreement, each Underwriter is contracting severally
and not jointly; except as provided in paragraphs B. and C. of this Section II,
the agreement of each Underwriter is to purchase only the respective number of
Firm Shares specified on Schedule A.
B. If for any reason one or more of the Underwriters shall fail
or refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section (IX hereof) to purchase and pay
for the number of Shares agreed to be purchased by such Underwriter or
Underwriters, the non-defaulting Underwriters shall have the right within
twenty-four (24) hours after such default to purchase, or procure one or more
other Underwriters to purchase, in such proportions as may be agreed upon
between you and such purchasing Underwriter or Underwriters and upon the terms
herein set forth, all or any part of the Shares which such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such Shares
and portion, the number of Shares which each non-defaulting Underwriter is
otherwise obligated to purchase under this Agreement shall be automatically
increased on a pro rata basis (as adjusted by you in such manner as you deem
advisable to avoid fractional shares) to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the Shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such Shares exceeds
10% of the total number of Shares which all Underwriters agreed to purchase
hereunder. If the total number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase shall not be purchased or absorbed in
accordance with the two preceding sentences, the Company, on behalf of itself
and the Selling Securityholder, shall have the right, within twenty-four (24)
hours next succeeding the twenty-four (24) hour period referred to above, to
make arrangements with other underwriters or purchasers reasonably satisfactory
to you for purchase of such Shares and portion on the terms herein set forth.
In any
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such case, either you or the Company, on behalf of itself and the Selling
Securityholder, shall have the right to postpone the Closing Date determined as
provided in Section IV hereof for not more than seven business days after the
date originally fixed as the Closing Date pursuant to said Section IV in order
that any necessary changes in the Registration Statement, the Offering
Memorandum, the Prospectus or any other documents or arrangements may be made.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the
non-defaulting Underwriters nor the Company, on behalf of itself and the
Selling Securityholder, shall make arrangements within the twenty-four (24)
hour periods stated above for the purchase of all the Shares which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall be terminated without further act or deed and without any
liability on the part of the Company or the Selling Securityholder to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company or the Selling Securityholder.
Nothing in this paragraph B., and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
C. On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Selling Securityholder grants an option to the several Underwriters to purchase
all or any portion of the Option Shares from the Selling Securityholder at the
same price per share as the Underwriters shall pay for the Firm Shares. Said
option may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters and may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date of this
Agreement upon written or telecopied notice by you to the Company setting forth
the aggregate number of shares of the Option Shares as to which the several
Underwriters are exercising the option. Delivery of certificates for the
shares of Option Shares, and payment therefor, shall be made as provided in
Section IV hereof. Each Underwriter will purchase such percentage of the
Option Shares as is equal to the percentage of Firm Shares that such
Underwriter is purchasing, the exact number of shares to be adjusted by you in
such manner as you deem advisable to avoid fractional shares.
III. OFFERING BY UNDERWRITERS.
A. The terms of the public offering of the Shares in the United
States by the Underwriters shall be as set forth in the Prospectus. The terms
of the private placement of the Shares in Canada by the Underwriters shall be
as set forth in the Offering Memorandum. The Underwriters may from time to
time change the public offering and private placement prices after the closing
of the public offering and the private placement, respectively, and increase or
decrease the concessions and discounts to dealers as they may determine.
B. You, on behalf of the Underwriters, represent and warrant that
(i) the information set forth in the last paragraph on the front cover page and
the information contained in the first, third, fifth, seventh, eighth and ninth
paragraphs of the section of the Prospectus entitled "Underwriting", the
Offering Memorandum, any Preliminary Prospectus and the Prospectus relating to
the Shares (insofar as such information relates to the Underwriters)
constitutes the only information furnished by the Underwriters to the Company
for inclusion in the Registration Statement, the Offering Memorandum, any
Preliminary Prospectus, and the Prospectus, and that the statements made
therein are correct and do not omit to state any material fact required to be
stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading, and (ii) the
Underwriters have not distributed and will not distribute prior to the Closing
Date or any Option Closing Date, as the case may be, any offering material in
connection with the offering and sale of the Shares other than the Preliminary
Prospectus, the Prospectus, the Registration Statement, the Offering Memorandum
and other materials permitted by the Act, the Rules and Regulations thereunder
and applicable Canadian securities laws.
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IV. DELIVERY OF AND PAYMENT FOR THE SHARES.
A. Delivery of certificates for the Firm Shares and the Option
Shares (if the option granted pursuant to Section II.C. hereof shall have been
exercised not later than 1:00 p.m., New York time, on the date at least two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (or at a location as otherwise agreed to by the parties) at 9:00
a.m., New York time, on the third or fourth business day after the date of this
Agreement unless otherwise permitted by the Commission pursuant to Rule 15c6-1
of the Exchange Act, or at such time on such other day, not later than seven
full business days after such third or fourth business day, as shall be agreed
upon in writing by the Company and you (the "Closing Date").
B. If the option granted pursuant to Section II.C. hereof shall
be exercised after 1:00 p.m., New York time, on the date two business days
preceding the Closing Date, and on or before the 30th day after the date of
this Agreement, delivery of certificates for the Option Shares, and payment
therefor, shall be made at the office of Xxxxxxx, Phleger & Xxxxxxxx LLP, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at a location as otherwise agreed to by
the parties) at 9:00 a.m., New York time, on the third business day after the
exercise of such option (the "Option Closing Date").
C. Payment for the Shares purchased from the Company shall be
made to the Company or its order and payment for the Shares purchased from the
Selling Securityholder shall be made to the account of the Selling
Securityholder, in each case by wire transfer of Federal funds to the accounts
specified by the Company and the Selling Securityholder, respectively, or by
one or more certified or official bank check or checks in same day funds. Such
payment shall be made upon delivery of certificates for the Shares to you for
the respective accounts of the several Underwriters against receipt therefor
signed by you. Certificates for the Shares to be delivered to you shall be
registered in such name or names and shall be in such denominations as you may
request at least three business days before the Closing Date, in the case of
Firm Shares, and at least two business days prior to the Option Closing Date,
in the case of the Option Shares. Such certificates will be made available to
the Underwriters for inspection, checking and packaging at a location in New
York, New York, designated by the Underwriters not less than one full business
day prior to the Closing Date or, in the case of the Option Shares, by 3:00
p.m., New York time, on the business day preceding the Option Closing Date.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
or the Selling Securityholder, for the account of the Selling Securityholder,
for Shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later Option Closing Date. Any such
payment by you shall not relieve such Underwriter from any of its obligations
hereunder.
V. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees
as follows:
A. The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto,
to become effective as promptly as possible; the Company will use its best
efforts to cause any Abbreviated Registration Statement as may be required
subsequent to the date the Registration Statement is declared effective to
become effective as promptly as possible; the Company will notify you,
promptly after it shall receive notice thereof, of the time when the
Registration Statement, any subsequent amendment to the Registration Statement
or any Abbreviated Registration Statement has become effective or any
supplement to the Prospectus has been filed. If the Company omitted
information from the Registration Statement at the time it was originally
declared effective in reliance upon Rule 430A(a) of the Rules and Regulations,
the Company will provide evidence satisfactory to you that the Prospectus
contains such information and has been filed, within the time period
prescribed, with the Commission pursuant to subparagraph (1) or (4) of Rule
424(b) of the Rules and
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Regulations or as part of a post-effective amendment to such Registration
Statement as originally declared effective which is declared effective by the
Commission. If the Company files a term sheet pursuant to Rule 434 of the
Rules and Regulations, the Company will provide evidence satisfactory to you
that the term sheet meeting the requirements of Rule 434(b) or (c), as
applicable, of the Rules and Regulations, has been filed, within the time
prescribed, with the Commission pursuant to subparagraph (7) of Rule 424(b) of
the Rules and Regulations. If for any reason the filing of the final form of
Prospectus is required under Rule 424(b)(3) of the Rules and Regulations, the
Company will provide evidence satisfactory to you that the Prospectus contains
such information and has been filed with the Commission within the time period
prescribed. The Company will notify you promptly of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information. Promptly upon your request, it
will prepare and file with the Commission any amendments or supplements to the
Registration Statement or Prospectus which, in the opinion of "Underwriters'
Counsel" may be necessary or advisable in connection with the distribution of
the Shares by the Underwriters. The Company will promptly prepare and file
with the Commission, and promptly notify you of the filing of, any amendments
or supplements to the Registration Statement or Prospectus which may be
necessary to correct any statements or omissions, if, at any time when a
prospectus relating to the Shares is required to be delivered under the Act,
any event shall have occurred as a result of which the Prospectus or any other
prospectus relating to the Shares as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. In case any Underwriter is required to deliver a
prospectus more than nine months after the Effective Date in connection with
the sale of the Shares, pursuant to Section 10(a)(3) of the Act, the Company
will prepare promptly upon request, but at the expense of such Underwriter,
such amendment or amendments to the Registration Statement and such prospectus
or prospectuses as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Act. The Company will file no amendment or
supplement to the Registration Statement or Prospectus that shall not
previously have been submitted to you a reasonable time prior to the proposed
filing thereof or to which you shall reasonably object in writing or which is
not in compliance with the Act and Rules and Regulations or the provisions of
this Agreement.
B. The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or the
use of the Prospectus or of the initiation or threat of any proceeding for that
purpose; and it will promptly use its best efforts to prevent the issuance of
any such stop order or to obtain its withdrawal at the earliest possible moment
if such stop order should be issued.
C. The Company will cooperate with you in endeavoring to qualify
the Shares for the offer and sale under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in
effect for so long as may be required for purposes of the distribution of the
Shares, except that the Company shall not be required in connection therewith
or as a condition thereof to qualify as a foreign corporation, or to execute a
general consent to service of process in any jurisdiction, or to make any
undertaking with respect to the conduct of its business. In each jurisdiction
in which the Shares shall have been qualified, the Company will make and file
such statements, reports and other documents in each year as are or may be
reasonably required by the laws of such jurisdictions so as to continue such
qualifications in effect for so long a period as you may reasonably request for
distribution of the Shares, or as otherwise may be required by law.
D. The Company will furnish to you, as soon as available, copies
of the Registration Statement (three of which will be signed and which will
include all exhibits), each Preliminary Prospectus, the Prospectus, the
Offering Memorandum and any amendments or supplements to such documents,
including any prospectus prepared to permit compliance with Section 10(a)(3) of
the Act, all in such quantities as you may from time to time reasonably
request.
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E. The Company will make generally available to its stockholders
as soon as practicable, but in any event not later than the forty-fifth (45th)
day following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, earnings
statements (which will be in reasonable detail but need not be audited)
complying with the provisions of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and covering a twelve (12) month period beginning after
the effective date of the Registration Statement, and will advise you in
writing when such statement has been made available.
F. During a period of five years after the date hereof, the
Company, as soon as practicable after the end of each respective period, will
furnish to its stockholders annual reports (including consolidated financial
statements audited by independent certified public accountants) and will
furnish to its stockholders unaudited quarterly consolidated statements of
operations for each of the first three quarters of the fiscal year, and will
furnish to you and the other several Underwriters hereunder (i) concurrently
with making such reports available to its stockholders, consolidated statements
of operations of the Company for each of the first three quarters in the form
made available to the Company's stockholders; (ii) concurrently with the
furnishing thereof to its stockholders, a consolidated balance sheet of the
Company as of the end of such fiscal year, together with consolidated
statements of operations, of stockholders' equity and of cash flow of the
Company for such fiscal year, accompanied by a copy of the certificate or
report thereon of nationally recognized independent certified public
accountants; (iii) concurrently with the furnishing of such reports to its
stockholders, copies of all reports (financial or other) mailed to
stockholders; (iv) as soon as they are available, copies of all reports and
consolidated financial statements furnished to or filed with the Commission,
any securities exchange or the Nasdaq National Market by the Company (except
for documents for which confidential treatment is requested); and (v) every
material press release and every material news item or article in respect of
the Company or its affairs which was generally released to stockholders or
prepared for general release by the Company. During such five-year period, if
the Company shall have any active subsidiaries, the foregoing consolidated
financial statements shall be on a consolidated basis to the extent that the
accounts of the Company are consolidated with any subsidiaries, and shall be
accompanied by similar consolidated financial statements for any significant
subsidiary that is not so consolidated.
G. The Company shall not, during the 90 days following the
effective date of the Registration Statement, except with your prior written
consent as Representatives, issue, sell, offer or agree to sell, grant,
distribute or otherwise dispose of, directly or indirectly, any shares of
Common Stock, or any options, rights or warrants with respect to shares of
Common Stock, or any securities convertible into or exchangeable for Common
Stock, other than (i) the sale of Shares hereunder, (ii) the grant of options
or the issuance of shares of Common Stock under the Company's stock option
plans or stock purchase plan, as the case may be, or (iii) the issuance of
shares of Common Stock upon exercise of the currently outstanding options or
warrants described in the Registration Statement.
H. The Company shall not, during the 90 days following the
effective date of the Registration Statement, except with your prior written
consent as Representatives, file a registration statement covering any of its
shares of capital stock, except that one or more registration statements on
Form S-8 may be filed at any time following the effective date of the
Registration Statement covering the registration of the Company's currently
existing option plans.
I. The Company will apply the net proceeds from the sale of the
Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
J. The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar (which may
be the same entity as the transfer agent) for its Common Stock.
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K. The Company will use its best efforts to maintain listing of
its shares of Common Stock on the Nasdaq National Market.
L. The Company is familiar with the Investment Company Act of
1940, as amended, and the rules and regulations thereunder, and has in the past
conducted its affairs, and will in the future conduct its affairs, in such a
manner so as to ensure that the Company was not and will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
M. If at any time during the 180 day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the Company will,
after written notice from you advising the Company to the effect set forth
above, consult with you in good faith regarding the necessity of disseminating
a press release or other public statement responding to or commenting on such
rumor, publication or event and, if the Company in its reasonable judgment
determines that such a press release or other public statement is appropriate,
the substance of any press release or other public statement.
VI. EXPENSES.
The Company and the Selling Securityholder agree with each Underwriter
that:
A. The Company will pay and bear all costs, fees and expenses in
connection with the preparation, printing and filing of the Registration
Statement (including consolidated financial statements, schedules and
exhibits), the Offering Memorandum (including fees relating to the filing of
reports in Canada), Preliminary Prospectuses and the Prospectus and any
amendments or supplements thereto; the reproduction of this Agreement, the
Agreement Among Underwriters, the Selected Dealer Agreement, the Preliminary
Blue Sky Memoranda and any Supplemental Blue Sky Memoranda and any instruments
related to any of the foregoing; the issuance and delivery of the Shares
hereunder to the several Underwriters, including transfer taxes, if any; the
cost of all stock certificates representing the Shares and transfer agents' and
registrars' fees; the fees and disbursements of corporate, patent and
regulatory counsel for the Company; all fees and other charges of the Company's
independent public accountants; the cost of furnishing to the several
Underwriters copies of the Registration Statement (including appropriate
exhibits), the Offering Memorandum, Preliminary Prospectuses and the
Prospectus, and any amendments or supplements to any of the foregoing; NASD
filing fees and expenses incident to securing any required review and the cost
of qualifying the Shares under the laws of such jurisdictions within the United
States as you may designate (including filing fees and fees and disbursements
of Underwriters' Counsel in connection with such NASD filings and Blue Sky
qualifications); listing application fees of the Nasdaq National Market; and
all other expenses directly incurred by the Company or the Selling
Securityholder in connection with the performance of their obligations
hereunder. Any additional expenses incurred as a result of the sale of the
Shares by the Selling Securityholder will be borne collectively by the Company
and the Selling Securityholder. The provisions of this Section VI.A are
intended to relieve the Underwriters from the payment of the expenses and costs
which the Selling Securityholder and the Company hereby agree to pay, but shall
not affect any agreement which the Selling Securityholder and the Company may
make, or may have made, for the sharing of such expenses and costs. Such
agreements shall not impair the obligations of the Company and the Selling
Securityholder hereunder to the several Underwriters.
B. If the transactions contemplated hereby are not consummated by
reason of any failure, refusal or inability on the part of the Company or the
Selling Securityholder to perform any agreement on their part to be performed
hereunder or to fulfill any condition of the Underwriters' obligations
hereunder, the Company and the Selling Securityholder will, in addition to
paying the expenses described in clause A. above, reimburse the
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several Underwriters for all out-of-pocket expenses (including reasonable fees
and disbursements of Underwriters' Counsel) incurred by the Underwriters in
reviewing the Registration Statement and the Prospectus and in preparing the
Offering Memorandum and in otherwise investigating, preparing to market or
marketing the Shares. Neither the Company nor the Selling Securityholder will
in any event be liable to any of the several Underwriters for any loss of
anticipated profits from the sale by them of the Shares.
VII. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the several Underwriters to purchase and pay for
the Shares, as provided herein, shall be subject to the accuracy, as of the
date hereof and the Closing Date and any later Option Closing Date, as the case
may be, of the representations and warranties of the Company and the Selling
Securityholder herein, to the performance by the Company and the Selling
Securityholder of their obligations hereunder and to the following additional
conditions:
A. The Registration Statement shall have become effective not
later than 9:00 a.m., New York City time, on the date following the date of
this Agreement, or such later time or date as shall be consented to in writing
by you. If the filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b) and Rule 430A of the Rules and Regulations,
the Prospectus shall have been filed in the manner and within the time period
required by Rule 424(b) and Rule 430A of the Rules and Regulations. No stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been initiated or, to
the knowledge of the Company, the Selling Securityholder or any Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of Underwriters'
Counsel.
B. All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement, the
Offering Memorandum and the Prospectus, and the registration, authorization,
issue, sale and delivery of the Shares shall have been reasonably satisfactory
to Underwriters' Counsel, and such counsel shall have been furnished with such
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this subsection.
C. You shall have received, at no cost to you, on the Closing
Date and on any later Option Closing Date, as the case may be, the opinions of
(i) Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, corporate counsel to the Company and the
Selling Securityholder, (ii) Xxxxxx & Xxxxxxx, patent counsel to the Company,
and (iii) Xxxxx and Xxxxxxx, L.L.P., regulatory counsel to the Company, dated
the Closing Date or such later Option Closing Date, in the forms attached
hereto on Appendix A, Appendix B and Appendix C, respectively, addressed to the
Underwriters and with reproduced copies of signed counterparts thereof for each
of the Representatives.
D. You shall have received from Xxxxxxx, Phleger & Xxxxxxxx LLP,
Underwriters' Counsel, an opinion or opinions, dated the Closing Date or on any
later Option Closing Date, as the case may be, in form and substance reasonably
satisfactory to you, with respect to the sufficiency of all corporate
proceedings undertaken by the Company and other legal matters relating to this
Agreement and the transactions contemplated hereby as you may reasonably
require, and the Company shall have furnished to such counsel such documents as
it may have reasonably requested for the purpose of enabling it to pass upon
such matters.
E. You shall have received on the Closing Date and on any later
Option Closing Date, as the case may be, a letter from the Accountants
addressed to the Company and the Underwriters, dated the Closing Date or such
later Option Closing Date, as the case may be, confirming that they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the Rules and Regulations thereunder and based upon the
procedures described in its letter delivered to you concurrently with the
execution
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of this Agreement (herein called the "Original Letter"), but carried out to a
date not more than three days prior to the Closing Date or any such later
Option Closing Date, as the case may be, (i) confirming that the statements and
conclusions set forth in the Original Letter are accurate as of the Closing
Date or such later Option Closing Date, as the case may be; and (ii) setting
forth any revisions and additions to the statements and conclusions set forth
in the Original Letter that are necessary to reflect any changes in the facts
described in the Original Letter since the date of such letter, or to reflect
the availability of more recent consolidated financial statements, data or
information. The letter shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties of
the Company which, in your reasonable judgment, makes it impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated
by the Prospectus. In addition, you shall have received from the Accountants a
letter, dated [ ], 1997, addressed to the Company and made available to you
for the use of the Underwriters stating that its review of the Company's system
of internal accounting controls, to the extent it deemed necessary in
establishing the scope of its latest examination of the Company's consolidated
financial statements, did not disclose any weaknesses in internal controls that
it considered to be material weaknesses. All such letters shall be in a form
reasonably satisfactory to the Representatives and their counsel.
F. You shall have received on the Closing Date and on any later
Option Closing Date, as the case may be, a certificate of the President and the
Chief Financial Officer of the Company, dated the Closing Date or such later
date, to the effect that as of such date (and you shall be satisfied that as of
such date):
1. The representations and warranties of the Company in
this Agreement are true and correct, as if made on and as of
the Closing Date or any later Option Closing Date, as the case
may be; and the Company has complied with all of the
agreements and satisfied all of the conditions on its part to
be performed or satisfied at or prior to the Closing Date or
any later Option Closing Date, as the case may be;
2. The Registration Statement has become effective under
the Act and no stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of
the Prospectus has been issued, and no proceedings for that
purpose have been instituted or are pending or, to the best of
their knowledge, threatened under the Act;
3. They have carefully reviewed the Registration
Statement, the Offering Memorandum and the Prospectus, when
the Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the
Registration Statement, the Offering Memorandum and the
Prospectus and any amendments or supplements thereto contained
all statements and information required to be included therein
or necessary to make the statements therein not misleading;
and when the Registration Statement became effective, and at
all times subsequent thereto up to the delivery of such
certificate, none of the Registration Statement, the Offering
Memorandum or the Prospectus or any amendment or supplement
thereto included any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; and, since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amended or supplemented Registration Statement,
Prospectus or Offering Memorandum that has not been so set
forth; and
4. Subsequent to the respective dates as of which
information is given in the Registration Statement, the
Offering Memorandum and the Prospectus, there has not been (A)
any material adverse change in the properties or assets
described or referred to in the Registration Statement, the
Offering Memorandum and the Prospectus or in the condition
(financial or otherwise), operations, business or prospects of
the Company and its Subsidiaries taken as a whole, (B) any
transaction which is material to the Company and its
Subsidiaries taken as a
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whole, except transactions entered into in the ordinary course
of business, (C) any obligation, direct or contingent,
incurred by the Company or its Subsidiaries, which is material
to the Company and its Subsidiaries taken as a whole, (D) any
change in the capital stock or outstanding indebtedness of the
Company or its Subsidiaries which is material to the Company
and its Subsidiaries taken as a whole, (E) any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company or its Subsidiaries, or (F) any loss or
damage (whether or not insured) to the property of the Company
or its Subsidiaries which has been sustained or will have been
sustained which has a Material Adverse Effect.
G. You shall have received on the Closing Date and on any later
Option Closing Date, as the case may be, a certificate of the Selling
Securityholder to the effect that, as of the Closing Date or such later Option
Closing Date:
(i) The representations and warranties
made by the Selling Securityholder herein are true and correct on the
Closing Date or on any later date on which Option Shares are to be
purchased, as the case may be; and
(ii) The Selling Securityholder has
complied with all obligations and satisfied all conditions which are
required to be performed or satisfied on the part of the Selling
Securityholder at or prior to the Closing Date or any later date on
which Option Shares are to be purchased, as the case may be.
H. The Company and the Selling Securityholder shall have
furnished to you such further certificates and documents as you shall
reasonably request (including certificates of officers of the Company or
officers of the Selling Securityholder), as to the accuracy of the
representations and warranties of the Company and the Selling Securityholder
herein, as to the performance by the Company and the Selling Securityholder of
their respective obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Underwriters hereunder.
I. The Company shall have timely filed with the Nasdaq National
Market a notification form for listing of additional shares on the Nasdaq
National Market with respect to the Company Shares; and the Firm Shares and the
Option Shares, if any, shall have been approved for designation upon notice of
issuance on the Nasdaq National Market.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company or the Selling Securityholder, as the
case may be, will furnish you with such number of conformed copies of such
opinions, certificates, letters and documents as you shall reasonably request.
VIII. INDEMNIFICATION AND CONTRIBUTION.
A. Subject to the provisions of Section VIII.G below, the Company
and the Selling Securityholder jointly and severally agree to indemnify and
hold harmless each Underwriter and each person (including each partner or
officer thereof) who controls any Underwriter within the meaning of Section 15
of the Act from and against any and all losses, claims, damages or liabilities,
joint or several, to which such indemnified parties or any of them may become
subject under the Act, the Exchange Act, or the common law or otherwise, and
the Company and the Selling Securityholder jointly and severally agree to
reimburse each such Underwriter and controlling person for any legal or other
out-of-pocket expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified
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parties, in each case arising out of or based upon (i) any breach of any
representation, warranty, agreement or covenant of the Company or the Selling
Securityholder contained in this Agreement, (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (including the Prospectus as part thereof and any Abbreviated
Registration Statement) or in the Offering Memorandum or any post-effective
amendment thereto (including any Abbreviated Registration Statement), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or in the Offering Memorandum or the omission or
alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that (1) the indemnity agreements of
the Company and the Selling Securityholder contained in this Section VIII.A
shall not apply to any such losses, claims, damages, liabilities or expenses if
such statement or omission is contained in the first, third, fifth, seventh,
eighth or ninth paragraphs of the section of the Prospectus entitled
"Underwriting" or the last paragraph of text on the cover page of the
Prospectus or arises out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), and (2) the indemnity agreement contained in
this Section VIII.A with respect to any Preliminary Prospectus or Offering
Memorandum shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages, liabilities or expenses
purchased the Shares which is the subject thereof (or to the benefit of any
person controlling such Underwriter) if at or prior to the written confirmation
of the sale of such Shares a copy of the Prospectus (or the Prospectus as
amended or supplemented or, in the case of Purchasers resident in Ontario,
Canada, the revised Offering Memorandum) was not sent or delivered to such
person and the untrue statement or omission of a material fact contained in
such Preliminary Prospectus was corrected in the Prospectus (or the Prospectus
as amended or supplemented or, in the case of Purchasers resident in Ontario,
Canada, the revised Offering Memorandum) unless the failure is the result of
noncompliance by the Company with paragraph (a) of Section V hereof; The
Company and the Selling Securityholder may agree, as among themselves and
without limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
The indemnity agreements of the Company and the Selling Securityholder
contained in this Section VIII.A and the representations and warranties of the
Company and the Selling Securityholder contained in Section I hereof shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the delivery of
any payment for the Shares.
B. Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its executive officers, each
of its directors, each other Underwriter and each person (including each
partner or officer thereof) who controls the Company or any such other
Underwriter within the meaning of Section 15 of the Act, and the Selling
Securityholder from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Act, the Exchange Act, or the common law or
otherwise and to reimburse each of them for any legal or other expenses
(including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any
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breach of any representation, warranty, agreement or covenant of such
Underwriter contained in this Agreement, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Abbreviated Registration
Statement) or in the Offering Memorandum or any post-effective amendment
thereto (including any Abbreviated Registration Statement) or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or
supplement thereto) or in the Offering Memorandum or the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that in the cases of clauses (ii) and
(iii) above, such statement or omission is contained in the third, fifth or
eighth paragraph of the section of the Prospectus entitled "Underwriting" or
the last paragraph on the cover page of the Prospectus or arises out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto). The indemnity
agreement of each Underwriter contained in this Section VIII.B shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the delivery of and
payment for the Shares.
C. Each party indemnified under the provision of paragraphs A.
and B. of this Section VIII agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against it, in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (a "Notice") of such service
or notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be
available to any party who shall fail so to give the Notice if the party to
whom such Notice was not given was unaware of the action, suit, investigation,
inquiry or proceeding to which the Notice would have related and was prejudiced
by the failure to give the Notice, but the omission so to notify such
indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its
own expense to participate in the defense of any action, suit or proceeding
against, or investigation or inquiry of, an indemnified party. Any
indemnifying party shall be entitled, if it so elects within a reasonable time
after receipt of the Notice by giving written notice (the "Notice of Defense")
to the indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or
parties shall be entitled to conduct the defense to the extent reasonably
determined by such counsel to be necessary to protect the interests of the
indemnified party or parties and (ii) in any event, the indemnified party or
parties shall be entitled, at its or their own expense to have counsel chosen
by such indemnified party or parties participate in, but not conduct, the
defense. It is understood that the indemnifying parties shall not, in respect
of the legal defenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all of the Underwriters and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, and (b) the fees and
expenses of more than one separate firm (in addition to any local
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counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act. If, within a reasonable time after receipt of the
Notice, an indemnifying party gives a Notice of Defense and the counsel chosen
by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs A. through C. of this Section VIII for any legal or
other expenses subsequently incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation, inquiry or
proceeding, except that (A) the indemnifying party or parties shall bear the
legal and other expenses incurred in connection with the conduct of the defense
as referred to in clause (i) of the proviso to the preceding sentence and (B)
the indemnifying party or parties shall bear such other expenses as it or they
have authorized to be incurred by the indemnified party or parties. If, within
a reasonable time after receipt of the Notice, no Notice of Defense has been
given, the indemnifying party or parties shall be responsible for any legal or
other expenses incurred by the indemnified party or parties in connection with
the defense of the action, suit, investigation, inquiry or proceeding. The
indemnifying party or parties shall not be liable for any settlement of any
proceeding effected without its or their written consent, provided such consent
has not been unreasonably withheld.
D. If the indemnification provided for in this Section VIII is
unavailable or insufficient to hold harmless an indemnified party under
paragraph A. or B. of this Section VIII, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph A. or B. of this Section VIII (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as the
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Securityholder, on the one hand, and the Underwriters,
on the other, shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Shares received by the Company and
the Selling Securityholder and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Shares. Relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by each indemnifying
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph D. were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this
paragraph D. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities, or actions in respect thereof, referred
to in the first sentence of this paragraph D. shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigation, preparation to defend or defense against any
action or claim which is the subject of this paragraph D. Notwithstanding the
provisions of this paragraph D., no Underwriter shall be required to contribute
any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph D. to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the
service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it will
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promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
of any such service shall not relieve the party from whom contribution may be
sought from any obligation it may have hereunder or otherwise (except as
specifically provided in paragraph C. of this Section VIII.
E. Neither the Company nor the Selling Securityholder shall,
without the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not such Underwriter or any person who controls such
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
F. The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including without limitation the
provisions of this Section VIII and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section VIII
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is
made in the Registration Statement and Prospectus as required by the Act and
the Exchange Act, or in the Offering Memorandum as required by Canadian
securities law.
G. Notwithstanding any other provision of this Agreement, the
liability of the Selling Securityholder under this Section VIII, solely in its
capacity as a Selling Securityholder herein and not with respect to any other
relationships any of the partners of the Selling Securityholder may have with
the Company, shall not exceed the lesser of (i) the amount equal to the public
offering price of the Selling Securityholder Shares sold by the Selling
Securityholder to the Underwriters minus the amount of the underwriting discount
paid thereon to the Underwriters by the Selling Securityholder, and (ii) the
Selling Securityholder's proportionate share of such liability, determined by
dividing the number of Selling Securityholder Shares under this Agreement by
the total number of shares of Common Stock sold under this Agreement by the
Company and the Selling Securityholder.
IX. TERMINATION. This Agreement may be terminated by you at any time on
or prior to the Closing Date or on or prior to any later Option Closing Date,
as the case may be, (i) if the Company or the Selling Securityholder shall have
failed, refused or been unable, at or prior to the Closing Date, or on or prior
to any later Option Closing Date, as the case may be, to perform any agreement
on their part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company or
the Selling Securityholder is not fulfilled, including, without limitation, any
material adverse change in the financial condition, earnings, operations,
business or business prospects of the Company from that set forth in the
Registration Statement or Prospectus, whether or not arising in the ordinary
course of business, or (ii) if trading on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market,
by such trading exchanges or by order of the Commission or any other
governmental authority having jurisdiction, or if a banking moratorium shall
have been declared by federal or New York authorities, or (iii) if the Company
shall have sustained a loss by strike, fire, flood, accident or other calamity
of such character as to have a Material Adverse Effect regardless of whether or
not such loss shall have been insured, or (iv) if there shall have been a
material adverse change in the general political or economic conditions or
financial markets in the United States as in the sole judgment of the
Representatives makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have occurred
an outbreak or escalation of hostilities between the United States and any
foreign power or of any other insurrection or armed conflict involving the
United States or other national or international calamity, hostilities or
crisis or the declaration by the United States of a national emergency which,
in the judgment of the Representatives, adversely affects the marketability of
the Shares, or (vi) if any foreign, federal or state statute, regulation, rule
or order of any court or other governmental authority shall have been enacted,
published, decreed or otherwise promulgated which in the judgment of the
Representatives materially and adversely affects or will materially and
adversely affect the business or operations of the Company, or trading in the
Common Stock shall have been suspended, or (vii) there shall have occurred a
material adverse decline in the value of securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market, or
(viii) action shall be taken by any foreign, federal, state or local government
or agency in respect of its monetary or fiscal affairs which, in the judgment
of the Representatives, has a material adverse effect on the securities markets
in the United States. If this Agreement shall be terminated in
23
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accordance with this Section IX, there shall be no liability of the Company or
the Selling Securityholder to the Underwriters and no liability of the
Underwriters to the Company or the Selling Securityholder; provided, however,
that in the event of any such termination the Company and the Selling
Securityholder agree to indemnify and hold harmless the Underwriters from all
costs or expenses incident to the performance of the obligations of the Company
and the Selling Securityholder under this Agreement, including all costs and
expenses referred to in Section VI.
If you elect to terminate this Agreement as provided in this Section
IX, the Company and the Selling Securityholder shall be notified promptly by
you by telephone, telecopy or telegram, confirmed by letter.
X. REIMBURSEMENT OF CERTAIN EXPENSES.
A. In addition to their other obligations under Section VIII of
this Agreement, the Company and the Selling Securityholder hereby jointly and
severally agree to reimburse on a quarterly basis the Underwriters for all
reasonable legal and other expenses incurred in connection with investigating
or defending any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, described in paragraph A. of Section VIII of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section X and the
possibility that such payments might later be held to be improper; provided,
however, that (i) to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them and
(ii) such persons shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
B. In addition to their other obligations under Section VIII of
this Agreement, the Underwriters hereby agree to reimburse on a quarterly basis
the Company and the Selling Securityholder for all reasonable legal and other
expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph B. of Section VIII of this Agreement, notwithstanding the absence of
a judicial determination as to the propriety and enforceability of the
obligations under this Section X and the possibility that such payments might
later be held to be improper; provided, however, that (i) to the extent any
such payment is ultimately held to be improper, the Company and the Selling
Securityholder shall promptly refund it and (ii) the Company and the Selling
Securityholder shall provide to the Underwriter, upon request, reasonable
assurances of its ability to effect any refund, when and if due.
XI. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company, the Selling Securityholder and the several
Underwriters and, with respect to the provisions of Section VIII hereof, the
several parties (in addition to the Company, the Selling Securityholder and the
several Underwriters) indemnified under the provisions of said Section VIII,
and their respective personal representatives, successors and assigns. Nothing
in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The term
"successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Shares from any of the several Underwriters.
XII. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telecopy and, if to the Underwriters, shall
be mailed, telecopied or delivered to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Xx. Xxxxxxx Xxxxxxx, with a copy to Xxxxxxx, Phleger
& Xxxxxxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxxx X. Xxxxx, Esq.; if to the Company, shall be mailed, telecopied or
delivered to it at its office, 0000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Xx. Xxxxxxx X. Xxxxxxxxxx, with a copy to Xxxxxxx Xxxxx
Xxxxxxx & Xxxxxxxxx, 0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000-0000, Attention: Xxxxxx Xxxxxxx, Xx.; and if to the Selling
Securityholder, shall be mailed, telecopied or delivered to the Selling
Securityholder in care of
24
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Digene Corporation, 0000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: Xx. Xxxxxxx X. Xxxxxxxxxx. All notices given by telecopy shall be
promptly confirmed by letter.
XIII. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(i) any investigation made by or on behalf of any Underwriter or controlling
person thereof, or by or on behalf of the Selling Securityholder, the Company
or the Company's respective directors of officers, and (ii) delivery of and
payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
You will act as Representatives of the several Underwriters in all
dealings with the Company under this Agreement, and any action under or in
respect of this Agreement taken by you jointly or by UBS Securities LLC, as
Representatives, will be binding upon all of the Underwriters.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
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Please sign and return to the Company and to the Selling
Securityholder in care of the Company the enclosed duplicates of this letter,
whereupon this letter will become a binding agreement among the Company, the
Selling Securityholder and the several Underwriters in accordance with its
terms.
Very truly yours,
DIGENE CORPORATION
By:
-------------------------------------
Mr. Xxxx Xxxxx
President and Chief Executive Officer
SELLING SECURITYHOLDER
By:
-------------------------------------
Mr. Xxxx Xxxxx
Armonk Partners
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
UBS SECURITIES LLC
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
By: UBS SECURITIES LLC
By:
-------------------------------
Name:
Title:
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
27
SCHEDULE A
UNDERWRITERS
Number of
Shares
to be
Underwriters Purchased
------------ ---------
UBS Securities LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [_____]
NationsBanc Xxxxxxxxxx Securities, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [_____]
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [_____]
=======
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SCHEDULE B
Lock-Up Agreements
29
APPENDIX A
OPINION OF COUNSEL TO THE COMPANY AND THE SELLING SECURITYHOLDER
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx shall opine to the effect that:
A. Each of Digene Corporation (the "Company") and Digene
Europe, Inc., a Delaware Corporation ("Digene Europe")
has been duly incorporated under the laws of the jurisdiction
of its incorporation, and each of the Company and Digene
Europe is validly existing as a corporation and is in good
standing under the laws of the jurisdiction of its
incorporation;
B. Each of the Company and Digene Europe has the corporate power
and authority to own, lease and operate its properties and to
conduct its business substantially as described in the
Prospectus. The Company is duly qualified to do business as a
foreign corporation and is in good standing in Maryland. To
such counsels knowledge, the Company does not own or control,
directly or indirectly, any corporation, association or other
entity other than Digene Europe and Digene do Brazil Ltda,
a limited liability company organized under the laws of Brazil
(collectively, the "Subsidiaries";
C. The Company has full power and authority (corporate and
otherwise) to enter into the Underwriting Agreement and to
perform the transactions contemplated hereby, including,
without limitation, the power and authority to issue, sell and
deliver to the Underwriters the Company Shares;
D. The Underwriting Agreement has been duly authorized by all
necessary corporate action on the part of the Company, and
necessary partnership action on the part of the Selling
Securityholder, and has been duly executed and delivered by
the Company and the Selling Securityholder and is a valid and
binding agreement of each of the Company and the Selling
Securityholder, enforceable in accordance with its terms
except as rights to indemnification or contribution may be
limited by applicable laws or equitable principles and except
as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by
general equitable principles;
E. All outstanding shares of capital stock of the
Company (including the Selling Securityholder Shares) and
Digene Europe (a) have been duly authorized and validly issued
and are fully paid and nonassessable, (b) to such counsel's
knowledge have been issued in compliance with all federal and
state securities laws, and (c) were not issued in violation or
subject to any preemptive right, resale right, right of first
refusal or similar right known to such counsel. To the
knowledge of such counsel, all shares of capital stock of
Digene Europe which are owned by the Company are free and
clear of any security interest created under Article 9 of the
Uniform Commercial Code. To the knowledge of such counsel, no
options or warrants to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities
or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or
obligations in Digene Europe are outstanding;
30
F. The form of certificate evidencing the Common Stock complies
with the applicable provisions of Delaware law;
G. The Company Shares to be purchased from the Company pursuant
to the Underwriting Agreement have been duly authorized for
issuance and sale to the Underwriters pursuant to the
Underwriting Agreement and, when issued and delivered by the
Company against payment therefor in accordance with the terms
of the Underwriting Agreement, will be duly and validly issued
and fully paid and nonassessable, and will be sold free and
clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest, and, to the knowledge of such
counsel, not in violation of any preemptive right, co-sale
right, right of first refusal or other similar right;
H. The Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or are
pending or threatened under the Act; any required filing of
the Prospectus and any supplement thereto pursuant to Rule
424(b) of the Rules and Regulations has been made in the
manner and within the time period required by such Rule 424(b)
and any required filing of an abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations
has been made in the manner and within the time period
required by such Rule 462(b);
I. The Registration Statement, all Preliminary Prospectuses, the
Prospectus, and each amendment or supplement thereto (other
than the consolidated financial statements (including the
notes and schedules) and financial and statistical data
derived therefrom, as to which such counsel need express no
opinion), comply as to form in all material respects with the
requirements of the Act and the applicable Rules and
Regulations, and to the best of such counsel's knowledge,
there are no agreements, contracts, leases or documents of a
character required to be described in, or filed as an exhibit
to, the Registration Statement by the Act and the applicable
Rules and Regulations which are not described or filed as
required;
J. The statements in the Registration Statement and the
Prospectus summarizing statutes, rules and regulations (other
than the statements under the captions "Risk Factors --
Uncertainty Regarding Patents and Proprietary Rights," "Risk
Factors -- Government Regulation," "Business -- Licenses,
Patents and Proprietary Information" and "Business --
Government Regulation," as to which such counsel need express
no opinion), including the Delaware corporation law and the
description of the certificate of incorporation and bylaws of
the Company, are accurate in all material respects and fairly
present the information required to be presented by the Act or
the Rules and Regulations; and such counsel does not know of
any statutes, rules or regulations required to be described in
the Registration Statement or the Prospectus that are not
described or referred to therein as required (except that such
counsel need express no opinion with respect to statutes,
rules or regulations relating to patents or United States Food
and Drug Administration or foreign regulatory matters);
K. The statements under the caption "Risk Factors -- Shares
Eligible for Future Sale" in the Prospectus, insofar as such
statements or documents constitute a summary of documents
referred to therein or matters of law, are accurate summaries
and fairly present, in all material respects, the information
called for with respect to such documents and matters;
31
L. The information required to be set forth in the Registration
Statement in answer to Items 9 and 10 (insofar as it relates
to such counsel) of Form S-3 is, to the best of such counsel's
knowledge, accurately and adequately set forth therein in all
material respects or no response is required with respect to
such Items;
M. Neither the Company nor Digene Europe is (a) in violation of
its certificate of incorporation or bylaws, or (b) to the best
knowledge of such counsel, in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of
indebtedness or in any contract, indenture, mortgage, loan
agreement, joint venture or other agreement or instrument
which is filed as an exhibit to the Registration Statement or
as an exhibit to any document incorporated by reference into
the Prospectus, or (c) to the best knowledge of such counsel,
in violation of any writ, injunction, judgment or decree of
any court or governmental agency or body to which the Company
is subject;
N. The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions therein
contemplated do not and will not (a) conflict with or result
in a breach of any of the terms or provisions of or,
constitute a default under, the certificate of incorporation
or bylaws (or similar organizational documents) of the Company
or the Selling Securityholder, or (b) to the best knowledge of
such counsel, result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness,
or any lease, contract or other agreement or instrument to
which the Company or the Selling Securityholder is a party
and which is filed as an exhibit to the Registration Statement
or as an exhibit to any document incorporated by reference
into the Prospectus, or (c) to the best knowledge of such
counsel, conflict with or result in a violation or breach of
any law, order, rule, regulation, writ, injunction, judgment
or decree of any court or governmental agency or body to which
the Company or the Selling Securityholder is subject (except
that no opinion need to be expressed with respect to
compliance with statutes, rules and regulations relating to
patents or United States Food and Drug Administration or
foreign regulatory matters or state securities or "Blue Sky"
laws), which violation or breach would have a Material Adverse
Effect;
O. To the best knowledge of such counsel, the Company has all
licenses, consents, certificates, orders, approvals and
permits of any federal, state, local or foreign government
authority that are necessary to conduct its business
substantially as described in the Registration Statement and
the Prospectus, except where failure to have such licenses,
consents, certificates, orders, approvals and permits would
not have a Material Adverse Effect (except that such counsel
need express no opinion with respect to such licenses,
consents, certificates, orders, approvals, permits, statutes,
rules or regulations relating to patents or United States Food
and Drug Administration or foreign regulatory matters);
P. No consent, approval, authorization, order, designation or
declaration of or filing by or with any court or regulatory,
administrative or other governmental agency or body is
necessary in connection with the execution and delivery of the
Underwriting Agreement by the Company and the Selling
Securityholder and the consummation of the transactions
therein contemplated except such as may have been obtained
under the Act, the Exchange Act, under foreign or state
securities or Blue Sky laws or under the rules and regulations
of the NASD in connection with the purchase and distribution
of the Shares by the Underwriters;
Q. To such counsel's knowledge, there are no pending or
threatened actions, suits, claims, proceedings or
investigations against the Company or any Subsidiary or any
of their respective officers or any of their respective
properties, assets or
32
rights before any court of governmental agency or body or
otherwise, except where such threatened actions, suits,
proceedings or investigations against the Company or any
Subsidiary or any of their respective officers or any of their
respective properties, assets or rights would not have a
Material Adverse Effect;
R. To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of shares of
Common Stock or other securities of the Company have
registration rights with respect to securities of the Company
and, except as set forth in the Registration Statement and
Prospectus, all holders of securities of the Company having
registration rights with respect to shares of Common Stock or
other securities have, with respect to the offering
contemplated hereby, waived such rights, such rights have
otherwise been waived, are not exercisable, or have expired by
reason of lapse of time following notification of the
Company's intent to file the Registration Statement.
S. No transfer taxes are required to be paid in connection with
the sale or delivery to the Underwriters of the Firm Shares or
the Option Shares;
T. The Company is not an "investment company," or
a "promoter" or "principal underwriter" for a registered
investment company, as such terms are defined in the
Investment Company Act of 1940, as amended.
U. The Selling Securityholder has full right, power and authority
to sell, transfer, assign and deliver the Selling
Securityholder Shares pursuant to the terms of the
Underwriting Agreement; and
V. To the knowledge of such counsel, pursuant to
the Underwriting Agreement, the Selling Securityholder Shares
will be sold to the Underwriters free of adverse claims. In
rendering such opinion, such counsel may assume that the
Underwriters are without notice of any adverse claims with
respect to the Selling Securityholder Shares.
In addition, such counsel shall include a statement to the effect that
such counsel has participated in conferences with officials and other
representatives of the Company, the Selling Securityholder, the
Representatives, Underwriters' Counsel and the independent public accountants
of the Company, at which conferences the contents of the Registration Statement
and the Prospectus and related matters were discussed, and although they have
not verified, and assume no responsibility for, the accuracy or completeness of
the statements contained in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel which caused them to believe
that, at the time the Registration Statement became effective the Registration
Statement (except as to consolidated financial statements (including notes and
schedules) and financial and statistical data derived therefrom, as to which
such counsel need express no opinion) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or at the Closing
Date or any later Option Closing Date, as the case may be, the Registration
Statement or the Prospectus (except as aforesaid) contained any untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Counsel rendering the foregoing may rely (i) as to questions of law
not involving the laws of the Commonwealth of Pennsylvania, the United States
or the General Corporation Law of the State of Delaware upon opinions of local
counsel, and (ii) as to questions of fact upon representations of the Selling
Securityholder and
33
representations or certificates of officers of the Company, governmental
officials and other persons, as the case may be, in which case its opinion is
to state that it is so doing and that it has no actual knowledge of any
material misstatement or inaccuracy in such opinions, representations or
certificates, and that they believe that they and the Underwriters are
justified in relying on such opinions or certificates. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
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APPENDIX B
OPINION OF PATENT COUNSEL TO THE COMPANY
Xxxxxx & Xxxxxxx shall indicate that they served as special counsel to
the Company, with respect to patents and proprietary rights, and shall opine to
the effect that:
A. To the best of such counsel's knowledge, the statements in the
Prospectus relating to United States patent and licensing
matters under the captions "Risk Factors -- Uncertainty
Regarding Patents and Proprietary Rights" and "Business," and
other references in the Prospectus to United States patent and
licensing matters, insofar as such statements constitute a
summary of legal matters, documents, or proceedings, are
accurate and present fairly the information purported to be
shown; and
B. To the best of such counsel's knowledge, the statements in the
Prospectus relating to United States patent and licensing
matters under the captions "Risk Factors -- Uncertainty
Regarding Patents and Proprietary Rights" and "Business," and
other references in the Prospectus to United States patent and
licensing matters, do not contain an untrue statement of
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.
35
APPENDIX C
OPINION OF REGULATORY COUNSEL TO THE COMPANY
Xxxxx & Xxxxxxx L.L.P. shall indicate that they served as special
United States Food and Drug Administration regulatory counsel to the Company,
with respect to government regulation, and shall opine that:
A. The statements in the Prospectus under the captions "Risk
Factors -- Government Regulation," and "Business -- Government
Regulation," and other references in the Prospectus to those
matters described in such sections, insofar as such statements
purport to summarize applicable provisions of the Food, Drugs
and Cosmetics Act and the regulations promulgated thereunder,
are accurate summaries in all material respects of the
provisions purported to be summarized under such captions in
the Prospectus; and
B. No facts have come to such counsel's attention which causes
such counsel to believe that the statements in the Prospectus
under the captions "Risk Factors -- Government Regulation,"
and "Business -- Government Regulation," and other references
in the Prospectus to those matters described in such sections,
insofar as such statements relate to FDA regulatory matters,
at the time the 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 as
of the date hereof contains an untrue statement of a material
fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Such counsel may advise you that, in rendering their opinion, they
have relied on certain factual representations of the Company and that they
have not independently verified the accuracy and completeness of such
representations.
