EXHIBIT 1.1
[FORM OF UNDERWRITING AGREEMENT]
14,780,000 Shares
DePUY, INC.
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
October __, 1996
October __, 1996
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇ LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
Bear, ▇▇▇▇▇▇▇ International Limited
▇▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇ LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ England
Dear Sirs and Mesdames:
DePuy, Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the several Underwriters, and Corange Limited, a shareholder of the
Company (the "Selling Shareholder") proposes to sell to the several
Underwriters, an aggregate of 14,780,000 shares of the common stock, $.01 par
value per share, of the Company (the "Firm Shares"), of which 7,780,000 shares
are to be issued and sold by the Company and 7,000,000 shares are to be sold by
the Selling Shareholder. It is understood that, subject to the conditions
hereinafter stated, 11,824,000 Firm Shares (the "U.S. Firm Shares") will be sold
to the several U.S. Underwriters named in Schedule I hereto (the "U.S.
Underwriters") in connection with the offering and sale of such U.S. Firm Shares
in the United States and Canada to United States and Canadian Persons (as such
terms are defined in the Agreement Between U.S. and International Underwriters
of even date herewith), and 2,956,000 Firm Shares (the "International Shares")
will be sold to the several International Underwriters named in Schedule II
hereto (the "International Underwriters") in connection with the offering and
sale of such International
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Shares outside of the United States and Canada to persons other than United
States and Canadian Persons. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Bear, ▇▇▇▇▇▇▇ &
Co. Inc., ▇▇▇▇▇ & Company and ▇▇▇▇▇▇ ▇▇▇▇ LLC shall act as representatives (the
"U.S. Representatives") of the several U.S. Underwriters, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. International Limited, Bear, ▇▇▇▇▇▇▇ International Limited, ▇▇▇▇▇ & Company
and ▇▇▇▇▇▇ ▇▇▇▇ LLC will act as representatives (the "International
Representatives") of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter collectively
referred to as the Underwriters.
The Company also proposes to issue and sell to the several Underwriters not
more than an additional 2,217,000 shares of the Company's common stock, $.01 par
value per share (the "Additional Shares"), if and to the extent that the U.S.
Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of common stock granted to the
U.S. Underwriters in Section 3 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares." The shares of
Common Stock, $.01 par value per share, of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "Common Stock." The Company and the Selling Shareholder are hereinafter
sometimes collectively referred to as the "Sellers."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement relating to the Shares. The registration
statement contains two prospectuses, the U.S. prospectus, to be used in
connection with the offering and sale of the Shares in the United States and
Canada to United States and Canadian Persons, and the international prospectus,
to be used in connection with the offering and sale of Shares outside the United
States and Canada to persons other than United States and Canadian Persons. The
international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the U.S. prospectus and
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "Prospectus." If the
Company has filed an abbreviated registration statement to
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register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
---------------------------------------------
The Company represents and warrants to and agrees with each of the
Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect; and no
proceedings for such purpose are pending before or, to the best knowledge of the
Company, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph 1(b)
do not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a
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material adverse effect on the Company and its subsidiaries, taken as a whole.
The Pre-Offering Reorganization (as described in the Prospectus) has been
consummated, except that, in the case of the distribution subsidiaries listed in
Exhibit A-2, as of the date hereof only beneficial and not record ownership of
the capital stock of such subsidiaries has been transferred to the Company.
(d) Each subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered by the
Company.
(f) The Allocation and Indemnity Agreement among the Company, Corange
Limited and Boehringer Mannheim Corporation (the "Allocation and Indemnity
Agreement") and the Registration Rights Agreement among the Company, Corange
Limited and certain subsidiaries of Corange Limited (the "Registration Rights
Agreement" and, collectively with the Allocation and Indemnity Agreement, the
"Intercompany Agreements") have been duly authorized and, when executed and
delivered by the Company, will constitute valid and binding agreements of the
Company enforceable in accordance with their terms except as enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and the availability of equitable remedies may be
limited by equitable principles of general applicability and except to the
extent that the provisions relating to indemnification and contribution
contained in the Registration Rights Agreement may be deemed unenforceable.
(g) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
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(h) The shares of Common Stock (including the Shares to be sold by the
Selling Shareholder) outstanding prior to the issuance of the Shares to be sold
by the Company have been duly authorized and are validly issued, fully paid and
non-assessable.
(i) The Shares to be sold by the Company have been duly authorized and,
when issued and delivered in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(j) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement and the Intercompany
Agreements will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement or the
Intercompany Agreements, except for such as have been obtained and such as may
be required by the securities or Blue Sky laws of the various states or foreign
jurisdictions in connection with the offer and sale of the Shares.
(k) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(l) There are no legal or governmental proceedings pending or, to the best
knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or may be party or to which any of the properties of the Company
or any of its subsidiaries is or may be subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes,
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regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(m) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(n) The Company is not and, after giving effect to the offering and sale
of the Shares to be issued and sold by the Company and the application of the
proceeds thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(o) The Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(p) Except for the Registration Rights Agreement, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant to
the Registration Statement.
(q) Subsequent to the respective dates as of which information is given in
the Registration Statement and
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Prospectus, (1) the Company and its subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any material
liability or obligation not in the ordinary course of business; (2) the Company
has not purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock;
and (3) there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its consolidated subsidiaries, except,
in the case of each of (1), (2) and (3) above, as described in or contemplated
by the Prospectus.
(r) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
subsidiaries, taken as a whole, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real 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, taken as a whole, in each case except as described
in or contemplated by the Prospectus.
(s) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent rights, licenses, inventions,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names currently employed by them in connection with the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a
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whole, all except as described in or contemplated by the Prospectus.
(t) No material labor dispute with the employees of the Company or any of
its subsidiaries exists, except as described in or contemplated by the
Prospectus, or, to the knowledge of the Company, is imminent; and the Company is
not aware of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors that
could result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
(u) The Company and each of its subsidiaries are insured by Bellago, a
wholly-owned subsidiary of the Selling Shareholder, and by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, except as described in or contemplated
by the Prospectus.
(v) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
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(w) To the best knowledge of the Company, there are no costs or liabilities
associated with Environmental Laws, including without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties which would, singly or in the aggregate, have a material adverse
effect on the condition, financial or otherwise, or on the earnings, business,
or operations of the Company and its subsidiaries, taken as a whole.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER.
---------------------------------------------------------
The Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by or
on behalf of the Selling Shareholder.
(b) The Intercompany Agreements have been duly authorized by the Selling
Shareholder and, when executed and delivered by the Selling Shareholder, will
constitute, valid and binding agreements of the Selling Shareholder enforceable
in accordance with their terms except as enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights generally
and the availability of equitable remedies may be limited by equitable
principles of general applicability and except to the extent that the provisions
relating to indemnification and contribution contained in the Registration
Rights Agreement may be deemed unenforceable.
(c) The execution and delivery by the Selling Shareholder of, and the
performance by the Selling Shareholder of its obligations under, this Agreement
and the Power of Attorney appointing certain individuals as the Selling
Shareholder's attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the "Power
of Attorney"), will not contravene any provision of applicable law, the
certificate of incorporation or by-laws of the Selling Shareholder, any
agreement or other instrument binding upon the Selling Shareholder or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with,
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any governmental body or agency is required for the performance by the Selling
Shareholder of its obligations under this Agreement or the Power of Attorney of
the Selling Shareholder, except such as may have been obtained and such as may
be required by the securities or Blue Sky laws of the various states or foreign
jurisdictions in connection with the offer and sale of the Shares.
(d) The Selling Shareholder has, and on the Closing Date will have, valid
title to the Shares to be sold by the Selling Shareholder and the legal right
and power, and all authorization and approval required by law, to enter into
this Agreement and the Power of Attorney and the Intercompany Agreements and to
sell, transfer and deliver the Shares to be sold by the Selling Shareholder.
(e) The Power of Attorney has been duly authorized, executed and delivered
by the Selling Shareholder and is a valid and binding agreement of the Selling
Shareholder.
(f) Delivery of the Shares to be sold by the Selling Shareholder pursuant
to this Agreement will pass title to the Shares free and clear of any security
interests, claims, liens, equities and other encumbrances.
(g) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph 2(g)
shall apply only to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to the Selling Shareholder furnished
to the Company in writing by the Selling Shareholder expressly for use therein.
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3. AGREEMENTS TO SELL AND PURCHASE. Each Seller, severally and not
-------------------------------
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $______ a share (the "Purchase
Price") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by such Seller as the number of Firm Shares set
forth in Schedules I and II hereto opposite the name of such Underwriter bears
to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 2,217,000
Additional Shares at the Purchase Price. If the U.S. Representatives, on behalf
of the U.S. Underwriters, elect to exercise such option, the U.S.
Representatives shall so notify the Company in writing not later than 30 days
after the date of this Agreement, which notice shall specify the number of
Additional Shares to be purchased by the U.S. Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the Closing Date
(as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Additional Shares may be purchased
as provided in Section 5 hereof solely for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such U.S. Underwriter bears to the total number of
Firm Shares.
Each Seller hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any
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securities convertible into or exercisable or exchangeable for Common Stock
(whether such shares or any such securities are now owned by such Seller or are
hereafter acquired) or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) in the case of the Company, any options or
phantom stock units granted to employees, consultants, sales representatives or
non-employee directors under the Company's incentive plan (as such terms are
defined in such plan), and shares of Common Stock issued in connection with the
exercise of any option or the conversion of any phantom stock units issued under
the Company's incentive plan or any stock issued or purchased or options granted
in connection with the Company's employee stock/option purchase plan, and (C) in
the case of shareholders of the Company, transfers to other direct or indirect
subsidiaries of the Selling Shareholder, provided that all such transferees will
be subject to the above sale restrictions. In addition, the Selling Shareholder
hereby agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated on behalf of the Underwriters, it will not, and it will not permit
any of its subsidiaries to, during the period ending 180 days after the date of
the Prospectus, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
4. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
------------------------
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
$_____________ a share (the "Public Offering Price") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be sold by each
--------------------
Seller shall be made to such Seller in Federal or other funds immediately
available in New York City against
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delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 A.M., New York City time, on November __, 1996, or at such
other time on the same or such other date, not later than _________, 1996, as
shall be agreed upon by you and the Company. The time and date of such payment
are hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 A.M., New York City time, on the date specified in the notice described in
Section 3 or at such other time on the same or on such other date, in any event
not later than _______, 1996, as shall be agreed upon by the U.S.
Representatives and the Company. The time and date of such payment are
hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
temporary or definitive form and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date or the Option Closing Date, as the case may be.
The certificates evidencing the Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or the Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
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Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 3:00 P.M. (New York City time) on the date hereof, and
no stop order suspending the effectiveness of the Registration Statement shall
have been issued under the Securities Act or proceeding therefor initiated or
threatened by the Commission.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any change, or any
development involving a
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prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct in all material respects as of
the Closing Date and that the Company has complied in all material respects with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion of
Coudert Brothers, outside counsel for the Company, dated the Closing Date, to
the effect that:
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; the
Reorganization has been consummated, except that, in the case of the
distribution subsidiaries listed in Exhibit A-2, as of the date hereof only
beneficial and not record ownership of the capital stock of such
subsidiaries has been transferred to the Company;
14
(i) each subsidiary of the Company listed on Exhibit A (each a
"Significant Subsidiary") has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(iii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(iv) the shares of Common Stock (including the Shares to be sold by
the Selling Shareholder) outstanding prior to the issuance of the Shares to
be sold by the Company have been duly authorized and are validly issued,
fully paid and non-assessable;
(v) the Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The Intercompany Agreements have been duly authorized,
executed and delivered by the Company and constitute valid and binding
agreements of the Company enforceable in accordance with their terms except
as enforceability thereof may be limited by bankruptcy, insolvency and
similar laws affecting creditors' rights generally and the availability of
equitable remedies may be limited by equitable principles of general
applicability and except to the extent that the provisions relating to
indemnification and contribution contained in the Registration Rights
Agreement may be deemed unenforceable;
15
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and the
Intercompany Agreements will not contravene any provision of applicable law
or the certificate of incorporation or by-laws of the Company or, to the
best of such counsel's knowledge, any agreement or other instrument binding
upon the Company or any of its subsidiaries that is material to the Company
and its subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
of its obligations under this Agreement or the Intercompany Agreements,
except such as have been obtained or as may be required by the securities
or Blue Sky laws of the various states or foreign jurisdictions in
connection with the offer and sale of the Shares by the U.S. Underwriters
(as to which such counsel need express no opinion);
(ix) the statements (A) in the Prospectus under the captions
"Pre-Offering Reorganization"; "Business -Government Regulation; - Legal
Proceedings"; "Management"; "Certain Transactions"; and "Description of
Capital Stock" and (B) in the Registration Statement in Items 14 and 15, in
each case insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(x) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required;
16
(xi) the Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended; and
(xii) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules and
other financial and statistical data including market share data included
therein as to which such counsel need not express any opinion) comply as to
form in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (B) has no reason to
believe that (except for financial statements and schedules and other
financial and statistical data including market share data as to which such
counsel need not express any belief) the Registration Statement and the
prospectus included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (C) has no reason to believe that
(except for financial statements and schedules and other financial and
statistical data including market share data as to which such counsel need
not express any belief) the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Underwriters shall have received on the Closing Date an opinion of
Coudert Brothers, counsel for the Selling Shareholder, dated the Closing Date,
to the effect that:
(i) this Agreement has been duly authorized, executed and delivered
by or on behalf of the Selling Shareholder;
(ii) The Intercompany Agreements have been duly authorized, executed
and delivered by the Selling Shareholder and constitute valid and binding
17
obligations of the Selling Shareholder enforceable in accordance with their
terms except as enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and the
availability of equitable remedies may be limited by equitable principles
of general applicability and except to the extent that the provisions
relating to indemnity and contribution contained in the Registration Rights
Agreement, may be deemed unenforceable;
(iii) the execution and delivery by the Selling Shareholder of, and
the performance by the Selling Shareholder of its obligations under, this
Agreement and the Power of Attorney of the Selling Shareholder and the
Intercompany Agreements will not contravene any provision of applicable
law, or the certificate of incorporation or by-laws of the Selling
Shareholder, or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon the Selling Shareholder or, to the best of
such counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Selling Shareholder, and
no consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Selling
Shareholder of its obligations under this Agreement or the Power of
Attorney or the Intercompany Agreements except such as have been obtained
or such as may be required by the securities or Blue Sky laws of the
various states or foreign jurisdictions in connection with offer and sale
of the Shares by the U.S. Underwriters (as to which such counsel need
express no opinion);
(iv) to the best of such counsel's knowledge the Selling Shareholder
has valid title to the Shares to be sold by such Selling Shareholder and
the legal right and power, and all authorization and approval required by
law, to enter into this Agreement and the Power of Attorney and the
Intercompany Agreements, and to sell, transfer and deliver the Shares to be
sold by the Selling Shareholder;
(v) the Power of Attorney of the Selling Shareholder has been duly
authorized, executed and delivered by the Selling Shareholder and is a
valid and binding agreement of the Selling Shareholder; and
18
(vi) delivery of the Shares to be sold by the Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear of
any security interests, claims, liens, equities and other encumbrances or
adverse claims (as such term is defined in Section 8-302 of the Uniform
Commercial Code in the State of New York), assuming that each of the
Underwriters is acting in good faith and has no notice of any adverse
claim.
(e) The Underwriters shall have received on the Closing Date an opinion of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Senior Vice President, General Counsel and Secretary of
the Company to the effect that:
(i) the statements in the Prospectus under the captions "Risk Factors -
Patents and Proprietary Know-how"; " - Patent Litigation"; and "Business -
Intellectual Property" fairly summarize the legal documents, matters and
proceedings set forth therein; and
(ii) such counsel has no reason to believe that the information under
the captions referred to in clause (i) above in the Prospectus at the time
the Registration Statement was declared effective contained (or in the
Prospectus as amended or supplemented, if applicable, as of the Closing
Date contains) any untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein not
misleading.
Such counsel may state that his opinion is based upon review and discussion
of the contents thereof with personnel at the Company familiar with such matters
and independent patent counsel to the Company but is otherwise without
independent check or verification.
(f) The Underwriters shall have received on the Closing Date an opinion of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the Closing Date,
covering the matters referred to in subparagraphs (vi), (vii), (ix) (but only as
to the statements in the Prospectus under "Description of Capital Stock" and
"Underwriters") and (xii) of paragraph (c) above.
19
With respect to subparagraph (xii) of paragraph (c) above, Coudert Brothers
and ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and discussion
of the contents thereof, but are without independent check or verification,
except as specified. With respect to paragraphs (c) and (d) above, Coudert
Brothers may rely upon an opinion or opinions of local counsel for the Company,
its subsidiaries and the Selling Shareholder and, with respect to factual
matters and to the extent such counsel deems appropriate, upon certificates of
the Company and the Selling Shareholder and the representations of the Selling
Shareholder contained herein and in the Power of Attorney and in other documents
and instruments; provided that (A) each such counsel is satisfactory to your
--------
counsel, (B) a copy of each opinion so relied upon is delivered to you and is in
form and substance satisfactory to your counsel, (C) copies of the Power of
Attorney and of any such other documents and instruments shall be delivered to
you and shall be in form and substance satisfactory to your counsel and (D)
Coudert Brothers shall state in their opinion that they are justified in relying
on each such other opinion.
The opinions of Coudert Brothers described in paragraphs (c) and (d) above
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. described in paragraph (e) above (and any opinions of
other counsel referred to in the immediately preceding paragraph) shall be
rendered to the Underwriters at the request of the Company or the Selling
Shareholder, as the case may be, and shall so state therein.
(g) The Underwriters shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from Price
Waterhouse LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus; provided
--------
that the letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
20
(h) The "lock-up" agreements, each substantially in the form of Exhibit B
hereto, between you and certain shareholders, officers and directors of the
Company relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the U.S. Representatives on the
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
7. COVENANTS OF THE COMPANY. In further consideration of the agreements
------------------------
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies, which may
include facsimile signatures, of the Registration Statement (including exhibits
thereto) and for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and to furnish to you in New
York City, without charge, prior to 4:00 P.M. New York City time on the business
day next succeeding the date of this Agreement and during the period mentioned
in paragraph (c) below, as many copies of the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering of
the Shares as in the opinion of counsel for the Underwriters the Prospectus is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result
21
of which it is necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Shares may have been
sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided, however, that no such qualification shall be required in any
jurisdiction where, as a result thereof, the Company would be subject to service
of general process or to taxation as a foreign corporation doing business in
such jurisdiction.
(e) To make generally available to the Company's security holders and to
you as soon as practicable an earnings statement covering the twelve-month
period ending December 31, 1997 that satisfies the provisions of Section 11(a)
of the Securities Act and the rules and regulations of the Commission
thereunder.
8. EXPENSES. Whether or not the transactions contemplated in this
--------
Agreement are consummated or this Agreement is terminated, the Sellers agree to
pay or cause to be paid all expenses incident to the performance of their
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel, the Company's accountants and counsel for the
Selling Shareholder in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated there with, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove
22
specified, (ii) all costs and expenses related to the transfer and delivery of
the Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky memorandum in
connection with the offer and sale of the Shares under state securities laws and
all expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 7(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky memorandum, up to a maximum of $25,000, (iv) all filing fees and
disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., (v) all fees and expenses in connection
with the preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to listing the
Shares on the New York Stock Exchange, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer agent,
registrar or depositary, (viii) the costs and expenses of the Company relating
to investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, and (ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. It is understood, however, that, except as provided in clauses
(iii) and (iv) of this Section, Section 9 entitled "Indemnity and Contribution",
and the last paragraph of Section 11 below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their counsel;
stock transfer taxes payable on resale of any of the Shares by them; any
advertising expenses connected with any offers they may make and the cost of
after market stabilization; mailings, telexes, shipping, wires and faxes
(including all delivery costs with respect to the Prospectus and any preliminary
prospectus); roadshow or closing banquets and the underwriters' portion of the
road show expenses (including travel, charter flights, limousines, hotels and
meals).
23
The provisions of this Section shall not supersede or otherwise affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
9. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to indemnify and
--------------------------
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or, in the
case of the Prospectus, make the statements therein, in light of the
circumstances in which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(b) The Selling Shareholder agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the case of the
Prospectus, make the statements therein, in light of the circumstances in which
they were made, not misleading, but only
24
with reference to information relating to the Selling Shareholder furnished in
writing by or on behalf of the Selling Shareholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholder, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or the Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading or,
in the case of the Prospectus, necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, but only
with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to paragraph (a), (b) or (c) of this Section 9, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of
25
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (i) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section and (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Selling Shareholder and all
persons, if any, who control the Selling Shareholder within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Underwriters
and such control persons of any Underwriters, such firm shall be designated in
writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. In the case of any such separate
firm for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. In the case of
the separate firm for the Selling Shareholder and such control persons of the
Selling Shareholder, such firm shall be designated in writing by the Selling
Shareholder. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in paragraph (a), (b)
or (c) of this Section 9 is unavailable to an
26
indemnified party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand from the offering of the Shares 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 indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by each Seller and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Sellers on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Sellers or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 9
are several in proportion to the respective numbers of Shares they have
purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 9 were determined by pro rata
--- ----
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (e) of this Section 9. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or
27
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this Section 9
and the representations, warranties and other statements of the Company and the
Selling Shareholder contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Selling Shareholder or any person controlling
the Selling Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
10. TERMINATION. This Agreement shall be subject to termination by notice
-----------
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event, singly or
together with any other such event, makes it, in your
28
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
11. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become
--------------------------------------
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedules I and II bears to the aggregate
number of Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
--------
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you, the Company and
the Selling Shareholder for the purchase of such Firm Shares are not made within
36 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter, the Company or the Selling
Shareholder. In any such case either you or the relevant Sellers shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. If,
on the Option Closing Date, any U.S. Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Additional Shares to be purchased, the non-defaulting U.S.
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase Additional Shares or (ii) purchase not less than the
29
number of Additional Shares that such non-defaulting U.S. Underwriters would
have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of any Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. COUNTERPARTS. This Agreement may be signed in two or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and construed in
--------------
accordance with the internal laws of the State of New York.
14. HEADINGS. The headings of the sections of this Agreement have been
--------
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
30
Very truly yours,
DePuy, Inc.
By_____________________________
Name:
Title:
Corange Limited
By_____________________________
Attorney-in-Fact
31
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇ LLC
Acting severally on behalf
of themselves and the
several U.S. Underwriters named
herein.
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
By___________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
Bear, ▇▇▇▇▇▇▇ International Limited
▇▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇ LLC
Acting severally on behalf
of themselves and the
several International Underwriters
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
International Limited
By___________________________
Name:
Title:
SCHEDULE I
Number of
U.S. Firm Shares
U.S. Underwriter To Be Purchased
---------------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇ LLC
_______________
Total ........
===============
SCHEDULE II
Number of
International
Firm Shares
International Underwriter To Be Purchased
------------------------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
Bear, ▇▇▇▇▇▇▇ International Limited
▇▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇ LLC
_______________
Total ........
===============
Exhibit A
---------
List of Significant Subsidiaries
--------------------------------
DePuy Orthotech
DePuy Ace
DePuy International
Exhibit A-2
-----------
List of Distribution Subsidiaries
---------------------------------
Exhibit B
---------
[FORM OF LOCK-UP LETTER]
------------------------
____________, 1996
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇ LLC
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇ & Company
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
Bear, ▇▇▇▇▇▇▇ & International Limited
▇▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇ LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ England
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with DePuy, Inc., a Delaware corporation (the
"Company"), providing for the public offering (the "Public Offering") by the
several Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Underwriters"), of ___
shares (the "Shares") of the Common Stock, $.01 par value per share, of the
Company (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering
(the "Prospectus"), (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock (whether such
shares or any such securities are now owned by the undersigned or are
hereafter acquired), or (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not
apply to the sale of any Shares to the Underwriters pursuant to the
Underwriting Agreement; in the case of the Company, any options or phantom
stock units granted to employees, consultants, sales representatives or non-
employee directors under the Company's incentive plan (as such terms are
defined in such plan), any shares of Common Stock issued in connection with
the exercise of any option or the conversion of any phantom stock units issued
under the Company's incentive plan or any stock issued or purchased or options
granted in connection with the Company's employee stock/option purchase plan
and in the case of stockholders of the Company, transfers to other direct or
indirect subsidiaries of Corange Limited, provided that all such transferees
will be subject to the above sale restrictions. In addition, the undersigned
agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of
the Underwriters, it will not, during the period commencing on the date hereof
and ending 180 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject
to negotiation between the Company and the Underwriters.
Very truly yours,
_________________________
(Name)
_________________________
(Address)