EXHIBIT 1.1
CRYOLIFE, INC.
2,500,000 Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
___________________, 1998
UNDERWRITING AGREEMENT
_________________, 1998
SBC WARBURG DILLON READ INC.
PIPER JAFFRAY INC.
as Managing Underwriters
c/o SBC WARBURG DILLON READ INC.
535 Madison Avenue
New York, New York 10022
Dear Sirs:
CryoLife Inc. (the "Company") proposes to issue and sell and the persons
named in Schedule B annexed hereto (the "Selling Stockholders") propose to sell
to the underwriters named in Schedule A annexed hereto (the "Underwriters") an
aggregate of 2,500,000 shares (the "Firm Shares") of Common Stock, $0.01 par
value per share (the "Common Stock"), of the Company, of which ________________
shares are to be issued and sold by the Company and an aggregate of
________________ shares are to be sold by the Selling Stockholders in the
respective amounts set forth under the caption "Firm Shares" in Schedule B
annexed hereto. In addition, solely for the purpose of covering over-
allotments, the Company proposes to grant to the Underwriters the option to
purchase from the Company up to an additional 375,000 shares of Common Stock
(the "Additional Shares"). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the Shares. The Shares are
described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively
called the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement (the "initial registration statement") on
Form S-3, including a prospectus, relating to the Shares, which incorporates by
reference documents which the Company has filed or will file in accordance with
the provisions of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (collectively called the "Exchange Act"). All of the
Shares have been duly registered under the Securities Act pursuant to such
initial registration statement or, if an additional registration statement has
been, or is proposed to be, filed pursuant to Rule 462(b) of the Act, all of the
Shares have been or will be, on the date of this Agreement, duly registered
under the Act pursuant to the initial registration statement and such additional
registration statement. If an additional registration statement has been, or is
proposed to be, filed with the Commission pursuant to Rule 462(b), such
additional registration statement was or will be prepared by the Company in
conformity with the requirements of the Act, has become or will become, on the
date of this Agreement, effective under the Act and copies thereof have been or
will be, prior to or concurrently with, filing with the Commission, delivered by
the Company to you. As used in this Agreement, "Effective Time" means the date
and the time as of which the initial registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c);
"Effective Date" means the date of the Effective Time; the "Initial Registration
Statement" means the initial registration statement as amended as of the
Effective Time, including any documents incorporated by reference therein at
such time and including (i) all portions of any additional registration
statement filed pursuant to Rule 462(b) under the Securities Act which are
deemed to be a part of such initial registration statement and (ii) all
information contained in any final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations in accordance with Section 5(c)(ii)
hereof and deemed to be a part of such initial registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; the "Rule 462(b) Registration Statement" means the additional
registration statement, if any, relating to the Common Stock and filed pursuant
to Rule 462(b) under the Securities Act at the time it becomes effective
pursuant to the Rules and Regulations, including (i) the contents of the Initial
Registration Statement incorporated therein by reference and (ii) all
information deemed to be a part of such additional registration statement
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and the
"Registration Statements" means the Initial Registration Statement and the Rule
462(b) Registration Statement, if any. "Preliminary Prospectus" means each
prospectus included in the initial registration statement, or amendments
thereof, before it became effective under the Act and any prospectus filed with
the Commission by the Company with your consent pursuant to Rule 424(a) of the
Act, and "Prospectus" means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Act or, if no
such filing is required, the form of final prospectus included in the Initial
Registration Statement. Reference made herein to any Preliminary Prospectus or
to the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act,
as of the date of such Preliminary Prospectus or the Prospectus, as the case may
be, and any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
document filed under the Exchange Act after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and incorporated by reference
in such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to a Registration Statement shall be deemed to
include any annual report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in such Registration Statement.
The Company, the Selling Stockholders and the Underwriters agree as
follows:
1. Sale and Purchase. Upon the basis of the warranties and
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representations and the other terms and conditions herein set forth, the Company
and each of the Selling Stockholders, severally and not jointly, agree to sell
to the respective Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase from the Company and each Selling Stockholder the
respective number of Firm Shares (subject to such adjustment as you may
determine to avoid fractional shares) which bears the same proportion to the
number of Firm Shares to be sold by the Company or by such Selling Stockholders,
as the case may be, as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule A annexed hereto bears to the total number of Firm
Shares to be sold by the Company and the Selling Stockholders, in each case at a
purchase price of $____________ per Share. The Company and each Selling
Stockholder is advised by you that the Underwriters intend (i) to make a public
offering of their respective portions of the Firm Shares as soon after the
effective date of the Registration Statement as in your judgment is advisable
and (ii) initially to offer the Firm Shares upon the terms set forth in the
Prospectus. You may from time to time increase or decrease the public offering
price after the initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
the other terms and conditions herein set forth, the Underwriters shall have the
right to purchase, severally and not jointly, from the Company ratably in
accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as you shall determine to avoid fractional shares),
all or a portion of the Additional Shares as may be necessary to cover over-
allotments made in connection with the offering of the Firm Shares, at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares. This option may be exercised at any time (but not more than once)
on or before the thirtieth day following the date hereof, by written notice to
the Company. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred
to as the "additional time of purchase"); provided, however, that the additional
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time of purchase shall not be earlier than the time of purchase (as defined
below) nor earlier than the second business day* after the date on which the
option shall have been exercised nor later than the tenth business day after the
date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares).
Pursuant to powers of attorney, which shall be satisfactory to counsel
for the Underwriters, granted by each Selling Stockholder, ____________________
and _______________________ will act as representatives of the Selling
Stockholders. The foregoing representatives (the "Representatives of the
Selling Stockholders") are authorized, on behalf of each Selling Stockholder, to
execute any documents necessary or desirable in connection with the sale of the
Shares to be sold hereunder by each Selling Stockholder, to make delivery of the
certificates of such Shares, to receive the proceeds of the sale of such Shares,
to give receipts for such proceeds, to pay therefrom the expenses to be borne by
each Selling Stockholder in connection with the sale and public offering of the
Shares, to distribute the balance of such proceeds to each Selling Stockholder
in proportion to the number of Shares sold by each Selling Stockholder, to
receive notices on behalf of each Selling Stockholder and to take such other
action as may be necessary or desirable in connection with the transactions
contemplated by this Agreement.
2. Payment and Delivery. Payment of the purchase price for the Firm
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Shares shall be made to the Company and each of the Selling Stockholders by
[wire transfer of immediately available funds], against delivery of the
certificates for the Firm Shares to you for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on __________________, 1998 (unless another time shall be agreed to
by you, the Company and the Representatives of the Selling Stockholders or
unless postponed in accordance with the provisions of Section 10 hereof). The
time at which such payment and delivery are actually made is hereinafter
sometimes called the time of purchase. Certificates for the Firm Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify on the second business day preceding the time of purchase. For
the purpose of expediting the checking of the certificates for the Firm Shares
by you, the Company and the Selling Stockholders agree to make such certificates
available to you for such purpose at least one full business day preceding the
time of purchase.
* As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner as the payment for the
Firm Shares. Certificates for the Additional Shares shall be delivered to you
in definitive form in such names and in such denominations as you shall specify
on the second business day preceding the additional time of purchase. For the
purpose of expediting the checking of the certificates for the Additional Shares
by you, the Company agrees to make such certificates available to you for such
purpose at least one full business day preceding the additional time of
purchase.
3. Representations and Warranties of the Company. The Company
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represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Registration Statements and Prospectus, and any further
amendments or supplements thereto, fully comply, or will fully comply, in
all material respects with the provisions of the Act, no part of a
Registration Statement as of its effective date will 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, and the Prospectus, as of its filing date, will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or neces sary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or representation
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with respect to any statement contained in a Registration Statement or the
Prospectus in reliance upon and in conformity with information concerning
the Underwriters and furnished in writing by or on behalf of any
Underwriter through you to the Company expressly for use in the
Registration Statements or the Prospectus; the documents incorporated by
reference in the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of the
Exchange Act, and do 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, in light of the circumstances under which they
were made, not misleading; no document relating to the offering of the
Shares has been filed, or transmitted for filing, with the Commission,
unless previously delivered to you, and no document has been or will be
prepared, distributed or filed in reliance on Rule 434 under the Act. The
Company and the offering of the Shares meet the eligibility requirements
for the use of Form S-3.
(b) As of the date of this Agreement, the Company has the
capitalization set forth under the heading entitled ["Actual"] in the
section of the Prospectus entitled ["Capitalization"] and, as of the time
of purchase and the additional time of purchase, as the case may be, the
Company shall have the capitalization set forth under the heading entitled
["As Adjusted"] in the section of the Prospectus entitled
["Capitalization"]; all of the issued and outstanding shares of capital
stock including Common Stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable; the Company
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Florida, with full power and
authority to own its properties and conduct its business as described in
the Prospectus, to execute and deliver this Agreement and to issue and sell
the Shares as herein contemplated;
(c) The Company and each of its subsidiaries (the "Subsidiaries")
are duly qualified or licensed by and are in good standing in each
jurisdiction in which they conduct their respective businesses and in which
the failure, individually or in the aggregate, to be so licensed or
qualified could have a material adverse effect on the business, financial
condition or results of operations of the Company and its Subsidiaries,
taken as a whole; and the Company and each of its Subsidiaries are in
compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such jurisdictions;
(d) Neither the Company nor any of its Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), its
respective charter or by-laws or in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, bank loan or credit agreement or other agreement
or instrument to which the Company or any of its Subsidiaries is a party or
by which any of them is bound, and the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby will not conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of time,
or both would constitute a breach of, or default under), any provisions of
the charter or by-laws, of the Company or any of its Subsidiaries or under
any provision of any license, indenture, mortgage, deed of trust, bank loan
or credit agreement or other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which any of them or their
respective properties may be bound or affected, or under any federal,
state, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of its Subsidiaries;
(e) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms;
(f) The Shares have been duly and validly authorized, and, when
the Shares are issued and delivered pursuant to this Agreement, such Shares
will be duly and validly issued and fully paid and non-assessable; the
Shares conform to the description thereof contained in the Registration
Statement and the Shares will conform to the description thereof contained
in the Prospectus.
(g) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in
the Prospectus, and the certificates for the Shares are in due and proper
form and the holders of the Shares will not be subject to personal
liability by reason of being such holders;
(h) No approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory commission,
board, body, authority or agency is required in connection with the
issuance and sale of the Shares as contemplated hereby other than
registration of the Shares under the Act and any necessary qualification
under the securities or blue sky laws of the various jurisdictions in which
the Shares are being offered by the Underwriters;
(i) Except as disclosed in the Prospectus no person has the
right, contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any shares of capital stock of the Company
upon the issue and sale of the Shares to the Underwriters hereunder, nor
does any person have preemptive rights, rights of first refusal or other
rights to purchase any of the Shares;
(j) Ernst & Young LLP, whose reports on the consolidated
financial statements of the Company and its Subsidiaries are filed with the
Commission as part of the Initial Registration Statement and Prospectus,
are independent public accountants as required by the Act and the
applicable published rules and regulations thereunder;
(k) Each of the Company and its Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings re quired under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations, consents
and approvals from other persons, in order to conduct its respective
business; neither the Company nor any of its Subsidiaries is in violation
of, or in default under, any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or rule or
any decree, order or judgment applicable to the Company or any of its
Subsidiaries the effect of which could have a material adverse effect on
the business, financial condition or results of operations of the Company
and its Subsidiaries taken as a whole;
(l) All legal or governmental proceedings, contracts or documents
of a character required to be described in a Registration Statement or a
Prospectus or to be filed as an exhibit to a Registration Statement have
been so described or filed as required;
(m) There are no actions, suits or proceedings pending or
threatened against the Company or any of its Subsidiaries or any of their
respective properties, at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority or agency which could result in a judgment, decree or order
having a material adverse effect on the business, financial condition or
results of operations of the Company and its Subsidiaries taken as a whole;
(n) The financial statements included in the Initial Registration
Statement and the Prospectus present fairly the consolidated financial
position of the Company and its Subsidiaries as of the dates indicated and
the consolidated results of operations and changes in financial position of
the Company and its Subsidiaries for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved, except that unaudited financial statements do not contain
footnotes and are subject to normal year-end adjustments;
(o) The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in the
Registration Statements and the Prospectus have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly computed on the basis described
therein. The assumptions used in the preparation of the pro forma
financial statements and other pro forma information in the Registration
Statements and the Prospectus are set forth therein and are believed to be
reasonable by the Company (based upon its consultations with its
independent public accountants about each of its assumptions underlying the
pro forma information), and the adjustments used therein are believed to be
appropriate by the Company (based
upon its consultations with its independent public accountants about each
of its assumptions underlying the pro forma information) to give pro forma
effect to the transactions or circumstances referred to therein. The pro
forma financial and operating information does not purport to represent
what the Company's results of operations would have been if the
transactions described had in fact occurred, nor does it purport to
indicate the future financial position or results of future operations of
the Company. The other financial and statistical information and data
relating to the Company set forth in the Registration Statements and the
Prospectus have been prepared on a basis consistent with the financial
statements and books and records of the Company;
(p) Subsequent to the respective dates as of which information is
given in the Registration Statements and Prospectus, and except as may be
otherwise stated therein, there has not been (A) any material and
unfavorable change, financial or otherwise, in the business, properties,
prospects, regulatory environment, results of operations or condition
(financial or otherwise), present or prospective, of the Company and its
Subsidiaries taken as a whole, (B) any transaction, which is material to
the Company and its Subsidiaries taken as a whole, contemplated or entered
into by the Company or any of its Subsidiaries or (C) any obligation,
contingent or otherwise, directly or indirectly incurred by the Company or
any of its Subsidiaries which is materi al to the Company and its
Subsidiaries taken as a whole;
(q) The Company has good title to all tangible properties and
assets owned or leased by it, in each case, except as set forth in the
Registration Statements and the Prospectus, free and clear of all pledges,
liens, encumbrances, security interests, charges, mortgages and defects of
title other than liens for taxes which taxes are not yet due and payable;
(r) The Company has not violated any foreign, federal, state or
local law, regulation, decree, order, directive, requirement or judgment
applicable to the Company relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), nor any federal or state
law relating to discrimination in the hiring, promotion or pay of employees
nor any applicable federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which violation could have a material
adverse effect on the business, financial condition or results of
operations of the Company and the Company has not received any notice which
is pending alleging any violation thereof or liability thereunder;
(s) The Company has such material permits, licenses, consents,
approvals, franchises and authorizations required by federal, state, local,
foreign or other governmental or regulatory authorities ("Permits"), and
has made all material filings required to own, lease and operate its
properties and to conduct its business. The Company is not in material
violation of, and has fulfilled and performed all of its material
obligations with respect to its Permits, and the Company has not received
notice from any governmental authority of the revocation or termination, or
threatened revocation or termination, of any Permits or any other material
impairment of the rights of the holder of any Permit; and, except as
described in the Prospectus, the permits contain no restrictions that are
materially burdensome to the Company;
(t) There is no claim pending or, to the best knowledge of the
Company, threatened or contemplated under any Environmental Laws against
the Company which, if adversely determined, individually or in the
aggregate, could have a material adverse effect on the business, financial
condition or results of operations of the Company; there are no past or
present actions or conditions, including, without limitation, the release
of any hazardous substance or waste regulated under any Environmental Law
that are likely to form the basis of any such claim against the Company, if
adversely determined, individually or in the aggregate could have a
material adverse effect on the business, financial condition or results of
operations of the Company;
(u) Neither the Company, nor to the best of the Company's
knowledge, any employee of the Company has made any payment of funds of the
Company prohibited by law, and no funds of the Company have been set aside
to be used for any payment prohibited by law;
(v) The Company has filed all federal or state income and
franchise tax returns required to be filed and has paid all taxes shown
thereon as due, and there is no material tax deficiency which has been or
might be asserted against the Company; all material tax liabilities of the
Company are adequately provided for on the books of the Company;
(w) Neither the Company nor any of its affiliates has incurred
any liability for any finder's fees or similar payments in connection with
the transactions herein contemplated;
(x) Except as specifically disclosed in the Prospectus, the
Company owns or possesses, or can acquire on terms which it believes will
be commercially reasonable, adequate rights to use all patent, patent
rights, inventions, trade secrets, know-how, trademarks, service marks,
trade names and copyrights (collectively, "Intellectual Property Rights")
which are necessary to conduct its businesses as described or contemplated
in the Registration Statements and Prospectus; the Company has not received
any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of the Company by others with respect to any
Intellectual Property Rights; the Company has not received any notice of,
and has no knowledge of, any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property Rights which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, might have a material adverse effect on the business,
financial condition or results of operations of the Company; and to the
knowledge of the Company, none of the patents owned by the Company are
unenforceable or invalid. The Company has duly and properly filed or
caused to be filed with the United States Patent and Trademark Office (the
"PTO") and applicable foreign and international patent authorities all
patent applications described or referred to in the Prospectus, and
believes its has complied with the PTO's duty of candor and disclosure for
each of the United States patent applications described or referred to in
the Prospectus; the Company is unaware of any facts which would preclude
the grant of a patent from each of the patent applications described or
referred to in the Prospectus; and the Company has no knowledge of any
facts which would preclude it from having clear title to its patent
applications described or referred to in the Prospectus;
(y) No labor disturbance by the employees of the Company exists
or, to the Company's knowledge, is imminent which could be expected to have
a material adverse effect on the business, financial condition or results
of operations of the Company. No collective bargaining agreements exists
with any of the Company's employees and, to the best of the Company's
knowledge, no such agreement is imminent;
(z) The Company has made all material filings and received all
material regulatory authorizations necessary to conduct the Company's
business as it is currently conducted in any foreign countries, based on
all available information provided to the Company through the date hereof
by applicable regulatory authorities; the Company is not in violation of
any such regulatory authorizations, any of which violation could have a
material adverse effect on the business, financial condition or results of
operations of the Company and the Company has no reason to believe that any
party granting any such authorization is considering limiting, suspending
or revoking the same and knows of no basis for any such limitation,
suspension or revocation;
(aa) The Company has obtained the agreement of each of the
Selling Stockholders and of each of its directors and officers and certain
of its other stockholders not to sell, contract to sell, grant any option
to sell or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable for Common
Stock or warrants or other rights to purchase Common Stock for a period of
90 days after the date of the Prospectus;
(ab) Neither the Company nor any of its subsidiaries is, or will
be, after giving effect to the issuance and sale of the Shares by the
Company, an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended; and
(ac) The Shares have been approved for listing on the New York
Stock Exchange subject to official notice of issuance.
4. Representations and Warranties of the Selling Stockholders. Each
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Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) Such Selling Stockholder now is and at the time of delivery
of such Shares (whether the time of purchase or additional time of
purchase, as the case may be) will be, the lawful owner of the number of
Shares to be sold by such Selling Stockholder pursuant to this Agreement
and has and, at the time of delivery thereof, will have valid and
marketable title to such Shares, and upon delivery of and payment for such
Shares (whether at the time of purchase or the additional time of purchase,
as the case may be), the Underwriters will acquire valid and marketable
title to such Shares free and clear of any claim, lien, encumbrance,
security interest, community property right, restriction on transfer or
other defect in title;
(b) Such Selling Stockholder has and at the time of delivery of
such Shares (whether the time of purchase or additional time of purchase,
as the case may be) will have, full legal right, power and capacity, and
any approval required by law (other than those imposed by the Act and the
securities or blue sky laws of certain jurisdictions), to sell, assign,
transfer and deliver such Shares in the manner provided in this Agreement;
(c) This Agreement and the Custody Agreement among
___________________________, as custodian, and the Selling Stockholders
(the "Custody Agreement") have been duly executed and delivered by such
Selling Stockholder and each is a legal, valid and binding agreement of
such Selling Stockholder enforceable in accordance with its terms;
(i) When each part of a Registration Statement became or
will become effective and at all times subsequent thereto through the
latest of the time of purchase, additional time of purchase or the
termination of the offering of the Shares, the Registration Statements and
Prospectus, and any supplements or amendments thereto will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(d) Such Selling Stockholder has duly and irrevocably authorized
the Representatives of the Selling Stockholders, on behalf of such Selling
Stockholder, to execute and deliver this Agreement and any other document
necessary or desirable in connection with the transactions contemplated
thereby and to deliver the Shares to be sold by such Selling Stockholder
and receive payment therefor pursuant hereto; and
(e) The sale of such Selling Stockholder's Shares pursuant to
this Agreement is not prompted by any information concerning the Company
which is not set forth in the Prospectus.
5. Certain Covenants of the Company. The Company hereby agrees:
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(a) To furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect so long as required for the
distribution of the Shares, provided that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except service of process with respect to
the offering and sale of the Shares); and to promptly advise you of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(b) To make available to you in New York City, as soon as
practicable after the Initial Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amend ments or supplements thereto after the
Effective Date) as the Underwriters may request for the purposes
contemplated by the Act;
(c) To advise you promptly and (if requested by you) to confirm
such advice in writing, (i) when a Registration Statement has become
effective and when any post-effective amendment thereto becomes effective
and (ii) if Rule 430A under the Act is used, when the Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner under the Act);
(d) To advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to a
Registration Statement or the Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for, or the
entry of a stop order suspending the effectiveness of a Registration
Statement and, if the Commission should enter a stop order suspending the
effectiveness of a Registration Statement, to make every reasonable effort
to obtain the lifting or removal of such order as soon as possible; to
advise you promptly of any proposal to amend or supplement a Registration
Statement or the Prospectus including by filing any documents that would be
incorporated therein by reference and to file no such amendment or
supplement to which you shall object in writing;
(e) To furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send
to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form
as may be designated by the Commission and such other documents, if any, as
may be incorporated by reference into a Registration Statement, and (iii)
such other information as you may reasonably request regarding the Company
or its Subsidiaries;
(f) To advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a prospectus
relating to the Shares is required to be delivered under the Act which, in
the judgment of the Company, would require the making of any change in the
Prospectus then being used, or in the information incorporated therein by
reference, so that the Prospectus would not include an untrue statement of
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they are
made, not misleading, and, during such time, to prepare and furnish, at the
Company's expense, to the Underwriters promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such
change and to furnish you a copy of such proposed amendment or supplement
before filing any such amendment or supplement with the Commission;
(g) To make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of twelve
months beginning after the Effective Date but not later than
__________________, 199__, as soon as is reasonably practicable after the
termination of such twelve-month period;
(h) To furnish to you three manually signed copies of each
Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and sufficient conformed copies of the
foregoing (other than exhibits) for distribution of a copy to each of the
other Underwriters; and to maintain in the Company's files manually signed
copies of such documents for at least five years from the date of filing;
(i) To furnish to you as early as practicable prior to the time
of purchase and the additional time of purchase, as the case may be, but
not later than two
business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements, if any, of the Company and its
Subsidiaries which have been read by the Company's independent certified
public accountants, as stated in their letter to be furnished pursuant to
Section 8(c) of this Agreement;
(j) To apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus;
(k) To furnish to you, before filing with the Commission
subsequent to the Effective Date and during the period referred to in
paragraph (f) above, a copy of any document proposed to be filed pursuant
to Sections 13, 14 or 15(d) of the Exchange Act;
(l) Not to sell, contract to sell, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock or permit the registration under the
Act of any shares of Common Stock, except for the registration of the
Shares and the sales to the Underwriters pursuant to this Agreement and
except for issuances of Common Stock upon the exercise of outstanding
options, warrants and debentures, for a period of 90 days after the date
hereof, without the prior written consent of the Managing Underwriters; and
(m) To use its best efforts to cause the Shares to be listed on
the New York Stock Exchange.
6. Certain Covenants of the Company and the Selling Stockholders.
-------------------------------------------------------------
The Company and each of the Selling Stockholders agree with each Underwriter as
follows:
(a) The Company and the Selling Stockholders, in such proportions
(aggregating 100%) as the number of Shares to be sold by the Company and by
each such Selling Stockholder bears to the total number of Shares or as
they otherwise may determine among themselves, will pay all expenses, fees
and taxes (other than any transfer taxes and fees and disbursements of
counsel for the Underwriters except as set forth under Section 7 hereof or
(iii) or (iv) below) in connection with (i) the preparation and filing of
the Registration Statement, each Preliminary Prospectus, the Prospectus,
and any amendments or supplements thereto, and the printing and furnishing
of copies of each thereof to the Underwriters and to dealers (including
costs of mailing and shipment), (ii) the issuance, sale and delivery of the
Shares by the Company and the Selling Stockholders, (iii) the word
processing and/or printing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Statements of Information, the
Custody Agreement and the Powers of Attorney and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and
to dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law as
aforesaid (including the legal fees and filing fees and other disbursements
of counsel to the Underwriters) and the printing and furnishing of copies
of any blue sky surveys or legal investment surveys to the Underwriters and
to dealers, (v) any listing of the Shares on any securities exchange or
qualification of the Shares for quotation on NASDAQ and any registration
thereof under the Exchange Act, (vi) the filing for review of the public
offering of the Shares by the National Association of Securities Dealers,
Inc. (the "NASD"), and (vii) the performance of the Company's and the
Selling Stockholders' other obligations hereunder; and
(b) The Company and the Selling Stockholders will not issue,
sell, grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exchangeable for Common Stock or warrants or other rights to purchase
Common Stock or, in the case of the Company, permit the registration under
the Act of any shares of Common Stock, except for the registration of the
Shares and the sales to the Underwriters pursuant to this Agreement and
except for issuances of Common Stock upon the exercise of outstanding
options, warrants and debentures, for a period of 90 days after the date of
the Prospectus, without the prior written consent of the Managing
Underwriters.
7. Reimbursement of Underwriters' Expenses. If the Shares are not
---------------------------------------
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 10 hereof or the default by one or more
of the Underwriters in its or their respective obligations hereunder, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the fees and disbursements of their counsel.
8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders on the
date hereof and at the time of purchase (and the several obligations of the
Underwriters at the additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Stockholders on the date hereof and at the time of purchase (unless previously
waived) and at the additional time of purchase, as the case may be), the
performance by the Company and the Selling Stockholders of their obligations
hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of purchase and
at the additional time of purchase, as the case may be, an opinion of
Arnall Golden & Gregory, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form satisfactory to Palmer & Dodge LLP, counsel for
the Underwriters, stating that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Florida, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, to
execute and deliver this Agreement and to issue, sell and deliver the
Shares as herein contemplated;
(ii) Each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of its respective jurisdiction of incorporation with full corporate
power and authority to own its respective properties and to conduct
its respective business;
(iii) The Company and its Subsidiaries are duly qualified
or licensed by each jurisdiction in which they conduct their
respective businesses and in which the failure, individually or in the
aggregate, to be so licensed or qualified could have a material
adverse effect on the operations, business or condition of the
Company and its Subsidiaries taken as a whole, and the Company and its
Subsidiaries are duly qualified, and are in good standing, in each
jurisdiction in which they own or lease real property or maintain an
office and in which such qualification is necessary;
(iv) This Agreement has been duly authorized, executed and
delivered by the Company;
(v) The Shares, when issued and delivered to and paid for by
the Underwriters, will be duly and validly authorized and issued and
will be fully paid and non-assessable;
(vi) The Company has an authorized capitalization as set
forth in the Prospectus; the outstanding shares of capital stock of
the Company have been duly and validly authorized and issued, and are
fully paid, nonassessable and free of statutory and contractual
preemptive rights; the Shares when issued will be free of statutory
and contractual preemptive rights; the certificates for the Shares are
in due and proper form and the holders of the Shares will not be
subject to personal liability by reason of being such holders;
(vii) The capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Prospectus;
(viii) The Registration Statements and the Prospectus
(except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the require ments of the Act;
(ix) Each Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act;
(x) No approval, authorization, consent or order of or
filing with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required in
connection with the issuance and sale of the Shares as contemplated
hereby other than registration of the Shares under the Act;
(xi) The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby do not and will not conflict with, or
result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time, or both, would constitute
a breach of or default under), any provisions of the charter or by-
laws of the Company or any of its Subsidiaries or under any provision
of any license, indenture, mortgage, deed of trust, bank loan, credit
agreement or other agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which any of them or their
respective properties may be bound or affected, or under any law,
regulation or rule or any decree, judgment or order applicable to the
Company or any of its Subsidiaries;
(xii) To the best of such counsel's knowledge, neither the
Company nor any of its Subsidiaries is in breach of, or in default
under (nor has any event occurred which with notice, lapse of time, or
both would constitute a breach of, or default under), any license,
indenture, mortgage, deed of trust, bank loan or any other agreement
or instrument to which the Company or any of its Subsidiaries is a
party or by which any of them or their respective properties may be
bound or affected or under any law, regulation or rule or any decree,
judgment or order applicable to the Company or any of its
Subsidiaries;
(xiii) To the best of such counsel's knowledge, there are
no contracts, licenses, agreements, leases or documents of a character
which are required to be filed as exhibits to a Registration Statement
or to be summarized or described in the Prospectus which have not been
so filed, summarized or described;
(xiv) To the best of such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened against the
Company or any of its Subsidiaries or any of their respective
properties, at law or in equity or before or by any commission, board,
body, authority or agency which are required to be described in the
Prospectus but are not so described;
(xv) The documents incorporated by reference in the
Registration Statements and Prospectus, when they were filed (or, if
an amendment with respect to any such document was filed when such
amendment was filed), complied as to form in all material respects
with the Exchange Act (except as to the financial statements and
schedules and other financial and statistical data contained or
incorporated by reference therein as to which such counsel need
express no opinion);
(xvi) The statements in the Prospectus relating to
requirements and procedures under the FDC Act or FDA regulations are
accurate and complete in all materials respects and present fairly
matters set forth therein;
(xvii) Such counsel has no actual knowledge of any action,
suit or proceeding pending or threatened by the FDA or other federal
regulatory authority, except in each case as described in the
Prospectus; and
(xviii) Such counsel have participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accountants of the Company and representatives
of the Underwriters at which the contents of the Registration
Statements and Prospectus were discussed and, although such counsel is
not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statements or Prospectus (except as and to the extent
stated in subparagraphs (vi) and (vii) above), on the basis of the
foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives
of the Company) nothing has come to the attention of such counsel that
causes them to believe that any part of a Registration Statement or
any amendment thereto at the time such part or amendment became
effective contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus or
any supplement thereto at the date of such Prospectus or such
supplement, and at all times up to and including the time of purchase
or additional time of purchase, as the case may be, contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules and
other financial and statistical data included in a Registration
Statement or Prospectus).
In rendering such opinion, such counsel may rely (to the extent such
counsel deems proper) as to matters specified in paragraphs (i) and (ii)
upon the opinion of Ronald D. McCall, Esq., or other counsel satisfactory
to counsel for the Underwriters.
(b) The Company shall furnish to you at the time of purchase and
at the additional time of purchase, as the case may be, an opinion or
opinions of patent counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the
case may be, with reproduced copies for each of the other Underwriters and
in form satisfactory to Palmer & Dodge LLP, counsel for the Underwriters,
stating that:
(i) All patents and pending patent applications owned by or
licensed to the Company known to such counsel and all contracts known
to such counsel pursuant to which the Company has, or has granted,
rights to any patents or pending patent applications are listed on
Schedule A;
(ii) Based upon such counsel's (a) inquiry of the Company's
representatives responsible for patent matters, (b) such counsel's
review of the chain of title in the PTO of the Company's United States
patents and patent applications listed in Schedule A: (i) the patents
listed on Schedule A (the "Patents") and patent applications listed on
Schedule A (the "Applications") have been validly assigned to the
Company and (ii) the Company is listed as the sole holder of record in
the records of the PTO of each of the Patents and each of the
Applications. Such counsel knows of no claims of third parties to any
ownership interest or lien with respect to any of the Patents or
Applications and such counsel has no knowledge of any facts which
would preclude the Company from having clear title and unencumbered
right to the Patents and Applications. None of the pending
Applications has been abandoned;
(iii) To the best of such counsel's knowledge, the Company
has complied with the PTO's duty of candor and disclosure for each of
the United States Patents and Applications;
(iv) There are no legal or governmental proceedings relating
to the Company's patent rights, other than PTO review of Applications
or comparable
foreign proceedings, and to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or others. To the best of such counsel's knowledge, there
is no pending or threatened interference proceeding or public use
proceeding with respect to any Application;
(v) No facts have come to such counsel's attention that
cause such counsel to believe that any of the claims of the Patents or
Applications is unenforceable or invalid. To the best of such
counsel's knowledge, there is no pending action, suit, proceeding or
claim by others challenging the validity or enforceability of any
claim of the Patents;
(vi) Such counsel has conducted searches with regard to the
inventions claimed in the Patents and Applications. Based thereon and
on discussions with representatives of the Company, such counsel has
ruled out substantially all of the patents of others. To the best of
such counsel's knowledge, there is no pending or threatened action,
suit or proceeding by others that the Company is infringing any
patent;
(vii) Any claim of infringement asserted by others is
believed by such counsel to be in error;
(viii) Such counsel has no knowledge of any facts that
would form a basis for the belief that the Company lacks any rights or
licenses to use all patents, know-how and other intellectual property
necessary to conduct the business now conducted or proposed to be
conducted by the Company as described in the Prospectus;
(ix) The statements in the Prospectus relating to patent,
trademark, licensing and other intellectual property matters, insofar
as such statements constitute a summary of legal matters, documents or
proceedings, are accurate and complete in all material respects and
present fairly the matters set forth therein; and
(x) No facts have come to such counsel's attention which
cause such counsel to believe that the statements in the Prospectus
relating to patent, trademark and licensing matters contained an
untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or as of the
date hereof, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein in the light of the circumstances
under which they were made, not misleading.
(c) The Selling Stockholders shall furnish to you at the time of
purchase and at the additional time of purchase, as the case may be, an
opinion of Arnall Golden & Gregory, counsel for the Selling Stockholders,
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies for
each of the other Underwriters, and in form and substance satisfactory to
Palmer & Dodge LLP, counsel for the Underwriters, stating that:
(i) This Agreement and the Custody Agreement have been duly
executed and delivered by or on behalf of each of the Selling
Stockholders;
(ii) Each Selling Stockholder has full legal right and
power, and has obtained any authorization or approval required by law
(other than those imposed by the Act and the securities or blue sky
laws of certain jurisdictions), to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stock holder in the manner
provided in this Agreement;
(iii) Delivery of certificates for the Shares by each
Selling Stockholder pursuant hereto will pass valid and marketable
title thereto to the Underwriters, free and clear of any claim, lien,
encumbrance, security interest, community property right, restriction
on transfer or other defect in title;
(iv) Each of the Representatives of the Selling Stockholders
has been duly authorized by each Selling Stockholder to execute and
deliver on behalf of such Selling Stockholder this Agreement and any
other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Shares to be sold
by such Selling Stockholder; and
(v) To the best of such counsel's knowledge, the statements
in the Prospectus under the caption ["Principal and Selling
Stockholders"] insofar as such statements constitute a summary of the
matters referred to therein present fairly the information called for
with respect to such matters.
(d) You shall have received from Ernst & Young LLP letters dated,
respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by the Managing Underwriters.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of
Palmer & Dodge LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, as to the
matters referred to in subparagraphs (iv), (v), (vii), (viii) and (ix) of
paragraph (a) of this Section 8.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which
the contents of the Registration Statements and Prospectus and related
matters were discussed and, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in a Registration Statement or the
Prospectus (except as to matters referred to under subparagraph (vii) of
paragraph (a) of this Section 8), on the basis of the foregoing (relying as
to materiality to a large extent upon the opinions of officers and other
representatives of the Company), no facts have come to the attention of
such counsel which lead them to believe that any part of a Registration
Statement or any amendment thereto at the time such part or amendment
became effective contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus as of its date or any supplement
thereto as of its date contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
express no comment with respect to the financial statements and schedules
and other financial and statistical data included in the Registration
Statements or Prospectus).
(f) No amendment or supplement to a Registration Statement or the
Prospectus, including documents deemed to be incorporated by reference
therein, shall be filed prior to the time any 462(b) Registration Statement
becomes effective, or, if none, the Initial Registration Statement, to
which you object in writing.
(g) The Initial Registration Statement shall become effective, or
if Rule 430A under the Act is used, the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) under the Act, at or before
5:00 P.M., New York City time, on the date of this Agreement, unless a
later time (but not later than 5:00 P.M., New York City time, on the second
full business day after the date of this Agreement) shall be agreed to by
the Company, the Representatives of the Selling Stockholders and you in
writing or by telephone, confirmed in writing; provided, however, that the
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Company, the Representatives of the Selling Stockholders and you and any
group of Underwriters, including you, who have agreed hereunder to purchase
in the aggregate at least 50% of the Firm Shares may from time to time
agree on a later date. The Company agrees to file any additional
registration statement which is proposed to be filed pursuant to Rule
462(b) with the Commission, in accordance with the Rules and Regulations,
by 10:00 p.m., Eastern Standard Time or Eastern Daylight Savings Time,
whichever is currently in effect, on the date of this Agreement, and,
concurrently with or prior to filing such additional registration
statement, to pay the associated filing fee or give irrevocable
instructions for payment in accordance with Rule 111(b) of the Act.
(h) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of a Registration Statement shall have been issued under the
Act or proceedings initiated under Section 8(d) or 8(e) of the Act; (ii)
the Registration Statements and all amendments thereto, or modifications
thereof, if any, shall 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; and (iii) the Prospectus and
all amendments or supplements thereto, or modifications thereof, if any,
shall 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, in the light of the circumstances under which they are
made, not misleading.
(i) Between the time of execution of this Agreement and the time
of purchase or the additional time of purchase, as the case may be, (i) no
material and unfavorable change, financial or otherwise (other than as
referred to in the Prospectus), in the business, condition or prospects of
the Company and its Subsidiaries taken as a whole shall occur or become
known and (ii) no transaction which is material and unfavorable to the
Company shall have been entered into by the Company or any of its
Subsidiaries.
(j) The Company will, at the time of purchase or additional time
of purchase, as the case may be, deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of
the Company as set forth in this Agreement and the conditions set forth in
paragraph (g) and paragraph (h) have been met and that they are true and
correct as of each such date.
(k) You shall have received signed letters, dated the date of
this Agreement, from each of the Selling Stockholders and each of the
directors and officers of the Company and certain of its other stockholders
to the effect that such persons shall not sell, contract to sell, grant any
option to sell or otherwise dispose of, directly or indirectly, any shares
of Common Stock of the Company or securities convertible into or
exchangeable for Common Stock or warrants or other rights to purchase
Common Stock for a period of 90 days after the date of the Prospectus
without the prior written consent of the Managing Underwriters.
(l) The Company and the Selling Stockholders shall have furnished
to you such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement and the
Prospectus as of the time of purchase and the additional time of purchase,
as the case may be, as you may reasonably request.
(m) The Company and the Selling Stockholders shall perform such
of their respective obligations under this Agreement as are to be performed
by the terms hereof at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
(n) The Shares shall have been approved for listing on the New
York Stock Exchange, subject only to notice of issuance at or prior to the
time of purchase.
(o) The Selling Stockholders will at the time of purchase and the
additional time of purchase, as the case may be deliver to you a
certificate of the Representatives of the Selling Stockholders to the
effect that the representations and the warranties of the Selling
Stockholders as set forth in this Agreement are true and correct as of each
such date.
(p) Between the time of execution of this Agreement and the time
of purchase or additional time of purchase, as the case may be, there shall
not have occurred any downgrading, nor shall any notice have been given of
(i) any intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company or any subsidiary of the Company
by any "nationally recognized statistical rating organization," as that
term is defined in Rule 436(g)(2) promulgated under the Act.
9. Effective Date of Agreement; Termination. This Agreement shall
----------------------------------------
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Initial Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statements
and Prospectus, (x) there has been any material adverse and unfavorable change,
financial or otherwise (other than as referred to in the Prospectus), in the
business, condition or prospects of the Company and its Subsidiaries taken as a
whole, which would, in your judgment or in the judgment of such group of
Underwriters, make it impracticable to market the Shares, or (y) there shall
have occurred any downgrading, or any notice shall have been given of (i) any
intended or potential downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company or any subsidiary of the Company by any nationally
recognized statistical rating organization or (z) if, at any time prior to the
time of purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York Stock Exchange shall have been suspended or minimum prices shall have
been established on the New York Stock Exchange, or if a banking moratorium
shall have been declared either by the United States or New York State
authorities, or if the United States shall have declared war in accordance with
its constitutional processes or there shall have occurred any material outbreak
or escalation of hostilities or other national or international calamity or
crisis of such magnitude in its effect on the financial markets of the United
States as, in your judgment or in the judgment of such group of Underwriters, to
make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 9, the Company, the Representatives of the Selling
Stockholders and each other Underwriter shall be notified promptly by letter or
telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company or the
Selling Stockholders, as the case may be, shall be unable to comply with any of
the terms of this Agreement, the Company or the Selling Stockholders, as the
case may be, shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 6(a), 7 and 11 hereof), and the
Underwriters shall be under no obligation or liability to the Company and the
Selling Stockholders under this Agreement (except to the extent provided in
Section 11 hereof) or to one another hereunder.
10. Increase in Underwriters' Commitments. If any Underwriter shall
-------------------------------------
default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the aggregate principal amount of Firm
Shares they are obligated to purchase pursuant to Section 1 hereof) the number
of Firm Shares agreed to be purchased by all such defaulting Underwriters, as
hereinafter provided. Such Shares shall be taken up and paid for by such non-
defaulting Underwriter or Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be taken up and paid for by all non-
defaulting Underwriters pro rata in proportion to the aggregate number of Firm
Shares set opposite the names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company and the Selling Stockholders agree with the non-
defaulting Underwriters
that they will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statements and
Prospectus and other documents may be effected.
The term Underwriter as used in this agreement shall refer to and
include any Underwriter substituted under this Section 10 with like effect as if
such substituted Under writer had originally been named in Schedule A.
11. Indemnity by the Company, the Selling Stockholders and the
----------------------------------------------------------
Underwriters.
- ------------
(a) The Company and the Selling Stockholders jointly and severally
agree to indemnify, defend and hold harmless each Underwriter, its directors and
officers, and any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
loss, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any such
person may incur under the Act, the Exchange Act or otherwise insofar as such
loss, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement (or in a Registration Statement as amended by any post-
effective amendment thereof by the Company) or in a Prospectus (the term
Prospectus for the purpose of this Section 11 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either the
Registration Statement or the Prospectus or necessary to make the statements
made therein not misleading, except insofar as any such loss, expense, liability
or claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by any Underwriter through you to the Company expressly for
use with reference to such Underwriter in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to be stated
in either such Registration Statement or Prospectus or necessary to make such
information not misleading, provided, that no Selling Stockholder shall be
--------
responsible, either pursuant to this indemnity or as a result of any breach of
this Agreement, for losses, expenses, liability or claims arising out of or
based upon such untrue statement or omission or allegation thereof based upon
information furnished by any party other than such Selling Stockholder and, in
any event, no Selling Stockholder shall be responsible, either pursuant to this
indemnity or as a result of any breach of this Agreement, for losses, expenses,
liability or claims for an amount in excess of the proceeds to be received by
such Selling Stockholder (before deducting expenses) from the sale of Shares
hereunder.
If any action is brought against an Underwriter or any such person in
respect of which indemnity may be sought against the Company or any Selling
Stockholder pursuant to the foregoing paragraph, such Underwriter or such person
shall promptly notify the Company and the Representatives of the Selling
Stockholders in writing of the institution of such action and the Company or
such Selling Stockholder, as the case may be, shall assume the defense
of such action, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses, provided, however,
that the omission to so notify the Company or the Representative of the Selling
Stockholders shall not relieve the Company or any Selling Stockholder from any
liability which they may have to any Underwriter or any such person or
otherwise. Such Underwriter or such controlling person shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been authorized in writing by
the Company or such Selling Stockholder in connection with the defense of such
action or the Company or such Selling Stockholder shall not have employed
counsel to have charge of the defense of such action or such indemnified party
or parties shall have reasonably concluded that there may be defenses available
to it or them which are different from or additional to those available to the
Company or such Selling Stockholder (in which case the Company or such Selling
Stockholder shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company or such Selling Stockholder, as the
case may be, and paid as incurred (it being understood, however, that the
Company or such Selling Stockholder shall not be liable for the expenses of more
than one separate counsel in any one action or series of related actions in the
same jurisdiction representing the indemnified parties who are parties to such
action). The Company or such Selling Stockholder shall not be liable for any
settlement of any such claim or action effected without its written consent but
if settled with the written consent of the Company or such Selling Stockholder,
the Company or such Selling Stockholder agrees to indemnify and hold harmless
any Underwriter and any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, each Selling Stockholder and
any person who controls the Company or any Selling Stockholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any loss, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company, any Selling Stockholder
or any such person may incur under the Act or otherwise, insofar as such loss,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use with reference to such Underwriter
in a Registration Statement (or in a Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated either in such
Registration Statement or Prospectus or necessary to make such information not
misleading.
If any action is brought against the Company, any Selling Stockholder
or any such person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company, such Selling
Stockholder or such person shall promptly notify such Underwriter in writing of
the institution of such action and such Underwriter shall assume the defense of
such action, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses, provided, however, that
the omission to so notify such Underwriter shall not relieve such Underwriter,
from any liability which they may have to the Company, any Selling Stockholder
or any such person or otherwise. The Company, such Selling Stockholder or such
person shall have the right to employ its own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of the Company, such
Selling Stockholder or such person unless the employment of such counsel shall
have been authorized in writing by such Underwriter in connection with the
defense of such action or such Underwriter shall not have employed counsel to
have charge of the defense of such action or such indemnified party or parties
shall have reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties, but
such Underwriter may employ counsel and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being under stood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel in any one action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such action). No
Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of such Underwriter but if settled with the
written consent of such Underwriter, such Underwriter agrees to indemnify and
hold harmless the Company, any Selling Stockholder and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid re quest, (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(c) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 11 in respect of any losses, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, expenses, liabilities or claims
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders
on the one hand and the Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Stockholders on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of underwriting discounts and com missions but before deducting expenses)
received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company and the Selling Stockholders on the one hand and
of the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by
the Company, by the Selling Stockholders or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, expenses, liabilities and claims referred to above shall
be deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any claim or action.
(d) The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
11 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in subsection (c)
above. Notwithstanding the provisions of this Section 11, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by such Underwriter 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 such untrue
statements or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriter's obligations to
contribute pursuant to this Section 11 are several in proportion to their
respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 11 and the covenants, warranties and representations of the Company and
the Selling Stockholders contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter, its directors and officers or any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, or by or on behalf of the Company, its directors and officers, any
Selling Stockholder or any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares. The
Company, each Selling Stockholder and each Underwriter agree promptly to notify
the others of the commencement of any litigation or proceeding against it and,
in the case of the Company, against any of the Company's officers and directors
in connection with the issuance and sale of the Shares, or in connection with
the Registration Statement or Prospectus.
12. Notices. Except as otherwise herein provided, all statements,
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requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
SBC Warburg Dillon Read Inc., 535 Madison Avenue, New York, N.Y. 10022,
Attention: Syndicate Department, if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
1655 Roberts Boulevard, N.W., Kennesaw, Georgia 30144, Attention: Chief
Financial Officer and, if to any of the Selling Stockholders, shall be
sufficient in all respects if delivered or sent to the Representatives of the
Selling Stockholders at __________, Attention: __________.
13. Construction. This Agreement shall be governed by, and construed
------------
in accordance with, the laws of the State of New York. The Section headings in
this Agreement have been inserted as a matter of convenience of reference and
are not a part of this Agreement.
14. Submission to Jurisdiction. The Company irrevocably submits to
--------------------------
the nonexclusive jurisdiction of any State or Federal court sitting in New York
over any suit, action or proceeding arising out of or relating to this
agreement. The Company irrevocably waives, to the fullest extent permitted by
law, any objection it may now or thereafter have to the laying of venue of any
such court and any claim that any such suit, action or proceeding brought in
such a court has been brought in an inconvenient forum. The Company agrees that
a final judgment in any such suit, action or proceeding brought in any such
court shall be conclusive and binding upon the Company and may be enforced in
any other court to the jurisdiction of which the Company is or may be subject,
by suit upon such judgment.
15. Parties at Interest. The Agreement herein set forth has been and
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is made solely for the benefit of the Underwriters, the Company, the Selling
Stockholders and the controlling persons, directors and officers referred to in
Section 11 hereof, and their respective successors, assigns, executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
16. Counterparts. This agreement may be signed by the parties in
------------
counterparts which together shall constitute one and the same agreement among
the parties.
17. Miscellaneous. SBC Warburg Dillon Read Inc., an indirect, wholly
-------------
owned subsidiary of Swiss Bank Corporation, is not a bank and is separate from
any affiliated bank, including any U.S. branch or agency of Swiss Bank
Corporation. Because SBC Warburg Dillon Read Inc. is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by SBC Warburg Dillon Read
Inc. are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
A lending affiliate of SBC Warburg Dillon Read Inc. may have lending
relationships with issuers of securities underwritten or privately placed by SBC
Warburg Dillon Read Inc. To the extent required under the securities laws,
prospectuses and other disclosure documents for securities underwritten or
privately placed by SBC Warburg Dillon Read Inc. will disclose the existence of
any such lending relationships and whether the proceeds of the issue will be
used to repay debts owed to affiliates of SBC Warburg Dillon Read Inc.
On December 8, 1997, Swiss Bank Corporation announced its intention to
merge with Union Bank of Switzerland. References in this document to Swiss Bank
Corporation include references to its successor entity following completion of
the merger.
References to the parties include references to their successors,
including, without limitation, an entity which assumes the rights and
obligations of the relevant party by operation of the law of the jurisdiction of
incorporation or domicile of such party.
If the foregoing correctly sets forth the understanding among the Company,
the Selling Stockholders and the Underwriters, please so indicate in the space
provided below for the purpose, whereupon this letter and your acceptance shall
constitute a binding agreement among the Company, the Selling Stockholders and
the Underwriters, severally.
Very truly yours,
CRYOLIFE, INC.
By:
Title:
THE SELLING STOCKHOLDERS NAMED IN SCHEDULE B
ATTACHED HERETO
By:
Attorney-in-Fact
Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in Schedule A
SBC WARBURG DILLON READ INC.
PIPER JAFFRAY INC.
By: SBC WARBURG DILLON READ INC.
By:
Title:
By:
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
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Total
SCHEDULE B
Number of
Selling Stockholders Firm Shares
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Total