EXHIBIT 1.1
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▇▇▇▇▇ RESPIRATORY THERAPEUTICS, INC.
(A DELAWARE CORPORATION)
____________ SHARES OF COMMON STOCK
PURCHASE AGREEMENT
Dated: December __, 2005
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▇▇▇▇▇ RESPIRATORY THERAPEUTICS, INC.
(A DELAWARE CORPORATION)
__________ SHARES OF COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
PURCHASE AGREEMENT
December __, 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
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 Schedule A and B hereto and (ii) the grant by the Selling
Shareholders to the Underwriters of the option described in Section 2(b) hereof
to purchase all or any part of _________ additional shares of Common Stock to
cover overallotments, if any. The aforesaid _________ shares of Common Stock
(the "Initial Securities") to be purchased by the Underwriters and all or any
part of the ________ 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 has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-xxxxxx), 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 amendments thereto, 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 and Agreements.
(a) Representations and Warranties and Agreements by the Company. The
Company represents and warrants to each Underwriter as of the date hereof, as of
the Applicable Time referred to in Section 1(a)(ii) hereof and 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) Non-Ineligible Issuer. At the time of filing the Registration
Statement, any 462(b) Registration Statement and any post-effective
amendments thereto, at the earliest time thereafter that the Company or
another offering participant made a bona fide offer (within the meaning of
Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the
date hereof, the Company was not an "ineligible issuer" as defined in Rule
405 of the 1933 Act Regulations ("Rule 405").
(ii) 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 a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto (including any
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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.
Each preliminary prospectus (including 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.
As of the Applicable Time, neither (x) the Issuer General Use Free
Writing Prospectus(es) (as defined below) issued at or prior to the
Applicable Time (as defined below) and the Statutory Prospectus (as
defined below) as of the Applicable Time, all considered together
(collectively, the "General Disclosure Package"), nor (y) any individual
Issuer Limited Use Free Writing Prospectus, when considered together with
the General Disclosure Package, included any untrue statement of a
material fact or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
"Applicable Time" means [ ]:00 [a/p]m (Eastern time) on [DATE] or
such other time as agreed by the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433 of the 1933 Act Regulations ("Rule
433"), relating to the Securities that (i) is required to be filed with
the Commission by the Company, (ii) is a "road show that is a written
communication" within the meaning of Rule 433(d)(8)(i) whether or not
required to be filed with the Commission or (iii) is exempt from filing
pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, in
each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form required to be retained in
the Company's records pursuant to Rule 433(g).
"Issuer General Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is intended for general distribution to
prospective investors (other than a Bona Fide Electronic Road Show (as
defined below)), as evidenced by its being specified in Schedule C hereto.
"Issuer Limited Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
"Statutory Prospectus" as of any time means the prospectus relating
to the Securities that is included in the Registration Statement
immediately prior to that time, including any document incorporated by
reference therein.
Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of
the Securities or until any earlier date that the issuer notified or
notifies ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as described in the Section
3(e),
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did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement, the Prospectus or any Free Writing Prospectus,
including any document incorporated by reference therein and any
preliminary or other prospectus deemed to be a part thereof that has not
been superseded or modified.
The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement, any
preliminary prospectus, the Prospectus or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ expressly for use therein.
(iii) 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.
(iv) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package 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, Shareholders' 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,
the General Disclosure Package and the Prospectus, if any, 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 Registration Statement, the General Disclosure Package and 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.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement, the
General Disclosure Package 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 and its Subsidiaries, considered as one
enterprise, 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 or any of its Subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its Subsidiaries, considered as one enterprise, 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.
(vi) 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 General Disclosure Package and 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.
(vii) Good Standing of Subsidiaries. Each of ▇▇▇▇▇ Respiratory
Products, Inc. and ▇▇▇▇▇ Respiratory Operations, Inc. (each a "Subsidiary"
and, collectively, the "Subsidiaries")
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has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the General Disclosure Package and
the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each 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; except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock of each such subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through Subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock of any
subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary. The only subsidiaries of the
Company are the subsidiaries listed on Exhibit 21 to the Registration
Statement.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the General Disclosure
Package and 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 General Disclosure Package and
the Prospectus or pursuant to the exercise of convertible securities or
options referred to therein). 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.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. 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.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
of its Subsidiaries is 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 or any of its Subsidiaries 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 or any Subsidiary 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 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
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Company or any Subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches, defaults or Repayment Events or
liens, charges 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 Subsidiary 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 Subsidiary 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 or any Subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any Subsidiary 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 or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, would result in a Material Adverse Effect.
(xiii) 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 any Subsidiary or the property of the
Company or any Subsidiary, 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 or any Subsidiary 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.
(xiv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement or the
General Disclosure Package or the Prospectus or to be filed as exhibits
thereto which have not been so described and filed as required.
(xv) Possession of Intellectual Property. The Company and its
Subsidiaries own or possess 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
and its Subsidiaries in the manner described in the General Disclosure
Package and 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
General Disclosure Package and the Prospectus, neither the Company nor any
Subsidiary is 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 General Disclosure
Package and the Prospectus or as would not have a Material Adverse Effect,
neither the Company nor any Subsidiary has received any notice of
infringement of or conflict with any Intellectual Property rights of
others. Except as disclosed in the General Disclosure Package and the
Prospectus or as would not have a Material Adverse Effect, the conduct of
the current and
6
future business of the Company and its Subsidiaries in the manner
described in the General Disclosure Package and 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 General Disclosure Package and the Prospectus or as would not have a
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 and its Subsidiaries.
(xvi) The Company and its Subsidiaries have 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 and its Subsidiaries (the "Company Patent Applications"). To the
knowledge of the Company, the Company and its Subsidiaries have complied
with the PTO's duty of candor and disclosure for the Company Patent
Applications and have made no material misrepresentation in the Company
Patent Applications. Neither the Company nor any of its Subsidiaries is
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. Neither the Company nor any of its
Subsidiaries is 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 and its Subsidiaries
from having clear title to the Company Patent Applications.
(xvii) 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 such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(xviii) Absence of Manipulation. Neither the Company nor any of its
Subsidiaries nor any affiliate of the Company or its Subsidiaries has
taken, nor will the Company or any of its Subsidiaries or any such
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.
(xix) Regulatory Authorizations and Filings. The Company and its
Subsidiaries possess 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 and its Subsidiaries are 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
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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 neither the
Company nor any of its Subsidiaries has 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.
Neither the Company nor any of its Subsidiaries has 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 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.
(xx) Regulatory Compliance. The Company and its Subsidiaries have
operated and currently are 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 any of its Subsidiaries or in
which the Company or any of its Subsidiaries 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, the General Disclosure Package and the
Prospectus are accurate in all material respects; and neither the Company
nor any Subsidiary has 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 or any of its Subsidiaries which termination,
suspension or material modification would reasonably be expected to have a
Material Adverse Effect.
(xxi) Title to Property. The Company and its Subsidiaries have good
and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, 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 General Disclosure Package and 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 its Subsidiaries; and all of the leases
and subleases material to the business of the Company and its
Subsidiaries, or under which the Company or any of its Subsidiaries holds
properties described in the General Disclosure Package and 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 and its Subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company and its Subsidiaries to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xxii) 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 General
Disclosure Package and the Prospectus will not be required,
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to register as an "investment company" under the Investment Company Act of
1940, as amended (the "1940 Act").
(xxiii) 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) neither the Company nor any of its
Subsidiaries is 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 and its Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are 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 or any of its Subsidiaries 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 or any of its Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxiv) 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, General Disclosure
Package 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.
(xxv) Insurance. The Company and its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as the
Company reasonably believes are adequate for the conduct of the business
of the Company and its Subsidiaries and the value of their properties and
as are customary in the business in which the Company and its Subsidiaries
is engaged; neither the Company nor any of its Subsidiaries has been
refused any insurance coverage sought or applied for; and the Company has
no reason to believe that they will not be able to renew their 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.
(xxvi) Internal Accounting Controls. The Company and each of its
Subsidiaries 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. Except as described in the Registration
Statement, General Disclosure Package and Prospectus, since the end of the
Company's most recent audited fiscal year, there has been (I) no
9
material weakness in the Company's internal control over financial
reporting (whether or not remediated) and (II) no change in the Company's
internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, the Company's internal control
over financial reporting.
(xxvii) Disclosure Controls and Procedures. The Company and its
Subsidiaries employ disclosure controls and procedures (as such term is
defined in Rule 13a-15 under the Securities Exchange Act of 1934 (the
"1934 Act")) which (A) are designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under
the 1934 Act is recorded, processed, summarized and reported within the
time periods specified in the Commission's rules and forms and that
material information relating to the Company and its Subsidiaries is made
known to the Company's principal executive officer and principal financial
officer by others within the Company and its Subsidiaries to allow timely
decisions regarding disclosure, 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 and each Subsidiary'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.
(xxviii) Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has
been no failure on the part of the Company or any of the Company's
directors or officers, in the capacities as such, to comply in all
material respects with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and
the rules and regulations promulgated in connection therewith (the
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"), including Section 402 related to loans and Sections
302 and 906 related to certifications.
(xxix) Pending Proceedings and Examinations. The Registration
Statement is not the subject to a pending proceeding or examination under
Section 8(d) or 8(e) of the 1933 Act, and the Company is not the subject
of a pending proceeding under Section 8A of the 1933 Act in connection
with the offering of the Securities.
(b) Representations and Warranties and Agreements 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 Applicable
Time referred to in Section 1(a)(ii) hereof and as of the 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. If such Selling Shareholder is an executive
officer of the Company, to the knowledge of such Selling Shareholder, the
representations and warranties of the Company contained in Section 1(a)
hereof are true and correct; such Selling Shareholder has reviewed and is
familiar with the Registration Statement, the General Disclosure Package
and the Prospectus, and neither the Prospectus nor any amendments or
supplements thereto (including any prospectus wrapper) nor the General
Disclosure Package 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; such Selling Shareholder is not prompted to sell the
Securities to be sold by such Selling Shareholder
10
hereunder by any material information concerning the Company or any
subsidiary of the Company which is not set forth in the General Disclosure
Package and the Prospectus.
If such Selling Shareholder is not an executive officer of the
Company, such Selling Shareholder has reviewed and is familiar with the
disclosure relating to such Selling Shareholder in the Registration
Statement, the General Disclosure Package and the Prospectus, and neither
the Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper) nor the General Disclosure Package 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, General
Disclosure Package or 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 material information
concerning the Company which is not set forth in the General Disclosure
Package and the Prospectus.
(ii) Authorization of this Agreement. This Agreement has been duly
authorized (in the case of Selling Stockholders that are entities rather
than natural persons), 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 (in the case of Selling Stockholders that are
entities rather than natural persons), 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) Securities in Form Suitable for Transfer. The Securities to be
sold by such Selling Shareholder pursuant to this Agreement are (1)
certificated securities in registered form ("Certificated Securities")
that 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"); (2) held in electronic
form in the account of a Depository Trust Company ("DTC") participant
("Book Entry Securities"); (3) represented by option agreements to be
exercised in connection with the offering contemplated by this Agreement;
or (4) represented
11
by warrants to be exercised in connection with the offering contemplated
by this Agreement. Certificated Securities and/or Securities represented
by option agreements and/or warrants, together with appropriate notices of
exercise, for all of the Securities to be sold by such Selling Shareholder
pursuant to this Agreement, other than Book Entry Securities, if any, in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank with signatures guaranteed
or notarized, 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. Book Entry
Securities representing all other Securities to be sold by such Selling
Shareholder pursuant to this Agreement, if any, have been transferred
electronically to the account of the Custodian with irrevocable
conditional instructions to deliver such Securities to the Underwriters
pursuant to this Agreement.
(vi) Valid Title. Such Selling Shareholder has, and at the Closing
Time and at such Date of Delivery 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 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
12
in connection with the sale and delivery of the Securities hereunder or
the consummation of the transactions contemplated by this Agreement,
except 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.
(x) No Association with NASD. Except as described in the completed
NASD Questionnaire provided by such Selling Shareholder to the Company on
or before November [ ], 2005, neither such Selling Shareholder 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.
(xi) Selling Shareholder Free Writing Prospectuses. Each Selling
Shareholder represents and agrees that, without the prior consent of each
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, it has not made and will not make any
offer relating to the Securities that would constitute a "free writing
prospectus," as defined in Rule 405 (any such "free writing prospectus" of
any Selling Shareholder, a "Selling Shareholder Free Writing Prospectus"),
and it has not used, referred to, or distributed, and will not use, refer
to or distribute, any such Selling Shareholder Free Writing Prospectus.
Any Selling Shareholder Free Writing Prospectus consented to by the
Representatives is hereinafter referred to as a Selling Shareholder
Permitted Free Writing Prospectus. Each Selling Shareholder represents
that it has treated or agrees that it has complied and will comply with
the requirements of Rule 433 applicable to any Selling Shareholder
Permitted Free Writing Prospectus of such Selling Shareholder, including
timely filing with the Commission where required, legending and record
keeping.
(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, each
Selling Shareholder, severally and not jointly, agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from each Selling Shareholder, at the price per
share set forth in Schedule D, that proportion of the number of Initial
Securities set forth in Schedule B opposite the name of 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, each Selling Shareholder, severally and not jointly, hereby grants an
option to the Underwriters to purchase from such Selling Shareholder up to an
additional number of shares of Common Stock, as set forth in Schedule B opposite
such Selling
13
Shareholders as named under the caption "Maximum Number of Optional Securities
To Be Sold", at the price per share set forth in Schedule D, 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. If
the Underwriters purchase only a portion of the Option Securities, each Selling
Shareholder will sell the same proportion of the total Option Securities to be
purchased as the number of Option Securities set forth opposite such Selling
Shareholder's name under the caption "Maximum Number of Optional Securities To
Be Sold" set forth in Schedule B bears to the total Maximum Number of Optional
Securities to be Sold on Schedule B. 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 Selling Shareholders 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 shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives,
the Company and the Selling Stockholders, on each Date of Delivery as specified
in the notice from the Representatives to the Company.
Payment shall be made to the Selling Shareholders by wire transfer of
immediately available funds to bank accounts designated by 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,
14
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
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, (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 or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and (v) if the Company becomes the subject
of a proceeding under Section 8A of the 1933 Act in connection with the offering
of the Securities. The Company will effect the filings required under Rule
424(b) in the manner and within the time period required by Rule 424(b) (without
reliance on Rule 424(b)(8)) 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 and Exchange Act Documents. 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 any preliminary prospectus
(including the prospectus included in the Registration Statement at the time it
became effective) or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise, and 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. The
Company has given the Representatives notice of any filings made pursuant to the
1934 Act or the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations") within 48 hours prior to the Applicable Time; the
Company will give the Representatives notice of its intention to make any such
filing from the Applicable Time to the Closing Time and will furnish the
Representatives with copies of such documents a reasonable amount of time prior
to such proposed filing and will not file any such document to which the
Representatives or counsel for the Underwriters shall reasonably object.
(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.
15
(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, the 1933 Act Regulations, the 1934 Act and the 1934 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. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement or included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company will promptly notify the
Representatives and will promptly amend or supplement, at its own expense, such
Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(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. The
Company will also supply the Underwriters with such information as is necessary
for the determination of the legality of the Securities for investment under the
laws of such jurisdictions as the Underwriters may request.
(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 to the Underwriters the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
16
(h) Restriction on Sale of Securities. During a period of 90 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 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 90-day period referred to above.
(i) Lock-up Agreements. The Company agrees to (i) enforce its rights under
its existing registration rights agreements and Shareholders agreement to
restrict the transfer of securities within the 90-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 90-day lock-up period.
(j) 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.
(k) Issuer Free Writing Prospectuses. The Company represents and agrees
that, unless it obtains the prior consent of each of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇, and each Underwriter represents and agrees that, unless it obtains the
prior written consent of the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, it has
not made and will not make any offer relating to the Securities that would
constitute an "issuer free writing prospectus," as defined in Rule 433, or that
would otherwise constitute a "free writing prospectus," as defined in Rule 405,
required to be filed with the Commission. Any such free writing prospectus
consented to by the Representatives is hereinafter referred to as an "Issuer
Permitted Free Writing Prospectus" and, collectively with any Selling
Shareholder Permitted Free Writing Prospectuses, the "Permitted Free Writing
Prospectuses." The Company represents that it has treated or agrees that it will
treat each Issuer Permitted Free Writing Prospectus as an "issuer free writing
prospectus," as defined in Rule 433, and has complied and will comply with the
requirements of Rule 433 applicable to any Issuer Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record keeping.
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
17
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, any
Permitted Free Writing Prospectus and of the Prospectus and any amendments or
supplements thereto and any costs associated with electronic delivery of any of
the foregoing by the Underwriters to the investors, (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) the costs and
expenses (including without limitation any damages or other amounts payable in
connection with legal or contractual liability) associated with the reforming of
any contracts for sale of the Securities made by the Underwriters caused by a
breach of the representation contained in the fourth paragraph of Section
1(a)(ii).
(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
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 the
manner and within the time period required by Rule 424(b) (without reliance on
Rule
18
424(b)(8)) (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 earlier of the time of execution of this Agreement or the Applicable
Time or since the respective dates as of which information is given in the
Prospectus and in the General Disclosure Package as of the Applicable Time, 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
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
19
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 E hereto. Such persons include all directors,
executive officers and Selling Shareholders and the holders of substantially all
of the outstanding stock 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 Selling Shareholders 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) Certificate of Selling Shareholders. A certificate, dated such
Date of Delivery, of an Attorney-in-Fact on behalf of each Selling
Shareholder certifying as to the matters set forth in Section 5(f).
(iii) Opinion of Counsel for Company. The favorable opinions of
▇▇▇▇▇▇ & Bird LLP, outside counsel for the Company, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
General Counsel of the Company, together with the favorable opinions 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.
(iv) Opinion of Counsel for Selling Shareholders. The favorable
opinion of [ ], counsel for the Selling Shareholders, 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 opinion required by
Section 5(c) hereof.
(v) 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
20
to be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(d) hereof.
(vi) 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 and by Selling Shareholders
Who Are Executive Officers. The Company and each Selling Shareholder who is an
executive officer of the Company on the date of this Agreement, jointly and
severally, agree 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 any
Issuer Free Writing 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.
(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(f) below) any such settlement is effected with the written consent of
the Company;
21
(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 any Permitted Free Writing
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(a) shall not exceed the initial public offering price of
the aggregate number of Securities sold by such Selling Shareholder under this
Agreement.
(b) Indemnification of Underwriters by Selling Shareholders Other Than
Executive Officers. Each Selling Shareholder who is not an executive officer of
the Company on the date hereof, 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 any Issuer Free Writing Prospectus or the Prospectus (or any amendment or
supplement thereto), 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 any Permitted Free Writing
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(b) 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 Underwriters in Connection with Selling Shareholder
Free Writing Prospectuses. 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 against (i)
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising out of any Selling Shareholder Free Writing Prospectus of such Selling
Shareholder (as a result of any untrue statement or alleged untrue statement of
a material fact contained therein or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, or otherwise);
and (ii) 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 such
Selling Shareholder Free Writing Prospectus; provided, that (subject to 6(f)
below) such settlement is effected with the written consent of such Selling
Shareholder; and (iii) any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇), reasonably incurred in
22
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commended or
threatened, or any claim whatsoever based upon any such Selling Shareholder Free
Writing Prospectus, to the extent that such expense is not paid under clause (i)
or (ii) above; and provided, further, 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 conformity with written information furnished to such
Selling Shareholder by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
expressly for use in any Selling Shareholder Permitted Free Writing Prospectus.
(d) 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 any
Permitted Free Writing 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇
▇▇▇▇▇▇▇ expressly for use therein.
(e) 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), 6(b) or
6(c) above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and in the case of parties indemnified pursuant to
Section 6(d) 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.
(f) 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 Section 6(c), 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
23
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.
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 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.
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
24
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 earlier of the time of
execution of this Agreement or the Applicable Time or since the respective dates
as of which information is given in the Prospectus and in the General Disclosure
Package as of the Applicable Time, 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.
25
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 Selling Shareholders 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. 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 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.
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
26
(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, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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. No Fiduciaries. The Company and each Selling Shareholder
acknowledges and agrees that (i) the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the public offering
price of the Securities and any related discounts and commissions, is an
arm's-length commercial transaction between the Company and the Selling
Shareholders, on the one hand, and the several Underwriters, on the other hand,
(ii) in connection with the offering contemplated hereby and the process leading
to such transaction each Underwriter is and has been acting solely as a
principal and is not the agent or fiduciary of the Company, any Selling
Shareholder, or their respective shareholders, creditors, employees or any other
party, (iii) no Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company or any Selling Shareholder with respect
to the offering contemplated hereby or the process leading thereto (irrespective
of whether such Underwriter has advised or is currently advising the Company or
any such Selling Shareholder on other matters) and no Underwriter has any
obligation to the Company or any Selling Shareholder with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement, (iv) the Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Company or any Selling Shareholder, and (v) the Underwriters have not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company and each Selling Shareholder has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.
SECTION 15. Certain Agreements, Waivers and Acknowledgements.
(a) IPO Lockup Agreements. The terms of the letter agreement executed by
each Selling Shareholder in favor of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as
representatives of the underwriters in connection with the Company's initial
public offering, with respect to restrictions on the transfer of securities of
the Company during the 180-day period following July 20, 2005 (the "IPO Lockup
Agreements"), are hereby amended so as to permit the filing of the Registration
Statement and the offer and sale by each Selling Shareholder of the respective
number of shares set forth opposite the name of each such Selling Shareholder on
Schedule B pursuant to this Agreement.
(b) Satisfaction or Waiver of Participation Rights. Each Selling
Shareholder acknowledges and agrees that any rights that such Selling
Shareholder may have pursuant to any agreement with the Company to include
shares in the registration of securities of the Company in connection with the
offering of Securities contemplated by this Agreement (and for clarity,
expressly excluding any rights as to indemnification and reimbursement of
expenses) are hereby satisfied or waived. Each such Selling Stockholder further
acknowledges and agrees that any rights such Selling Stockholder may have in
27
connection with the amendment of the IPO Lockup Agreements in the manner
described above in Section 15(a) are hereby satisfied or waived.
SECTION 16. 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 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 18. 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 19. 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 20. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
28
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: ▇▇▇▇▇▇ Thong
Title: Director
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: _____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
FOR THEMSELVES AND AS REPRESENTATIVES OF THE OTHER UNDERWRITERS NAMED IN
SCHEDULE A HERETO.
29
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.....................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.....................
[ ]..............................................
[ ]..............................................
------------------
Total........................................
==================
A-1
SCHEDULE B
Maximum Number
Number of Initial of Optional Securities
Selling Shareholder Securities to Be Sold to Be Sold
------------------- --------------------- ----------------------
B-1
SCHEDULE C
Issuer General Use Free Writing Prospectus
[List]
C-1
SCHEDULE ▇
▇▇▇▇▇ RESPIRATORY THERAPEUTICS, INC.
__________ 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
D-1
SCHEDULE E
[LIST LOCKUP SIGNATORIES]
E-1