1
EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
4,500,000 SHARES
THORATEC LABORATORIES CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
March __, 2000
▇▇▇▇▇▇ BROTHERS INC.,
As Representative of the several
Underwriters named in Schedule ▇,
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Thoratec Laboratories Corporation, a California corporation (the
"Company"), and Gambro, Inc. (the "Selling Stockholder"), propose to sell an
aggregate of 4,500,000 shares (the "Firm Stock") of the Company's Common Stock,
no par value per share (the "Common Stock"). Of the 4,500,000 shares of the Firm
Stock, 3,000,000 are being sold by the Company and 1,500,000 by the Selling
Stockholder. In addition, the Selling Stockholder proposes to grant to the
Underwriters named in Schedule 1 hereto (the "Underwriters") an option to
purchase up to an additional 675,000 shares of the Common Stock on the terms and
for the purposes set forth in Section 3 (the "Option Stock"). The Firm Stock and
the Option Stock, if purchased, are hereinafter collectively called the "Stock."
This is to confirm the agreement concerning the purchase of the Stock from the
Company and the Selling Stockholder by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (including any
amendments thereto, if any) with respect to the Stock has (i) been prepared by
the Company in conformity with the requirements of the United States Securities
Act of 1933 (the "Securities Act") and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies of
such registration statement and any amendment thereto have been delivered by the
Company to you as the representative (the "Representative") of the Underwriters.
As used in this Agreement, "Effective Time" means the date and the time as of
which such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus
2
included in such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the Commission
by the Company with the consent of the Representative pursuant to Rule 424(a) of
the Rules and Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including any documents
incorporated by reference therein at such time and all information contained in
the final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations in accordance with Section 5 hereof and deemed to be a
part of the registration statement as of the Effective Time pursuant to
paragraph (b) of Rule 430A of the Rules and Regulations; and "Prospectus" means
such final prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. Reference made herein to
any Preliminary Prospectus or to the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such Preliminary Prospectus
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed under the United States Securities
Exchange Act of 1934 (the "Exchange Act") after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and incorporated by reference
in such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
include any annual report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement. The Commission has not
issued any order preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents 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; and any
further documents so filed and incorporated by reference in the Prospectus, when
such documents become effective or are filed with Commission, as the case may
be, will conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(d) The Company and each of its subsidiaries (as defined in
Section 17) have been duly incorporated and are validly existing as corporations
in good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
2
3
standing as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority necessary to own
or hold their respective properties and to conduct the businesses in which they
are engaged; and none of the subsidiaries of the Company is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules and Regulations.
(e) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(f) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the description thereof contained in the Prospectus.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and each of the documents relating to this Agreement to
which the Company is a party has been duly authorized, executed and delivered by
the Company.
(h) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby and in
the Registration Statement and Prospectus will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby.
(i) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right (other than rights which have been waived or
satisfied) with respect to any securities of the Company owned by such person,
to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Securities Act.
(j) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period preceding
the date of the
3
4
Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or
S of, the Securities Act, other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee compensation plans or
pursuant to outstanding options, rights or warrants.
(k) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements included in
the Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such date, there
has not been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved.
(m) Deloitte & Touche LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 9(j) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(n) Neither the Company or any of its subsidiaries owns any real
property. The Company and each of its subsidiaries have good and marketable
title to all personal property owned by them, 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
materially interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and all real 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.
(o) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in
similar industries.
(p) The Company and each of its subsidiaries own or possess
adequate licenses or other rights to use all patents, patent applications,
inventions, trademarks, trade names, applications for registration of
trademarks, service marks, service ▇▇▇▇ applications, copyrights, know-how,
manufacturing processes, formulae, trade secrets, licenses and rights in any
thereof and any other intangible property and assets (herein called the
"Proprietary Rights") necessary to conduct its business in the manner described
in the Prospectus, except where the failure to so own or possess such
Proprietary Rights would not, singularly or in the aggregate, have a material
adverse effect on the financial position, stockholders' equity, results of
operations, business or prospects of the Company. The Company and each of its
subsidiaries take security measures to provide adequate trade secret protection
in its non-patented technology. Except as disclosed in the Prospectus, neither
the Company nor any of its subsidiaries has received any notice of
4
5
infringement or conflict with asserted rights of others with respect to any
Proprietary Rights which could result in any material adverse effect on the
Company, or any of its subsidiaries, as the case may be, and, except as
specifically identified and described in the Prospectus, no action, suit,
arbitration or legal, administrative or other proceeding, or investigation is
pending, or, to the knowledge of the Company, threatened, which involves any
Proprietary Rights. Except as disclosed in the Prospectus, the Proprietary
Rights of the Company and its subsidiaries referred to in the Prospectus do not,
to the knowledge of the Company, infringe or conflict with any right or valid
and enforceable patent of any third party, or any discovery, invention, product
or process which is the subject of a patent application filed by any third
party, known to the Company which could have a material adverse effect on the
Company or any of its subsidiaries. Neither the Company nor any of its
subsidiaries is subject to any judgment, order, writ, injunction or decree of
any court or any Federal, state, local, foreign or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or any arbitrator, nor, except as described in the Prospectus, has it
entered into or is a party to any contract which restricts or impairs the use of
any such Proprietary Rights in a manner which would have a material adverse
effect on the use of any of the Proprietary Rights. The Company and each of its
subsidiaries have complied, in all material respects, with its respective
contractual obligations relating to the protection of the Proprietary Rights
used pursuant to licenses. To the knowledge of the Company, no person is
infringing on or violating the Proprietary Rights owned or used by the Company
or any of its subsidiaries.
(q) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, might have a
material adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries; and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(r) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(s) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have not
been described in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the Rules and
Regulations.
(t) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(u) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be expected to have
a material adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries.
(v) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
5
6
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
(w) The Company and each of its subsidiaries has filed all
federal, state and local income and franchise tax returns required to be filed
through the date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of any tax
deficiency which, if determined adversely to the Company or any of its
subsidiaries, might have) a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries.
(x) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(y) The Company and each of its subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(z) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws or similar governing document, (ii) is in
default in any material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in any material respect
of any law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of its
business.
(aa) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(ab) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company or any
of its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or
6
7
previously owned or leased by the Company or its subsidiaries in violation of
any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except for any
violation or remedial action which would not have, or could not be reasonably
likely to have, singularly or in the aggregate with all such violations and
remedial actions, a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused
by the Company or any of its subsidiaries or with respect to which the Company
or any of its subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not have or
would not be reasonably likely to have, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries; and the terms "hazardous wastes," "toxic wastes,"
"hazardous substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
(ac) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act of
1940 and the rules and regulations of the Commission thereunder.
(ad) The Company and each of its subsidiaries has such permits,
licenses, franchises, authorizations and clearances (collectively, "Permits") of
governmental or regulatory authorities, including, without limitation, the Food
and Drug Administration and/or any committee thereof, as are reasonably
necessary to own, lease and operate its properties and to conduct its business
in the manner described in the Prospectus, subject to such qualifications as may
be set forth in the Prospectus, except where such failure to receive such
Permits would not, individually or in the aggregate, be reasonably expected to
have a material adverse effect on the operations, business or prospects of the
Company; subject to such qualifications as may be set forth in the Prospectus,
the Company and each of its subsidiaries has fulfilled and performed all its
material obligations with respect to the Permits, and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the holder
of any Permit, subject in each case to such qualification as may be set forth in
the Prospectus. Except as described in the Prospectus, none of the Permits
contains any restriction that is materially burdensome to the Company or any of
its subsidiaries.
(ae) Except to the extent disclosed in the Registration Statement
and the Prospectus, the clinical, pre-clinical and other studies and tests
conducted by or on behalf of or sponsored by the Company or any of its
subsidiaries or in which the Company or any of its subsidiaries or the Company's
or any of its subsidiaries' products under development have participated that
are described in the Prospectus were and, if still pending, are being conducted
in accordance with standard medical and scientific research procedures. The
descriptions of the results of such studies and tests are accurate and complete
in all material respects and fairly present the data derived from such studies
and tests, and the Company has no knowledge of any other studies or tests the
results of which are inconsistent with or otherwise call into question the
results described or referred to in the Prospectus. Except to the extent
disclosed in the Registration Statement and the Prospectus, the Company has
operated and currently is in compliance in all material respects with all
applicable FDA rules, regulations and policies.
7
8
Except to the extent disclosed in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has received any notices or
other correspondence from the Food and Drug Administration or any other
governmental agency requiring the termination, suspension or modification of any
clinical or pre-clinical studies or tests that are described in the Prospectus
or the results of which are referred to therein.
2. Representations, Warranties and Agreements of the Selling
Stockholder. The Selling Stockholder represents, warrants and agrees that:
(a) The Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) the Selling Stockholder
will have good and valid title to the shares of Stock to be sold by the Selling
Stockholder hereunder on such date, free and clear of all liens, encumbrances,
equities or claims; and upon delivery of such shares and payment therefor
pursuant hereto, good and valid title to such shares, free and clear of all
liens, encumbrances, equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a custody
agreement (the "Custody Agreement") with American Securities Transfer and Trust,
Inc., as custodian (the "Custodian"), for delivery under this Agreement,
certificates in negotiable form (with signature guaranteed by a commercial bank
or trust company having an office or correspondent in the United States or a
member firm of the New York or American Stock Exchanges) representing the shares
of Stock to be sold by the Selling Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "Power of Attorney") appointing D. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇, as attorneys-in-fact, with full power of
substitution, and with full authority (exercisable by any one or more of them)
to execute and deliver this Agreement and to take such other action as may be
necessary or desirable to carry out the provisions hereof on behalf of the
Selling Stockholder.
(d) The Selling Stockholder has full right, power and authority
to enter into this Agreement, the Power of Attorney and the Custody Agreement;
the execution, delivery and performance of this Agreement, the Power of Attorney
and the Custody Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or to which
any of the property or assets of the Selling Stockholder is subject, nor will
such actions result in any violation of the provisions of the charter or by-laws
or similar governing document of the Selling Stockholder or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property or assets of the
Selling Stockholder; and, except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Power of Attorney or the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby
and thereby.
(e) All information relating to the Selling Stockholder in the
Registration Statement and the Prospectus and any further amendments or
supplements to the Registration
8
9
Statement or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, does not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on behalf
of any Underwriter specifically for inclusion therein.
(f) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
(g) The Selling Stockholder is not prompted to sell shares of
Stock by any information concerning the Company that is not set forth in the
Registration Statement and the Prospectus.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 3,000,000 shares of
the Firm Stock and the Selling Stockholder hereby agrees to sell 1,500,000
shares of the Firm Stock, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set opposite that Underwriter's name in Schedule 1 hereto.
Each Underwriter shall be obligated to purchase from the Company, and from the
Selling Stockholder, that number of shares of the Firm Stock which represents
the same proportion of the number of shares of the Firm Stock to be sold by the
Company, and by the Selling Stockholder, as the number of shares of the Firm
Stock set forth opposite the name of such Underwriter in Schedule 1 represents
of the total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase obligations of
the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representative may determine.
In addition, the Selling Stockholder grants to the Underwriters
an option to purchase up to 675,000 shares of Option Stock. Such option is
granted solely for the purpose of covering over-allotments in the sale of Firm
Stock and is exercisable as provided in Section 5 hereof. Shares of Option Stock
shall be purchased severally for the account of the Underwriters in proportion
to the number of shares of Firm Stock set opposite the name of such Underwriters
in Schedule 1 hereto. The respective purchase obligations of each Underwriter
with respect to the Option Stock shall be adjusted by the Representative so that
no Underwriter shall be obligated to purchase Option Stock other than in 100
share amounts.
The price of both the Firm Stock and any Option Stock shall be
$_____ per share.
The Company and the Selling Stockholder shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
9
10
4. Offering of Stock by the Underwriters.
Upon authorization by the Representative of the release of the
Firm Stock, the several Underwriters propose to offer the Firm Stock for sale
upon the terms and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the offices of ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ &
▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York
City time, on the fourth full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between the
Representative and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company and the
Selling Stockholder shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representative for the account of each
Underwriter against payment to or upon the order of the Company and the Selling
Stockholder of the purchase price by wire transfer in immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in
such names and in such denominations as the Representative shall request in
writing not less than two full business days prior to the First Delivery Date.
For the purpose of expediting the checking and packaging of the certificates for
the Firm Stock, the Company and the Selling Stockholder shall make the
certificates representing the Firm Stock available for inspection by the
Representative in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Selling Stockholder and the Company by
the Representative. If the Option is exercised in part, the Underwriters shall
purchase on a pro rata basis from the Selling Stockholder that number of shares
of Option Stock offered by the Selling Stockholder pursuant to Section 3 hereof.
Such notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the
Representative, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the shares of
Option Stock are delivered are sometimes referred to as a "Second Delivery Date"
and the First Delivery Date and any Second Delivery Date are sometimes each
referred to as a "Delivery Date."
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representative and the Selling Stockholder) at 10:00 A.M., New York City time,
on the such Second Delivery Date. On the such Second Delivery Date, the Selling
Stockholder shall deliver or cause to be delivered the certificates representing
the Option Stock to the Representative for the account of each Underwriter
against payment to or upon the order of the Selling Stockholder of the purchase
price by wire transfer in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Option Stock shall be registered in such names and in such
denominations as the Representative shall request in the aforesaid written
notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Selling
10
11
Stockholder shall make the certificates representing the Option Stock available
for inspection by the Representative in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the such Second Delivery
Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representative and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the last Delivery Date
except as permitted herein; to advise the Representative, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representative with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Stock; to advise the Representative, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) To furnish promptly to the Representative and to counsel for
the Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representative such number of the
following documents as the Representative shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement and the computation of per share earnings), (ii) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the Prospectus
(excluding exhibits thereto) and, if the delivery of a prospectus is required at
any time after the Effective Time in connection with the offering or sale of the
Stock or any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Representative and, upon its
request, to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the Representative
may from time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance;
11
12
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representative, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the
Representative and counsel for the Underwriters and obtain the consent of the
Representative to the filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representative an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representative copies of all materials furnished by the Company
to its shareholders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange upon which the Common Stock may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the Exchange
Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Stock for offering and sale
under the securities laws of such jurisdictions as the Representative may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock and shares issued pursuant
to employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights), or sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than the grant of options pursuant
to option plans existing on the date hereof), or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of ▇▇▇▇▇▇ Brothers
Inc. on behalf of the Underwriters;
(j) Prior to the Effective Date, to apply for the listing of the
Stock on the Nasdaq National Market System and to use its best efforts to
complete that listing, subject only to official notice of issuance and evidence
of satisfactory distribution, prior to the First Delivery Date;
12
13
(k) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company"
within the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
7. Further Agreements of the Selling Stockholder. The Selling
Stockholder agrees:
(a) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock) or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of ▇▇▇▇▇▇ Brothers
Inc.
(b) That the Stock to be sold by the Selling Stockholder
hereunder, which is represented by the certificates held in custody for the
Selling Stockholder, is subject to the interest of the Underwriters, that the
arrangements made by the Selling Stockholder for such custody are to that extent
irrevocable, and that the obligations of the Selling Stockholder hereunder shall
not be terminated by any act of the Selling Stockholder, by operation of law, by
the death or incapacity of the individual Selling Stockholder or, in the case of
a trust, by the death or incapacity of any executor or trustee or the
termination of such trust, or the occurrence of any other event.
(c) To deliver to the Representative prior to the First Delivery
Date a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States person) or Form W-9 (if
the Selling Stockholder is a United States person).
8. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; (d) the costs of producing and distributing this Agreement and any
other related documents in connection with the offering, purchase, sale and
delivery of the stock; (e) the costs of delivering and distributing the Custody
Agreement and the Power of Attorney; (f) the filing fees incident to securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of sale of the Stock; (g) any applicable listing or other fees; (h)
the fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 6(h) preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); and (i) all other costs and expenses incident to
the performance of the obligations of the Company and the Selling Stockholder
under this Agreement; provided that, except as provided in this Section 8 and in
Section 13, the Underwriters shall pay their own costs and expenses, including
the costs and
13
14
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters, and the Selling Stockholder shall pay the fees and expenses of its
counsel, the Custodian (and any other attorney-in-fact), and any transfer taxes
payable in connection with its sale of Stock to the Underwriters.
9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholder contained herein, to the performance by the Company
and the Selling Stockholder of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel
for the Underwriters, is material or omits to state a fact which, in the opinion
of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Custody Agreement,
the Power of Attorney, the Stock, the Registration Statement and the Prospectus,
and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company and the Selling Stockholder shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & White shall have furnished to the
Representative its written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representative, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its businesses requires such qualification and has
all power and authority necessary to own or hold its properties and conduct the
businesses in which it is engaged;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of the
Company (including the shares of Stock being delivered on such Delivery Date)
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each of the
subsidiaries of the
14
15
Company owned by the Company are owned by the Company, free and clear of all
liens, encumbrances, equities or claims;
(iii) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel;
(iv) The real property and buildings held under lease by
the Company are held by it 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;
(v) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending to which the Company is a party or of
which any property or assets of the Company is the subject which, if determined
adversely to the Company, might have a material adverse effect on the
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company except as described in the Prospectus; and,
to the best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of Rule
424(b) of the Rules and Regulations specified in such opinion on the date
specified therein and no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by the Commission;
(vii) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by the Company prior to such
Delivery Date (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Securities Act and the Rules
and Regulations; the documents incorporated by reference in the Prospectus and
any further amendment or supplement to any such incorporated document made by
the Company prior to such Delivery Date (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder;
(viii) To the best of such counsel's knowledge, there are
no contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been described or filed as
exhibits to the Registration Statement or incorporated therein by reference as
permitted by the Rules and Regulations;
(ix) This Agreement has been duly authorized, executed and
delivered by the Company; and each of the other documents relating to this
Agreement to which the Company is a party has been duly authorized, executed and
delivered by the Company;
15
16
(x) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance by the Company
with all of the provisions of this Agreement and each of the other documents to
be entered into in connection with the consummation of the transactions
contemplated hereby and in the Registration Statement and the Prospectus
(including the issuance and sale of the Stock and the use of proceeds from the
sale of the Stock as described under the caption "Use of Proceeds") will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement, license or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws or
similar governing document of the Company or any of its subsidiaries or any
statute or any order, rule or regulation (including the United States Food and
Drug Administration and any similar foreign governing body) known to such
counsel of any court or governmental agency or body having jurisdiction over the
Company or any of it subsidiaries or any of their properties or assets; and,
except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state or foreign securities laws
in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby;
(xi) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right (other than rights which have been waived or
satisfied) to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act;
(xii) Neither the Company nor any subsidiary is an
"investment company" as defined in the Investment Company Act of 1940, as
amended; and
(xiii) Each of the Power-of-Attorney and Custody Agreement
constitutes a valid and binding agreement of the Selling Stockholder enforceable
in accordance with its terms.
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of California and the General Corporation Law
of the State of California. Such counsel shall also have furnished to the
Representative a written statement, addressed to the Underwriters and dated such
Delivery Date, in form and substance satisfactory to the Representative, to the
effect that (x) such counsel has acted as counsel to the Company on a regular
basis and has acted as counsel to the Company in connection with the preparation
of the Registration Statement, and (y) based on the foregoing, no facts have
come to the attention of such counsel which lead it to believe that (I) the
Registration Statement, as of the Effective Date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading or (II) any document incorporated by reference in the
Prospectus or
16
17
any further amendment or supplement to any such incorporated document made by
the Company prior to such Delivery Date, when they became effective or were
filed with the Commission, as the case may be, contained, in the case of a
registration statement which became effective under the Securities Act, any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, or, in the case of other documents which were filed under the
Exchange Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(e) Fish & ▇▇▇▇▇▇▇▇▇▇ P.C. shall have furnished to the
Representative its written opinion, as patent counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representative, to the effect that it serves as
special patent counsel to the Company with respect to the Proprietary Rights,
and that:
(i) The information in the Prospectus contained under the
headings "Risk Factors--Our inability to protect our proprietary technologies
could harm our competitive position," "Business--General," "Business--Thoratec
Circulatory Support Products," "Business--Advantages of the Thoratec VAD
System--Thoratec Biomaterials," "Business--Thoratec Biomaterials--Thoralon,"
"Business--Thoratec Vascular Graft Products," "Business--Patents and Proprietary
Rights" and "Business--Competition," to the extent that it constitutes
description of legal matters or summaries of legal matters, documents or
proceedings, has been reviewed by such counsel and is correct in all material
respects and it fairly and correctly presents the information presented therein;
(ii) To such counsel's knowledge, there are no pending
legal or governmental proceedings, or allegations on the part of any person of
infringement by the Company of patents, trade secrets, trademarks, service
marks, or copyrights of others, nor to such counsel's knowledge, has the Company
been advised that such proceedings are threatened or contemplated. To such
counsel's knowledge, the Company is not infringing any patents, trademarks,
service marks, copyrights or violating any trade secrets of others. Such counsel
has conducted an infringement search of the United States Patent and Trademark
Office (the "PTO") patent records in the subject matter areas of biomaterials
and arterial grafts, and has reviewed the patents uncovered in the search. Such
counsel has not reviewed the prosecution files and makes no opinion as to such
files. To such counsel's knowledge, no person is infringing or otherwise
violating any of the Company's patents, trade secrets, trademarks, service
marks, copyrights or other proprietary information or know-how of the Company in
any way which could materially affect the use thereof by the Company;
(iii) To such counsel's knowledge, the Company owns or
possesses sufficient licenses or other rights to use all patents, trade secrets,
trademarks, service marks or other proprietary information or know-how described
in the above-identified headings of the Prospectus necessary to conduct the
business now being or proposed to be conducted by the Company as described in
the Prospectus;
(iv) With respect to the United States patents and patent
applications relating to biomaterials, ventricular assist devices and grafts
identified in the above-identified headings in the Prospectus, the Company is
listed in the records of the PTO as the sole assignee of record in each of the
relevant patents and applications listed in Schedule I attached to its opinion,
except that U.S. Patent No. 5,443,504 is assigned to ▇▇▇▇▇▇ ▇▇▇▇. Additionally,
U.S. Patent Nos. 5,235,003 and 4,731,073 are solely assigned to the Company by
virtue of assignments recorded in their
17
18
respective parent applications, therefore there are no assignments in the PTO
recorded on these patents. To such counsel's knowledge, there are no asserted
claims of any person relating to the scope of or to the ownership of the patents
or applications, nor to such counsel's knowledge has any unasserted claim
relating to such scope or ownership been communicated to the Company. To such
counsel's knowledge, there are no outstanding liens which have been filed in the
PTO against the patents or applications in Schedule I, except as listed. There
are no material defects of form in the preparation or filing of the applications
which such counsel has reviewed. A list of the applications which such counsel
has reviewed is attached to its opinion as Schedule II. These applications are
being diligently prosecuted and no application has been finally rejected. None
of these applications is abandoned;
(v) To such counsel's knowledge, according to its files of
the foreign patents listed in Schedule I, the Company is listed as the sole
assignee of record;
(vi) To such counsel's knowledge, there are no asserted
claims of any persons relating to the scope or ownership of the foreign patents
in Schedule I nor, to such counsel's knowledge, has any unasserted claim
relating to such scope or ownership been communicated to the Company. To such
counsel's knowledge, there are no material defects of form in the preparation or
filing of the foreign applications. The foreign applications have completed
prosecution, and issued as patents indicated in Schedule I;
(vii) The Company is the exclusive licensee in fields of
use respectively specified in the license with ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ dated March 29,
1989, of the United States patent and foreign patent and patent applications in
Schedule III attached to its opinion. With the Underwriters' permission, such
counsel assumes the validity of the signatures and proper authorization of the
signatures to such licenses. To such counsel's knowledge, such licenses are duly
executed, validly binding and enforceable in accordance with their terms and the
Company is not in default of any material provision of such license. To such
counsel's knowledge, there are no asserted claims of any persons relating to the
scope or ownership of the foreign patents or foreign applications in Schedule
III;
(viii) To such counsel's knowledge, and upon inquiry of
the Company, all relevant prior art references known to the Company or its
counsel in the prosecution of the U.S. patents and applications in Schedules I
and II as "prosecuted by us" were disclosed to the PTO and to such counsel's
knowledge and upon inquiry of the Company, neither such counsel nor the Company
made any misrepresentation to or concealed any material fact from the PTO during
such prosecution;
(ix) Upon inquiry of the Company, the Company takes
security measures adequate to assert trade secret protection in its non-patented
technology. Upon inquiry of the Company, the agreements executed by the
Company's employees, consultants and other advisors respecting trade secrets,
confidentiality, or intellectual property rights appear to be valid, binding and
enforceable in accordance with their terms; and
(x) Such counsel is not aware of any other matter that
leads it to believe that, with respect to licenses, patents, trade secrets,
copyrights or other proprietary information or know-how owned or used by the
Company which are the subject of the foregoing opinion, the registration
statement, at the time it became effective, contained an untrue statement of
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of circumstances under which they were made,
not misleading.
18
19
(f) ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C. shall have furnished to the
Representative its written opinion, as regulatory counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representative, to the effect that it
serves as special patent counsel to the Company with respect to the Proprietary
Rights, and that:
(i) The information in the Prospectus under the headings
"Risk Factors--We have a history of net losses, and we may not achieve or
maintain profitability," "Risk Factors--Physicians may not accept or continue to
accept our products under development," "Risk Factors--We rely on single source
suppliers. Our business will be harmed if our suppliers interrupt the sale of
materials to us," "Risk factors--If we fail to obtain approval from the FDA and
from foreign regulatory authorities, we cannot market and sell our products
under development in the United States and in other countries,"
"Business--Strategy--Obtain U.S. Approval and Support European and U.S. Market
Launch of Vectra VAG," "Business--Thoratec Circulatory Support Products,"
"Business--Thoratec Vascular Graft Products," "Business--Manufacturing."
"Business--Government Regulation" and "Business--Facilities," insofar as they
constitute summaries of Food and Drug Administration regulatory provisions in
general, have been reviewed by such counsel and are correct in all material
respects and fairly and correctly present the material information called for
with respect thereto; and
(ii) Such counsel has reviewed the Registration Statement,
and nothing has come to its attention that leads it to believe that, with
respect to matters pending before the FDA, the Registration Statement, at the
time it became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of its
date (unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Company for use in connection with the
offering which differs from the Prospectus on file at the Commission at the time
the Registration Statement becomes effective, in which case at the time it is
first provided to the Underwriters for such use) or at the First Delivery Date
or the Second Delivery Date, as the case may be, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
relating to matters pending before the FDA necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(g) [▇▇▇▇▇▇▇▇, Chance Limited Liability Partnership], shall have
furnished to the Representative its written opinion, as special U.K. counsel to
the Company, addressed to the Underwriters and dated such Delivery Date, in form
and substance reasonably satisfactory to the representative to the effect that:
(i) Thoratec Europe Limited has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation;
(ii) All of the issued shares of capital stock of Thoratec
Europe Limited have been duly and validly authorized and issued and are fully
paid, non-assessable and are owned by the Company, free and clear of all liens,
encumbrances, equities or claims and none of such shares of capital stock was
issued in violation of preemptive or other similar rights arising by operation
of law or under the charter and by-laws or similar governing document of the
Thoratec Europe Limited;
(iii) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance by the Company
with all of the provisions of this Agreement and each of the other documents to
be entered into in connection with the
19
20
consummation of the transactions contemplated hereby and in the Registration
Statement and the Prospectus (including the issuance and sale of the Stock and
the use of proceeds from the sale of the Stock as described under the caption
"Use of Proceeds"), will result in any violation of the provisions of the
charter or by-laws or similar governing document of Thoratec Europe Limited or
any statute or any order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over Thoratec Europe Limited
or any of its properties or assets; and
(iv) No governmental consents, approval, authorizations,
registrations, declarations or filings are required by the Company or Thoratec
Europe Limited for the execution and delivery of this Agreement by the Company
and consummation of the transactions contemplated herein.
(h) Counsel for the Selling Stockholder shall have furnished to
the Representative its written opinion, as counsel to the Selling Stockholder
for whom it is acting as counsel, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the
Representative, to the effect that:
(i) The Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this Agreement, the Power
of Attorney and the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Selling Stockholder is a party or
by which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws or similar governing
document of the Selling Stockholder or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Selling Stockholder or the property or assets of
the Selling Stockholder; and, except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Power of Attorney or the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby
and thereby;
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have
been duly authorized, executed and delivered by the Selling Stockholder;
(iv) Immediately prior to such Delivery Date, the Selling
Stockholder had good and valid title to the shares of Stock to be sold by the
Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power and authority to sell,
assign, transfer and deliver such shares to be sold by such Selling Stockholder
hereunder; and
20
21
(v) Good and valid title to the shares of Stock to be sold
by the Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters.
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of Colorado and the General Corporation Law of
the State of Delaware and (ii) in rendering the opinion in Section 9(e)(iv)
above, rely upon a certificate of the Selling Stockholder in respect of matters
of fact as to ownership of and liens, encumbrances, equities or claims on the
shares of Stock sold by the Selling Stockholder, provided that such counsel
shall furnish copies thereof to the Representative and state that it believes
that both the Underwriters and it are justified in relying upon such
certificate. Such counsel shall also have furnished to the Representative a
written statement, addressed to the Underwriters and dated such Delivery Date,
in form and substance satisfactory to the Representative, to the effect that (x)
such counsel has acted as counsel to the Selling Stockholder on a regular basis
and has acted as counsel to the Selling Stockholder in connection with the
preparation of the Registration Statement, and (y) based on the foregoing, no
facts have come to the attention of such counsel that lead it to believe that
the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact relating to the Selling Stockholder or omitted to
state such a material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the Prospectus contains
any untrue statement of a material fact relating to the Selling Stockholder or
omits to state such a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
(i) ▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP shall have furnished to
the Representative its written opinion, as counsel for the Underwriters,
addressed to the Underwriters and dated such Delivery Date, with respect to the
issuance and sale of the Stock, the Registration Statement, the Prospectus and
other related matters as the Representative may reasonably require, and the
Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(j) At the time of execution of this Agreement, the
Representative shall have received from Deloitte & Touche LLP a letter, in form
and substance satisfactory to the Representatives, addressed to the Underwriters
and dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(k) With respect to the letter of Deloitte & Touche LLP referred
to in the preceding paragraph and delivered to the Representative concurrently
with the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Representative a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the
21
22
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial information
and other matters covered by the initial letter and (iii) confirming in all
material respects the conclusions and findings set forth in the initial letter.
(l) The Company shall have furnished to the Representative a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the Company
has complied with all its agreements contained herein; and the conditions set
forth in Sections 9(a) or 9(o) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement and the Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (B) since the Effective Date no event has occurred which should have been
set forth in a supplement or amendment to the Registration Statement or the
Prospectus.
(m) The Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholder) shall have furnished to
the Representative on such Delivery Date a certificate, dated such Delivery
Date, signed by, or on behalf of, the Selling Stockholder (or the Custodian or
one or more attorneys-in-fact) stating that the representations, warranties and
agreements of the Selling Stockholder contained herein are true and correct as
of the First Delivery Date and that the Selling Stockholder has complied with
all agreements contained herein to be performed by the Selling Stockholder at or
prior to the such Delivery Date.
(n) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
or (ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representative, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(o) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by any other
regulatory body
22
23
or governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by Federal or state authorities, (iii) the United States
shall have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or inadvisable
to proceed with the public offering or delivery of the Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(p) The Nasdaq National Market shall have approved the Stock for
listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in (A) any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of the
offering of the Stock ("Marketing Materials"), including any roadshow or
investor presentations made to investors by the Company (whether in person or
electronically), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials, any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representative by or on behalf of any Underwriter specifically for
23
24
inclusion therein which information consists solely of the information specified
in Section 10(f). The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) [The Selling Stockholder shall indemnify and hold harmless
each Underwriter, its officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which that
Underwriter, officer, employee or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, but only to the extent that the untrue statement or alleged untrue
statement was made in reliance upon and in conformity with information furnished
to the Company by the Selling Stockholder, (ii) the omission or alleged omission
to state in any Preliminary Prospectus, Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that the omission or alleged omission was
made in reliance upon and in conformity with information furnished to the
Company by the Selling Stockholder or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Stock, or the Offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out or based upon matters covered by clause (i) or (ii) above
(provided that the Selling Stockholder shall not be liable under this clause
(iii) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or omitted to
be taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse each Underwriter, its officers and employees
and each such controlling person for any legal or other expenses reasonably
incurred by that Underwriter, its officers and employees or controlling person
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Selling Stockholder shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any such amendment or supplement
in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representative by or on behalf
of any Underwriter specifically for inclusion therein which information consists
solely of the information specified in Section 10(f). The foregoing indemnity
agreement is in addition to any liability which the Selling Stockholder may
otherwise have to any Underwriter or any officer, employee or controlling person
of that Underwriter.]
(c) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its directors
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or
24
25
supplement thereto, or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representative by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Company or any such director, officer,
employee or controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ counsel to represent jointly
the Representative and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or the Selling Stockholder under this Section 10 if, in the
reasonable judgment of the Representative, it is advisable for the
Representative and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company or the
Selling Stockholder. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
25
26
(e) If the indemnification provided for in this Section 10 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, 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 such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholder on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholder on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling Stockholder,
on the one hand, and the total underwriting discounts and commissions received
by the Underwriters with respect to the shares of the Stock purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the shares of the Stock under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Selling Stockholder or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 10(e) 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 herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section shall be deemed to include, for purposes of this Section 10(e), 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 10(e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 10(e) are several in proportion to their respective
underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
11. Defaulting Underwriters.
26
27
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representative who so agree, shall have the right, but shall
not be obligated, to purchase, in such proportion as may be agreed upon among
them, all the Stock to be purchased on such Delivery Date. If the remaining
Underwriters or other underwriters satisfactory to the Representative do not
elect to purchase the shares which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement (or, with
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholder, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Section 8 and Section 13. As used
in this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter
of any liability it may have to the Company and the Selling Stockholder for
damages caused by its default. If other underwriters are obligated or agree to
purchase the Stock of a defaulting or withdrawing Underwriter, either the
Representative or the Company may postpone the Delivery Date for up to seven
full business days in order to effect any changes that in the opinion of counsel
for the Company or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representative by notice given to and received by the
Company and the Selling Stockholder prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 9(m),
9(n) or 9(o), shall have occurred or if the Underwriters shall decline to
purchase the Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If the Company or
the Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholder to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholder is
not fulfilled, the Company and the Selling Stockholder will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
and the Selling Stockholder shall pay the full amount thereof to the
Representative. If this Agreement is terminated pursuant to Section 12 by reason
of the default of
27
28
one or more Underwriters, neither the Company nor the Selling Stockholder shall
be obligated to reimburse any defaulting Underwriter on account of those
expenses.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax:
▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any notice pursuant to Section 10(d),
to the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers
Inc., 3 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(c) if to the Selling Stockholder, shall be delivered or sent by
mail, telex or facsimile transmission to the Selling Stockholder at Gambro,
Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇, President and Chief Financial Officer (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representative, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholder shall be entitled to act and rely upon any request, consent,
notice or agreement given or made on behalf of the Underwriters by ▇▇▇▇▇▇
Brothers Inc. and the Company and the Underwriters shall be entitled to act and
rely upon any request, consent, notice or agreement given or made on behalf of
the Selling Stockholder by the Custodian or the attorney-in-fact appointed
pursuant to the Power of Attorney.
15. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholder and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Selling Stockholder contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 10(c) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholder and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
28
29
17. Definition of the Terms "Business Day" and "subsidiary." For
purposes of this Agreement, (a) "business day" each Monday, Tuesday, Wednesday,
Thursday or Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close and (b)
"subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations.
18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
19. Consent to Jurisdiction. Each party irrevocably agrees that
any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby ("Related Proceedings") may be
instituted in the federal courts of the United States of America located in the
City of New York or the courts of the State of New York in each case located in
the Borough of Manhattan in the City of New York (collectively, the "Specified
Courts"), and irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "Related Judgment"), as to which such jurisdiction is non-exclusive) of
such courts in any such suit, action or proceeding. The parties further agree
that service of any process, summons, notice or document by mail to such party's
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum. Each party not located in
the United States hereby irrevocably appoints CT Corporation System, which
currently maintains a New York City office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, as its agent to receive service of process
or other legal summons for purposes of any such action or proceeding that may be
instituted in any state or federal court in the City and State of New York.
20. Waiver of Immunity. With respect to any Related Proceeding,
each party irrevocably waives, to the fullest extent permitted by applicable
law, all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified Courts,
and with respect to any Related Judgment, each party waives any such immunity in
the Specified Courts or any other court of competent jurisdiction, and will not
raise or claim or cause to be pleaded any such immunity at or in respect of any
such Related Proceeding or Related Judgment, including, without limitation, any
immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976,
as amended.
21. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
22. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
29
30
If the foregoing correctly sets forth the agreement among the
Company, the Selling Stockholder and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
THORATEC LABORATORIES CORPORATION,
as the Company
By:
-------------------------------
Name:
Title:
GAMBRO, INC., as the Selling Stockholder
By:
-------------------------------
Name:
Title: Attorney-in-Fact
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
For itself and as Representative of the
several Underwriters named in Schedule 1
hereto
By: ▇▇▇▇▇▇ BROTHERS INC.
By:
-------------------------------
Authorized Representative
31
SCHEDULE 1
Number of Shares
Underwriters of Firm Stock
------------ -------------
▇▇▇▇▇▇ Brothers Inc.......................................
Bear, ▇▇▇▇▇▇▇ & Co. Inc...................................
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc...............................
Fidelity Capital Markets, a division of National
Financial Services Corporation..........................
-------------
Total 3,000,000.