EXHIBIT 1.1
================================================================================
▇▇▇▇▇ RESPIRATORY THERAPEUTICS, INC.
(A DELAWARE CORPORATION)
7,079,000 SHARES OF COMMON STOCK
PURCHASE AGREEMENT
Dated: July , 2005
================================================================================
▇▇▇▇▇ RESPIRATORY THERAPEUTICS, INC.
(A DELAWARE CORPORATION)
7,079,000 SHARES OF COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
PURCHASE AGREEMENT
July , 2005
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
4 World Financial Center
New York, New York 10080
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the several
Underwriters to be named in the
within mentioned Purchase Agreement
Ladies and Gentlemen:
▇▇▇▇▇ Respiratory Therapeutics, Inc., a Delaware corporation (the
"Company"), and the persons listed in Schedule B hereto (the "Selling
Shareholders") confirm their respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ are acting as representatives
(in such capacity, the "Representatives"), with respect to (i) the sale by the
Company and the Selling Shareholders, acting severally and not jointly, and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $0.01 per share, of the
Company ("Common Stock") set forth in Schedules A and B hereto and (ii) the
grant by the Company to the Underwriters of the option described in Section 2(b)
hereof to purchase all or any part of 1,061,000 additional shares of Common
Stock to cover overallotments, if any. The aforesaid 7,079,000 shares of Common
Stock (the "Initial Securities") to be purchased by the Underwriters and all or
any part of the 1,061,000 shares of Common Stock subject to the option described
in Section 2(b) hereof (the "Option Securities") are hereinafter called,
collectively, the "Securities."
The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company, the Selling Shareholders and the Underwriters agree that up
to 503,950 shares of the Securities to be purchased by the Underwriters (the
"Reserved Securities") shall be reserved for sale by the Underwriters to certain
eligible employees and persons having business relationships with the Company
(the "Invitees"), as part of the distribution of the Securities by the
Underwriters, subject to the
terms of this Agreement, the applicable rules, regulations and interpretations
of the National Association of Securities Dealers, Inc. and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are not
orally confirmed for purchase by the Invitees by the end of the first business
day after the date of this Agreement, such Reserved Securities may be offered to
the public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-123585), including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act").
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits and any schedules thereto, at the time it
became effective, and including the Rule 430A Information, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus in
the form first furnished to the Underwriters for use in connection with the
offering of the Securities is herein called the "Prospectus." For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto has been issued under the 1933 Act, and no proceedings
for that purpose have been instituted or are pending or, to the knowledge
of the Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state
2
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, any preliminary
prospectus and any supplement thereto or prospectus wrapper prepared in
connection therewith, at their respective times of issuance and at the
Closing Time, complied and will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the
Prospectus and such preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the offer and sale of
Reserved Securities. Neither the Prospectus nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit 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. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto).
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto complied when so filed in all material respects with the
1933 Act Regulations, and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly in all material respects the
financial position of the Company at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company, other than those in the ordinary course of business,
which are material with respect to the Company, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
3
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vi) No Subsidiaries. The Company has no subsidiaries.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock, including the Securities to be purchased by the
Underwriters from the Selling Shareholders, have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock, including the Securities to be
purchased by the Underwriters from the Selling Shareholders, was issued in
violation of the preemptive or other similar rights of any securityholder
of the Company.
(viii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have been
duly authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable; the Common Stock
conforms in all material respects to all statements relating thereto
contained in the Prospectus and such description conforms to the rights
set forth in the instruments defining the same; no holder of the
Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. The Company is not in
violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Company with its obligations
hereunder have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults or Repayment
Events or liens, charges
4
or encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the charter
or by-laws of the Company or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers, customers or contractors, which, in either case, would
result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit or
proceeding, and no inquiry or investigation of which the Company is aware,
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or involving the Company or its property, which is required to be
disclosed in the Registration Statement (other than as disclosed therein),
or which might result in a Material Adverse Effect, or which might
materially and adversely affect the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits thereto which have not been
so described and filed as required.
(xiv) Possession of Intellectual Property. The Company owns or
possesses adequate licenses or other rights to use the patent rights,
inventions, copyrights, trademarks, service marks, trade names, technology
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary rights, and excluding generally commercially
available "off the shelf" software programs licensed pursuant to shrink
wrap or "click and accept" licenses) (collectively, "Intellectual
Property") necessary to conduct the business of the Company in the manner
described in the Prospectus (collectively, the "Company Intellectual
Property") and the absence of which, individually or in the aggregate,
would not have a Material Adverse Effect. Except as disclosed in the
Prospectus, the Company is not obligated to pay a royalty, grant a
license, or provide other consideration to any third party in connection
with the Company Intellectual Property. Except as disclosed in the
Prospectus or as would not have a Material Adverse Effect, the Company has
not received any notice of infringement of or conflict with any
Intellectual Property rights of others. Except as disclosed in the
Prospectus or as would not have a Material Adverse Effect, the conduct of
the current and future business of the Company in the manner described in
the Prospectus does not and will not, to the knowledge of the Company,
infringe, interfere or conflict with any valid issued patent claim or
other Intellectual Property right of any third party, or any claim of a
patent application filed by any third party, which patent application has
been published in the United States Patent and Trademark Office (the
"PTO") or similar foreign authority or is otherwise known to the Company
and which claim would reasonably be expected to issue as a valid claim.
Except as described in the Prospectus or as would not have a
5
Material Adverse Effect, no third party, including any academic or
governmental organization, possesses or could obtain rights to the Company
Intellectual Property which, if exercised, could enable such party to
develop products competitive to those of the Company.
(xv) The Company has duly and properly filed or caused to be
filed with the PTO and applicable foreign and international patent
authorities all patent applications owned by the Company (the "Company
Patent Applications"). To the knowledge of the Company, the Company has
complied with the PTO's duty of candor and disclosure for the Company
Patent Applications and has made no material misrepresentation in the
Company Patent Applications. The Company is not aware of any information
material to a determination of patentability regarding the Company Patent
Applications not called to the attention of the PTO or similar foreign
authority. The Company is not aware of any information not called to the
attention of the PTO or similar foreign authority which would preclude the
grant of a patent for the Company Patent Applications. The Company has no
knowledge of any information which would preclude the Company from having
clear title to the Company Patent Applications.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except (i) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and (ii) such as have been obtained
under the laws and regulations of jurisdictions outside the United States
in which the Reserved Securities are offered.
(xvii) Absence of Manipulation. Neither the Company nor any
affiliate of the Company has taken, nor will the Company or any affiliate
take, directly or indirectly, any action which is designed to or which has
constituted or which would be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(xviii) Regulatory Authorizations and Filings. The Company
possesses such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct its business, including without limitation all such
certificates, approvals, authorizations, licenses and permits required by
the United States Food and Drug Administration (the "FDA") or any other
federal, state or foreign agencies or bodies engaged in the regulation of
pharmaceuticals or biohazardous materials, except where the failure so to
possess would not, singly or in the aggregate, result in a Material
Adverse Effect; the Company is in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, result in a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not, singly or in the aggregate, result in a Material Adverse Effect; and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
The Company has not failed to file with applicable regulatory
authorities any statement, report, information or form required by any
applicable law, regulation or order, except where the failure to be so in
compliance would not, individually or in the aggregate, have a Material
6
Adverse Effect, all such filings were in material compliance with
applicable laws when filed and no material deficiencies have been asserted
by any regulatory commission, agency or authority with respect to any such
filings or submissions.
(xix) Regulatory Compliance. The Company has operated and
currently is in compliance with all applicable rules, regulations and
policies of the FDA, except where the failure to so operate or be in
compliance would not reasonably be expected to have a Material Adverse
Effect.
Any human studies or tests and preclinical and clinical trials
conducted by or on behalf of the Company or in which the Company
participated were and, if still pending, are being, conducted in all
material respects in accordance with experimental protocols, procedures
and controls pursuant to, where applicable, accepted professional and
scientific standards; any descriptions of the results of such studies,
tests and trials contained in the Registration Statement and the
Prospectus are accurate in all material respects; and the Company has not
received any notices or correspondence from the FDA or any foreign, state
or local governmental body exercising comparable authority requiring the
termination, suspension or material modification of any studies, tests or
preclinical or clinical trials conducted by or on behalf of the Company
which termination, suspension or material modification would reasonably be
expected to have a Material Adverse Effect.
(xx) Title to Property. The Company has good and marketable
title to all real property owned by the Company and good title to all
other properties owned by it, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (A) are described in the
Prospectus or (B) do not, singly or in the aggregate, 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 all of the leases
and subleases material to the business of the Company, or under which the
Company holds properties described in the Prospectus, are in full force
and effect, and the Company has no notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xxi) Investment Company Act. The Company is not required, and
upon the issuance and sale of the Securities as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectus will not be required, to register as an "investment company"
under the Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) the Company is not in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products, asbestos-containing materials or mold
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
has all permits,
7
authorizations and approvals required under any applicable Environmental
Laws and is in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company and (D) there are no events or circumstances that
would reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company relating to
Hazardous Materials or any Environmental Laws.
(xxiii) Registration Rights. Except for such rights as have
been waived with respect to the offering of Securities contemplated hereby
or otherwise disclosed in the Registration Statement and Prospectus, there
are no persons with registration rights or other similar rights to have
any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxiv) Insurance. The Company carries, or is covered by,
insurance in such amounts and covering such risks as the Company
reasonably believes are adequate for the conduct of its business and the
value of its properties and as are customary in the business in which the
Company is engaged; the Company has not been refused any insurance
coverage sought or applied for; and the Company has no 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 have a Material Adverse Effect.
(xxv) Internal Accounting Controls. The Company maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (C) access to assets is permitted only in accordance
with management's general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxvi) Disclosure Controls and Procedures. The Company has
established and maintains disclosure controls and procedures (as such term
is defined in Rule 13a-15 under the 1934 Act), which (A) are designed to
ensure that material information relating to the Company is made known to
the Company's principal executive officer and principal financial officer
by others within the Company, and (B) are effective in all material
respects to perform the functions for which they were established. Based
on the evaluation of the Company's disclosure controls and procedures
described above, the Company is not aware of (1) any significant
deficiency in the design or operation of internal controls which could
adversely affect the Company's ability to record, process, summarize and
report financial data or any material weaknesses in internal controls or
(2) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal controls.
Since the most recent evaluation of the Company's disclosure controls and
procedures described above, there have been no significant changes in
internal controls or in other factors that could significantly affect
internal controls.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder, severally and not jointly, represents and warrants to each
Underwriter as of the date hereof, as of the
8
Closing Time, and, if the Selling Shareholder is selling Option Securities on a
Date of Delivery, as of each such Date of Delivery, and agrees with each
Underwriter, as to itself only, as follows:
(i) Accurate Disclosure. Such Selling Shareholder has reviewed and
is familiar with the disclosure relating to such Selling Shareholder in
the Registration Statement and Prospectus, and neither the Prospectus nor
any amendments or supplements thereto (including any prospectus wrapper)
includes 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,
provided that the representation in this paragraph is limited to
statements or omissions made in reliance upon and in conformity with
information relating to such Selling Shareholder furnished to the Company
in writing by such Selling Shareholder expressly for use in the
Registration Statement, Prospectus or any amendments or supplements
thereto; such Selling Shareholder is not prompted to sell the Securities
to be sold by such Selling Shareholder hereunder by any information
concerning the Company which is not set forth in the Prospectus.
(ii) Authorization of this Agreement. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Shareholder.
(iii) Authorization of Power of Attorney and Custody Agreement. The
Power of Attorney and Custody Agreement, in the form heretofore furnished
to the Representatives (the "Power of Attorney and Custody Agreement"),
has been duly authorized, executed and delivered by such Selling
Shareholder and is the valid and binding agreement of such Selling
Shareholder.
(iv) Noncontravention. The execution and delivery of this Agreement
and the Power of Attorney and Custody Agreement and the sale and delivery
of the Securities to be sold by such Selling Shareholder and the
consummation of the transactions contemplated herein and compliance by
such Selling Shareholder with its obligations hereunder do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any tax, lien, charge or encumbrance upon
the Securities to be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or
other agreement or instrument to which such Selling Shareholder is a party
or by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
or other organizational instrument of such Selling Shareholder, if
applicable, or any applicable treaty, law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties.
(v) Certificates Suitable for Transfer. The Securities to be sold by
such Selling Shareholder pursuant to this Agreement are certificated
securities in registered form and are not held in any securities account
or by or through any securities intermediary within the meaning of the
Uniform Commercial Code as in effect in the State of New York (the "UCC").
Certificates for all of the Securities to be sold by such Selling
Shareholder pursuant to this Agreement, in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or
assignment in blank with signatures guaranteed, have been placed in
custody with Wachovia Bank, N.A. (the "Custodian") with irrevocable
conditional instructions to deliver such Securities to the Underwriters
pursuant to this Agreement.
9
(vi) Valid Title. Such Selling Shareholder has, and at the Closing
Time will have, valid title to the Securities to be sold by such Selling
Shareholder free and clear of all security interests, claims, liens,
equities or other encumbrances 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 Custody Agreement and to sell, transfer and
deliver the Securities to be sold by such Selling Shareholder.
(vii) Delivery of Securities. Upon payment of the purchase price for
the Securities to be sold by such Selling Shareholder pursuant to this
Agreement, delivery of such Securities, as directed by the Underwriters,
to Cede & Co. ("Cede") or such other nominee as may be designated by The
Depository Trust Company ("DTC"), registration of such Securities in the
name of Cede or such other nominee, and the crediting of such Securities
on the books of DTC to securities accounts of the Underwriters (assuming
that neither DTC nor any such Underwriter has notice of any "adverse
claim," within the meaning of Section 8-105 of the UCC, to such
Securities), (A) DTC shall be a "protected purchaser," within the meaning
of Section 8-303 of the UCC, of such Securities and will acquire its
interest in the Securities (including, without limitation, all rights that
such Selling Shareholder had or has the power to transfer in such
Securities) free and clear of any adverse claim within the meaning of
Section 8-102 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such
Securities and (C) no action (whether framed in conversion, replevin,
constructive trust, equitable lien or other theory) based on any "adverse
claim," within the meaning of Section 8-102 of the UCC, to such Securities
may be asserted against the Underwriters with respect to such security
entitlement; for purposes of this representation, such Selling Shareholder
may assume that when such payment, delivery and crediting occur, (x) such
Securities will have been registered in the name of Cede or another
nominee designated by DTC, in each case on the Company's share registry in
accordance with its certificate of incorporation, bylaws and applicable
law, (y) DTC will be registered as a "clearing corporation," within the
meaning of Section 8-102 of the UCC and (z) appropriate entries to the
accounts of the several Underwriters on the records of DTC will have been
made pursuant to the UCC.
(viii) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or would be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(ix) Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by such Selling Shareholder of
its obligations hereunder or in the Power of Attorney and Custody
Agreement, or in connection with the sale and delivery of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement, except (A) such as may have previously been made or obtained or
as may be required under the 1933 Act or the 1933 Act Regulations or the
1934 Act or state securities laws and (B) such as have been obtained under
the laws and regulations of jurisdictions outside the United States in
which the Reserved Securities are offered.
(x) No Association with NASD. Except as described in the completed
NASD Questionnaire provided by such Selling Shareholder to the Company on
or before July 18, 2005, neither such Selling Stockholder nor any of its
affiliates directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, or is a
person associated with (as defined in such NASD Questionnaire), any member
firm of the National Association of Securities Dealers, Inc.
10
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of the Selling Shareholders as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and each Selling Shareholder, severally and not jointly, agree to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company and each Selling
Shareholder, at the price per share set forth in Schedule C, that proportion of
the number of Initial Securities set forth in Schedule B opposite the name of
the Company or such Selling Shareholder, as the case may be, which the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters to purchase
up to an additional 1,061,000 shares of Common Stock, as set forth in Schedule
B, at the price per share set forth in Schedule C, less an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Initial Securities but not payable on the Option Securities. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
overallotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ but shall
not be later than seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter defined. If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as ▇▇▇▇▇▇▇ ▇▇▇▇▇ in its discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇▇
& Bird LLP, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other place as shall
be agreed upon by the Representatives and the Company and the Selling
Shareholders, at 9:00 A.M. (Eastern time) on the fourth business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company and the Selling Shareholders
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities
11
shall be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Representatives and the Company, on each Date of Delivery as
specified in the notice from the Representatives to the Company.
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Custodian against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇, individually and not as representatives of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by any Underwriter
whose funds have not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Representatives notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)) or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, will furnish the Representatives
with copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any such
document to which the Representatives or counsel for the Underwriters shall
reasonably object.
12
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(g) Rule 158. The Company will timely file such reports pursuant to the
Securities Exchange Act of 1934 (the "1934 Act") as are necessary in order to
make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
13
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".
(i) Listing. The Company will use its reasonable best efforts to effect
and maintain the quotation of the Securities on the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, (i) directly or indirectly, 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 any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
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 Securities to be sold hereunder, (B) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectus, or (C) any options to purchase Common Stock
granted pursuant to the Company's existing long-term incentive plans referred to
in the Prospectus, provided that such options shall not be vested and
exercisable within the 180-day period referred to above (subject to extension as
provided below).
The Company further agrees that, notwithstanding the foregoing, if (i)
during the last 17 days of the 180-day lockup period, the Company issues an
earnings release or material news or a material event relating to the Company
occurs, or (ii) prior to the expiration of the 180-day lock-up period, the
Company announces that it will release earnings results or becomes aware that
material news or a material event will occur during the 16-day period beginning
on the last day of the 180-day lock-up period, then the restrictions set forth
in this Section 3(j) shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence of
the material news or material event, as applicable, unless ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ waive, in writing, such extension.
(k) Lock-up Agreements. The Company agrees to (i) enforce its rights under
its existing registration rights agreements and stockholders agreement to
restrict the transfer of securities within the 180-day period following the
Closing Date and (ii) use commercially reasonable best efforts to obtain
executed copies of the "lock-up" agreement in the form of Exhibit C from each
option holder who exercises an option during the 180-day lock-up period.
(l) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the rules and regulations
of the Commission thereunder.
(m) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of this Agreement. The Underwriters
will notify the Company as to which persons will need to be so restricted. At
the request of the Underwriters, the Company will direct the transfer agent to
place a stop transfer restriction upon such securities for such period of time.
Should the Company release, or seek to release, from such restrictions any of
the Reserved Securities, the Company agrees to reimburse the Underwriters for
any
14
reasonable expenses (including, without limitation, legal expenses) they incur
in connection with such release.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the costs
and expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the Securities, including
without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations, travel and lodging expenses of the representatives
and officers of the Company and any such consultants, and the cost of aircraft
and other transportation chartered in connection with the road show, (x) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities, (xi) the fees and expenses incurred in connection with the inclusion
of the Securities in the Nasdaq National Market and (xii) all costs and expenses
of the Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company for sale to Invitees.
(b) Expenses of the Selling Shareholders. The Selling Shareholders will
pay all expenses incident to the performance of their respective obligations
under, and the consummation of the transactions contemplated by this Agreement,
including (i) the fees and expenses of any custodian or attorney-in-fact and
expenses associated with communications with and collection of documents from
Selling Shareholders, (ii) any stamp duties, capital duties and stock transfer
taxes, if any, payable upon the sale of the Securities to the Underwriters, and
their transfer between the Underwriters pursuant to an agreement between such
Underwriters and (iii) the fees and disbursements of their respective counsel
and other advisors.
(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
15
or any subsidiary of the Company or on behalf of any Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinions of Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinions, dated as of Closing Time, of (i)
▇▇▇▇▇▇ & Bird LLP, outside counsel for the Company, to the effect set forth in
Exhibit A-1 hereto and to such further effect as counsel to the Underwriters may
reasonably request, (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, General Counsel of the Company, to
the effect set forth in Exhibit A-2 hereto and to such further effect as counsel
to the Underwriters may reasonably request, (iii) Hunton & ▇▇▇▇▇▇▇▇ LLP,
intellectual property (patent) counsel for the Company, to the effect set forth
in Exhibit A-3 hereto and to such further effect as counsel to the Underwriters
may reasonably request, (iv) Holland & Knight LLP, intellectual property
(trademark) counsel for the Company, to the effect set forth in Exhibit A-4
hereto and (v) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, regulatory counsel for the Company, to the
effect set forth in Exhibit A-5 and to such further effect as counsel to the
Underwriters may reasonably request, each in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters.
(c) Opinions of Counsel for the Selling Shareholders. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of the respective counsel for each of the Selling Shareholders, in form
and substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters, to the
effect set forth in Exhibit B hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Ropes & ▇▇▇▇ LLP, counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, in form and
substance satisfactory to the Underwriters.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any Material Adverse Effect, and the Representatives
shall have received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such Material
Adverse Effect, (ii) the representations and warranties in Section 1(a) hereof
are true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or, to their knowledge, contemplated by the
Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of each Selling Shareholder contained in
16
Section 1(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters 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.
(h) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from Ernst & Young LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (g) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have been
approved for inclusion in the Nasdaq National Market, subject only to official
notice of issuance.
(j) No Objection. The NASD shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the Representatives
shall have received an agreement substantially in the form of Exhibit C signed
by the persons listed on Schedule D hereto. Such persons include all directors,
executive officers and stockholders of the Company on the date hereof.
(l) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company certifying as
to the matters set forth in Section 5(e).
(ii) Opinion of Counsel for Company. The favorable opinion of ▇▇▇▇▇▇
& Bird LLP, outside counsel for the Company, together with the favorable
opinion of Hunton & ▇▇▇▇▇▇▇▇ LLP, intellectual property (patent) counsel
for the Company, Holland & Knight LLP, intellectual property (trademark)
counsel for the Company, and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, regulatory counsel to
the Company, each in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinions required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
Ropes & ▇▇▇▇ LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion required by
Section 5(d) hereof.
17
(iv) Bring-down Comfort Letter. A letter from Ernst & Young LLP, in
form and substance satisfactory to the Representatives and dated such Date
of Delivery, substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 5(g) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date of
Delivery.
(m) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents as
they may require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company
and the Selling Shareholders in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(n) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company and the Selling
Shareholders at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any party
to any other party except as provided in Section 4 and except that Sections 1,
6, 7 and 8 shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters by Company. The Company agrees to
indemnify and hold harmless each Underwriter, its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), its selling
agents and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any
Underwriter who failed to deliver a Prospectus (as then amended or
supplemented, provided by the Company to the several Underwriters in the
requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims,
damages and liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, 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, if such material misstatement or
omission was cured, as determined by a court of competent jurisdiction in
a decision not subject to further appeal, in such Prospectus and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person;
18
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of
the Company;
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto).
(b) Indemnification of Underwriters by Selling Shareholders. Each Selling
Shareholder, severally and not jointly, agrees to indemnify and hold harmless
each Underwriter, its Affiliates and selling agents and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and in the manner set forth in clauses
(a)(i), (ii) and (iii) above, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in reliance upon and
in conformity with written information furnished by or on behalf of such Selling
Shareholder to the Company expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), and to the extent and manner set forth in
Section 6(f) below, provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the extent arising out
of any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
430A Information, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), and provided, further, that the aggregate
liability of each Selling Shareholder under this Section 6 shall not exceed the
initial public offering price of the aggregate number of Securities sold by such
Selling Shareholder under this Agreement.
(c) Indemnification of Company, Directors, Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, each Selling
Shareholder and each person, if any, who controls any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 6, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Merrill
19
▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(d) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or 6(b)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and in the case of parties indemnified pursuant to Section 6(c)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii), or settlement of any claim in connection with any violation
referred to in Section 6(f), effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
(f) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees to indemnify and hold
harmless the Underwriters, their Affiliates and selling agents and each person,
if any, who controls any Underwriter within the meaning of either Section 15 of
the 1933 Act or Section 20 of the 1934 Act, from and against any and all loss,
liability, claim, damage and expense (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending,
investigating or settling any such action or claim), as incurred, (i) arising
out of the violation of any applicable laws or regulations of foreign
jurisdictions where Reserved Securities have been offered; (ii) arising out of
any untrue statement or alleged untrue statement of a material fact contained in
any prospectus wrapper or other material prepared by or with the consent of the
Company for distribution to Invitees in connection with the offering of the
Reserved Securities 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; (iii) caused by the failure of any Invitee to
pay for and accept delivery of Reserved Securities which have been orally
confirmed for
20
purchase by any Invitee by the end of the first business day after the date of
the Agreement; or (iv) related to, or arising out of or in connection with, the
offering of the Reserved Securities.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) 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 Shareholders, on the one hand, and of the Underwriters, on the other
hand, in connection with the statements or omissions, or in connection with any
violation of the nature referred to in Section 6(f) hereof, which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders, on the one hand,
and the total underwriting discount and commissions received by the
Underwriters, on the other hand, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of the
Securities as set forth on the cover of the Prospectus.
The relative fault of the Company and the Selling Shareholders, on the one
hand, and the Underwriters, on the other hand, shall be determined by reference
to, among other things, whether any such 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 or the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission or any
violation of the nature referred to in Section 6(f) hereof.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 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 which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
The Selling Shareholders' obligations to contribute as provided in this
Section 7 are several in proportion to the gross proceeds received by them
respectively from the sale of the Securities under this
21
Agreement and not joint and shall be subject to the limitations on aggregate
liability set forth in the last proviso of Section 6(b).
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company or such Selling Shareholder,
as the case may be. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Shareholders submitted pursuant hereto, shall remain operative and in
full force and effect regardless of (i) any investigation made by or on behalf
of any Underwriter or its Affiliates or selling agents, any person controlling
any Underwriter, its officers or directors, any person controlling the Company
or any person controlling any Selling Shareholder and (ii) delivery of and
payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any Material Adverse Effect, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the Nasdaq National Market, or if trading generally
on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States or
with respect to Clearstream or Euroclear systems in Europe or (v) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
22
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the (i) Representatives or (ii) the Company and the
Selling Shareholders shall have the right to postpone Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Default by one or more of the Selling Shareholders or the
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of Securities which such Selling
Shareholder is obligated to sell hereunder, and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth in Schedule B hereto,
then the Underwriters may, at option of the Representatives, by notice from the
Representatives to the Company and the non-defaulting Selling Shareholders,
either (i) terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8
shall remain in full force and effect or (ii) elect to purchase the Securities
which the non-defaulting Selling Shareholders and the Company have agreed to
sell hereunder. No action taken pursuant to this Section 11 shall relieve any
Selling Shareholder so defaulting from liability, if any, in respect of such
default.
In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
23
(b) If the Company shall fail at Closing Time or at the Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
nondefaulting party; provided, however, that the provisions of Sections 1, 4, 6,
7 and 8 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
SECTION 12. Tax Disclosure. Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the transactions
contemplated hereby, the Company (and each employee, representative or other
agent of the Company) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.
SECTION 13. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention of Equity Capital Markets and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Incorporated, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, fax (▇▇▇) ▇▇▇-▇▇▇▇, attention of Equity Capital
Markets Syndicate Desk; notices to the Company shall be directed to it at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, attention
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; and notices to the Selling Shareholders shall be
directed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as Attorney-in-Fact, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 14. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters, the Company, the Selling Shareholders and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Shareholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 16. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 18. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the Underwriters,
the Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
▇▇▇▇▇ RESPIRATORY THERAPEUTICS, INC.
By: _______________________________________
Name:
Title:
The SELLING SHAREHOLDERS named in Schedule
B hereto, acting separately
By: _______________________________________
Name:
Title: Attorney-in-Fact
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: _____________________________________
Name:
Title: Authorized Signatory
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: _____________________________________
Name:
Title: Authorized Signatory
FOR THEMSELVES AND AS REPRESENTATIVES OF THE OTHER UNDERWRITERS NAMED IN
SCHEDULE A HERETO.
25
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.............................................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated...............................................
Deutsche Bank Securities Inc....................................................
RBC Capital Markets Corporation.................................................
--------
Total.................................................................. [ ]
========
Sch A-1
SCHEDULE B
Maximum Number
Number of Initial of Optional Securities
Securities to Be Sold to Be Sold
--------------------- ----------------------
▇▇▇▇▇ RESPIRATORY THERAPEUTICS, INC. 5,333,000 1,061,000
Perseus-▇▇▇▇▇ BioPharmaceutical Fund 1,339,000
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. 249,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ventures L.P. 158,000
Total................................
Sch B-1
SCHEDULE C
▇▇▇▇▇ RESPIRATORY THERAPEUTICS, INC.
7,079,000 Shares of Common Stock
(par value $0.01 per share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial
public offering price set forth above less $[ ] per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Sch C - 1
SCHEDULE D
[List of persons and entities
subject to lock-up]
Sch D - 1
EXHIBIT A-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated, and is validly existing as
a corporation in good standing under the laws of the State of Delaware, and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under the Purchase Agreement. The Company is duly
qualified as a foreign corporation to do business and is in good standing in New
Jersey.
(ii) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus in the column entitled "Actual" under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant to
the Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus); the shares of
issued and outstanding capital stock of the Company, including the Securities to
be purchased by the Underwriters from the Selling Shareholders, have been duly
authorized and validly issued and, upon the assumption that the Company has
received the full consideration for such shares, are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company under the Delaware General Corporation Law (the
"DGCL"), the Company's Certificate of Incorporation or By-Laws, or any contract,
agreement or instrument set forth as an exhibit to the Registration Statement.
(iii) The Securities to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to
the Purchase Agreement and, when issued and delivered by the Company pursuant to
the Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued, fully paid and non-assessable. The
issuance of the Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company under the DGCL, the Company's
Certificate of Incorporation or By-Laws, or any contract, agreement or
instrument set forth as an exhibit to the Registration Statement. To the best of
our knowledge, there are no persons with registration rights or other similar
rights to have any securities registered pursuant to the Registration Statement.
(iv) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(v) We have been advised by the staff of the SEC that the Registration
Statement has been declared effective under the 1933 Act; any required filing of
the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the best of our knowledge, no
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(vi) The Registration Statement, including any Rule 462(b) Registration
Statement and the Rule 430A Information, the Prospectus, and each amendment or
supplement to the Registration Statement and Prospectus, as of their respective
effective or issue dates (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we express no
opinion) complied as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
A-1-1
(vii) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements under the
DGCL, with any applicable requirements of the Certificate of Incorporation and
By-Laws of the Company and the requirements of the Nasdaq National Market.
(viii) Except as otherwise disclosed in the Registration Statement, to the
best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any subsidiary is
a party, or to which the property of the Company or any subsidiary is subject,
before or brought by any court or governmental agency or body, domestic or
foreign, which would reasonably be expected to result in a Material Adverse
Effect, or which would reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Company of its obligations thereunder.
(ix) The information in the Prospectus under "Risk Factors - We and
Cardinal depend on a single supplier for guaifenesin, the active ingredient in
our Mucinex product line, who has advised us that it cannot deliver the amount
of guaifenesin we have requested in the near term, and our current supplier for
dextromethorphan, the additional active ingredient in Mucinex DM, is exiting the
business;" "Business - Reimbursement;" "Business - Manufacturing;" "Description
of Capital Stock;" and "Underwriting" and in the Registration Statement under
Items 14 and 15, to the extent that such information constitutes matters of law,
summaries of legal matters, the Company's Certificate of Incorporation and
By-Laws or legal proceedings, or legal conclusions, has been reviewed by us and
is correct in all material respects.
(x) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we express no
opinion herein) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement or for the
offering, issuance, sale or delivery of the Securities.
(xi) The execution, delivery and performance of the Purchase Agreement
and the consummation of the transactions contemplated in the Purchase Agreement
and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use Of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument set forth as an exhibit to the Registration Statement nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its properties, assets or operations; provided,
however, that we express no opinion in this Paragraph (xi) as to compliance with
federal securities laws (addressed elsewhere) or state securities laws).
(xii) The Company is not required, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be required, to register as an
"investment company" under the 1940 Act.
A-1-2
We have participated in conferences with officers and other
representatives of the Company, its independent public accountants, and your
representatives and counsel, at which the contents of the Registration Statement
and the Prospectus, and amendments thereto, and related matters, were discussed.
Because of the inherent limitations in the independent verification of factual
matters and the nature of the determination of many such matters involved in the
registration process, we are not passing upon and do not assume any
responsibility for, and make no representation that we have independently
verified, the accuracy, completeness or fairness of the information and
statements contained in the Registration Statement or the Prospectus or the
amendments thereto, except as otherwise expressly set forth in this opinion.
However, subject to the foregoing, nothing has come to our attention that would
lead us to believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information (except for financial statements and
schedules and other financial data included therein or omitted therefrom, as to
which we make no statement), at the time such Registration Statement or any such
amendment 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 or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included therein or omitted therefrom, as to which we
need make no statement), at the time the Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Closing Time,
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 the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of fact (but not
as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. The opinion should not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
Such counsel may state that the opinion is limited to matters governed by the
federal laws of the United States of America, the laws of the State of New York
and Delaware, and is subject to customary assumptions, exceptions, limitations
and qualifications set forth in the opinion.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus in the column entitled "Actual" under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant to
the Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus); the shares of
issued and outstanding capital stock of the Company, including the Securities to
be purchased by the Underwriters from the Selling Shareholders, have been duly
authorized and validly issued and, upon the assumption that the Company has
received the full consideration for such shares, are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company under the Delaware General Law (the "DGCL"), the
Company's Certificate of Incorporation or By-Laws, or any contract, agreement or
instrument known to me, which includes, without limitation, such contract,
agreement or instrument set forth as an exhibit to the Registration Statement.
(ii) The Securities to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to
the Purchase Agreement and, when issued and delivered by the Company pursuant to
the Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued, fully paid and non-assessable. The
issuance of the Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company under the DGCL, the Company's
Certificate of Incorporation or By-Laws, or any contract, agreement or
instrument known to me, which includes, without limitation, such contract,
agreement or instrument set forth as an exhibit to the Registration Statement.
To the best of my knowledge, there are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement.
(iii) The execution, delivery and performance of the Purchase Agreement
and the consummation of the transactions contemplated in the Purchase Agreement
and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to me, to which the Company is a party or by which it may be
bound, or to which any of the property or assets of the Company is subject
(except for such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that would not have a Material Adverse Effect),
including each such agreement or instrument set forth as an exhibit to the
Registration Statement nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-Laws of the Company, or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to me, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its properties, assets
or operations; provided, however, that I express no opinion in this Paragraph
(iii) as to compliance with federal securities laws (addressed elsewhere) or
state securities laws).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF INTELLECTUAL PROPERTY (PATENT) OPINION
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) To such counsel's knowledge, the Company owns, possesses or has
adequate rights to use the Company Intellectual Property necessary to carry on
the business of the Company as described in the Prospectus;
(ii) Other than as described in the Prospectus, to such counsel's
knowledge, the Company has not received any written notice of interference or
opposition, or infringement of or conflict with, and such counsel has no
knowledge of any infringement of or conflict with, asserted rights of others
with respect to any Company Intellectual Property;
(iii) Other than as described in the Prospectus, to such counsel's
knowledge, the discoveries, inventions, products or processes of the Company
referred to in the Prospectus that are material to the business of the Company
as described in the Prospectus do not infringe, interfere or conflict with any
right or patent claim of any third party;
(iv) Other than as described in the Prospectus, to such counsel's
knowledge, no third party has any ownership right in or to any Company
Intellectual Property, other than any licensor of the Company of such Company
Intellectual Property;
(v) To the knowledge of such counsel, (A) the Company's patents are
valid and enforceable and are entitled to a statutory presumption of validity
and of ownership by the assignee, (B) there are no asserted or unasserted claims
of any third party relating to the scope or ownership of any of the Company's
patents, other than of the licensor of any such patent, (C) there are no liens
which have been filed against any of the Company's patents, (D) there are no
material defects of form in the preparation or filing of the Company's patent
applications that are material to the business of the Company as described in
the Prospectus, (E) the Company's patent applications that are material to the
business of the Company as described in the Prospectus are being diligently
prosecuted, and (F) the Company is listed on the records of the PTO or
appropriate foreign patent offices as the sole assignee of record of the patents
and patent applications owned by the Company;
(vi) To the knowledge of such counsel, all material references required
to be disclosed were disclosed to the PTO during the prosecution of the
Company's patents and the Company's patent applications and no misrepresentation
was made to, or material fact required to be disclosed was withheld from, the
PTO during such prosecution;
(vii) The information in the Registration Statement and the Prospectus
under the captions "Risk Factors - If our patent position does not adequately
protect our products and future products, others will be able to compete against
us more directly, which may harm our business;" "Risk Factors - If we are unable
to protect the intellectual property rights related to our brands, our ability
to compete effectively in the markets for our products could be negatively
impacted;" "Risk Factors - If we are unable to protect the confidentiality of
our trade secrets and proprietary information, our technology and information
may be used by others to compete against us;" "Risk Factors - Legal proceedings
or third party claims of intellectual property infringement may require us to
spend time and money and could prevent us from developing or commercializing
products;" and "Business - Intellectual Property" (the "IP Portion"), insofar as
it constitutes statements of matters of law, summaries of legal matters,
documents to which the Company is a party or legal proceedings, has been
reviewed by such counsel and is correct in all material respects.
A-3-1
In addition to the opinions provided above, such counsel shall confirm to
you as follows:
In the course of its assistance in the preparation of the IP Portion, such
counsel has participated in conferences with officers and other representatives
of the Company, the Underwriters, counsel to the Company and counsel to the
Underwriters at which the contents of the IP Portion were discussed, and
although such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements in the IP Portion
and has not verified the same except to the extent provided above, on the basis
of the foregoing and the information that was disclosed to such counsel (relying
as to materiality to the extent such counsel deems appropriate upon the officers
of the Company), no facts have come to the attention of such counsel to lead it
to believe that (A) the IP Portion of the Registration Statement 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,
or (B) the IP Portion of the Prospectus, as of the date of the Prospectus or as
of the Closing Date, contained or contains any 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 the circumstances under which they were
made, not misleading.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF INTELLECTUAL PROPERTY (TRADEMARK)
OPINION TO BE DELIVERED PURSUANT TO SECTION 5(B)
(i) To such counsel's knowledge, the Company owns, possesses or has
adequate rights to use the Company trademarks necessary to carry on the business
of the Company as described in the Prospectus;
(ii) Other than as described in the Prospectus, to such counsel's
knowledge, the Company has not received any written notice of interference or
opposition, or infringement of or conflict with, and such counsel has no
knowledge of any infringement of or conflict with, asserted rights of others
with respect to any Company trademarks;
(iii) Other than as described in the Prospectus, to such counsel's
knowledge, no third party has any ownership right in or to any Company
trademarks, other than any licensor of the Company of such Company Intellectual
Property;
(iv) The Company or ▇▇▇▇▇ Laboratories, Inc., its predecessor in
interest, is listed on the records of the PTO as the sole owner of the
trademarks owned by the Company;
(v) Such counsel has no reason to believe that any of the Company's
trademark applications filed with the PTO will not eventuate in registered
trademarks, or that any trademark registrations previously issued or issued in
respect of any such applications will not afford the Company reasonable
trademark protection relative to the subject matter thereof;
(vi) The trademarks A ▇▇▇▇▇ Respiratory Therapeutics, Humibid, Mucinex and
Mr. Mucus have been registered with the PTO or are the subject of pending
trademark applications;
(vii) The information in the Registration Statement and the Prospectus
under the captions "Risk Factors - If we are unable to protect the intellectual
property rights related to our brands, our ability to compete effectively in the
markets for our products could be negatively impacted;" and "Business -
Intellectual Property" (the "IP Portion"), insofar as it constitutes statements
of matters of law, summaries of legal matters, documents to which the Company is
a party or legal proceedings, has been reviewed by such counsel and is correct
in all material respects.
A-4-1
In addition to the opinions provided above, such counsel shall confirm to
you as follows:
In the course of its assistance in the preparation of the IP Portion, such
counsel has participated in conferences with officers and other representatives
of the Company, the Underwriters, counsel to the Company and counsel to the
Underwriters at which the contents of the IP Portion were discussed, and
although such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements in the IP Portion
and has not verified the same except to the extent provided above, on the basis
of the foregoing and the information that was disclosed to such counsel (relying
as to materiality to the extent such counsel deems appropriate upon the officers
of the Company), no facts have come to the attention of such counsel to lead it
to believe that (A) the IP Portion of the Registration Statement 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,
or (B) the IP Portion of the Prospectus, as of the date of the Prospectus or as
of the Closing Date, contained or contains any 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 the circumstances under which they were
made, not misleading.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF REGULATORY OPINION
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) Such counsel is familiar with the United States Federal Food, Drug,
and Cosmetic Act (the "FFDC Act") set forth at 21 U.S.C. Section 201 et seq.,
regulations promulgated the authority of the FFDC Act, and the enforcement of
the FFDC Act and its regulations by the United States Food and Drug
Administration (the "FDA") (for purposes of this opinion referred to
collectively as the "FDA Laws") and has reviewed the information in the
Registration Statement and the Prospectus under the captions "Risk Factors -
Products approved for marketing remain subject to regulation. Complying with
such regulation can be costly and failure to comply could result in a loss of
approvals or suspension of product sales;" "Risk Factors - We may not be able to
obtain marketing approval for any of the products resulting from our development
efforts and failure to obtain these approvals could materially harm our
business;" "Risk Factors - The manufacture and packaging of pharmaceutical
products such as our Mucinex product line are subject to the requirements of the
FDA. If we or our third party manufacturers fail to satisfy these requirements,
our product development and commercialization efforts may be materially harmed;"
"Risk Factors - Our current products may cause mild side effects including upset
stomach, nausea, vomiting, diarrhea, headache, dizziness, skin rash (including
hives), constipation and drowsiness. If we or others identify additional, more
severe side effects associated with our current or future products, we may be
required to withdraw our products from the market, perform lengthy additional
clinical trials or change the labeling of our products, any of which would
hinder or preclude our ability to generate revenues;" "Risk Factors - Our
products are subject to recalls even after receiving FDA or foreign regulatory
clearance or approval. Recalls could harm our reputation and business;" "Risk
Factors - Mucinex D may be subject to additional governmental regulation;" and
"Business - Government Regulation;" (collectively, the "Regulatory Portion");
and
(ii) In such counsel's opinion, insofar as the statements in the
Regulatory Portion constitute summaries of the FDA Laws, the Regulatory Portion
is accurate in all material respects.
In addition to the opinions provided above, such counsel shall confirm to
you as follows:
In the course of its assistance in the preparation of the Regulatory
Portion, such counsel has participated in conferences with officers and other
representatives of the Company, the Underwriters, counsel to the Company and
counsel to the Underwriters at which the contents of the Regulatory Portion were
discussed, and although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements in
the Regulatory Portion and has not verified the same except to the extent
provided above, on the basis of the foregoing and the information that was
disclosed to such counsel (relying as to materiality to the extent such counsel
deems appropriate upon the officers of the Company), no facts have come the
attention of such counsel to lead it to believe that (A) the Regulatory Portion
of the Registration Statement 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, or (B) the Regulatory Portion of the
Prospectus, as of the date of the Prospectus or as of the Closing Date,
contained or contains any 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 the circumstances under which they were made, not
misleading.
A-5-1
EXHIBIT B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
DELIVERY OF THE OPINIONS SET FORTH BELOW IS A REQUIREMENT TO PARTICIPATE IN THIS
OFFERING. Each opinion must cover NY law, US law and the law of the Selling
Shareholder's jurisdiction of organization (for Selling Shareholders who are
partnerships or similar entities, opinions should also cover jurisdictions of
upper tier entities if such entities act/sign for the Selling Shareholder) and
must be in a form acceptable to the Underwriters. Counsel should be aware that
Purchase Agreement and POA/Custody Agreement are governed by NY law and closing
will occur in NY. Drafts should be provided no later than April 30, 2005.
(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which we need express no opinion) is necessary or required to be
obtained by the Selling Shareholder for the performance by the Selling
Shareholder of its obligations under the Purchase Agreement or in the Power of
Attorney and Custody Agreement, or in connection with the offer, sale or
delivery of the Securities.
(ii) The Power of Attorney and Custody Agreement has been duly
authorized, executed and delivered by the Selling Shareholder and constitutes
the valid and binding agreement of the Selling Shareholder.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder.
(iv) Each Attorney-in-Fact has been duly authorized by the Selling
Shareholders to deliver the Securities on behalf of the Selling Shareholder in
accordance with the terms of the Purchase Agreement.
(v) The execution, delivery and performance of the Purchase Agreement
and the Power of Attorney and Custody Agreement, the sale and delivery of the
Securities, the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement and compliance by the Selling
Shareholder with its obligations under the Purchase Agreement have been duly
authorized by all necessary action on the part of the Selling Shareholder and do
not and will not result in any violation of the provisions of the charter or
by-laws of the Selling Shareholder, if applicable, or any law, administrative
regulation, judgment or order of any governmental agency or body or any
administrative or court decree having jurisdiction over such Selling Shareholder
or any of its properties.
(vi) The Selling Shareholder is the record owner and, to our knowledge,
the beneficial owner, of the Securities to be sold by such Selling Shareholder
pursuant to the Purchase Agreement.
(vii) Upon payment of the purchase price for the Securities to be sold by
such Selling Shareholder pursuant to the Purchase Agreement, delivery of such
Securities, as directed by the Underwriters, to Cede or such other nominee as
may be designated by DTC, registration of such Securities in the name of Cede or
such other nominee and the crediting of such Securities on the books of DTC to
securities accounts of the Underwriters (assuming that neither DTC nor any such
Underwriter has notice of any "adverse claim", within the meaning of Section
8-105 of the UCC, to such Securities), (A) DTC shall be a "protected purchaser",
within the meaning of Section 8-303 of the UCC, of such Securities and will
acquire its interest in the Securities (including, without limitation, all
rights that such
B-1
Selling Shareholder had or has the power to transfer in such Securities) free
and clear of any adverse claim within the meaning of Section 8-102 of the UCC,
(B) under Section 8-501 of the UCC, the Underwriters will acquire a valid
security entitlement in respect of such Securities and (C) no action (whether
framed in conversion, replevin, constructive trust, equitable lien, or other
theory) based on any "adverse claim", within the meaning of Section 8-102 of the
UCC, to such Securities may be asserted against the Underwriters with respect to
such security entitlement; for purposes of this representation, such Selling
Shareholder may assume that when such payment, delivery and crediting occur, (x)
such Securities will have been registered in the name of Cede or another nominee
designated by DTC, in each case on the Company's share registry in accordance
with its certificate of incorporation, bylaws and applicable law, (y) DTC will
be registered as a "clearing corporation", within the meaning of Section 8-102
of the UCC, and (z) appropriate entries to the accounts of the several
Underwriters on the records of DTC will have been made pursuant to the UCC.
B-2
EXHIBIT C
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS AND STOCKHOLDERS
PURSUANT TO SECTION 5(k)]
February __, 2005
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
4 World Financial Center
New York, New York 10080
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the several
Underwriters to be named in the
within mentioned Purchase Agreement
Re: Proposed Public Offering by ▇▇▇▇▇ Laboratories, Inc.
Dear Sirs and Mesdames:
The undersigned, a stockholder, officer and/or director of ▇▇▇▇▇
Laboratories, Inc., a Texas corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇")
propose to enter into a Purchase Agreement (the "Purchase Agreement") with the
Company and the selling shareholders named therein (the "Selling Shareholders")
providing for the public offering (the "Public Offering") of shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder, officer and/or director of the Company, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned agrees with each underwriter to be named in
the Purchase Agreement that, during a period of 180 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, directly or indirectly, (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 for the sale of,
or otherwise dispose of or transfer any shares of the Company's Common Stock or
any securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file, or cause to be filed, any registration statement under the Securities Act
of 1933, as amended, with respect to any of the foregoing (collectively, the
"Lock-Up Securities") or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lock-Up Securities, whether any such
swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
Notwithstanding the foregoing, and subject to the conditions below, the
undersigned may transfer the Lock-Up Securities in the transactions listed as
(i)-(iv) below without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇, provided that (1) ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have received
a duplicate form of this lock-up agreement executed and delivered by each donee,
trustee, distributee, or transferee, as the case may be, (2) any such transfer
shall not involve a disposition for
C-1
value, (3) such transfers are not required to be reported in any public report
or filing with the Securities and Exchange Commission or otherwise and (4) the
undersigned does not otherwise voluntarily effect any public filing or report
regarding such transfers:
(i) as a bona fide gift or gifts; or
(ii) to any trust for the direct or indirect benefit of the undersigned or
the immediate family of the undersigned; or
(iii) as a distribution to limited partners or stockholders of the
undersigned; or
(iv) to the undersigned's affiliates or to any investment fund or other
entity controlled or managed by the undersigned.
For purposes of this lock-up agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
Furthermore, the undersigned may sell shares of Common Stock of the
Company purchased by the undersigned (1) from the underwriters through a
directed share program conducted as part of the Public Offering or (2) in the
open market following the Public Offering, in either case, if and only if (i)
such sales are not required to be reported in any public report or filing with
the Securities and Exchange Commission or otherwise and (ii) the undersigned
does not otherwise voluntarily effect any public filing or report regarding such
sales, in each of cases (i) and (ii) above, within one week of such sale.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Lock-Up Securities except in compliance with the foregoing
restrictions.
This lock-up agreement shall automatically terminate upon termination of
the Purchase Agreement if the Purchase Agreement is terminated prior to the
Closing Date (as such term is defined in the Purchase Agreement) in accordance
with its terms.
Very truly yours,
Name: __________________________________________
(Print exact name. Names of stockholders
must match stock records of Company.)
x
_________________________________________________
(signature)
If not signing in individual capacity:
By: __________________________________________
(print name of signatory)
Title: __________________________________________
(print title of signatory)
C-2