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EXHIBIT 1
[FORM OF UNDERWRITING AGREEMENT]
2,000,000 SHARES
NOVOSTE CORPORATION
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
__________, 1999
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_____________, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
NOVOSTE CORPORATION, a Florida corporation (the "COMPANY"), proposes to
issue and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS") 2,000,000 shares of its Common Stock, $.01 par value (the "FIRM
SHARES"). The Company and certain shareholders of the Company (the "SELLING
SHAREHOLDERS") named in Schedule II hereto also severally propose to sell to the
several Underwriters not more than an additional 300,000 shares of Common Stock,
$.01 par value, of the Company (the "ADDITIONAL SHARES"), if and to the extent
that you shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such shares of common stock granted to the Underwriters in
Section 3 hereof. Of the Additional Shares, 100,000 shares are to be issued and
sold by the Company and 200,000 shares are to be sold by the Selling
Shareholders, each Selling Shareholder selling the amount set forth opposite
such Selling Stockholder's name in Schedule II hereto. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES." The
shares of Common Stock, $.01 par value, of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "COMMON STOCK." The Company and the Selling Shareholders are hereinafter
sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (File No. 333-________),
including a prospectus, relating to the Shares. The registration statement as
amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";
the prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "PROSPECTUS." The term "preliminary prospectus" as used in
this Agreement shall mean each preliminary prospectus included in the
Registration
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Statement prior to the time it becomes effective. Unless otherwise indicated,
any reference herein to the Registration Statement, the Prospectus or the
preliminary prospectus shall include all documents incorporated therein by
reference. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462 Registration Statement.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending
before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and incorporated by reference in the Prospectus complied,
or will comply when so filed, in all material respects with the
Exchange Act and the applicable rules and regulations of the
Commission thereunder, (ii) the Registration Statement, when it
became effective, did not contain and, as amended or supplemented,
if applicable, 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 the statements therein not
misleading, (iii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and
(iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not
apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through
you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Florida, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the
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extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate
power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable
and are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the
Prospectus.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued, fully paid and non-assessable.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
conflict with, result in a breach of any of the terms and
provisions of, or constitute a default under, the articles of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a
whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required
for the performance by the Company of its obligations
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under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken
as a whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of
this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a
party or to which any of the properties of the Company or any of
its subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as
required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects
with the Securities Act and the applicable rules and regulations
of the Commission thereunder.
(m) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(n) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (including, without limitation,
all laws and regulations relating to radioactive materials)
("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses
or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are 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 permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not,
singly or in the aggregate,
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have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(p) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) the
Company and its subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into
any material transaction not in the ordinary course of business;
(ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock other than ordinary
and customary dividends; and (iii) there has not been any material
change in the capital stock, short-term debt or long-term debt of
the Company and its consolidated subsidiaries, except in each case
as described in or contemplated by the Prospectus.
(q) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to
the business of the Company and its subsidiaries, in each case
free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company
and its subsidiaries; and any real or personal property and
buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by
the Company and its subsidiaries, in each case except as described
in the Prospectus.
(r) The Company and its subsidiaries own or possess all
material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names
("INTELLECTUAL PROPERTY") currently employed by them in connection
with the business now operated by them and necessary for the
conduct of their business as described in the Prospectus (the
"COMPANY INTELLECTUAL
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PROPERTY"), and, except as described in the Prospectus, neither
the Company nor any of its subsidiaries has received any notice of
any infringement of or conflict with the Intellectual Property
rights of others, which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
result in any material adverse effect on the condition, financial
or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole. To the best of the
Company's knowledge, the Company Intellectual Property does not
infringe upon or conflict with the Intellectual Property rights of
others, in a manner which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
result in any material adverse effect on the condition, financial
or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole.
(s) The Company and its subsidiaries 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 listed in
Exhibit A hereto or described or referred to in the Prospectus
(the "COMPANY PATENT APPLICATIONS"), and believe they have
complied with the PTO's duty of candor and disclosure for the
Company Patent Applications; the Company and its subsidiaries are
unaware of any facts material to a determination of patentability
regarding the Company Patent Applications not called to the
attention of the PTO; the Company and its subsidiaries are unaware
of any facts not called to the attention of the PTO which would
preclude the grant of a patent for the Company Patent
Applications; the Company and its subsidiaries have no knowledge
of any facts which would preclude them from having clear title to
the Company Patent Applications.
(t) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in
or contemplated by the Prospectus, or, to the knowledge of the
Company, is imminent; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or
contractors that could result in any material adverse effect on
the Company and its subsidiaries, taken as a whole.
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged (including, without
limitation, the aspects of its business involving radioactive
materials); neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for; and neither
the
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Company nor any such subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a
cost that could not have a material adverse effect on the Company
and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus.
(v) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their
respective businesses, including without limitation, all such
certificates, authorizations and permits required by the United
States Food and Drug Administration (the "FDA"), the Nuclear
Regulatory Commission (the "NRC") or any other federal, state or
foreign agencies or bodies engaged in the regulation of medical
devices or radioactive materials, and neither the Company nor any
such subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could
result in a material adverse effect on the condition, financial or
otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole. The Company and
its subsidiaries are in compliance in all material respects with
all applicable federal, state, local and foreign laws,
regulations, orders and decrees, including without limitation, all
regulations prescribed by the FDA, the NRC or any other federal,
state or foreign agencies or bodies engaged in the regulation of
medical devices or radioactive materials, except where
noncompliance would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(w) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(x) Ernst & Young LLP are, and during the periods covering
their report included in the Registration Statement and the
Prospectus were, independent accountants with respect to the
Company as required by the Securities Act.
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The financial statements of the Company and its subsidiaries
(together with the related notes thereto) included in the
Registration Statement present fairly the financial position and
results of operations of the Company and its subsidiaries at the
respective dates and for the respective periods to which they
apply, subject to normal year-end adjustments. Such financial
statements (together with the related notes thereto) have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved
except as otherwise stated therein.
(y) The Shares have been approved for quotation on the Nasdaq
National Market, subject to official notice of issuance.
(z) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company
to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company
to include such securities with the Shares registered pursuant to
the Registration Statement. All persons who possess such rights
have effectively waived them with respect to the offering of the
Shares.
(aa) Each material contract, agreement and license to which
the Company or any of its subsidiaries is bound including, without
limitation, [LIST OF MATERIAL CONTRACTS, INCLUDING SUPPLIER
AGREEMENTS] is legal, valid, binding, enforceable, and in full
force and effect. No party is in breach or default with respect to
any such contract, agreement and license, and no event has
occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or
acceleration, under any such contract, agreement or license. No
party has repudiated any provision of any such contract, agreement
or license.
(bb) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or
operations of the Company or any of its subsidiaries will be
affected by the Year 2000 Problem (that is, any significant risk
that computer hardware or software applications used by the
Company and its subsidiaries will not, in the case of dates or
time periods occurring after December 31, 1999, function at least
as effectively as in the case of dates or time periods occurring
prior to January 1, 2000); as a result of such review, (i) the
Company has no reason to believe, and does not believe, that (A)
there are any issues related to the Company's preparedness to
address the Year 2000 Problem that are of a character required to
be described or referred to in the Registration Statement or
Prospectus which have not been accurately described in the
Registration Statement or Prospectus and (B) the Year 2000 Problem
will have a material adverse effect on the condition,
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financial or otherwise, or on the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, or result
in any material loss or interference with the business or
operations of the Company and its subsidiaries, taken as a whole;
and (ii) the Company reasonably believes, after due inquiry, that
the suppliers, vendors, customers or other material third parties
used or served by the Company and such subsidiaries are addressing
or will address the Year 2000 Problem in a timely manner, except
to the extent that a failure to address the Year 2000 Problem by
any supplier, vendor, customer or material third party would not
have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business or operations of the
Company and its subsidiaries, taken as a whole.
2. Representations and Warranties of the Selling Shareholders. Each of
the Selling Shareholders represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations
under, this Agreement, the Custody Agreement signed by such
Selling Shareholder and ____________, as Custodian, relating to
the deposit of the Shares to be sold by such Selling Shareholder
(the "CUSTODY AGREEMENT") and the Power of Attorney appointing
certain individuals as such Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement
(the "POWER OF ATTORNEY") will not contravene any provision of
applicable law, or any agreement or other instrument binding upon
such Selling Shareholder or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such
Selling Shareholder, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency
is required for the performance by such Selling Shareholder of its
obligations under this Agreement or the Custody Agreement or Power
of Attorney of such Selling Shareholder, except such as may be
required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Shares.
(c) On the Option Closing Date, such Selling Shareholder will
have valid title to the Shares to be sold by such Selling
Shareholder and the legal right and power, and all authorization
and approval required by law, to enter into this Agreement, the
Custody Agreement and the Power of Attorney and to sell, transfer
and deliver the Shares to be sold by such Selling Shareholder.
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(d) On the Option Closing Date, the Shares to be sold by such
Selling Shareholder pursuant to this Agreement will have been duly
authorized and will be validly issued, fully paid and
non-assessable.
(e) The Custody Agreement and the Power of Attorney have been
duly authorized, executed and delivered by such Selling
Shareholder and are valid and binding agreements of such Selling
Shareholder.
(f) Delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement will pass title to such
Shares free and clear of any security interests, claims, liens,
equities and other encumbrances.
(g) (i) All information relating to such Selling Shareholder
furnished to the Company in writing by or on behalf of such
Selling Shareholder for use in the Registration Statement or the
Prospectus is, and on the Option Closing Date will be, true,
correct, and complete, and does not, and on the Option Closing
Date will not, contain any untrue statement of a material fact or
omit to state any material fact necessary to make such information
not misleading.
3. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective number of Firm Shares set forth in Schedule I hereto
opposite its name at $______ a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each Seller, severally and
not jointly, agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to 300,000 Additional Shares at the Purchase Price. If you, on behalf of the
Underwriters, elect to exercise such option, you shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total
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number of Additional Shares to be purchased as the number of Firm Shares set
forth in Schedule I hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing, or (C) transactions by any person
other than the Company relating to shares of Common Stock or other securities
acquired in open market transactions after the completion of the offering of the
Shares. In addition, each Selling Shareholder, agrees that, without the prior
written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 90 days after the date of
the Prospectus, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
$_____________ a share (the "PUBLIC OFFERING PRICE") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on ____________, 1999, or at
such other time on the same or such other date, not later than _________, 1999,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE". The Closing of the offering and
sale of the Firm Shares will be held at the offices
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of Ropes & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Payment for any Additional Shares to be sold by each Seller shall be
made to such Seller in Federal or other funds immediately available in New York
City against delivery of such Additional Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section 3 or at such other time on the same
or on such other date, in any event not later than _______, 1999, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "OPTION CLOSING DATE". The Closing of the offering and sale
of the Additional Shares will be held at the offices of Ropes & ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date and the
Option Closing Date, as the case may be, are subject to the condition that the
Registration Statement shall have become effective not later than 5:30 p.m. (New
York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date and the Option Closing Date, as the
case may be:
(i) there shall not have occurred any
downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a
possible change that does not indicate the direction of
the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized
statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any
change, or any development involving a prospective change,
in the condition,
14
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the
date of this Agreement) that, in your judgment, is material
and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, a certificate,
dated such date and signed by an executive officer of the Company,
to the effect set forth in Section 6(a)(i) above and to the effect
that the representations and warranties of the Company contained
in this Agreement are true and correct as of such date and that
the Company has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied
hereunder on or before such date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings
threatened.
(c) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C., outside counsel for the Company,
dated such date, to the effect that:
(i) the Company has been duly incorporated,
is validly existing as a corporation in good standing
under the laws of the State of Florida, has the corporate
power and authority to own its property and to conduct its
business as described in the Prospectus and is duly
qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such
qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a
material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been
duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to
own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or
leasing of property requires such
15
qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a
material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) the authorized capital stock of the
Company conforms as to legal matters to the description
thereof contained in the Prospectus;
(iv) the shares of Common Stock
outstanding prior to the issuance of the Shares to be sold
by the Company have been duly authorized and are validly
issued, fully paid and non-assessable;
(v) all of the issued shares of capital
stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and
non-assessable and, to the best of such counsel's
knowledge, are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(vi) the Shares to be sold by the Company
have been duly authorized and, when issued and delivered
in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any
preemptive or similar rights under any provision of
applicable law, the articles of incorporation or by-laws
of the Company or, to the best of such counsel's
knowledge, any other agreement or instrument binding on
the Company and its subsidiaries;
(vii) this Agreement has been duly
authorized, executed and delivered by the Company;
(viii) the execution and delivery by the
Company of, and the performance by the Company of its
obligations under, this Agreement will not contravene any
provision of applicable law or conflict with, result in a
breach of any of the terms and provisions of, or
constitute a default under, the articles of incorporation
or by-laws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries that
is material to the Company and its subsidiaries, taken as
a whole, or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or
agency is required for the performance by the
16
Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale
of the Shares;
(ix) the statements (A) in the Prospectus under the
captions "Risk Factors - Dependence on Supplier of Beta
Radiation Isotope," "Risk Factors Issuance of a Preferred
Stock May Adversely Affect Rights of Common Shareholders or
Discourage a Takeover," "Risk Factors - Other Provisions
Discouraging a Takeover," "Risk Factors - Potential Adverse
Effect of Outstanding Registration Rights," "Business -
Manufacturing, Sources of Supply and Scale-Up", "Business
Patents and Proprietary Technology" (but only those
pertaining to the Company's relations with Emory University
and its staff physicians), "Principal and Selling
Shareholders" and "Underwriters," and (B) in the
Registration Statement in Item 15, in each case insofar as
such statements constitute summaries of the legal matters
or documents referred to therein, fairly present the
information called for with respect to such legal matters
and documents and fairly summarize the matters referred to
therein;
(x) to the best of such counsel's knowledge, there
are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries
is a party or to which any of the properties of the Company
or any of its subsidiaries is subject that are required to
be described in the Registration Statement or the
Prospectus and are not so described, or any statutes,
regulations, contracts or other documents that are required
to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(xi) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus, will
not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended;
(xii) except as described in the Prospectus, there
are no contracts, agreements or understandings between the
Company and any person granting such person the right to
require the Company to file a registration statement under
the Securities Act with respect to any securities of the
Company or to require the Company to include such
securities with the Shares registered pursuant to the
Registration Statement, and all persons who possess such
rights have effectively
17
waived them with respect to the offering of the Shares;
(xiii) the Registration Statement has become
effective and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose
are pending before or threatened by the Commission;
(xiv) the Shares have been approved for quotation
on the Nasdaq National Market, subject to official notice
of issuance; and
(xv) such counsel (A) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and
the Prospectus (except for financial statements and
schedules and other financial and statistical data included
therein as to which such counsel need not express any
opinion) complied when so filed as to form in all material
respects with the Exchange Act, and the applicable rules
and regulations of the Commission thereunder, (B) is of the
opinion that the Registration Statement and Prospectus
(except for financial statements and schedules and other
financial and statistical data included therein as to which
such counsel need not express any opinion) comply as to
form in all material respects with the Securities Act and
the applicable rules and regulations of the Commission
thereunder, (C) has no reason to believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express
any belief) the Registration Statement and the Prospectus
included therein at the time the Registration Statement
became effective 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 and (D) has no reason to believe
that (except for financial statements and schedules and
other financial and statistical data as to which such
counsel need not express any belief) the Prospectus
contains any 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.
(d) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C., counsel for the
Selling Shareholders, dated the Option Closing Date, to the effect
that:
(i) this Agreement has been duly authorized, executed and
delivered
18
by or on behalf of each of the Selling Shareholders;
(ii) the execution and delivery by each Selling Shareholder
of, and the performance by such Selling Shareholder of its
obligations under, this Agreement and the Custody Agreement
and Powers of Attorney of such Selling Shareholder will not
contravene any provision of applicable law or, to the best
of such counsel's knowledge, any agreement or other
instrument binding upon such Selling Shareholder or, to the
best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent,
approval, authorization or order of, or qualification with,
any governmental body or agency is required for the
performance by such Selling Shareholder of its obligations
under this Agreement or the Custody Agreement or Power of
Attorney of such Selling Shareholder, except such as may be
required by the securities or Blue Sky laws of the various
states in connection with offer and sale of the Shares;
(iii) each of the Selling Shareholders has valid title to
the Shares to be sold by such Selling Shareholder and the
legal right and power, and all authorization and approval
required by law, to enter into this Agreement and the
Custody Agreement and Power of Attorney of such Selling
Shareholder and to sell, transfer and deliver the Shares to
be sold by such Selling Shareholder;
(iv) the Custody Agreement and the Power of Attorney of
each Selling Shareholder have been duly authorized,
executed and delivered by such Selling Shareholder and are
valid and binding agreements of such Selling Shareholder;
(v) delivery of the Shares to be sold by each Selling
Shareholder pursuant to this Agreement will pass title to
such Shares free and clear of any security interests,
claims, liens, equities and other encumbrances; and
(vi) such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules and other financial and
statistical data included therein as to which such counsel
need not express any opinion) comply as to form in all
material respects with the Securities Act and the
applicable rules and regulations of the Commission
thereunder, (B) has no reason to believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express
19
any belief) the Registration Statement and the prospectus
included therein at the time the Registration Statement
became effective 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 and (C) has no reason to believe
that (except for financial statements and schedules and
other financial and statistical data as to which such
counsel need not express any belief) the Prospectus
contains any 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.
(e) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion dated
such date of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special patent counsel to the
Company, to the effect that:
(i) the statements in the Registration Statement
and Prospectus under the captions "Risk Factors -
Uncertainty Regarding Our Issued Patent and Pending Patent
Applications" and "Business -- Patents and Proprietary
Technology" insofar as such matters constitute matters of
law or legal conclusions thereunder are accurate and
correct in all material respects and fairly present such
matters of law and legal conclusions;
(ii) to such counsel's knowledge, there are no
legal or governmental proceedings pending (other than the
Company Patent Applications) relating to the Company, the
claimed inventions of the patents and patent applications
listed on Exhibit B hereto (the "COMPANY PATENTS"), or the
Company Intellectual Property, and to such counsel's
knowledge, no such proceedings are threatened or
contemplated by governmental authorities or others;
(iii) such counsel has no knowledge of any facts
which would preclude the Company from having valid license
rights or clear title to the Company Patents, and based on
representations by the Company that no interests have been
conveyed to third parties which have not been recorded in
the PTO, the Company has clear record title to the Company
Patents free and clear of any liens or encumbrances that
have been recorded with the PTO;
(iv) to the best of such counsel's knowledge, the
Company has complied with the PTO duty of candor and
disclosure for each of the
20
Company Patents, and such counsel has no knowledge that the
Company lacks or will be unable to obtain any rights or
licenses to use all Intellectual Property necessary to the
conduct of its business as now or proposed to be conducted
by the Company as described in the Prospectus;
(v) such counsel has no knowledge of any facts
material to a determination of patentability regarding the
Company Patent Applications not called to the attention of
the PTO, and is unaware of any facts not called to the
attention of the PTO which would preclude the grant of a
patent for the Company Patent Applications;
(vi) such counsel is not aware of any basis for a
finding of unenforceability of invalidity of any Company
Patents or Company Intellectual Property, and (except as
disclosed in the Prospectus) to the best of such counsel's
knowledge, the Company has not received any notice of
infringement or of conflict with rights or claims of others
with respect to any Intellectual Property owned or used by
the Company or its subsidiaries;
(vii) based upon a review of the third party rights
made known to counsel and discussion with Company
scientific personnel, such counsel has no knowledge of any
patent rights of others which are or would be infringed by
specific products or processes referred to in the
Prospectus, including without limitation, the Beta-Cath
System, which infringement, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding,
would result in any material adverse effect on the
condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries,
taken as a whole; and
(viii) such counsel (A) has no reason to believe
that the portions of the Registration Statement and the
Prospectus under the captions "Risk Factors --Uncertainty
Regarding Our Issued Patent, Pending Patent Applications
and Other Matters" and "Business -- Patents and Proprietary
Technology" (excluding those portions pertaining to the
Company's relations with Emory University and its staff
physicians) included therein at the time the Registration
Statement became effective 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 and (B) has no reason to
believe that the portions of the Prospectus under the
captions "Risk Factors -- Uncertainty Regarding Our Issued
Patent, Pending Patent
21
Applications and Other Matters" and "Business -- Patents
and Proprietary Technology" (excluding those portions
pertaining to the Company's relations with Emory University
and its staff physicians) contains any 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.
(f) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion dated
such date of ____________, special regulatory counsel to the
Company, to the effect that:
(i) the statements in the Registration Statement and
Prospectus under the captions "Risk Factors - Early Stage
of Clinical Testing of Beta-Cath System; No Assurance of
its Safety and Efficacy," "No Assurance of Regulatory
Approvals" (except the portions under the subheading
"Approvals to Use, Handle and Distribute Radioactive
Materials"), and "Business - Clinical Trials," and
"Business --Government Regulation" (except the portions
pertaining to the regulation of radioactive materials)
(collectively, the "DEVICE REGULATORY PORTION") insofar as
such matters constitute matters of United States federal,
state or local law or legal conclusions thereunder are
accurate and correct in all material respects and fairly
present such matters of law and legal conclusions; and
(ii) such counsel (A) has no reason to believe that
the Device Regulatory Portion of the Registration
Statement and the Prospectus included therein at the time
the Registration Statement became effective 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 and (B) has
no reason to believe that the Device Regulatory Portion of
the Prospectus contains any 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.
(g) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion dated
such date of ____________, special regulatory counsel to the
Company, to the effect that:
(i) the statements in the Registration Statement and
Prospectus under the captions "Risk Factors - No Assurance
of Regulatory Approvals - Approvals to Use, Handle and
Distribute Radioactive
22
Materials," "Risk Factors - The Beta-Cath System Utilizes
Radioactive Materials," "Business - Government Regulation"
(only as to the portions pertaining to the regulation of
radioactive materials) (collectively, the "RADIOACTIVE
MATERIALS REGULATORY PORTION") insofar as such matters
constitute matters of United States federal, state or local
law or legal conclusions thereunder are accurate and
correct in all material respects and fairly present such
matters of law and legal conclusions; and
(ii) such counsel (A) has no reason to believe that
the Radioactive Materials Regulatory Portion of the
Registration Statement and the Prospectus included therein
at the time the Registration Statement became effective
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 and (B) has no reason to believe that the
Radioactive Materials Regulatory Portion of the Prospectus
contains any 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.
(h) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion of
Ropes & ▇▇▇▇, counsel for the Underwriters, dated such date,
covering the matters referred to in Sections 6(c)(vi), 6(c)(vii),
6(c)(ix) (but only as to the statements in the Prospectus under
"Underwriters") and 6(c)(xv) (but only as to clauses (B), (C) and
(D)) above.
With respect to Section 6(c)(xv) above, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Green, P.C. may state that their opinion and belief are based upon
their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto
and documents incorporated by reference and review and discussion
of the contents thereof, but are without independent check or
verification except as specified. With respect to Section
5(e)(viii) above, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP may state that their opinion
and belief are based upon their participation in the preparation
of the relevant portions of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents
incorporated by reference and review and discussion of the
contents thereof, but are without independent check or
verification except as specified. With respect to clauses (B), (C)
and (D) of Section 6(c)(xv) above, Ropes & ▇▇▇▇ may state that
their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto (other than the
23
documents incorporated by reference) and upon review and
discussion of the contents thereof (including documents
incorporated by reference), but are without independent check or
verification except as specified.
With respect to Section 6(c)(ii) and 6(c)(v) above, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & Green, P.C. may rely upon an opinion or opinions of
foreign counsel to the Company; provided that (A) each such
foreign counsel is satisfactory to your counsel, (B) a copy of
each opinion so relied upon is delivered to you and is in form and
substance satisfactory to your counsel and (C) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Green, P.C. shall state in their opinion that they are justified
in relying on each such other opinion or opinions.
The opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C. (with respect to
the Company), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C. (with respect to the
Selling Shareholders), ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, __________ and
___________ described, respectively, in Sections 6(c), 6(d), 6(e),
6(f) and 6(g) above (and any opinions of foreign counsel to the
Company referred to in the immediately preceding paragraph) shall
be rendered to the Underwriters at the request of the Company or
one or both of the Selling Shareholders, as the case may be, and
shall so state therein.
(i) The Underwriters shall have received, on each of the date
hereof, the Closing Date and the Option Closing Date, a letter
dated such date, in form and substance satisfactory to the
Underwriters, from Ernst & Young, LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference
into the Registration Statement and the Prospectus; provided that
the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
(j) The "lock-up" agreements, each substantially in the form
of Exhibit C hereto, between you and certain shareholders,
officers and directors of the Company relating to sales and
certain other dispositions of shares of Common Stock or certain
other securities, delivered to you on or before the date hereof,
shall be in full force and effect on the Closing Date and the
Option Closing Date, as the case may be.
(k) The Underwriters shall have received on the Option Closing
Date a certificate dated the Option Closing Date and signed by
each of the Selling Shareholders to the effect that the
representations and warranties of such Selling Shareholder
contained in this Agreement are true and correct as of the Option
Closing Date and that such Selling Shareholders has complied with
all
24
of the agreements and satisfied all of the conditions to be
performed or satisfied on the part of such Selling Shareholder
hereunder on or before the Option Closing Date.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on
the Option Closing Date of such other documents as you may
reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional
Shares.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish you, without charge, three signed copies of
the Registration Statement (including exhibits thereto and
documents incorporated by reference) and to each other Underwriter
a conformed copy of the Registration Statement (without exhibits
thereto but including documents incorporated by reference) and to
furnish to you in New York City, without charge, prior to 10:00
a.m. New York City time on the business day next succeeding the
date of this Agreement and during the period mentioned in Section
7(c) below, as many copies of the Prospectus, any documents
incorporated by reference, and any supplements and amendments
thereto as you may reasonably request. The terms "supplement" and
"amendment" or "amend" as used in this Agreement shall include all
documents subsequently filed by the Company with the Commission
pursuant to the Exchange Act that are deemed to be incorporated by
reference in the Prospectus.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to
file with the Commission within the applicable period specified in
Rule 424(b) under the Securities Act any prospectus required to be
filed pursuant to such Rule.
(c) If, during such period after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith
to prepare, file with the Commission
25
and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses you will furnish to the
Company) to which Shares may have been sold by you on behalf of
the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements
in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending ________, ____ that
satisfies the provisions of Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of the Sellers'
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel, the Company's accountants and counsel for the
Selling Shareholders in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 7(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all costs and expenses incident to listing the
Shares on the Nasdaq National Market, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer agent,
registrar or depositary, (viii) the costs and expenses of the Company relating
to investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the
26
Shares, including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 9 entitled "Indemnity and Contribution", and
the last paragraph of Section 11 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided,
however, that the foregoing indemnity agreement with respect to
any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so
to have been delivered, at or prior to the written confirmation of
the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such
failure is the result of noncompliance by the Company with Section
7(a)
27
hereof.
(b) Each Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act, and the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only with
reference to information relating to such Selling Shareholder
furnished in writing by or on behalf of such Selling Shareholder
expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements
thereto; provided, however, that the foregoing indemnity agreement
with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Shares, or any
person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by
the Company with Section 7(a) hereof. The liability of each
Selling Shareholder under this Agreement shall be limited to an
amount equal to the net proceeds received by the Selling
Shareholder from the offering of the Additional Shares sold by
such Selling Shareholder, except with respect to (i) any breaches
of the representations and warranties set forth in Sections 2(a),
2(b), 2(c), 2(d), 2(e) and 2(f) hereof, (ii) intentional
misrepresentation or (iii) fraud.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Shareholders,
the directors of the Company, the officers of the Company who sign
the Registration Statement
28
and each person, if any, who controls the Company or any Selling
Shareholder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against
any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to
information relating to such Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use in
the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to Section 9(a), 9(b),
or 9(c) such person (the "INDEMNIFIED PARTY") shall promptly
notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention
of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that
the indemnifying party shall not, in respect of the legal expenses
of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (i)
the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Underwriters and all persons, if
any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local 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 either such
Section and (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling
Shareholder within the
29
meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Underwriters and such control
persons of any Underwriters, such firm shall be designated in
writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. In the case of any
such separate firm for the Company, and such directors, officers
and control persons of the Company, such firm shall be designated
in writing by the Company. In the case of any such separate firm
for the Selling Shareholders and such control persons of any
Selling Shareholders, such firm shall be designated in writing by
the persons named as attorneys-in-fact for the Selling
Shareholders under the Powers of Attorney. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel
as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the
subject matter of such proceeding.
(e) To the extent the indemnification provided for in Section
9(a), 9(b) or 9(c) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on
the other hand from the offering of the Shares
30
or (ii) if the allocation provided by clause (i) of this sentence
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) of this sentence but also the relative fault of the
indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with
the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on
the one hand and the Underwriters on the other hand in connection
with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of
the Shares (before deducting expenses) received by each Seller and
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
of the Prospectus, bear to the aggregate Public Offering Price of
the Shares. The relative fault of the Sellers on the one hand and
the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Sellers or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 9
are several in proportion to the respective number of Shares they
have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 9
were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable
considerations referred to in Section 9(e). The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions
of this Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission, and each Selling Shareholder shall not be required to
contribute any amount in excess of the net proceeds received by
such Selling Shareholder form the offering of the Additional
Shares sold by such Selling Stockholder, except with respect to
(i) any breach
31
of the representations and warranties in Sections 2(a), 2(b),
2(c), 2(d), 2(e) and 2(f) hereof, (ii) intentional
misrepresentation or (iii) fraud. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other
statements of the Company and the Selling Shareholders contained
in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, any Selling Shareholder or any
person controlling any Selling Shareholder, or the Company, its
officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 10(a)(i) through 10(a)(iv), such event, singly
or together with any other such event, makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the
32
number of Firm Shares set forth opposite their respective names in Schedule II
bears to the aggregate number of Firm Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you, the Company and the Selling Shareholders for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholders. In any such
case either you or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. If, on the Option Closing Date,
any Underwriter or Underwriters shall fail or refuse to purchase Additional
Shares and the aggregate number of Additional Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Additional
Shares to be purchased, the non-defaulting Underwriters shall have the option to
(i) terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
33
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
34
Very truly yours,
NOVOSTE CORPORATION
By:
-----------------------------------------
Name:
Title:
The Selling Shareholders named in
Schedule II hereto, acting
severally:
By:
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
--------------------------
Name:
Title:
35
SCHEDULE I
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
----------------
Total.................................................================
36
SCHEDULE II
NUMBER OF
SELLING SHAREHOLDER ADDITIONAL SHARES
------------------- -----------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Total........................................... ==================
37
EXHIBIT A
COMPANY PATENT APPLICATIONS
38
EXHIBIT B
COMPANY PATENTS
39
EXHIBIT C
[FORM OF LOCK-UP LETTER]
_____________, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Novoste Corporation, a Florida corporation (the
"COMPANY"), providing for the public offering (the "PUBLIC OFFERING") by the
several Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "UNDERWRITERS"), of up to
_______ shares (the "Shares") of the Common Stock, $.01 par value of the Company
(the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement or (b)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering. In
40
2
addition, the undersigned agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
-----------------------------------
(Name)
------------------------------------
(Address)